Difference between an assessee's total personal capital and capital recorded in a partnership firm cannot be treated as unexplained credit merely through an incorrect comparison. Opening capital was reflected in returns for earlier assessment years, while the increase during the relevant year was supported by disclosed partnership profit share, remuneration and other recorded receipts. As no material rebutted the continuity and source of the capital, the addition under Section 68 was unsustainable and stood deleted.

Revision under section 263 requires a demonstrated error that is prejudicial to Revenue and cannot rest on reappreciation of material already examined during limited scrutiny. The ITAT found that reconciliations and supporting records addressed TDS credit, professional receipts and payout advances, including external-counsel amounts not constituting the assessee's income; revision was therefore invalid. The difference between Form 3CD and book expenditure was reconciled as gross TDS-reporting payments versus net expenditure, with no resulting prejudice; revision also failed on that ground. Expanding beyond the show cause notice through vague directions for broad verification constituted an impermissible roving reassessment. The revisionary order was set aside and the original assessment restored.

A section 54 deduction may be claimed in a return filed in response to a section 148 notice where it directly relates to the long-term capital gain assessed in reassessment. Reassessment may consider a deduction connected with escaped income and does not treat such a claim as an attempt to reopen unrelated concluded matters. Timely filing of an original return under section 139(1) is not a condition precedent to section 54 relief. The Assessing Officer must verify the substantive conditions for investment in a residential property and allow the deduction where those conditions are satisfied.

COVID-19 exclusion of limitation for judicial or quasi-judicial proceedings does not extend statutory due dates for furnishing TDS statements. Consequently, late-filing fee remains applicable under section 234E unless a specific statutory or administrative relaxation covers the relevant statement. Circular No. 12/2021 extended the due date for the final quarter of financial year 2020-21 to 15 July 2021, requiring recalculation of default for assessment year 2021-22, but providing no corresponding relief for assessment year 2022-23. Interest under sections 201(1A) and 220(2) remains payable where tax payment and conditions protecting against default are not established; waiver of section 220(2) interest lies before the prescribed authority.

Section 50C valuation requires an effective opportunity for the taxpayer to contest a Departmental Valuation Officer's report where the taxpayer has objected to stamp-duty valuation. Completion of assessment before receipt of the valuation report, without allowing objections on matters such as land access, comparable sale instances and adopted rates, requires fresh determination. The valuation-based addition was restored for reconsideration after examining the taxpayer's objections and any registered valuer's report.

Reassessment under sections 147 and 143(3) cannot be sustained where the section 148 notice is issued by an officer without pecuniary jurisdiction under CBDT Instruction No. 1/2011. For a corporate assessee in Delhi whose returned income fell below the threshold allocated to an Assistant Commissioner or Deputy Commissioner, jurisdiction lay with the Income-tax Officer. As the instruction binds departmental authorities, issuance of notice by the ACIT constituted a defect in the inherent authority to assume jurisdiction. The reassessment proceedings were therefore void and quashed.

Project receipts recognised under the consistently applied Percentage of Completion Method cannot be taxed again in the year of receipt to the extent already adjusted against revenue and offered to tax in subsequent accepted assessments. Verification is required to identify any unadjusted balance, which may be treated as income for the relevant year. Tax deduction at source on acquisition of development rights did not apply where the payment preceded the commencement of the relevant withholding provision, and the related disallowance provision had not yet been extended to such payments. Consequently, denial of the acquisition cost for non-deduction of tax was unsustainable.

Documented acquisition, holding and sale of listed shares through allotment, banking, demat and broker records support a long-term capital gains claim where the shares were held for more than one year, sold through the stock exchange and subjected to securities transaction tax. General allegations that a scrip was a penny stock, abnormal price movements, or adverse investigation material do not by themselves establish that the transaction was fictitious. A cash-credit addition requires cogent assessee-specific material linking the taxpayer or broker to price manipulation or accommodation entries; absent such evidence, the documented sale proceeds cannot be treated as unexplained cash credit.

Cash deposits were not established as sales receipts during the demonetisation period because complete corroborative evidence and a verifiable nexus with recorded sales were lacking. The double-taxation claim could not be accepted on the available material, and treating the deposits as unexplained cash credit was not inherently unjustified. However, bank statements and remand material had only partly been examined, and the estimated cash-in-hand acceptance was not correlated with verifiable records. The addition was therefore restored to the Assessing Officer for fresh adjudication after allowing the assessee to provide supporting evidence.

Possession granted under a joint development agreement solely for development, without conveyance, title transfer, monetary advance or part performance, does not constitute a taxable transfer. Capital gains arise on receipt of constructed flats under the special regime, with stamp-duty value of the built-up area forming consideration; the flats may qualify as residential-house investment for exemption. On subsequent flat sales, acquisition cost should match the value adopted at the first stage, and the holding period runs from the occupancy certificate. Deemed rental income provisions do not apply to unsold flats held as capital assets rather than stock-in-trade.

Rectification under section 254(2) extends to patent omissions and manifest inconsistencies, not a review on merits. Where an order records material on residential status and consequential foreign income but leaves those grounds undecided, and gives inconsistent foreign-tax-credit directions, the issues may be restored for fresh adjudication. Residential status is central to determining whether foreign income is chargeable in India and the eligible credit. Foreign tax credit cannot be denied solely because Form No. 67 was filed with a belated return before processing; the filing requirement is treated as directory, with Rule 128(9)'s amendment regarded as clarificatory. Eligible credit requires re-examination after determining residential status and taxable income.

An appeal must be filed before the Tribunal Bench having territorial jurisdiction over the appellant's registered office. As the registered office fell within the Cuttack Bench's jurisdiction, filing before the Hyderabad Bench was not maintainable. No statutory provision permitted the Hyderabad Bench or its Registry to transfer the appeal to the competent Bench. The stated delay was also unsupported by sufficient cause for condonation.

Section 80JJAA permits a deduction of 30% of additional employee cost for three assessment years, including the year in which eligible employment is provided, subject to prescribed conditions. A third-year deduction claim cannot be disallowed solely because employee strength did not increase during the relevant previous year, particularly where the deduction was allowed in the preceding years and adjusted for employees who left employment. Eligibility nonetheless requires verification of the statutory conditions, supporting report and relevant earlier appellate finding. The claim was remitted for limited verification, with deduction to be allowed if eligibility is established.

Reassessment initiated on the incorrect premise that no return was filed is invalid where the return disclosed the property transaction and the Department had already examined it through AIR information. Explanation 2(a) to section 147 could not apply on those facts, and reassessment required fresh material rather than a renewed examination of the same transaction. Section 50C substitutes stamp-duty value for declared consideration but does not independently establish income escaping assessment. The section 148 notice was therefore void ab initio, and the reassessment failed.

Completed unsold units held as stock-in-trade may attract notional rental income under section 23(5) after the prescribed vacancy period where completion and occupation certificates have been obtained and the units are not work-in-progress. Identified units for which advances have been received, without final possession, may be excluded from the notional-rent base subject to verification of supporting details; where such material is first filed in appeal, Rule 46A verification is required. Annual letting value should be based on municipal ratable value rather than an ad hoc percentage of the cost of unsold stock.

The first proviso to Section 149(1) bars reassessment notices for assessment years beginning on or before 1 April 2021 if they were already time-barred under the erstwhile limitation regime. For assessment year 2015-16, the former six-year limitation expired on 31 March 2022, making the Section 148 notice issued thereafter invalid. Compliance with Section 148A procedures and exclusions or extensions under the erstwhile third and fourth provisos to Section 149(1) cannot override the first proviso or revive a barred notice. The reassessment order was therefore quashed.

Interest attributable to admitted bogus accommodation loans is not allowable because the underlying loans are non-genuine and their principal amounts were offered as income. Tax deducted at source from the interest payment is not itself interest expenditure and must be excluded from the disallowance. An estimated addition for commission on accommodation entries requires corroborative evidence of actual payment and quantum; it cannot be based solely on a presumption that commission would have been paid. Accordingly, interest is disallowed subject to exclusion of tax deducted at source, while the commission additions are deleted for all relevant assessment years.

Agricultural land demonstrably used for cultivation until transfer retained its agricultural character despite tenancy-law permission before sale and the purchaser obtaining non-agricultural permission later; gains on transfer were therefore not taxable as capital gains. Agricultural receipts supported by undisputed bills, recorded in the books and consistent with earlier disclosures could not be treated as unexplained income merely because they were omitted from the return. Share-sale profit remained taxable as long-term capital gain because the assessee did not hold the controlling stake or management of the company, defeating the basis for characterising the sale as a business venture. All three additions were deleted.

Cash payments towards credit-card dues were explained by frequent bank withdrawals and income returned from contract business under presumptive taxation. Where cash availability throughout the year is established and no specific mismatch or alternative use of withdrawn funds is shown, a direct date-wise correlation between each withdrawal and payment is unnecessary. Acceptance of presumptive business income also prevents rejection of the explanation that bank credits and withdrawals arose from that business, as taxing payments sourced from already taxed receipts would cause double taxation. The addition for unexplained money under Section 69A was deleted.

Corporate guarantees issued to wholly owned associated enterprises should be benchmarked at 0.5%, as bank guarantee charges and external borrowing rates are not comparable to lower-risk group guarantees. Outstanding cross-border receivables denominated in foreign currency should be benchmarked using the market rate for the repayment currency, namely LIBOR plus 200 basis points, after a normal 60-day interest-free credit period. Transfer-pricing adjustments for corporate guarantee commission and delayed associated-enterprise receivables are consequently recomputed using these arm's length parameters.