Addition u/s 56(2)(x) - immovable property acquired under pre-existing agreement - Date of agreement for stamp-value comparison Applicability of section 56(2)(x) to immovable property registered after its introduction pursuant to an agreement executed earlier, where part consideration had been paid through prescribed banking modes - HELD THAT: - The agreement was executed before section 56(2)(x) came into force, the sale deed recorded the agreed consideration, and part consideration had been ... ... ...

Taxability of below-value acquisition of land as non-monetary business benefit - Deductibility of actual cost of land Non-monetary business benefit under section 28(iv) - Below-value acquisition of land - Taxability of the benefit arising from acquisition of land at a consideration lower than its established value - HELD THAT: - Section 28(iv) applies to a benefit or perquisite arising from business or profession where the benefit is non-monetary. The Tribunal found that the assessee obtained... ... ...

Difference between stamp duty value and purchase price as income of the assessee u/s 56(2)(vii)(b) - Stamp duty valuation - retrospective application of curative 10 per cent tolerance band Addition for acquisition of immovable property below its stamp duty value-applicability of the enhanced 10 per cent tolerance band to the variation between consideration and stamp duty value - HELD THAT: - The enhanced tolerance limit was held to be curative and beneficial, intended to relieve genuine purch... ... ...

Reassessment sanction by specified authority - Jurisdictional defect in reassessment - Approval under section 151(ii) - Invalid reassessment for want of competent sanction Validity of reassessment for A.Y. 2017-18 where approval for the order under section 148A(d) and consequential notice under section 148 was granted by the Principal Commissioner after expiry of three years from the end of the relevant assessment year - HELD THAT: - Under the amended reassessment regime, where more than thre... ... ...

Depreciation on goodwill arising from slump sale - TDS credit in year of assessability of corresponding income Depreciation on goodwill arising from slump sale - Excess liabilities as consideration for business and commercial rights - Allowability of depreciation on goodwill recorded on acquisition of a going-concern business under a slump-sale business transfer agreement, where liabilities taken over exceeded the assets acquired - HELD THAT: - Assumption of liabilities in excess of the asset... ... ...

Ad hoc disallowance of referral-based commission expenditure - Non identification of non-genuine payments - Sustainability of an estimated disallowance from commission expenditure incurred under a referral-based business model - HELD THAT: - Although the initial burden to establish business expenditure rests on the assessee, the documentary material, including recipient details, PAN and TDS particulars, Form No. 26Q and payment details furnished before the Assessing Officer, had to be considered... ... ...

Rectification of mistake apparent from record - Section 68 cash credit confined to year of credit Rectification of prior-year share capital and securities premium - Scope of record in rectification proceedings - Rectification of the addition of share capital and securities premium claimed to have been received in an earlier assessment year - HELD THAT: - For an addition under section 68, the credit must have been received in the year concerned. The record for rectification is not confined to ... ... ...

Jurisdiction to cancel charitable registration - Centralisation of assessment jurisdiction - Principal Commissioner of Income Tax (Central), Jodhpur's territorial and subject-matter jurisdiction Competence of the Principal Commissioner (Central) to cancel the assessee's charitable registration in the absence of proof that exemption and registration jurisdiction had been transferred - HELD THAT: - The expression "Principal Commissioner or Commissioner" identifies the rank of the author... ... ...

Territorial and subject-matter jurisdiction remains necessary for cancellation of charitable registration; designation as a Principal Commissioner or Commissioner does not itself confer authority over exemption registration. Exemption jurisdiction continues with the designated exemption authority unless lawfully transferred. Centralisation of group assessments for investigation does not establish transfer of registration jurisdiction without a transfer order, notification, or other jurisdictional instrument assigning an Assessing Officer under the relevant Central Commissioner. Notification No. 70/2014 applies only where such assignment is proved. On these principles, cancellation of registration for want of jurisdiction was quashed and the original registration restored, while the underlying allegations and retrospective-cancellation issue remained unresolved.

Goodwill arising from acquisition of a going-concern business under a slump-sale agreement may constitute a depreciable intangible asset where assumed liabilities exceed acquired assets and are subsequently discharged. Such excess liabilities represent economic consideration for business and commercial rights, notwithstanding the absence of separately stated consideration or individual asset valuations. The Finance Act, 2021 exclusion of goodwill from depreciable intangible assets operates prospectively. Where depreciation on goodwill is allowable under normal provisions, no consequential add-back is warranted in book-profit computation. TDS credit is available in the year in which corresponding income is assessable, subject to verification that the income was offered to tax in that year.

Section 28(iv) covers non-monetary benefits arising from business or profession, including land acquired in a real-estate business for consideration below its established value. The ITAT treated the difference as a real business benefit received in kind, rather than a notional gain, and distinguished loan-waiver principles. It sustained taxation of the benefit and rejected the constitutional objection. The taxable benefit does not increase the land's deductible cost: where no corresponding expenditure was incurred, deduction is limited to the actual acquisition cost despite a revenue-neutrality claim. The addition was sustained and the appeal dismissed.

Project-completion accounting, when consistently followed by a real estate developer, is a recognised method and cannot be rejected merely because substantial sale proceeds were received or the Assessing Officer preferred a different revenue-recognition method. Rejection under section 145 was unsustainable because no specific defect showed that the accounts were unreliable, while estimated profit was applied to recorded receipts without an independent basis. Differing flat agreement values also did not establish undisclosed consideration without cogent evidence of actual on-money receipts. Payments for extra work under separate agreements could not be attributed to the developer solely through a director's connection. The book rejection and additions were deleted.

Return-processing adjustments cannot disallow diminution in the value of a business-purpose investment in a wholly owned subsidiary solely because a tax audit report describes it as capital expenditure where binding jurisdictional precedent permits an analogous business loss. Once an intimation is issued after considering the taxpayer's response, the Centralised Processing Centre performs a quasi-judicial function and must follow binding High Court law. Failure to consider a jurisdictional High Court decision delivered before the intimation, and specifically raised in a rectification application, constitutes a mistake apparent from the record. The resulting disallowance requires rectification in accordance with that precedent.

Penalty for under-reporting attributable to misreporting applies where inadmissible deductions are claimed against interest income from nationalised banks and dividend income. The statutory protection based on a bona fide explanation is confined to under-reported income and does not extend to under-reporting resulting from misreporting. Once the Assessing Officer classifies the conduct as misreporting and applies the corresponding charge, penalty follows at the prescribed rate. Payment of tax and interest after disallowance in scrutiny assessment, while penalty proceedings remain pending, does not constitute voluntary disclosure or establish a bona fide mistake. The penalty for misreporting was sustained and the appeal dismissed.

Penalty under section 271AAC(1) was not sustainable where unexplained cash deposits were assessed only by estimating and restricting the addition to a profit percentage. An ad hoc estimated addition did not, by itself, establish conscious concealment or undisclosed income. The penalty levied solely on that estimated addition was therefore deleted, and the appeal was allowed.

TNMM aggregation prevented separate benchmarking of IT support services where accepted segmental margins already included the associated-enterprise markup and the services were inextricably linked to the core business. The transfer-pricing adjustment on the IT support-services margin was deleted. Notional interest on overdue associated-enterprise receivables was unwarranted because the taxpayer was debt-free, incurred no significant interest cost, and no new material justified departure from earlier treatment; the related adjustment was deleted. Capital expenditure on an in-house scientific-research facility remained deductible under section 35(1)(iv) despite the concessional tax regime and absence of valid Form 3CM, which was relevant to section 35(2AB), not section 35(1)(iv).

Under the Transactional Net Margin Method, selling commission paid to associated enterprises forms part of the operating cost of the software development services segment when it is closely linked to that segment. Where TNMM is accepted as the most appropriate method and the segment is accepted as arm's length, the commission cannot be isolated for separate benchmarking or assigned a nil arm's-length price after its inclusion in the segmental operating margin. Verification under an appellate direction resulted in deletion of the transfer-pricing adjustment, and the Revenue's challenge to the verification and consequential relief failed.

Third-party seized diaries and excel sheets cannot support additions for alleged cash rebate repayment or unaccounted molasses sales unless they clearly establish the transactions and are supported by independent corroborative evidence. Unsigned, ambiguous entries, a retracted statement, and denial of cross-examination undermine their evidentiary value and breach natural justice; the related additions were deleted. Disallowance computed under section 14A read with Rule 8D cannot be imported into book-profit computation under section 115JB, requiring deletion of that adjustment. Components integral to a cogeneration plant, without standalone function, qualify for the higher depreciation rate applicable to the plant; the depreciation disallowance was deleted.

Gold imported outside Reserve Bank of India-authorised bulk-import channels or the passenger-import regime under the Baggage Rules is prohibited goods under the Customs Act, 1962. The definition extends to goods restricted under any law in force and is not limited to prohibitions expressly notified under the Customs Act. Consequently, penalties applicable to improper importation of prohibited goods apply. A penalty order is not jurisdictionally invalid merely because it cites an incorrect provision or does not specify the relevant clause, provided the adjudicating authority had substantive power and its reasoned order identifies the goods as prohibited.

Target Plus Scheme requires a broad nexus, not a strict product-to-product nexus, between duty-free imported inputs and exports within the product group specified in the duty credit certificate. Continuous cast copper rods could therefore be imported duty-free where linked to the Engineering Products group, but not merely because they bore nexus to one of several groups covered by a certificate. Extended limitation and customs penalties require intent to evade duty through fraud, collusion, wilful misstatement or suppression. Policy ambiguity, a bona fide exemption understanding, valid uncancelled certificates, and export documents already held in Customs records precluded such findings. The duty demand and consequential penalties were set aside.