“Section 35(4)”

The Supreme Court holds that legislative intent must be ascertained by reading the statute as a whole, construing one provision with reference to others to ensure a consistent enactment. Courts must consider the entire statute and its setting, not just the specific clauses, even if the language used has some inexactitude.

Additions to income cannot be made solely based on entries in seized material, such as loose papers, found at a third party's premises. Independent corroborative evidence, specifically proving the actual transfer of money, is essential to sustain such additions during search assessments.

Disallowance under Section 14A cannot be made if the assessee has not received any exempt income during the relevant assessment year. The mere possibility of earning exempt income does not trigger disallowance.

Section 44AB (tax audit) does not apply where the assessee is not engaged in a business or profession and consequently has no income under the head 'profits and gains from business or profession'.

A statement recorded under Section 132(4) of the Income-tax Act during a search operation carries significant evidentiary value, and its subsequent retraction is only valid if supported by cogent reasons and evidence of coercion or falsehood.

Natural justice, including the right to a reasonable opportunity of being heard, must be afforded to the assessee, especially when a rectification order enhances the assessment.

The Assessing Officer cannot disregard the decision of the designated authority (DSIR) regarding scientific research and development (R&D) expenditure. Disallowance of weighted deduction under section 35(2AB) solely because the amount was not approved by DSIR is unsustainable.

Disallowance of expenditure under Section 14A requires a proximate cause establishing the relationship between the expenditure and the exempt income. The expenditure must have a real, dominant, and immediate relationship with income not forming part of the total income.