Before 1 April 2023, section 151 required approval from the specified higher authority for a reassessment notice issued more than three years after the end of the relevant assessment year. Approval by a Commissioner did not satisfy that requirement, even where the notice recorded approval by the Principal Chief Commissioner. The exclusion provision inserted into section 151 with effect from 1 April 2023 applied prospectively and did not apply to a notice issued in 2022. Without the required approval, the notice lacked jurisdiction and the consequent assessment could not stand.

Unexplained expenditure under section 69C requires proof that expenditure was incurred and its source was unexplained; supplier invoice discrepancies alone do not establish both conditions. Business expenditure under section 37 requires a business purpose, and an increase in fees or comparison with prior turnover alone does not justify disallowance. Section 68 applies to credits, not loan repayments recorded as debits. Loan confirmations, financial statements and bank records can support the lender's identity, creditworthiness and transaction genuineness. Differences between GST and book turnover do not establish suppressed sales where commercial credit notes and customer ledgers reconcile them and no off-book receipts are shown. Payments by advertising agencies to newspaper publishers for publication do not require tax deduction where no separate production or consultancy work is identified.

Under Section 144C, the Dispute Resolution Panel cannot enhance income by introducing a wholly new source arising after and absent from the draft assessment order. The applicable Revenue appeal provision requires a Panel direction, not merely refusal to entertain a fresh proposal. Foreign-currency loans to associated enterprises require currency-specific benchmarking rather than domestic rupee rates or unsupported risk premiums. For exempt-income expenditure, sufficient satisfaction permits Rule 8D; where own funds exceed relevant investments and no specific borrowing funded them, a presumption against interest attribution applies. Administrative expenditure is computed using investments yielding exempt dividends during the year; without evidence of error, the voluntary allocation remains the floor. Section 115JB requires exempt-income expenditure to be identified independently from the accounts; Rule 8D is not automatically incorporated into book profit. Borrowing costs for an overseas acquisition through subsidiaries may be deductible where commercial expediency establishes a business nexus.

Transfer-pricing operating margins require comparability adjustments for material differences in capacity utilisation under the transactional net margin method, because fixed costs are spread over different production volumes. Capacity-utilisation information may be obtained from comparable companies to assess the adjustment. Operating-margin calculations also require consistent treatment of income and related expenditure: costs incurred to earn R&D fees treated as non-operating are excluded from operating costs.

The income-tax addition under section 56 arose from the difference between a property's stamp duty value and its purchase consideration. The approved valuer's report was admitted as additional evidence after the first appellate authority had not considered it because it was not furnished during assessment. A departmental valuation reference under section 50C had not been made despite the taxpayer's request. Fresh assessment was directed with consideration of both valuation reports and an adequate opportunity of hearing; the correctness of the addition remains undetermined.

Reopening an assessment after four years requires approval from the Principal Commissioner or Commissioner under section 151; approval by a range-level authority does not satisfy that requirement. Income discovered during reassessment cannot be assessed independently if the income forming the recorded reason for reopening is not assessed. A commodity trading loss already added back in the return and carried forward, rather than set off against income, cannot be added back again without resulting in double taxation.

Under the substituted reassessment regime, Section 151 requires prior approval from the specified authority. Where more than three years have elapsed from the end of the relevant assessment year, approval must come from the higher authority specified in Section 151(ii), rather than the Principal Commissioner. Approval from a different authority does not confer reassessment jurisdiction, affecting the Section 148A order, the Section 148 notice and the consequential reassessment order.

Section 80A requires the relevant Chapter VI-A deduction to be claimed in the return; a later letter with an audit report does not satisfy that requirement. For the electricity business concerned, the sector regulator prescribed capitalization of 10% of employee costs. Under the applicable precedent, late payment surcharges in electricity bills do not accrue as income. Regulatory revenue gaps recoverable through future tariffs are not accrued income without reasonable certainty of recovery, notwithstanding accounting recognition. Bad debt write-offs do not require separate proof that debts have become bad. Section 41 requires remission or cessation of a liability, not merely stale cheques or unmatched deposits. An arm's length adjustment cannot rest on an ad hoc percentage without market comparables under prescribed methods. Excess subsidy held for eligible consumers and adjustable against later bills is not the business's income.

Satellite transmission receipts are not taxable as equipment or process royalty under domestic law or the India-Singapore tax treaty where customers receive access to bandwidth but no right to use the satellite or its embedded process. The operator retains control of the satellite and transponder, and the substance of the arrangement governs its characterisation rather than the leasing terminology used in the agreements. Retrospective amendments to domestic law do not alter the treaty definition of royalty.

Tax deducted at source does not support a refund claim through rectification after settlement under the Vivad-se-Vishwas Scheme where the claimed excess payment has not crystallised and no departmental order establishes it. Refunds for other assessment years adjusted against the demand after settlement must be verified against the settled liability. Any amount recovered after settlement in excess of that liability is refundable upon verification.

Interest under Section 28 of the Land Acquisition Act is an accretion to land value and forms part of enhanced compensation for capital gains purposes, unlike interest under Section 34. This treatment continues after the amendment to Section 145A of the Income-tax Act. Where compensation for compulsorily acquired agricultural land is exempt under Section 10(37), Section 28 interest is not taxable as income from other sources under Section 56(2)(viii) merely because of that amendment.

Transfer pricing for intra-group services requires prescribed benchmarking rather than a nil arm's-length price based on an assumption that an independent enterprise would pay nothing. Benchmarking examines service costs, allocations and transactional net margins; tested-party selection considers functions, assets, risks, relative complexity and reliable comparables, not foreign location alone. A qualifying transfer-pricing reference made during assessment proceedings extends the section 153 limitation period by twelve months; the draft assessment must still be forwarded within that period. Proposed prejudicial assessment variations require communication and an opportunity to respond. Where no exempt income is earned, a voluntary expenditure disallowance may be retained without a further disallowance; retrospective application of the statutory clarification to a fresh disallowance remains unsettled. A computation sheet gives effect to the assessment order and cannot independently create an addition.

Amended Section 147 permits assessment of income discovered during reassessment even when no addition is made on the original ground for reopening. Its Explanation dispenses with separate compliance with Section 148A for subsequently discovered issues. Penny-stock trading loss disallowance can turn on findings that transactions are colourable, including substantial differences between purchase and sale prices, price movements unrelated to company performance or the market index, and the absence of evidence rebutting those findings.

Penalty for non-compliance with an information notice is not warranted where a subsequent notice affords another opportunity to supply the same information, and the information is furnished and used before completion of assessment. In those circumstances, the initial non-compliance is treated as technical, even if the information is provided after the subsequent deadline.

Reassessment notice validity depends on delivery within the applicable limitation period. A notice dated 31 March 2021 but received by email on 1 April 2021 was invalid because the email evidence showed receipt after the deadline and the assessing officer's report did not establish earlier delivery. The reassessment was void from inception. The relevant precedent addressed changes to the reassessment notice procedure under the Income-tax Act, 1961, effective from 1 April 2021.

The addition for alleged bogus purchases does not survive: the disputed amount was not shown in the assessee's books, the assessing officer did not resolve the claim concerning the smaller purchase amount, and the requested remand report was not provided. Comparable accommodation-entry matters involved a 6% restriction, with no distinguishing facts identified. The smaller purchase amount was considered insignificant in the diamond trade.

Tax deduction at source is not required on harvesting and transportation charges paid on farmers' behalf if the charges form part of the purchase cost and are deducted from the price payable to farmers. These conditions require verification before determining any resulting disallowance. Irrecoverable advances supporting an overseas subsidiary established to extend the sugar business may be deductible as a business loss; direct payment to vendors does not itself negate commercial expediency or the business nexus. Bagasse transfer pricing may be supported by third-party quotations, an applicable electricity tariff adjusted for the relevant year and calculations based on the fair and remunerative sugarcane price. The central electricity tariff is not determinative against that material.

Revisional jurisdiction requires an assessment to be both erroneous and prejudicial to revenue. An assessment based on a legally sustainable view reached after inquiry cannot be revised merely because the revisional authority disagrees or revenue is lost. Section 54B requires agricultural use of the transferred land during the two years immediately preceding transfer and purchase of other land for agricultural use within the prescribed period. It does not require agricultural income to be declared in tax returns for those years. Sale deeds and land records may provide material concerning the agricultural land.

Foreign exchange gains or losses are operating in nature for transfer pricing only if they have a direct nexus with the international transaction. Gains from trade debtor realisations and creditor payments qualify where that nexus exists; exchange loss on fixed-asset purchases was excluded. Comparability requires assessment of functional profiles and business characteristics. Substantial intangibles, software product revenues, diversified activities without a sub-service breakdown, and training activities were relevant to the exclusion of four companies. An earlier tribunal decision may be relied on where the relevant facts are the same. The assessee's margin remains subject to verification.

Misdescribing a revised draft assessment order as a draft assessment order does not warrant review as an error apparent when the undisputed basis of the decision remains unchanged. Section 144B of the Income-tax Act, 1961 required a revised draft assessment order before the final assessment. An earlier draft had been issued, but no revised draft was passed; the misdescription therefore did not justify review of the order quashing the assessment.