Impounded Tally entries reflecting an educational trust's receipts, payments and expenditure do not establish unexplained investments of the individuals handling those funds unless material shows investment of their own unaccounted income. The ledger balances operated as control accounts for trust-related collections, expenditure and bank deposits, and reconciliation with the trust's regular accounts supported deletion of the Section 69 additions. Separately, a bank-credit loan remained taxable as unexplained money under Section 69A because the lender's explanation for the deposited source was inconsistent with human probability and did not establish creditworthiness or the source of funds.

Reassessment notices for assessment years 2014-15 to 2016-17 under Section 148 were invalid because they relied on investigation-wing information received before 4 March 2021, rather than cases flagged through the prescribed post-4 March 2021 process. The additional legal ground was admissible as it arose from facts already on record and went to the root of the assessments. CBDT instructions, clarified on 12 March 2021, restricted selection of investigation-report cases for reassessment to the specified process and did not permit jurisdictional Assessing Officers to select other cases. The notices and consequential reassessments were quashed.

For section 56(2)(x), the District Valuation Officer's value replaces the stamp-duty value when applying the safe-harbour rule. The 10% tolerance for differences between purchase consideration and valuation, intended to reduce hardship in genuine transactions, operates as a curative and beneficial provision with retrospective effect. Where the difference between actual consideration and the District Valuation Officer's valuation was 9.57%, it remained within the permissible tolerance; consequently, the addition under section 56(2)(x) was not sustainable and was deleted.

Cash deposits claimed to arise from inherited savings, agricultural income or prior remittance withdrawals require satisfactory, credible corroboration of their nature, source and availability at the time of deposit. An affidavit alone, without cash-flow details, agricultural or land records, receipt evidence, or proof that withdrawn funds remained available, does not establish the explanation; the deposit is consequently treated as unexplained money. An enhanced tax rate for unexplained income applies prospectively where the deposit predates the amendment's effective date and no retrospective operation is specified. Tax must therefore be computed under the law applicable when the deposit was made.

Exemption under section 11 cannot be denied solely because the audit report in Form No. 10B was filed one day after the prescribed due date. Furnishing Form No. 10B is procedural and directory rather than mandatory; a delay in filing the report does not by itself defeat exemption where the trust fulfils the substantive statutory conditions. The Assessing Officer must allow the claimed exemption once those substantive conditions are satisfied.

Estate income administered by a sole executor is chargeable under section 168(1)(a) in the executor's hands as if the executor were an individual, rather than at the maximum marginal rate applicable to an association of persons or artificial juridical person. Where more than one executor administers the estate, section 168(1)(b) applies. The number of executors must be verified from the will and testamentary documents before determining the correct assessment status and tax rate. Subject to confirmation of a sole executor, the estate is assessable at individual rates; the assessment requires fresh verification.

Section 43CA does not apply where agreements for sale of land fixed consideration and substantial non-cash consideration was received before the provision came into force, even if sale deeds were registered later. Subsequent registration merely completes the pre-existing contractual arrangement and does not render the provision retrospectively applicable. Although Section 43CA permits stamp-duty value as on the agreement date where consideration is received otherwise than in cash, that mechanism does not extend the provision to transactions substantially executed before enactment. Applying the law prevailing when substantive contractual obligations arose, stamp-duty valuation could not support the addition.

Reassessment orders issued in the name of a private company after its conversion into an LLP are void where the Assessing Officer had been informed of the conversion and received the conversion certificate before issuing jurisdictional notices. A company and LLP have distinct legal identities and tax treatment. Service of notice under section 143(2) after a return in response to section 148 is a jurisdictional requirement. Issuing both that notice and the reassessment order to an entity that had ceased to exist is a substantive illegality, not a mere misdescription, and cannot be cured under section 292B. The reassessment orders were quashed.

Section 270A requires the applicable statutory circumstance and factual basis for under-reporting or misreporting to be specifically identified in the initiating notice and penalty proceedings. Under-reporting under section 270A(2) is distinct from under-reporting resulting from misreporting under section 270A(9). Initiating proceedings for misreporting but imposing penalty for under-reporting, without specifying the relevant charge, denies the assessee a meaningful opportunity to respond and breaches natural justice. The penalty was therefore treated as invalid and quashed.

Reassessments based on documents seized during a search of a third party must proceed under Section 153C where the material pertains to the assessee and is relevant to determining that assessee's income. Sections 153A and 153C override the general reassessment mechanism under Sections 147 and 148 through non-obstante clauses. Consequently, Section 147 is unavailable for initiating reassessment on such search-seized material. Reassessment orders initiated under Section 147 in these circumstances lack jurisdiction and are liable to be quashed; factual additions need not be examined.

Cash deposits during demonetisation were satisfactorily explained where the assessee substantiated a maternal gift through the donor's income-tax returns showing undisputed rental income, and the Revenue made no enquiry into her accumulated cash savings despite unavailable bank withdrawals. A further deposit was explained through the HUF's disclosed rental income and available cash resources. As the disclosed rental receipts of both sources were not disputed and the assessee discharged the burden of proving the sources, the additions for unexplained investments were deleted.

Transfer-pricing adjustment on interest paid to a related enterprise may be deleted as revenue neutral if factual verification confirms a specified domestic transaction between domestic entities. Revenue neutrality ordinarily applies unless profit shifts from a profit-making entity to a loss-making entity or from a higher-tax entity to a lower-tax entity. Where the taxpayer is subject to a concessional lower rate and the related enterprise to a higher rate, an alleged shift would move profit to the higher-tax entity. Verification is required because the transaction was treated as international despite the related enterprise being identified as domestic.

Reassessment initiated more than three years after the relevant assessment year requires approval from the specified senior authority under section 151(ii); approval by a Principal Commissioner is not competent for that period. Notice beyond three years is permissible under section 149(1)(b) only where escaped income represented by an asset meets the prescribed threshold. Where the alleged escaped income falls below that threshold, the section 148A(d) order, section 148 notice and consequential reassessment are invalid and liable to be quashed.

Interest for failure to deduct tax on lease-rent payments is confined to the period from the date of deductibility until the deductee files its return. Disallowance for non-deduction of tax applies only to expenditure claimed as a revenue deduction in computing taxable income. Interest capitalised as inventory or work-in-progress under the percentage-of-completion method, and not charged to the profit and loss account, cannot be disallowed because it has not been claimed as deductible expenditure. Consequently, capitalised interest is excluded from the disallowance, while interest liability for non-deduction ends on the deductee's return-filing date.

Interim judicial directions restraining tax deduction or recovery from employees' leave fare concession payments removed the bank's subsisting obligation to deduct tax during the protected period. Subsequent vacation of that protection could operate only prospectively and could not retrospectively create default for payments already made. Later restraint on recovery from employees also prevented recovery action. Default liability arises only where a deductor fails to deduct despite an existing legal obligation, and the Department must ascertain whether recipients have paid the tax. The bank was therefore not an assessee in default, and the related tax demand and interest were deleted.

Where corresponding sales are not disputed and purchases may have been sourced from unregistered dealers, treating the entire alleged bogus-purchase amount as unexplained expenditure is inappropriate. A lump-sum disallowance of 2% of the alleged bogus purchases is considered appropriate, while the remaining addition is deleted. The approach limits the adjustment to the estimated profit element or possible irregularity in procurement rather than disallowing the full purchase value.

Section 10(10AA)(ii) leave-encashment exemption is discussed in light of Notification No. 31/2023, which raised the ceiling for non-government employees from Rs. 3 lakh to Rs. 25 lakh. The enhancement is characterised as beneficial and remedial, intended to remove disparity with government employees and mitigate hardship; it may therefore apply liberally to pending proceedings where no vested Revenue right is affected. The notes also describe a liberal, justice-oriented approach to "sufficient cause" for condoning filing delay under section 249(3), where illness, bereavement, bona fides, and absence of deliberate inaction are established.

Permanent establishment under Article 5 of the India-Thailand DTAA was not established because no cogent material showed that employees of the Indian affiliate acted for the Thai assessee, that the assessee deputed personnel to India, or that it had a fixed place of business at its disposal in India. Survey statements concerning expatriates and remuneration paid by a Japanese parent did not prove a taxable presence for the assessee. Goods were supplied and services rendered offshore from Thailand. Earlier years involving materially identical facts had likewise found no permanent establishment, supporting non-taxability of the offshore activities in India.

Capital gains tax applies where an assessee's mortgaged property is sold by a bank to discharge another person's loan and the entire sale proceeds are appropriated towards that secured liability. The owner retains ownership until sale and, by voluntarily creating an equitable mortgage, subjects the equity of redemption to sale upon default. Sale under an enforceable mortgage is treated like a voluntary sale for capital-gains computation. Capital gains are calculated on the full sale consideration under the indexed-cost framework, subject to admissible deductions; adjustment of proceeds against the loan does not change the consideration's character or eliminate the tax liability.

Section 68 requires an assessee to establish the creditor's identity, creditworthiness and the genuineness of each credit. Confirmations, permanent account details, bank statements, income-tax records and books of account may discharge this initial burden; a creditor's non-appearance under summons does not by itself negate otherwise reliable documentary evidence. Repayment of an earlier unsecured loan should not be assessed again as an unexplained credit. Once the initial burden is met, the Revenue must produce cogent material to disprove the explanation, as suspicion and omission of share application money from the balance sheet are insufficient. The real income doctrine and approbate and reprobate do not apply without unexplained credits or an inconsistent position.