Section 92B requires an international transaction to be established before advertising, marketing and promotion expenditure can be subjected to a transfer pricing adjustment. The Revenue must establish an agreement, arrangement or understanding with the associated enterprise; expenditure comparisons or incidental benefits alone do not suffice. The bright line test is not a prescribed method for determining the arm's length price. Reallocated management support costs included in a cost-plus charge must be considered alongside the corresponding service revenue. Section 92(3) restricts the application of transfer pricing provisions where the resulting computation would reduce income chargeable to tax.

Penalty for furnishing inaccurate particulars of income is invalid where satisfaction for that ground is recorded during assessment but the penalty notices specify concealment of income. Section 271(1)(c) of the Income-tax Act, 1961 distinguishes the two grounds, and penalty proceedings must correspond to the satisfaction recorded during assessment. Repeatedly specifying concealment in the notices is not a mere clerical defect curable under section 292B. Natural justice requires a penalty to be imposed only on a charge the taxpayer was called upon to answer.

Section 54F provides a deduction for qualifying investment in residential property, including a proportionate interest in properties jointly allotted to co-owners under a joint development agreement. Entitlement must be assessed individually for each co-owner. Different treatment of co-owners on the same material facts requires a distinguishing factual or legal basis. The deduction for a co-owner's proportionate interest is computed according to the statutory formula.

Interest awarded under Section 28 of the Land Acquisition Act, 1894 is an accretion to the value of acquired land and forms part of enhanced compensation as a capital receipt. Amendments to Section 145A of the Income-tax Act, 1961 do not change that character, so the interest is not taxable as income from other sources.

Prosecution for delayed deposit of tax deducted at source requires a judicious exercise of discretion under applicable CBDT directions, including consideration of reasonable cause and relevant remittances. Payment of the tax, interest and late filing fee before the show-cause notice and the TDS statement filing deadline is relevant to that assessment. The prosecution guidelines also specify periods for sanction and complaint. Prosecution after payment of tax and interest, where applicable guidelines have been disregarded, may amount to an abuse of process.

The character of a subsidy depends on its purpose, rather than solely on its form or the timing of receipt. A sales-tax incentive intended to attract capital investment is a capital receipt even when provided through a sales-tax exemption. The incentive schemes also sought to develop backward areas and core-sector industries and generate employment.

Gains from transferring debenture interest coupon strips held for more than twelve months are treated as long-term capital gains and qualify for deduction under section 54EC. Capital gains treatment applies to investment bonds transferred before maturity. The modified tax treatment under Circular No. 2/2002 applies prospectively to bonds issued after the circular, not retrospectively to bonds issued before it.

Exemption for income from citizen-service centres requires examination of the nature of the activity and the relationship between service charges and costs for the relevant year under Section 2(15). Fees, aggregate surplus or enabling powers alone do not establish that a public utility activity is commercial. If the commercial-activity proviso applies, the applicable receipts threshold must also be examined. Application of income under Section 11 is a separate enquiry; registration does not remove annual scrutiny, and the assessee bears the initial burden of establishing entitlement to exemption.

Approved resolution plans bind government creditors under Section 31 of the Insolvency and Bankruptcy Code, and Section 238 gives the Code priority over inconsistent laws. The clean slate principle protects the successful resolution applicant from pre-plan tax claims excluded from the plan; a reservation for statutory obligations does not revive an excluded income-tax claim. Reassessment provisions address income chargeable to tax that has escaped assessment and cannot be used to pursue the excluded claim or collect evidence against former management or third parties. Other lawful investigative avenues remain available without requiring the resolved corporate debtor to participate in reassessment.

Reassessment proceedings involve an order under Section 148A recording reasons that address the taxpayer's reply. Where the recorded reasons address the reply, a challenge based on its alleged non-consideration does not warrant interference with the notice. The taxpayer can submit a return and supporting documents for the Assessing Officer's consideration, with an appellate remedy available thereafter. The assessment remains to be completed in accordance with law.

Financial hardship raised by an applicant must be considered before an appellate authority rejects a stay application solely for non-payment of a stipulated deposit. Where the required deposit is 20% of the demand, rejection without considering the asserted hardship is unsustainable and requires fresh consideration of the stay application. The underlying statutory appeal remains pending.

An approved resolution plan binds governmental creditors under section 31 of the Insolvency and Bankruptcy Code, while section 238 gives the Code overriding effect. The clean slate principle extinguishes pre-plan tax claims not included in the approved plan, precluding reassessment of the corporate debtor for those claims. Reassessment under sections 147 and 148 of the Income-tax Act addresses income escaping assessment and cannot be initiated against the corporate debtor to gather evidence concerning former management or third parties. Other statutory inquiry powers remain available.

Section 149 distinguishes the ordinary three-year period for reassessment from the extended period, which requires alleged escaped income to meet the prescribed Rs. 50 lakh threshold. Exclusion of specified time and extension of a short residual period cannot be used to invoke the extended period when that threshold is unmet. Section 151 requires the sanctioning authority to independently consider the material, including the taxpayer's reply, the income involved and limitation. Reasons supplied later cannot supplement approval lacking contemporaneous consideration.

Section 54F provides a proportionate capital gains exemption where the cost of the qualifying residential house is less than the net consideration. The cost of an excluded residential unit cannot simply be added as taxable income. For the stay of recovery, the tax computation used the statutory proportion rather than adding the entire cost of the second unit. The stay was conditional on payment of 20% of the recalculated tax and covered the specified balance pending disposal of the statutory appeal and for four weeks thereafter. Entitlement to exemption for both units remained undecided.

Penalty under section 271(1)(c) for furnishing inaccurate particulars arose from the disallowance of management service fees claimed on a bona fide basis in accordance with observations in an earlier assessment. The appeal against the impugned judgment and order was dismissed because no good ground was found to justify interference with it.

Lottery winnings are treated as income from other sources rather than business income, and participation in a lottery draw is not a business activity. This distinction is relevant where lottery tickets are held as stock-in-trade in a business. Section 115BB prescribes a special rate of tax for income from lottery winnings.

Transfer pricing of advertising, marketing and promotional expenditure concerns the allocation of brand-building costs between a taxpayer and an overseas intellectual property rights proprietor. Other issues include disallowance under Section 14A of the Income-tax Act in the absence of exempt income and the use of seized material from other assessment years to make disallowances.

Rice husk composite board made from extracted fibres bonded with PVC resin is classified as fibreboard under heading 4411, rather than particle board, based on its composition, manufacturing characteristics and essential character. Indian Standard specifications are not mandatory for determining the primary tariff heading. Rice husk board attracts GST at 12% before 22 September 2025 and 5% from that date under the applicable rate entries. The classification and rates depend on the authenticity of the submitted materials.

Tea-and-accessory bundles sold for a single price are mixed supplies, rather than composite supplies, when the items are separately supplyable and not naturally bundled in ordinary business. Natural bundling depends on customer expectations, industry practice and whether accompanying items are integral to the supply. A mixed supply attracts the highest GST rate applicable to any component. Bundles with stainless steel spoons, plastic spoons or glass cups attract 18% GST and use HSN codes 82159900, 39241090 and 70139900, respectively. Tea and wooden honey dipper bundles attract 5% GST; where both components attract the same rate, either component's HSN code may be used.

Compostable polymer-based or biodegradable plastic substitute carry bags fall under residual HSN 39269099 in Chapter 39 because preceding headings contain no specific entry for them. Biodegradable polymer-based bags within Chapter 39 qualify for the 5% GST rate under Entry 319 of Schedule I, subject to the validity of their claimed biodegradability. An interim test report recorded biodegradation of the tested sample, but other tests remained outstanding.