Section 263 revision was unsustainable where the Assessing Officer had examined the Section 54F exemption claim and accepted that six flats formed one interconnected triplex residential unit. The same factual issue had been resolved in favour of treating the flats as a single residential house in an earlier assessment year. An assessment view consciously adopted after enquiry and supported by a plausible interpretation of "residential house" could not be replaced merely by a different view to establish an erroneous and revenue-prejudicial order. Judicial consistency required following the earlier coordinate-bench treatment on identical facts, rendering the revision order invalid.

Interest on borrowed capital incurred after completion of a real estate project and issuance of the occupation certificate is revenue expenditure where unsold flats are finished stock-in-trade ready for sale. Borrowing costs incurred up to project completion form part of construction cost, but capitalisation ends when the units are ready for sale. Section 40(a)(ia) does not require deferral of an otherwise allowable interest deduction until the flats are sold. Once tax is deducted and paid in accordance with its proviso, the interest is deductible in that previous year.

Rule 10CA prevents a transfer-pricing adjustment where the tested party's margin falls within the applicable interquartile range or statutory tolerance. Software development services and online advertisement support services therefore required no adjustment. Foreign-exchange differences on realisation of ITES export invoices require verification of their operational nexus, with corresponding comparable-margin adjustments where appropriate. Services Export from India Scheme scrip income is non-operating because it arises from a government incentive scheme rather than ITES operations. Virinchi Limited was excluded due to the insignificant scale of its ITES segment. Proposed changes to other comparables and alleged margin-computation errors require fresh FAR analysis, verification and reasoned determination.

Section 56(2)(viib) does not apply where shares are allotted as non-cash consideration for acquiring a business undertaking, because no money is received on issue. Receivables previously recognised as income and written off after non-recovery qualify as bad debts; student receivables cannot be partly disallowed on an unsupported ad hoc basis. No section 14A disallowance arises without exempt income. Reversal of unearned fees and related prepaid franchise fees is not taxable under sections 41(1) or 28(iv) without prior deduction or benefit. Loan processing charges are deductible business expenditure. Recipient taxation protects royalty payments from disallowance. Prior-period expenses require proof of crystallisation, while verification is required for claimed voluntary disallowance of expense provisions.

Capital gains on redemption of preference shares must be computed using the actual and ascertainable consideration received or accruing under Section 48. The redemption amount cannot be replaced with the price paid for equity shares of the same company because the shares carry different rights, and no applicable deeming provision permits substitution. Section 50CA was inapplicable for the relevant assessment year, while Section 50D did not apply because consideration was ascertainable. A higher cost-of-acquisition claim based on capital reduction, share consolidation and cost allocation requires fresh factual verification; it is not a pure legal issue arising from the existing record and cannot be admitted as an additional ground.

Penalty proceedings under Section 270A require a notice under Section 274 to identify the precise charge, namely under-reporting or the applicable misreporting limb. Notices referring generally to "under-reporting/misreporting" without specifying the statutory basis fail to clearly inform the assessee of the allegation and are not in accordance with law. Such defective notices invalidate the consequential penalty proceedings, resulting in deletion of penalties for both assessment years.

Reassessment for Assessment Year 2015-16 was time-barred because the first proviso to Section 149(1) preserves the pre-amendment limitation restriction for years up to Assessment Year 2021-22. The applicable six-year period expired on 31 March 2022. The fifth and sixth provisos, excluding time allowed or extended for a response under Section 148A(b), operate within the amended three-year and ten-year framework and do not enlarge the first-proviso restriction. As no extension to respond under Section 148A(b) was sought, the subsequent Section 148 notice was beyond limitation. A non-speaking special leave petition dismissal does not confirm lower-court reasoning or trigger merger.

Rejection of liquor-trading books is justified where proper accounts, stock registers, sale bills and supporting vouchers are not maintained, and reported net profit is below the range accepted in comparable businesses. Profit may therefore be estimated at 3% of stock put to use. Advertisement-display charges received from liquor companies for use of business-premises space constitute business receipts separate from core trading turnover. Where estimated trading profit is computed only on stock put to use and does not include those receipts, separate addition of the display charges as business income is justified. The estimated trading profit and separate treatment of display-charge receipts remain sustained.

Tax-deduction liability for leave travel concession reimbursements involving foreign travel does not arise automatically under Section 201(1). The Revenue must examine whether beneficiary employees have paid the relevant tax. Where a subsisting judicial direction prevented treatment of the reimbursement as income for tax-deduction purposes and placed any eventual tax liability on employees, compliance with that direction cannot create deductor default. On materially identical facts, consistency with a coordinate-Bench approach also supports deletion of demands under Sections 201(1) and 201(1A). A penalty under Section 271C founded solely on the quashed tax-deduction default has no independent basis and must also be deleted.

Bad-debt deduction for written-off commodity-trading receivables is allowable where the receivables arose from trading transactions, were previously offered as income, and were written off in the books; the possibility of later recovery does not defeat the claim, and any recovery is taxable when received. Computation of deduction for windmill units requires factual examination of whether head-office expenditure and depreciation on common assets are attributable to those units. The composition of such expenses, outsourced operational arrangements, and the use of common assets must be examined before allocating expenditure and determining eligible windmill profits.

The enhanced tax rate under Section 115BBE, effective from 1 April 2017 without express retrospective operation, does not apply to unexplained income surrendered for Financial Year 2016-17. Such income, including surrendered cash and gold treated as unexplained income, remains taxable at the pre-amendment rate, with applicable surcharge and cess. A bank cash deposit may be telescoped against cash surrendered during survey only after verification that the surrendered cash or recorded cash balance remained available and was not otherwise used. Credit should be allowed to the extent of available cash, preventing duplication of additions.

Section 80P deduction does not extend to interest on income-tax refunds, whose proximate source is statutory compensation for excess tax retained, or to interest on deposits with commercial banks, which is neither business income from the specified activity nor investment income from another co-operative society. Interest and dividends from investments with co-operative societies may qualify if verification establishes the investee entities' co-operative status and the statutory conditions. Excess contributions to an approved gratuity fund beyond the prescribed annual limit are not deductible. Interest paid for delayed deposit of tax deducted at source is not allowable as business expenditure. A challenge solely to initiation of penalty proceedings is premature and must be addressed in the separate penalty proceedings.

Penalty for failure to obtain a tax audit was not sustainable where GST was accounted for separately as a liability under the exclusive method and the taxpayer reasonably believed it was excluded from turnover for the tax-audit threshold. ICAI guidance recognises that no turnover adjustment is needed where tax is included in the sale price. Differing views on GST inclusion, coupled with the absence of deliberate, knowing, mala fide or contumacious non-compliance, established reasonable cause. The penalty was therefore directed to be deleted.

Depreciation on goodwill arising from amalgamation remains allowable where it was admitted in the amalgamation year, entered the intangible-asset block, and the opening written-down value became final without any change in facts, law, valuation, or block composition. Depreciation is mandatory once the statutory conditions are met, and the settled basis of the opening written-down value cannot be reopened in a later year. Vendor compliance expenses deducted from export proceeds are allowable where contemporaneous records establish their direct nexus with export sales. Deductions for retail-support activities, including promotional and display arrangements, need not be disallowed merely because separate invoices are unavailable when the amounts are supported by customer-program and remittance records.

Faceless reassessment jurisdiction under Sections 147 and 144B extended to the National Faceless Assessment Centre before Notification No. 18/2022 where binding CBDT directions under Section 119 required it to complete reassessments, subject to specified exclusions. The later Section 151A notification did not invalidate reassessments completed under the earlier faceless-assessment framework. Additions for cash payments and rent income made in an ex parte assessment required fresh appellate adjudication because the assessee's continuing mental illness prevented effective participation. The first appellate authority must provide three effective opportunities to furnish supporting material before deciding those additions on merits.

Bank deposits arising from xerox and fabric-trading transactions cannot be assessed in full as unexplained cash credits where the related withdrawals, transaction details and stock particulars indicate genuine business activity. Although handmade supporting bills were not accepted as reliable, taxation must be confined to the income element embedded in alleged bogus cash receipts rather than the gross deposits. Applying the presumptive-taxation standard, income is estimated at 8% of the cash receipts deposited in the bank account.

Domestic companies with turnover below the prescribed threshold are taxable at the 25% rate under the applicable Finance Act. Eligibility depends on the statutory conditions, not on an incorrect reference to section 115BA in the return. A mistaken provision cited while claiming the lower rate does not permit taxation at 30% where the Finance Act independently prescribes the 25% rate. The applicable rate must therefore be determined from the company's eligibility under the Finance Act.

Reassessment cannot be used to recharacterise property-sale proceeds already assessed as long-term capital gains as business income solely by revisiting the same assessment record. Where the original scrutiny considered the sale transaction and the property had consistently been shown as a fixed asset, an audit-driven reopening requires fresh tangible material establishing income escapement. A different view of the same facts is an impermissible change of opinion, rendering the reopening and consequential reassessment invalid.

Interest disallowances relating to unsecured loans required fresh adjudication because substantially similar issues for the preceding assessment year had been restored for de novo consideration. The outcome for that preceding year was material to determination for the relevant year. No view was taken on the merits, and the appellate authority was required to reconsider the matter after providing adequate hearing opportunity, together with the connected preceding-year proceedings.

Jurisdictional objections to reassessment, including challenges to notice, statutory procedure and disposal of objections, must be adjudicated before addressing additions on merits. Section 250(6) requires an appellate order to identify points for determination, decide them and provide reasons. The discretionary power to set aside a best-judgment assessment for fresh assessment does not remove this duty. The validity and effect of filings made through a deceased assessee's electronic account require record-based examination without a stated conclusion. A reasoned speaking order must determine the legal and jurisdictional grounds before any remand of merits.