Interest on borrowed capital is deductible where strategic investments to acquire or retain control in group companies form part of the taxpayer's business and are commercially expedient. Business purpose is not negated by low operational receipts or dividend income being separately classified. Where interest-free funds exceed the relevant investments or advances, those investments may be presumed to have been funded from interest-free sources without requiring a direct fund-wise nexus. Each assessment year remains independently examinable; acceptance of similar claims in other years or for group entities does not prevent scrutiny in the relevant year.

Souharda Sahakaris registered under the Karnataka Souharda Sahakari Act, 1997 qualify as co-operative societies for income-tax purposes where they provide credit facilities exclusively to members. Dealings with members retain the character of mutuality notwithstanding the character or number of associate members permitted under the bye-laws. Profits and gains attributable to member credit facilities, including income connected with that eligible activity, qualify for deduction under section 80P(2)(a)(i). The deduction extends to the entire eligible income derived from providing such credit facilities to members.

Section 263 revision is barred where the revisionary order is passed after the two-year limitation period running from the end of the financial year in which the assessment order was made. The revision also fails where the assessment had examined software arrangements, copyright rights, treaty treatment and relevant Supreme Court precedent before accepting that software-related receipts were not royalty. As no assessment error prejudicial to Revenue was established, the revisionary order was quashed and the original assessment remained undisturbed.

Penalty immunity requires an opportunity of hearing before an application can be rejected, and the rejection must identify the statutory conditions that remain unmet. Where the penalty order does not disclose non-compliance, the immunity application requires fresh consideration, including the taxpayer's compliance with prescribed conditions and any delay in filing Form No. 68. Income disclosed only in response to reassessment notice may constitute under-reported income where no original return was filed and no explanation is provided. If immunity is unavailable, penalty must be determined through a reasoned proceeding after a further hearing.

Reassessment after four years may be sustained where fresh survey information reveals possible accommodation entries or bogus transactions and the original assessment did not examine the relevant purchases and sales. Producing records alone does not establish full and true disclosure of primary facts concerning transaction genuineness, and reopening on such fresh material is not merely a change of opinion. Where alleged bogus purchases and corresponding sales arise from the same unsubstantiated dealings, the full purchase amount should not be added while sales are accepted. Taxable income should instead be estimated on turnover by applying a 5% gross-profit rate, after credit for profit already disclosed.

Internal TNMM is the appropriate method for benchmarking ITeS transactions where associated-enterprise and non-associated-enterprise segments perform broadly similar customer-care and technical-support functions. Segmental results prepared using allocation keys remain reliable unless specific defects in those keys or in the segmental analysis are identified; lack of audited segment accounts alone does not justify rejecting the internal comparison. Internal segmental financial data provides a more reliable basis than external comparables for applying TNMM, making substitution of External TNMM unsustainable.

Tax deduction at source under Section 194C applies to external development charges paid to an urban development authority where binding jurisdictional precedent governs their TDS character. A pending challenge before the Supreme Court does not displace that precedent, although implementation remains subject to the eventual outcome. Payments described as administrative charges connected with changes in beneficial interest and development rights require verification of their true character, the applicable government scheme, and resulting Chapter XVII-B obligations before TDS liability can be determined. Materially disputed payment character therefore requires fresh fact-based and legal examination.

Penalty for concealment or furnishing inaccurate particulars cannot be sustained where the statutory notice retains both charges without identifying the precise default, denying the taxpayer a definite charge to answer. A penalty order issued in the name of an entity that ceased to exist on amalgamation is also unsustainable, particularly where that status was disclosed and the underlying assessment in that name was quashed. Further, restriction of licence-fee expenditure does not establish concealment or inaccurate particulars where material facts were disclosed and no incorrect facts were asserted. These defects remove the jurisdictional and factual basis for penalty.

Cancellation of charitable registration under Section 12AB(4) requires a prior inquiry, satisfaction of a specified violation, and a notice identifying the relevant violation with a reasonable opportunity to respond. General notices that combine the inquiry and cancellation stages, or rely on allegations not put to the trust, do not meet that procedure. Cash deposits already accepted as disclosed fee income cannot establish non-genuine charitable activity. Alleged benefits to specified persons through asset-related payments fall for assessment under Section 13(1)(c), unless evidence establishes non-charitable application, diversion, or activities outside charitable objects; they do not alone constitute a specified violation warranting cancellation or refusal of renewal.

Faceless-assessment requirements under sections 144B and 144C do not invalidate an assessment made by the jurisdictional Assessing Officer where the faceless procedure does not apply and statutory assessment notices were issued. Best-judgment assessment and rejection of books under sections 144 and 145(3) require established material irregularities or substantial accounting discrepancies. In share-trading businesses, broker-ledger entries, contract notes and adjustments of sale proceeds against purchases may explain absent bank entries. Gross-profit estimates must address relevant material, identify accounting defects and rest on a rational, methodical basis suited to the business; unsupported profit rates cannot sustain an addition.

Trust registration requires both charitable objects and prima facie evidence that the trust carries on genuine charitable activities. Educational objects in a trust deed do not alone establish genuineness where accounts and responses fail to identify educational institutions operated or managed by the trust, statutory recognition, or verifiable details of students and staff. Leasing premises to another entity that runs an educational institution, and receiving lease rent, does not demonstrate the trust's own educational activity unless the trust establishes its charitable role or application of rental income to charitable purposes. Registration was therefore not grantable.

Tax deduction at source applies to external development charges paid to Haryana Shehri Vikas Pradhikaran. Statutory creation and performance of functions resembling governmental functions do not make the authority "Government" for the relevant statutory exclusion. Applying the jurisdictional High Court's binding determination, failure to deduct tax at source on those payments results in the payer being treated as an assessee in default.

Reassessment notices and consequential orders were invalid where the recorded reasons rested on unverified and factually incorrect information. For one assessment year, reopening proceeded on the false premise that the assessee had not filed a return, and transaction descriptions were ambiguous. For the other, the notice lacked transaction-wise and party-wise particulars, incorrectly characterised bank transactions and amounts advanced as undisclosed income, and relied on an unverified aggregate. A substantial later reduction in the alleged escaped income reinforced the lack of verification. These defects established non-application of mind both in recording reasons and granting statutory approval, requiring the notices and consequential reassessment orders to be quashed.

A BOT road-concessionaire may deduct a scientifically estimated provision for future major repairs when enforceable contractual maintenance obligations have accrued during the accounting year. Periodic repair duties, consequences of breach, and defect-cure obligations on termination establish a present business liability. Where the provision is based on a detailed and reasonably certain estimate, supported by subsequent actual expenditure, deferred quantification or payment does not make it contingent. The provision for major repairs is therefore an allowable deduction despite the expenditure being incurred in a later period.

Retired employees seeking exemption for leave encashment under the enhanced limit effective from 1 April 2023 may pursue statutory remedies under the Income-tax Act, 1961, including filing revised returns where available. The writ petitions were disposed of with liberty to use those remedies, while preserving all rights and contentions. No substantive determination of eligibility for the enhanced exemption or the availability of revised returns was made.

No pending assessment proceedings concerning the respondent left a writ petition challenging an advance ruling without any surviving matter for consideration. The High Court therefore disposed of the petition without adjudicating the challenge on its merits, while preserving liberty to reopen the matter if assessment proceedings concerning the respondent were subsequently found to be pending in fact.

Amounts already assessed or considered in an original assessment cannot support a further addition merely by being recast as bogus construction expenditure or fictitious long-term capital loss. Where reassessment concerns an issue examined under section 143(3), fresh information or material is required to support reopening. Concurrent factual findings that the amounts were already considered, coupled with the absence of new material, do not raise a substantial question of law under section 260A. The appellate deletion of both additions therefore remains undisturbed.

Retention of seized cash under Section 132B cannot continue after completion of the searched person's assessment where no demand relating to the cash was raised and the cash was accepted as belonging to a non-searched assessee. Reassessment proceedings subsequently initiated against that non-searched assessee do not preserve the statutory charge or justify continued withholding. Release of the net seized amount, after adjustment of the stated tax liability, was directed. Whether the cash could initially have been treated as self-assessment tax remains for determination in the admitted appeal.

Land-acquisition compensation payable under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is treated as not subject to income-tax deduction. TDS deducted from such compensation is refundable to legal heirs. Non-filing of returns for the relevant assessment year and the absence of a condonation application do not by themselves defeat the refund claim, where the heirs can seek condonation and file the prescribed return. On receipt of the required application and return, the delay should be condoned, the return processed, and the TDS refunded.

Classification of a co-operative bank's deposits as unsecured loans was challenged because the assessment entry conflicted with the balance-sheet treatment. The assessment order was quashed to enable the taxpayer to receive an opportunity before the assessing authority. The merits of whether the deposits could properly be treated as unsecured loans were left open, and revenue authorities may issue notice and conduct fresh proceedings in accordance with law.