“Section 263(1)(c)”

Penalty under section 271(1)(c) for furnishing inaccurate particulars cannot be imposed for a mere disallowance, bona fide mistake, or inadvertent error, especially when relevant facts are disclosed in the tax audit report. The levy of penalty requires proof of intent to conceal income or furnish false particulars.

An expenditure does not automatically become capital in nature merely because it results in some enduring benefit for the assessee; it can be treated as revenue expenditure if incurred for genuine business purposes.

Discounts offered to distributors under a tightly controlled relationship constitute commission and are subject to tax deduction at source under Section 194H of the Income-tax Act.

Section 194H of the Income Tax Act, 1961, is not applicable on the discount extended to distributors of pre-paid services, as the distributor does not earn income at the time of purchasing pre-paid cards from the assessee. The assessee is not in possession of any income belonging to the distributor at that point.

Royalty involves a payment for the exclusive right to use something. Merely sharing information about a machine's design, even if tailored to a buyer's needs, does not constitute a transfer of an exclusive right to use, and therefore may not be considered royalty.

Revisionary jurisdiction under Section 263 of the Income-tax Act is barred if the issue in question is already pending appeal before the Commissioner (Appeals), as per Explanation 1(c) to Section 263.

An assessment order becomes erroneous and prejudicial to the revenue under Section 263 if the Assessing Officer fails to conduct a proper inquiry or investigation, even if the return appears prima facie correct. The Income-tax Officer has a duty to investigate and cannot remain passive.

Discounts allowed by a business to grow its operations in a competitive market are acceptable and cannot be disallowed. Expenses incurred for business growth in a competitive world are not to be disallowed.