Business losses from a share broker's dealing errors were accepted as genuine and incurred in the ordinary course of broking, following detailed verification in reassessment. Consistency supported their deductibility because no factual or legal defect in the accepted claim was established. Proprietary securities-trading losses were also allowable where contract notes, global reports and transaction-wise records showed that derivative positions were squared off during the financial year. Compulsory cash settlement further confirmed that the losses were realised rather than notional mark-to-market losses on open contracts. Contemporaneous evidence establishing completed transactions prevails over a mistaken admission when determining whether a business loss is deductible.

Marketing expenditure supported mainly by self-made vouchers may not justify complete disallowance where it relates to ordinary client visits, entertainment, refreshments, travel and related sales activities, and audited books contain no adverse findings. The disallowance was restricted to a limited amount. Insufficient substantiation alone does not constitute misreporting of income under Section 270A(9) unless a specified statutory category, such as misrepresentation, suppression of facts, wholly unsupported expenditure or false entries, is established. As no such category was identified, penalty for misreporting was deleted.

Section 56(2)(viib) applies only where consideration is received for an actual issue of shares. Share application money received from a holding company and later converted into compulsorily convertible debentures, without shares being issued during the relevant year, does not attract the provision. A premium arrangement between a holding company and its subsidiary also does not confer the targeted benefit on an outside party. Genuine salary costs, finance charges and other necessary business expenses remain deductible even where no business income arises in the same year. Consequently, the share-premium addition and disallowance of business expenditure were deleted.

Revaluation of an existing tenancy right through book entries does not constitute unexplained investment where no new asset, funds, or consideration is introduced. Section 69 applies to unrecorded investments whose nature and source remain unexplained; a tenancy right continuously held since 1984 and merely revalued in the books does not meet that condition. Corresponding increases in the asset and partners' capital accounts reflect fair value rather than real income, particularly where no depreciation is claimed on the revalued amount. As revaluation involves no sale, relinquishment, extinguishment, distribution, or other transfer, it also does not amount to a transfer under Section 2(47).

Interest on borrowed funds advanced interest-free to a wholly owned special-purpose subsidiary for acquiring industrial land may be deductible where the advance serves genuine group business needs and commercial expediency. The subsidiary's start-up losses, board-approved interest holiday, and subsequent lease acquisition of the land supported the business purpose. Deductibility is assessed from the perspective of a prudent businessperson and does not require immediate profit or interest income. On the stated analysis, the interest expenditure was allowable under Section 36(1)(iii) of the Income-tax Act, 1961.

TDS credit under section 199 and Rule 37BA is available only to the person in whose hands the corresponding income is assessable. Where post-conversion business income was offered to tax by a partnership firm, an individual could not claim related TDS merely because deductors incorrectly reported the individual's PAN in Form 26AS. The firm may pursue the disputed credit through rectification proceedings, subject to verification that it offered the corresponding income to tax.

For benchmarking under the Transactional Net Margin Method, broad functional similarity supports inclusion of a manufacturing comparable where its functions remained unchanged and it was accepted in subsequent years. The arm's length price requires recomputation after including that comparable. Brought-forward business losses, although allowed while determining income, must also be reflected in the final tax-liability computation. The tax computation therefore requires revision to give effect to those losses.

Online gaming winnings are taxable only to the extent of real net gains after adjusting buy-in amounts, not on cumulative wallet credits representing deposits, redeployed funds, or intermediate transactions. The pre-amendment expression "income by way of winnings" requires identification of actual winnings before the deduction restriction applies. The later net-winnings framework for online games, including provisions on tax deduction and computation, is described as clarifying this principle. Where gross wallet credits are lower than buy-ins and result in a net gaming loss, no taxable income arises from gaming winnings; gross credits cannot be assessed as income.

Delayed appellate claims for statutory exemption may be entertained where substantial justice, the taxpayer's entitlement to lawful relief, and the appellate authority's power to admit a fresh claim support condonation. Compensation received by similarly situated BSNL employees under BSNL VRS-2019 qualifies for exemption under section 10(10B) where no distinguishing factual or legal circumstances exist. Taxable income should be recomputed after allowing the exemption, with any consequential refund granted in accordance with law.

Unaccounted sale-consideration additions require corroborative evidence beyond seized loose sheets, internal spreadsheets, broker material and chats. Where material does not identify purchasers, record cash receipts, or establish a cash trail, and purchaser affidavits denying cash payments remain unrebutted, estimated on-money additions cannot be sustained; varying unit characteristics also defeat uniform sale-rate estimation. Deemed rental income under Section 23(5) applies to eligible unsold units after the prescribed period from building-use permission, without excluding projects commenced before the provision took effect. In the absence of evidence of letting efforts or grounds to alter the accepted estimate, deemed rent at 3% of the value of unsold units remains applicable.

An employer complying with a subsisting interim judicial direction requiring leave travel concession reimbursements to be paid without tax deduction cannot be treated as an assessee in default under sections 201(1) and 201(1A). The direction treated the reimbursements as not constituting income for tax deduction purposes during the relevant assessment year, while preserving employees' tax liability if the writ proceedings failed. On materially identical facts, the applicable High Court decision established that compliance with the binding direction involved no actionable failure to deduct tax under section 192. Tax and consequential interest were therefore inapplicable.

A paper-form assessment order issued after electronic proceedings remained valid because section 282A permits paper orders to be signed, and any non-substantive procedural defect is protected by section 292B. Repair items for existing plant and machinery were revenue expenditure absent evidence of a new asset or enduring capital benefit, so the disallowance was deleted. Shop-floor consumables were allowable where purchase, issue and consumption records supported the accounting entries. Vendor advances written off for undelivered materials were allowable as business loss due to their business nexus. Relief-fund contributions were not deductible without proof that they were incurred wholly and exclusively for business purposes.

Cash found in employees' lockers was not assessable as unexplained money where the assessee established that it represented recorded sales of leftover construction material. Sales invoices, ledger and cash-book entries, buyer confirmations, audited accounts, inventory reduction and GST reporting supported the source. As the recorded sales, profits, stock and trading records remained accepted, and no positive evidence showed that the sales were false or the documentation fabricated, the conditions for an addition as unexplained money were not met. The addition was therefore deleted, applying the principle of consistency and requiring cogent material to reject an accounted source.

Salary payments exceeding the basic exemption threshold required tax deduction at source under the applicable salary-TDS regime. Payments to five persons, though claimed as commission, were recorded as salary, and the first year of business did not remove the withholding obligation. The resulting disallowance for failure to deduct tax at source was therefore valid against the assessee.

Reassessment notices lack jurisdiction where they rely on transactions, income details and PAN particulars of a different assessee, fail to satisfy the applicable monetary threshold, or do not record the required condition that escaped income is represented by an asset. Reassessment based on material obtained through a third-party search also requires prior approval from the competent authority under the amended reassessment procedure. Non-compliance with these threshold and approval requirements renders the proceedings jurisdictionally invalid and incapable of sustaining the related assessments.

Penalty for concealment under Section 271(1)(c) cannot survive where the underlying reassessment and the first appellate quantum order have been quashed. Reassessment proceedings were invalid because they were initiated without due application of mind; consequently, the assessment forming the basis for the penalty no longer subsisted. The penalty order therefore lacked an independent foundation and was quashed in favour of the assessee.

Investment in a new residential house qualifies for Section 54F exemption where an allotment letter records adjustment of the sale consideration towards a flat under construction and the allotment remains valid. Circular No. 471 treats allotment under a construction scheme as the relevant acquisition event; a later conveyance executed after stamp-duty payment does not, by itself, show that the house was not acquired or that exemption conditions were breached. The allowable Section 54F deduction is therefore to be computed in accordance with law.

Penalty for concealment of income or furnishing inaccurate particulars cannot rest solely on an ad hoc profit-rate addition for alleged accommodation entries. Where the addition was restricted to a nominal estimated percentage and the assessee furnished supporting records, including financial statements, tax records, bank statements and stock register, no material established concealment or inaccurate particulars. Penalty under Section 271(1)(c) was therefore set aside.

Compensation attributable to development rights transferred to a developer under a pre-existing binding Development Agreement does not accrue as taxable income to the land-holding entity where the developer holds the exclusive commercial interest, funded acquisition, and assumed the associated risks and obligations. Retention of legal title alone does not establish entitlement to the full compulsory-acquisition compensation. Payment to the developer discharges an overriding contractual obligation, provided the arrangement is genuine and consistently implemented. Taxing the same receipt in both hands would result in double taxation where the developer has offered it to tax.

Additions for alleged cash on-money payments cannot rest solely on adverse third-party statements that were neither supplied to the assessee nor tested through requested cross-examination; the addition was therefore deleted. The claimed deduction of interest income requires verification of the relevant income and applicable statutory conditions, and must be allowed if eligibility is established. The governing principle is that untested third-party material, withheld from the assessee despite a request for cross-examination, cannot validly support an addition.