Section 68 does not permit cash deposits in specified bank notes during demonetisation to be treated as unexplained cash credits where recorded cash sales establish their source. Accepted trading results and stock records free from defects support the genuineness of the recorded sales; the absence of customer particulars for cash sales alone does not make the sale proceeds unexplained. On these facts, the addition for unexplained cash credit was deleted.

Penalty for misreporting of income under section 270A(9) does not arise merely because employees' PF/ESI contributions are disallowed on a technical basis. Where the taxpayer disclosed the payments and all related particulars in its records and tax audit report, and no material establishes suppression or misrepresentation of income, rejection of the claim does not constitute misreporting. The penalty was therefore unsustainable.

Non-conformity of a scrutiny notice with a CBDT-prescribed format is an internal administrative lapse and a curable procedural defect; where the notice otherwise initiates scrutiny, section 292B preserves the consequential assessment. Appellate deletion of additions for unexplained expenditure and time deposits cannot rest on documents or explanations first produced on appeal without giving the Assessing Officer an opportunity under Rule 46A. Such reliance breaches natural justice, and failure to state reasons for admitting evidence or deleting additions makes the appellate decision non-speaking. The jurisdictional challenge fails, while the addition issues require de novo assessment after giving the assessee due opportunity.

Section 68 permits an unexplained-credit addition only where a credit is entered in the relevant previous year and the taxpayer fails to establish the investor's identity, creditworthiness and the transaction's genuineness. Confirmations, tax records, audited financials, banking trails and source-of-source material support those requirements unless contrary evidence discredits them. Repayment of an existing loan balance, without receipt of a fresh loan, does not create a relevant-year credit. An investor's accepted funding source may satisfy source-of-source requirements, while a Section 132(4) statement must specifically link the investor or transaction to an accommodation entry. A commission addition requires an independent evidentiary basis.

Section 68 requires an assessee receiving share capital to establish each investor's identity and creditworthiness and the genuineness of the transaction. Confirmations, tax returns, audited financial statements, bank records, share-allotment documents and evidence of immediate funding sources may substantiate that burden. Investor creditworthiness may be supported by loan repayments received from financially capable entities, liquidation of investments, and sufficient net worth. Banking-channel transactions and unrebutted documentary evidence remain material; low returned income or an investor's location alone does not disprove creditworthiness. The evidentiary requirement can extend to explaining the investors' source of funds.

Reassessment under Sections 148A(b) and 148A(d) requires consistency between the foundational allegation in the notice and the reasons supporting the determination that income escaped assessment. Where the notice alleged that a land purchase was unrecorded, but the subsequent determination accepted disclosure of the property and instead questioned the source of funds received from a holding company, the reassessment rested on an impermissible new ground. This divergence created a jurisdictional defect, rendering the reassessment invalid and liable to be quashed.

Documented IPO share acquisition through banking channels, demat credit, and screen-based stock-exchange sales with bank-received consideration substantiate the genuineness of share transactions for Section 68 purposes. Penny-stock characteristics, substantial price movement, general investigation material, and human-probability reasoning do not justify treating sale proceeds as unexplained cash credit without evidence linking the taxpayer to manipulation or accommodation entries. The claimed long-term capital gain remains accepted. A Section 69C addition for estimated commission expenditure also fails where the underlying transactions are genuine and no evidence establishes that commission was incurred.

Section 45(2) applies only when an owner converts a capital asset into, or treats it as, stock-in-trade of a business carried on by that owner. Entering a joint development agreement under which another party undertakes development does not, without evidence of conversion or real-estate business, alter the land's capital-asset character; the long-term capital-gains addition was therefore deleted. Business-income treatment of flats transferred to a spouse requires proof of a sale for actual consideration. Unrebutted affidavit and bank evidence of non-payment outweigh a sale-deed recital or value stated for duty purposes, so no taxable business income arose and the addition was deleted.

Limitation for notice under Section 153C is determined from the deemed date of search, fixed by the handing over of seized material to the assessing officer of the other person. The material was handed over on 17 September 2021. The proviso to Section 153C(3), read with Section 153(3), barred issuance of the notice after 1 April 2021. Consequently, the notice issued on 9 October 2021 was beyond the prescribed limitation period and was invalid for lack of jurisdiction, as was the consequential assessment.

Timely issuance and recorded service of a scrutiny notice within the statutory period preserve assessment validity where no evidence disproves service or identifies another mandatory breach. For unexplained-money treatment, possession creates only a rebuttable presumption of ownership. A consistent search-stage explanation that cash was held in safe custody for an employer, supported by the employer's cash book and audited accounts, rebuts that presumption unless the revenue discredits those records or proves personal ownership. The cash is therefore not assessable in the individual's hands as unexplained money, and the consequential special tax treatment does not arise.

Reassessment under sections 147 and 148 requires a legally sustainable reopening based on recorded information. Where the recorded reasons concern specified financial transactions but no addition is made on those transactions, an addition on unrelated surplus funds cannot be sustained. The absence of an addition on the issue forming the basis for reopening prevents reassessment from supporting a separate, unconnected addition; consequently, the reassessment and the surplus-fund addition are legally unsustainable.

Section 148 reassessment notices must state a definite jurisdictional basis. Treating an assessee alternatively as a searched person and another person leaves jurisdiction indeterminate and invalidates the notice. Section 151 approval requires genuine examination of the recorded reasons; an unexplained mismatch between the escaped-income figure in the reasons and approval demonstrates mechanical approval. These defects invalidated the reassessment proceedings and resulted in quashing of the assessment.

Section 54F relief depends on qualifying residential construction and actual net consideration, not merely the commercial description of the plot or the construction as a godown. Where co-owners hold the same transferred asset and new property on identical facts, consistent treatment is required; however, each co-owner's relief must be limited to the verified share of actual investment so that aggregate relief does not exceed the asset's actual cost. Deemed stamp-duty valuation under section 50C cannot replace stated sale consideration when calculating section 54F relief.

Prior sanction under Section 151 must be communicated to the Assessing Officer before a reassessment notice is issued under Section 148. Same-date approval is insufficient where the record establishes that the officer received sanction only after issuing the notice; the resulting reassessment and consequential assessment lack jurisdictional validity. A collective Section 151 approval covering multiple entities is also invalid for reassessment purposes. Notices founded on such consolidated approval, together with consequential additions, cannot be sustained.

Refund of a transportation advance is not an unexplained cash credit where documentary confirmation and ledger records establish the source and character of the receipt. Recording the refund under a slightly different transporter name created only a naming discrepancy and did not rebut evidence that the amount was returned against an earlier advance. The receipt therefore retained the character of an advance refund, and the corresponding addition was deleted.

Section 270A may be triggered where a return is first filed in response to a section 148 notice and assessed income exceeds the non-taxable threshold, but this does not create an automatic penalty. Income is excluded from under-reported income where the taxpayer gives a bona fide explanation and fully discloses material facts under section 270A(6)(a). Delay caused by statutory audit and a pending condonation application, coupled with figures accepted without adjustment and payment of tax and interest, supported deletion of the penalty.

Statutory valuation fiction under section 56(2)(vii)(b) permits substitution of stamp-duty value for stated consideration in assessment, but does not by itself establish concealment of income or furnishing of inaccurate particulars for penalty under section 271(1)(c). Penalty requires evidence that actual undisclosed consideration was paid or that disclosed purchase and payment particulars were false. Explanation 1 does not apply where the taxpayer's explanation is substantiated, bona fide and not found false. Acceptance of an assessment addition does not amount to an admission of concealment because assessment and penalty proceedings are distinct. A penalty notice remains valid where it specifically identifies concealment as the charge.

Uncorroborated survey statements, particularly disclosures based on pro forma accounts rather than actual books, cannot alone establish unexplained money where no unrecorded assets are found and audited books have not been rejected. Corroborative evidence is required before estimated income may be treated as unexplained money. Failure to upload a tax-audit report may be protected from penalty where the audit was completed within time and a bona fide technical lapse, including an auditor's illness, establishes reasonable cause.

Foreign tax credit under Section 90 is treated as a substantive entitlement not defeated by delayed furnishing of the prescribed form where Rule 128(9) imposes a deadline without prescribing denial as a consequence. Late filing is not included among the specified grounds for non-allowance of credit, supporting a directory construction of the procedural requirement. A computation that records available foreign tax credit in its annexures but enters nil credit in the calculation contains an apparent internal inconsistency. Such an error is capable of rectification under Section 154, followed by consequential recomputation of the credit.

Rejection of books of account under section 145(3) is permissible where primary books, bills and vouchers are not produced and the correctness or completeness of accounts cannot be verified. An audit report does not replace underlying records. Best judgment assessment after such rejection requires an honest estimate with a reasoned nexus to supporting material; rejection alone does not justify an arbitrary expenditure disallowance. Where no specific bogus or inflated expenditure, basis for the selected rate, or corroborative material exists, the quantum requires verification. Audited financial statements from adjacent years may be admitted as additional evidence for verification under the applicable appellate rules.