“Section 10(6)(ii)”

Reopening assessment based on a mere re-look of accounts already furnished and assessed under section 143(3) is not permissible if there was no failure on the part of the assessee to make a true and full disclosure. The assessment cannot be reopened on the ground that income has escaped assessment merely by re-examining previously filed accounts.

A payment of bonus or commission is allowable as a business deduction under Section 36(1)(ii) unless it constitutes a distribution of profits or dividends, thereby distinguishing payments genuinely for services from those merely intended to escape taxation.

Where an expense is incurred for the purpose of acquiring a capital asset, and that asset is subsequently sold, the expenditure must be considered as part of the cost of acquisition of that asset for the purpose of calculating capital gains. This is because the expense forms an integral part of the cost of acquiring the asset, not an expenditure of revenue nature.

A notice for reassessment under section 148 is invalid if the Assessing Officer has no 'reason to believe' that income has escaped assessment, distinguishing between 'reason to believe' and 'reason to suspect'.

The Gujarat High Court held that evidence found in loose papers during a search under section 132(4A) can be used to make additions to income, provided it is corroborated. The court found that the assessee's case was squarely covered by its previous decision in CIT-II vs. Kantibhai Revidas Patel.