Demurrer-based limitation rulings cannot conclusively preclude an evidence-based determination where limitation depends on disputed facts. A demurrer tests pleadings on assumed facts and does not permanently admit those facts or prevent contrary evidence. Party autonomy in arbitral procedure remains subject to mandatory limitation law and cannot bypass the duty to dismiss time-barred claims. Under the setting-aside standard, only a severable direction making a preliminary demurrer finding final may be set aside where it denies a proper evidentiary opportunity and offends fundamental justice; the preliminary finding may otherwise remain intact.

VAT-paid hiring of modems and set-top boxes is treated as a deemed sale rather than a taxable service, excluding the related rental charges from service tax. Tax deducted at source by subscribers remains part of the gross consideration because it is deducted and remitted on the service provider's behalf; taxable value therefore includes that amount. CENVAT credit for service tax on bank charges is available where online banking records substantiate the charges and tax debit and permit departmental verification, despite the absence of a formal invoice. Bad debts written off do not represent actual receipts under receipt-based valuation; related valuation and service-category adjustment issues require fresh adjudication.

Section 44AD provides presumptive taxation without requiring the assessee to maintain books of account. Because section 68 operates on credits recorded in books, cash deposits cannot be assessed as unexplained credits where no relevant book entry exists. Restrictions introduced by an amendment concerning cash deposits under section 44AD do not apply to an earlier relevant assessment year. These considerations govern whether revisionary jurisdiction may be invoked on the ground that the original assessment was erroneous and prejudicial to Revenue.

Interest or dividend derived by a co-operative society from investments with another co-operative society qualifies for deduction under Section 80P(2)(d), provided both recipient and payer are co-operative societies within the statutory definition. Section 80P(4) excludes only an assessee that itself is a co-operative bank under Part V of the Banking Regulation Act; it does not disqualify a non-bank co-operative society merely because the payer is classified as a co-operative bank. Accordingly, a co-operative credit society that is not a co-operative bank may claim deduction on interest received from deposits with a registered co-operative society.

Section 80P(2)(d) permits a co-operative society to deduct interest income derived from investments with another co-operative society. Section 80P(4) prevents a co-operative bank from claiming the deduction in its own capacity but does not alter its status as a co-operative society registered under applicable co-operative societies law. Accordingly, interest earned by a co-operative society on deposits with co-operative banks qualifies for deduction under section 80P(2)(d).

Interest earned by a consumer co-operative society on deposits with a co-operative bank does not qualify for the deduction available for interest or dividends from investments with another co-operative society. A co-operative bank's regulated banking activity places it outside that beneficial deduction framework, except for a primary agricultural credit society. The deposit interest is therefore taxable. Expenditure directly connected with earning that taxable interest remains allowable, subject to verification of corresponding administrative or other expenses in accordance with law.

Head-office directors' remuneration and fees allocated to an Indian permanent establishment qualify as executive and general administrative expenditure under Section 44C where a certified turnover-based allocation remains within the statutory ceiling. Article 7 of the India-Singapore tax treaty permits deduction of permanent-establishment expenses incurred in India or elsewhere, subject to domestic-law limits. Section 44C operates independently of inconsistent provisions in Sections 28 to 43A through its non obstante clause. A common head-office expense allocation cannot be rejected merely because it is notional when it is properly certified and within the statutory limit.

Adjustment under section 143(1) disallowing exempt dividend income and interest on tax-free bonds requires fresh examination where the exemption claims have not been considered on their merits. The jurisdictional Assessing Officer must determine the claims afresh after allowing a revised computation and providing a reasonable opportunity of hearing. The disallowance cannot be sustained without adjudication of the exemption claims on merits.

Assessment proceedings substantially conforming to the Act remained valid despite an erroneous post-expiry reference to Sections 143(3A) and 143(3B), because notices, responses and a draft assessment order were present and Section 292B cured the defect. Stock held by separately recorded related concerns could not be attributed to the assessee, and reconciled stock at its premises could not be treated as excess where accepted books and stock records showed no defect; the resulting additions were deleted. Electricity consumption alone did not establish suppressed production or unexplained expenditure under Section 69C when audited records were unrejected and no corroborative evidence existed; that addition was also deleted.

Reasonable cause for delayed filing of a first appeal may arise from business losses, regulatory restrictions on activities, and disputes between partners. Where that explanation is established, the appellate authority should condone the delay and decide the appeal on merits under the appellate framework rather than dismissing it in limine. The appeal is restored for fresh merits adjudication after affording the assessee due opportunity.

Section 153C requires recorded satisfaction identifying seized material that pertains to the other person and bears on income for the relevant assessment year. Where the same Assessing Officer handles both the searched and other persons, separate satisfaction notes are unnecessary, but the recorded note must still establish that material-and-year nexus. Satisfaction limited to land-sale documents for assessment year 2010-11 could not support an unsecured-loan addition for assessment year 2012-13 based on a different bundle; the addition was therefore outside the valid scope of the proceedings and deleted.

Section 68 permits addition of an unsecured loan only where the credit remains unexplained. Information alleging that a lender provides accommodation entries, without verification of contrary banking evidence, does not by itself establish an unexplained cash credit. Where repayment through RTGS is supported by the lender's bank statement and remains neither verified nor disputed by the Revenue, the loan is not liable to addition under Section 68.

For AY 2020-21, section 143(1)(a) did not permit a processing adjustment to disallow a Chapter VI-A deduction; authority for such an adjustment applied only from AY 2021-22. Interest or dividend earned from a co-operative bank may qualify for deduction under section 80P(2)(d), because a co-operative bank is primarily a co-operative society, subject to verification of the interest particulars and eligible amount. Delay caused by bona fide pursuit of rectification may be condoned where it was unintentional and substantial justice outweighs technical considerations.

Section 68 requires an assessee to establish creditor identity and creditworthiness and transaction genuineness before unsecured loans or creditor balances may be treated as unexplained income. Confirmations, bank statements, income-tax returns, accounts and assessment records can substantiate unsecured loans. For trade creditor balances, ledger extracts, confirmation, audited accounts and banking records may establish advances received against land sales, absent contrary material linking the balances to unaccounted income.

A notice under Section 143(2) issued before filing of the return does not satisfy the mandatory requirement for a statutory notice after the return is filed. Where no fresh post-return notice is issued, the resulting jurisdictional defect renders the assessment void ab initio. Binding precedents applied by the appellate authority support this consequence, and the assessment cannot be sustained.

Section 14A disallowance cannot be sustained by relying on interest expenditure that was not claimed, notwithstanding exempt dividend income. Additions for unrecorded profit and out-of-books property investments require corroborative evidence; bald loose-paper entries that do not identify the land, seller, date or nature of transactions are insufficient, particularly where no evidence of purchase or development exists. Receipt of shares under a documented gift was not taxable under Section 56 for the relevant year because the relied-on amendment applied only from 1 January 2009. The disputed additions for the three assessment years were accordingly deleted.

Work-in-progress previously disclosed and accepted on scrutiny cannot support a recast trading account where books have not been rejected; the related addition was deleted. For incomplete real-estate projects, consistently applying the completion-of-work method requires profit recognition in the relevant years, and an estimated gross-profit addition in an intervening year would result in double taxation; those additions were deleted. Profit from sale of a flat recorded as a fixed asset, rather than stock-in-trade, is taxable as capital gains and not business income. The deletions concerning work-in-progress, project profits and the flat sale were sustained.

Reassessment initiated after four years requires fresh tangible material supporting a belief that income escaped assessment and an allegation that the assessee failed to make full and true disclosure of material facts. Examination of an increase in capital, without new material before the Assessing Officer, does not meet the jurisdictional requirement for reopening a scrutiny assessment. In the absence of an allegation linking escapement to inadequate disclosure, the conditions for reassessment were not satisfied. The reassessment and consequential assessment were quashed.

Consequential assessment following revision under section 263 is limited to matters within the revision order. Additional claims for bad debts written off and for provision for bad and doubtful debts, where they do not arise from the consequential assessment, cannot be admitted in those proceedings. The claims were therefore rejected as outside the permissible scope of the consequential assessment.

Search additions require seized material that identifies the taxable event, parties, transaction nature and purpose, and relevant assessment year; vague loose sheets and unverified employee statements cannot, without corroboration, support unexplained-income additions. Presumptions for seized records establish genuineness but do not permit speculative readings of cryptic entries. Payments recorded in books or through banking channels are not unexplained, and entries must be assessed, if at all, in the correct assessment year; unsupported expenditure may remain taxable. A sales abstract reconciled with books and bank receipts does not establish suppressed turnover. Income and related expenditure or investment arising from the same material may be telescoped to prevent double taxation. Mere receivables, cheques, or promissory notes without linkage or actual accrual do not establish taxable income.