Depreciation is allowable on moulds and tools where expenditure initially claimed as revenue is capitalised and no depreciation has previously been allowed on that cost. Interest-related disallowance against exempt income is unwarranted where own funds exceed the investments generating exempt income, as borrowed funds cannot be presumed to have financed those investments. Refundable distributor deposits do not reduce the actual cost of freezers for depreciation because they are neither reimbursements of the asset cost nor subsidies. Accordingly, depreciation applies to the capitalised moulds and tools and the full freezer cost, without an exempt-income interest disallowance.

Section 80P(2)(d) permits a co-operative society to deduct qualifying interest income received from another co-operative society. A co-operative society that does not hold a banking licence cannot be treated as a co-operative bank. Accordingly, interest earned by a co-operative society on deposits with co-operative banks qualifies for deduction under Section 80P(2)(d).

Fair market value of property as on 1 April 1981 for long-term capital gains computation requires reliable valuation evidence. An unsupported value adopted by the assessee cannot be accepted, while Sub-Registrar guidance value does not necessarily reflect fair market value. The Assessing Officer must refer the property to the Departmental Valuation Officer and determine the relevant fair market value on that basis.

Accommodation-entry income cannot be estimated at a uniform commission rate where beneficiary identities, underlying transactions and commission rates are not fully verified. Commission income may be estimated only for verifiably identified beneficiaries; credits lacking substantiated beneficiary details require examination as unexplained cash credits. Where the record does not establish the identified transactions, assessment of corresponding sums in beneficiaries' hands, or the applicable commission percentage, the addition requires fresh determination. The assessee must provide complete documentary evidence, following which the Assessing Officer must make a de novo assessment in accordance with law.

Interest paid by a co-operative bank to co-operative housing societies on time deposits is subject to tax deduction at source where it exceeds the prescribed threshold. The specific rules applicable to co-operative societies carrying on banking business prevail over the general member-interest exemption. The amendment effective from 1 June 2015 excludes co-operative banks from that exemption for time-deposit interest, operates prospectively, and applies to the relevant assessment year. Housing co-operative society recipients are not banking entities eligible for the exemption; accordingly, the bank must deduct tax on qualifying interest payments.

Accommodation-entry assessments distinguish between unidentified and identified beneficiaries: related bank credits are assessable as unexplained cash credits where beneficiaries are not disclosed, while commission-rate assessment applies where they are identified. The estimated commission-income additions therefore require fresh determination under that principle, as genuine trading and the claimed commission rate were unsupported. Share application money remains taxable as unexplained cash credit where confirmations do not establish subscribers' identity, financial capacity and transaction genuineness. Cash deposits remain undisclosed income where no documentary evidence establishes their source.

Revisional jurisdiction requires an assessment order to be both erroneous and prejudicial to the interests of the Revenue. Explanation 2 to section 263 applies where the Assessing Officer has failed to make necessary inquiry or verification. Where the assessment record shows a specific inquiry into a section 80G claim, supported by furnished particulars and documents, revision cannot rest on alleged lack of inquiry. Corporate social responsibility expenditure disallowed under section 37(1) may still raise a debatable issue regarding eligibility for section 80G deduction. An assessment adopting a plausible view on that issue is not erroneous, making revision under section 263 impermissible.

Tax deduction at source is not required on interest paid by a co-operative bank to a co-operative-society depositor, as the exemption for interest paid by one co-operative society to another continues to apply to co-operative banks in respect of time deposits. Consequently, the bank cannot be treated as an assessee in default for non-deduction on such interest. Late fee for delayed TDS statements depends on whether the relevant return was filed within the prescribed time; verification of timely filing is required, and the fee must be deleted if timely filing is established.

Revisionary jurisdiction requires an assessment order to be both erroneous and prejudicial to the Revenue. Where the taxpayer disclosed CSR payments and supporting donation particulars, acceptance of a deduction claim under section 80G may represent a considered and legally plausible view. A different view does not establish error when two reasonable views are possible, and inadequate inquiry differs from complete absence of inquiry. Disallowance of CSR expenditure as business expenditure under section 37(1) does not prevent a separate section 80G deduction if its conditions are met. The mandatory nature of CSR spending alone does not disqualify qualifying payments, leaving revision unavailable on these facts.

Reassessment notices concerning escaped income below the prescribed threshold cannot be issued after three years from the end of the relevant assessment year. A notice issued beyond that limitation is time-barred and void, rendering the consequential reassessment legally unsustainable. A pure legal challenge to such a notice may be admitted as an additional ground where it goes to the root of the assessment and requires no further evidence or factual verification.

Mandatory approval from the competent authority under Section 151 is required for a reassessment notice issued under Section 148 after three years from the end of the relevant assessment year. Approval contrary to that requirement renders the notice invalid. The jurisdictional objection, involving a pure legal question requiring no further evidence, was admitted at the threshold. Invalidity of the Section 148 notice resulted in quashing of the reopening proceedings and the reassessment order founded on it.

Reassessment initiated more than three years after the end of the relevant assessment year requires prior approval under Section 151(ii) from the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General before an order under Section 148A(d) and notice under Section 148 may be issued. Approval by a Principal Commissioner is not competent for this purpose. The TOLA extension applied only to approval under Section 151(i) until 30 June 2021 and did not validate later approval by an incorrect authority. The Section 148 notice, reassessment proceedings and consequential assessment order were therefore without jurisdiction and quashed.

Section 54F exemption requires the assessee to reinvest capital gains in a residential property acquired in the assessee's own name. Applying the jurisdictional High Court's interpretation of the corresponding exemption under Section 54B, investment in a property standing solely in the spouse's name does not meet that statutory condition. Accordingly, capital gains reinvested in the assessee's wife's residential property do not qualify for deduction under Section 54F, and the claimed exemption was disallowed.

Capital-gains taxability on transfer of alleged rural agricultural land depends on factual verification that the land was a capital asset under the Income-tax Act. The inquiry must establish the land's precise location, its distance from relevant municipal or cantonment limits on the transfer date, applicable notifications, and the land's nature and use. Where lower authorities have not examined these statutory conditions despite competing material on urban inclusion and agricultural character, the capital-gains addition requires fresh examination after providing the taxpayer an adequate opportunity to substantiate the land's status.

Section 43CA does not apply to flat sales concluded through booking, allotment and agreement before the provision's commencement merely because registration occurs later; the resulting stamp-duty valuation difference is not brought within that provision. Interest on capital borrowed for a real-estate business may be deducted as a period cost, including where the project is stock-in-trade, subject to verifying the business nexus and preventing double deduction through work-in-progress. Foreign exchange loss on consultancy liabilities and monetary-item settlement is revenue expenditure under Accounting Standard 11 where it lacks a direct connection with bringing inventory to its present location or condition, and is not capitalised to project cost.

Penalty for additions relating to interest received on enhanced compensation cannot be sustained where the taxability of that interest is a debatable legal issue and judicial views diverge. The absence of a settled legal position prevents penalty from being imposed merely because the addition was made. Penalty connected with such interest income was therefore deleted in favour of the assessee.

Reassessment limitation for assessment years up to 2021-22 remains governed by the earlier regime through the first proviso to section 149(1)(b). For AY 2017-18, the six-year limitation expired on 31 March 2024. A section 148 notice issued on 31 August 2024 was therefore time-barred and was set aside in favour of the assessee.

Penalty proceedings cannot rest on a cyclostyled show cause notice that leaves irrelevant particulars unstruck and fails to specify the applicable charge. Such vagueness prevents an effective response and makes the notice incapable of forming a valid foundation for penalty. Applying the Full Bench ruling relied on by the Tribunal, the penalty was treated as invalid because the notice did not clearly communicate the charge to be answered.

Prior notice to an applicant is required before rejecting an application for approval under Section 80G(5B). Where the absence of notice is undisputed, the rejection is procedurally infirm and cannot be sustained. Consequently, the Revenue's proposed challenge to the approval was not entertained, and questions concerning the applicant's substantive eligibility for approval did not arise for consideration.

Compounding of income-tax offences addresses the effect of a reduced penalty on eligibility for relief from prosecution, including the principle that penalty reduction may bar prosecution. It also concerns the binding force of an unchallenged writ direction and the limits of contempt jurisdiction to modify an earlier order. Compounding fees must be calculated and communicated within 60 days, with one month allowed for payment after the amount is communicated. Questions of law remain open.