For inherited property, fair market value as on 01.04.1981 may replace cost of acquisition under Section 55(2)(b) where no contrary material challenges the claimed value. Claimed improvement expenditure may be accepted when the Assessing Officer's estimate lacks a proper valuation exercise or reference under Section 55A and available valuation evidence supports substantial construction. Section 54 deduction covers capital gains actually invested in purchase or construction of a residential house by the extended return-filing date under Section 139(4); non-deposit in the Capital Gains Account Scheme by the Section 139(1) due date does not defeat the deduction. Capital-gains computation is accordingly revised using the substituted acquisition value, accepted improvement cost, and full residential-investment deduction.

Denial of an adequate hearing can vitiate assessment and appellate proceedings where assessment follows an incomplete response without awaiting the balance reply or granting a requested video-conference hearing. Additional evidence may be admitted under Rule 29 where it is relevant to effective adjudication and could not be produced earlier for reasons beyond the assessee's control. Deciding an appeal while remand verification remains pending, without a remand report, final hearing, or opportunity to address adverse findings, breaches natural justice. Surviving issues require fresh adjudication after adequate opportunity is provided.

Reassessment notices for assessment year 2015-16 issued on or after 1 April 2021 were required to be dropped under the applicable limitation regime, making a notice issued on 12 April 2022 time-barred and without jurisdiction. Reopening without verifying registered property documents and payment schedules also reflected non-application of mind where those records showed that the relevant payments had occurred earlier. Investment in immovable property must be assessed in the year in which payment is made; registration in a later assessment year does not shift the investment to that year. Accordingly, the reassessment and investment addition for assessment year 2015-16 were unsustainable.

Charitable registration requires a trust's exempt application of income to be confined to India. A trust deed permitting application of income for persons residing outside India is incompatible with that requirement, rendering the trust ineligible for regular charitable registration on its existing terms. Although a substantial filing delay was condoned on a reasonable and bona fide explanation arising from the absence of the person handling the trust's administrative and tax affairs, the registration rejection remained valid because the deed contemplated overseas application of income.

Employee stock-option settlement costs paid to a group entity upon allotment or conversion of stock units are treated as employee compensation incurred for business purposes and deductible as revenue expenditure under Section 37(1), where the corresponding vesting-period provision had been added back and no material factual change exists. For transfer pricing, an operating margin agreed in a Bilateral Advance Pricing Agreement for IT and IT-enabled support services may be applied to an otherwise uncovered Associated Enterprise transaction where the services, functional profile and circumstances are identical. The adjustment is consequently limited to aligning the uncovered transaction's margin with the agreed APA margin.

Actual write-off of pre-2006 NPA debts by a cooperative bank qualifies for deduction where no statutory provision for bad and doubtful debts existed under section 36(1)(viia); the provision-account limitation applies only to debts covered by that provision. Recovery of loans previously written off cannot be added again if it was already credited to profit and loss account and included in taxable income, as this would duplicate taxation. Disallowance of delayed employees' provident fund contributions requires verification of supporting details before applying the governing provisions and relevant Supreme Court ruling; the matter requires fresh determination.

Bona fide and uncontroverted explanations for delayed filing and non-participation may constitute sufficient cause where supported by statutory compliance. Missed communications sent to an accountant's registered email address, coupled with prompt action after discovery, supported condonation of the filing delay. Documents accompanying the registration application evidenced modification of the trust's objects, despite alleged non-production. Fresh registration sought after expansion of educational objects required reconsideration on merits. The application was restored for fresh adjudication after granting a proper opportunity of hearing, consistent with natural justice.

Registration under section 12AB requires examination of the trust's objects, the genuineness of its activities and material legal compliance. Refusal or cancellation under section 12AB(4) must rest on a definite, recorded finding of a specified violation within the statutory Explanation. Concerns regarding cash deposits, donations, expenditure and possible application of section 13(1)(b), without identifying a contravention of applicable law, do not establish such a violation. Contentions on the character and genuineness of activities and section 13(1)(b) require determination. A fresh inquiry into receipts, donor trusts, fund application, salary expenditure and legal compliance, with an effective hearing opportunity, is required.

Preference share capital cannot be treated as unexplained cash credit where the assessee establishes the investors' identity, creditworthiness and the genuineness of investments through share applications, banking records, confirmations, tax returns, financial statements and corporate records. Receipt through banking channels supported the transactions, while uncorroborated investigation statements could not sustain an addition without an effective cross-examination opportunity. In the absence of evidence that funds originated from and returned to the assessee through investor companies, and in view of consistent decisions on substantially identical transactions, the Section 68 addition was deleted.

Sales commission paid to an associated enterprise for sales support and representation was linked to actual sales and supported by a written agreement, purchase orders, supply instructions, export invoices and shipping records. The associated enterprise's role in procuring and coordinating export orders supported the commission's arm's-length nature, so a nil-value benchmarking adjustment was deleted. Trade receivables arising from transactions accepted under TNMM did not warrant separate notional-interest adjustment where working-capital adjustment addressed delayed realisation, no interest was charged to either associated or unrelated parties, and no differential credit benefit or determinable notional income was established. Both transfer-pricing additions were unsustainable.

Section 80IA(5) governs computation of eligible undertaking profits but does not confine the resulting deduction to business income; sections 80A and 80AB permit deduction up to gross total income, subject to the statutory ceiling. Interest for delayed provident fund remittances under section 7Q is compensatory and deductible, whereas damages under section 14B are penal and disallowable. Reversal of a previously disallowed sick-leave provision requires verification to prevent double taxation. Section 14A read with Rule 8D cannot disallow expenditure where no exempt income arose; the Finance Act 2022 Explanation applies prospectively.

For Assessment Year 2024-25, a resident individual under the concessional tax regime in Section 115BAC(1A), with income within the prescribed threshold, may claim the Section 87A rebate against tax on short-term capital gains taxable under Section 111A. Section 87A contained no express exclusion for such gains, while Section 112A(6) expressly restricted rebate against specified long-term capital gains. That express restriction could not be extended to Section 111A. The later limitation effective from Assessment Year 2026-27 operates prospectively and does not affect the unamended position for Assessment Year 2024-25.

Exempt-income disallowance is confined to investments that actually generated exempt income during the relevant year, rather than all investments. CSR expenditure incurred by a statutory port authority under shipping guidelines remains allowable because the Companies Act CSR exclusion does not apply to a non-company. An actuarially certified one-time payment to address a superannuation-fund deficit is not subject to the ceiling for ordinary annual contributions, and direct pension payments are deductible. Software expenditure supported by invoices, banking payments and tax deduction cannot be rejected solely for the recipient's non-compliance. Accrual-based provisions for recurring, ascertained and audited liabilities are deductible.

A valid option for the new tax regime under Section 115BAC, once exercised by a taxpayer with business or professional income, continues for subsequent assessment years unless withdrawn under the prescribed proviso. Filing Form 10-IE and availing the regime in an earlier year, followed by continued assessment under that regime, establishes a subsisting option. An incorrect statement in a later return about the first year of exercise is a clerical error that does not negate the existing statutory option. Tax computation under the new regime therefore remains available for the relevant subsequent year.

Section 12AB registration requires examination of charitable objects, genuineness of activities and legal compliance material to those objects; unverified regulatory allegations or accounting discrepancies do not justify refusal unless they objectively show non-genuine or non-charitable activity. Funding arrangements, institutional autonomy, contributions, scholarships and any admissions nexus require evidence-based verification. Cancellation of an existing registration must proceed separately under section 12AB(4), with the specified violation and hearing requirements, and cannot be effected through a renewal decision. Where section 80G(5) approval depends on the registration determination, it requires fresh consideration alongside the renewed section 12AB enquiry.

Alleged bogus-purchase additions were unsustainable where invoices, transport and e-way bill records, supplier confirmation, banking-channel payments, GST material and stock records substantiated the transactions, while corresponding sales and books remained undisputed. Subsequent cancellation of the supplier's registration and general information could not displace contemporaneous evidence without effective contrary inquiry. Reconciled purchase and sale transactions also did not support additions for estimated gross profit, unexplained expenditure or alleged unexplained GST where no fictitious dealings, cash return, or unexplained money was established, books were not rejected, and no specific response opportunity was provided for the GST component. Penalty for under-reporting or misreporting could not continue after deletion of its sole quantum basis.

Delay caused by tax communications being sent to a consultant who was severely affected by COVID-19 and later died may be condoned where the assessee did not deliberately default. Substantial justice should prevail over technical limitation objections when no material establishes wilful delay. Where a penalty order was passed ex parte and the first appellate authority rejected the appeal only as time-barred without examining the grounds, the penalty dispute should be restored for fresh adjudication on merits after providing reasonable opportunity. No conclusion is reached on the validity of the penalty itself.

Article 12(4) of the India-Singapore tax treaty treats services as fees for technical services only where technical knowledge, experience, skill, know-how or processes are effectively made available, or a technical plan or design is developed and transferred. Continuing research management support that leaves the recipient dependent on the provider does not meet this test; incidental advisory, managerial or technical benefit is insufficient. Accordingly, such fees are not taxable in India as fees for technical services where no permanent establishment exists. Retrospective limitation provisions governing assessments nevertheless apply, so the assessments are not time-barred.

Share application money and share premium cannot be treated as unexplained cash credit where corporate records, confirmations, tax returns, financial statements, bank records, allotment documents and valuation material establish the investors' identity, creditworthiness and transaction genuineness. Investigation material alone does not displace such evidence without independent enquiry, identified defects or valuation examination. The later proviso requiring explanation of the investor's source of funds did not apply retrospectively to the relevant assessment year. The quantum of share premium, by itself, was insufficient to justify an addition under Section 68.

Foreign exchange fluctuation loss arising on year-end restatement of an external commercial borrowing used to acquire capital assets retains a capital character. Subsequent conversion of the borrowing into equity shares does not alter the character of the loss. Where the borrowing was obtained from a parent company for capital purposes, the resulting exchange loss is not allowable as a business-revenue deduction. Consistency with the treatment adopted in earlier assessment years applies where no distinguishing facts or change in law exists.