“Section 266(3)”

The Revenue cannot take a conflicting stand from what it had earlier accepted in a previous assessment year without compelling justification. This principle of consistency applies to various issues, including the treatment of customs duty in closing inventory.

When the provisions of a fiscal statute are unambiguous, they must be interpreted strictly, and benefits not explicitly provided cannot be conferred by ignoring or misinterpreting the clear words in the section.

The court interprets the law as it is and cannot legislate by adding or subtracting from a statutory provision. Legislative casus omissus cannot be supplied by the judicial interpretative process, as it is for the Legislature to amend the law.

The Supreme Court holds that income tax is levied on real income, not on hypothetical or notional accrual. For income to be taxable, it must genuinely accrue or be received, taking into account the realistic probability of its realization.

Rental income earned by letting out a property predominantly as bare letting is assessable under the head 'Income from house property', even if the assessee is the owner.

Expenditure incurred for painting, re-laying of damaged floors, partitions, and other improvements on leased premises is revenue expenditure deductible under Section 37(1) of the Income Tax Act.

The annual value of a property lying vacant is to be assessed at 'NIL' in terms of Section 23(1)(c) of the Income Tax Act, 1961.

The appellate authority's power to enhance income is restricted to the income that was the subject-matter of the assessment by the Income Tax Officer.