Profits from captive consumption of wind-generated electricity qualify for deduction under Section 80IA. Eligible profits must be computed using the rate at which the Electricity Board supplies electricity to consumers, rather than the lower rate at which generating companies supply electricity to the Board. Expenditure cannot be disallowed merely because payment recipients could not be produced more than two years later or because payments increased over earlier years. Further, payments below the tax-deduction-at-source threshold do not attract disallowance for non-deduction of tax. The claimed captive-power deduction and deletion of the expenditure disallowance follow.

Long-term capital gain from listed-share sales cannot be treated as unexplained cash credit solely on a general investigation report alleging penny-stock transactions. Where the report does not identify or implicate the taxpayer, and purchases and sales occur through banking channels, shares are credited to a demat account, and trading occurs on a recognised stock exchange, adverse inference requires independent material linking the taxpayer to accommodation entries. Absence of inquiry with the stock exchange or counterparties further prevents rejection based on presumption or surmise. The addition was directed to be deleted.

Employee-welfare payments to educational institutions and club expenditure for employees qualify as business expenditure where incurred for efficient business operations and not barred by the restriction on contributions to specified funds. Expenditure on enabling facilities is revenue expenditure if it creates no capital asset. Receipts directly and inextricably connected with project setup are capital receipts deductible from capital work-in-progress. Business-related bad debts, advances and claims may be written off where arising from supplies, shortages or stock transfers. Premiums on foreign-currency hedging contracts are amortisable as ascertained, non-speculative liabilities. Mineral-oil survey expenditure is deductible where permitted by the applicable production-sharing framework. Consistent prior treatment applies where facts and law remain unchanged.

Escrow adjustment deducted from slump-sale consideration forms part of the capital-gains computation and cannot be disallowed under the business-expenditure provision. Deductions under provisions governing business income apply only to income assessable as profits and gains of business or profession. As no business-income deduction was claimed for the disputed adjustment, that provision does not apply. The proposed addition is therefore unjustified and deleted.

Prior approval under section 151 is a jurisdictional condition for issuing a reassessment notice under section 148 after four years. The competent authority must record satisfaction on the reasons before the notice is issued. Approval recorded after issuance cannot cure the defect, because subsequent sanction does not validate a notice issued without the required prior authority. Consequently, the reassessment notice and consequential reassessment are invalid for want of jurisdiction.

Brought-forward unabsorbed depreciation under Section 32(2) of the Income-tax Act assumes the character of current-year depreciation. It may therefore be adjusted against taxable income under other heads, including income from house property, and is not restricted to business profits where no positive business income arises in the relevant year. The set-off is available because the carried-forward depreciation is treated as current depreciation for the relevant year.

Section 87A rebate is available against income-tax payable on short-term capital gains taxable at the special rate under Section 111A. Section 87A grants a rebate from income-tax, while Section 111A prescribes the applicable special tax rate for gains from transfer of listed equity shares. Neither provision contains an express statutory restriction excluding tax on such short-term capital gains from the rebate. The rebate can therefore be set off against tax payable on income taxable under Section 111A.

Commission expenditure paid to agents for procuring business from pharmaceutical companies qualifies for deduction under Section 37(1) where it is incurred wholly and exclusively for business purposes. The required business nexus was supported by the linkage between the payments and commission income earned, verification of recipients' identities, payment through banking channels, tax deducted at source, and recipients' disclosure of the income in their tax returns. In the absence of material showing fictitious payments, non-existent recipients, or return of funds to the payer, the expenditure is treated as genuine and allowable as a business deduction.

Reassessment initiated and completed against a dissolved partnership firm after its business succession to a proprietorship concern is legally unsustainable where the Department had accepted the succession and assessed the relevant transactions in the successor's hands. Assessing the same income again in the dissolved firm's hands would cause impermissible double taxation. Reopening jurisdiction also fails where the recorded reasons merely refer to financial transactions and cash deposits without identifying the relevant bank account, specific transaction, or material indicating income escapement by the erstwhile firm. The reassessment and consequential addition were therefore invalid.

Interest earned by a primary agricultural credit society on deposits of surplus profits qualifies for deduction as profits attributable to providing credit facilities to members where the deposits are connected with, permitted by, or required for its lending business. Interest from members' funds or deposits lacking a business nexus is distinguishable, and entitlement requires factual verification. Disallowances for failure to deduct tax at source and the taxability of miscellaneous income require fresh examination where relevant expenditure, tax-deduction and income particulars were not furnished and an effective opportunity to provide them was allegedly unavailable. The relevant records must be examined in accordance with natural justice.

Alleged bogus purchases supported by books, banking channels, GST records, invoices, delivery challans, stock registers and accepted corresponding sales should not ordinarily result in disallowance of the entire purchase value where the books are not rejected. Supplier-related adverse material and discrepancies in transport documents may justify taxing the embedded profit attributable to unverifiable purchases. The profit element was estimated at 12.5%, with the remaining purchase disallowance deleted. The governing principle is that accepted sales and corroborative accounting and tax records support a profit-based addition rather than full purchase disallowance.

Section 54F treats the cost of a new residential asset as extending beyond the purchase consideration where genuine post-purchase reconstruction, renovation, alterations and improvements are incurred to make the house suitable for residential use. The cost of land and construction may be aggregated, and the prior habitability of the purchased house or the scale of improvement expenditure does not by itself disqualify the expenditure. However, expenses for personal comfort rather than construction do not qualify. Genuine reconstruction and renovation expenditure, together with the purchase cost, is eligible for the full Section 54F deduction.

Penalty under Section 271DA for alleged cash receipt contrary to Section 269ST cannot survive where the sole quantum addition was deleted because the assessee was not involved in the underlying transaction. Establishing an actual cash receipt by the assessee is essential. Presumptions relating to seized material do not apply where the material was recovered from another entity's premises, did not refer to the assessee, and lacked supporting admission. A pending further appeal against the quantum deletion does not alter the operative effect of existing appellate findings without a stay. The penalty was therefore unsustainable and deleted.

Business expenditure remains deductible where profit and loss accounts, purchase records, VAT returns and sales records establish that the underlying receipts and costs arose from business transactions. Incorrectly reporting those receipts and expenses under income from other sources in the return constitutes a return-preparation error and does not alter their true business character. The claimed expenditure was therefore allowable as business expenditure, and the disallowance was deleted.

Interest paid on bank and non-banking financial company borrowings used to advance loans was deductible from income from other sources where the assessment record established a direct nexus between the borrowings, the loans advanced to private parties, and the interest income earned. Interest expenditure incurred to generate declared interest income was allowable under the applicable deduction provision. The corresponding disallowances for both assessment years were deleted.

Assessment against a person other than the searched person under the search-assessment framework depends on the date seized material is handed to that person's Assessing Officer. Where handover and satisfaction occur on or after 1 April 2021, that framework is excluded and reassessment is the prescribed route; the notice and consequential assessment were quashed for lack of jurisdiction. Penalty limitation for a matter not linked to assessment proceedings begins when the Assessing Officer refers the matter for penalty action. As the penalty order was passed after the applicable six-month period, the penalty for accepting prohibited loans or deposits was time-barred and quashed.

Recurring digital marketing and platform-facilitation expenditure incurred to promote an existing business is revenue expenditure where it creates no asset or advantage in the capital field. Digital advertising, media management, search-engine optimisation, SMS broadcasting, content generation, video production and social-media strategy required repeated promotional spending and merely improved customer traffic, sales and commission income; the expenditure was allowable under Section 37. Payments for digital-platform search and product-display services similarly enabled product visibility, corrected search terms and improved customer access without procuring a capital asset or enduring capital advantage; they were also allowable under Section 37. The enduring-benefit test applies commercially, not mechanically.

Section 194N places the obligation to deduct tax at source on the banking company making cash payments beyond the prescribed threshold, while Section 271C penalises the person that fails to make that deduction. A customer receiving cash is not liable for the bank's deduction failure or related penalty. A bank therefore lacks statutory authority to impose a lien on a customer's current account to recover alleged tax deducted at source on cash withdrawals, particularly where no tax-authority direction exists. The lien must be released and account operations permitted upon furnishing relevant income-tax returns.

Share capital received from four investors could not be treated as unexplained cash credit where scrutiny assessments of those investors had accepted the sources of their investments and made no additions in their hands. The Tribunal treated the investments as genuine in the recipient company's hands on the basis of the assessment records. That factual finding disclosed no infirmity or substantial question of law, rendering the share-capital addition under Section 68 unsustainable.

Revision under Section 263 requires the assessment order to be both erroneous and prejudicial to Revenue interests. Explanation 2(a) covers assessments made without necessary inquiry or verification, but does not remove the requirement to establish both conditions. Where the Assessing Officer sought and received details on unsecured loans and trade payables, examined the explanations, and adopted a plausible view, revision cannot rest solely on audit objections or a preference for further verification. Absent material showing Revenue prejudice, revision is invalid.