“Section 109(1)”

A working capital adjustment is mandated and a prerequisite for correctly determining the Arm's Length Price (ALP) under Rule 10B(1)(e) and Rule 10B(3) of the Income Tax Rules, 1962. This adjustment accounts for differences in working capital and outstanding receivables between the assessee and comparable companies.

Penalty under section 271AAB cannot be levied mechanically; the Assessing Officer must apply an independent mind, grant a hearing, and record satisfaction that the income genuinely falls within the statutory definition, which requires discovery of an unrecorded asset or income entry during search.

Unrecoverable trade advances, including loans to joint venture partners or advances against land, are allowable as a business loss incidental to trade under Section 37(1) of the Income Tax Act when written off in the books of accounts. Such losses are treated akin to bad debts eligible for deduction.

For a valid assessment under section 153C, the satisfaction note must contain reasons and the basis for concluding that seized documents belong to the assessee, especially prior to June 1, 2015, when the language of the section was 'belongs to'.

A return filed in response to a notice under Section 148 should be treated as a valid return, and an assessment made without issuing a notice under Section 143(2) is void.

Payments made for purchasing stock-in-trade or raw materials are considered expenditure for the purpose of Section 40A(3). This view is supported by decisions from multiple High Courts.

When an assessee fails to establish the genuineness of share price increases in penny stock companies within a short period, the AO can reasonably conclude that transactions are bogus and capital gains result from accommodation entries.

The reopening of a tax assessment under Section 147(b) is valid if based on factual information provided by an audit party that highlights a fact overlooked by the Assessing Officer, rather than a question of law.