“Section 215(3)”

A sworn statement recorded under Section 132(4) during a search and seizure operation is a strong piece of evidence for assessing undisclosed income, particularly when supported by subsequent actions like filing returns and paying taxes on the admitted income.

A loss of tax incurred by the Revenue is considered prejudicial to the interests of the Revenue. This interpretation is key for invoking the revisionary powers under Section 263.

The law declared by a High Court is binding on all subordinate authorities and tribunals within its territorial jurisdiction.

Interest on arrears of tax is compensatory in nature, not penal, and is therefore an allowable deduction under the Income-tax Act. This decision reversed a previous Full Bench ruling.

This case establishes that a statutory amendment, specifically Section 9(1)(ii) relating to income deemed to accrue or arise in India (salary for services/leave), applies prospectively from its effective date, such as April 1, 2000.

Interest under Section 215 of the Income Tax Act is not leviable if tax was deductible at source but was not deducted by the payer. The liability for advance tax on interest income and the corresponding interest liability for non-payment arises only when the payer has failed to deduct tax at source.

Interest on borrowed capital used for purposes not directly related to the assessee's immediate business, such as providing interest-free advances or investing in a subsidiary's shares, is not deductible under Section 36(1)(iii) due to a restrictive interpretation of "for the purposes of business."

Interest derived by a cooperative society from its investments, other than those in cooperative societies, is eligible for deduction under section 80P(2)(a)(i). The denial of this deduction by the CIT(A) is unsustainable.