Issues: (i) Whether the enhanced 60% tax rate under the amended Section 115BBE could be applied to surrendered unexplained income pertaining to Financial Year 2016-17 relevant to Assessment Year 2017-18; (ii) Whether the cash deposit of Rs.2,00,000 could be set off against cash surrendered during survey and available cash balance.

Issue (i): Whether the enhanced 60% tax rate under the amended Section 115BBE could be applied to surrendered unexplained income pertaining to Financial Year 2016-17 relevant to Assessment Year 2017-18.

Analysis: The amendment enhancing the rate under Section 115BBE from 30% to 60% was effective from 01.04.2017 and contained no express retrospective operation. The governing fiscal law for Financial Year 2016-17 was therefore the law in force at the commencement of the relevant assessment year. The surrendered cash and gold investment, though treated as unexplained income under Section 69A, arose during Financial Year 2016-17.

Conclusion: The 60% rate under the amended Section 115BBE was inapplicable; the surrendered income was taxable at 30%, subject to applicable surcharge and cess. This issue is decided in favour of the assessee.

Issue (ii): Whether the cash deposit of Rs.2,00,000 could be set off against cash surrendered during survey and available cash balance.

Analysis: The availability of surrendered cash and cash balance on the date of bank deposit, including whether it had been utilised or depleted in the intervening period, required factual verification. To the extent the deposit emanated from cash already surrendered and brought to tax, a separate addition would result in duplication.

Conclusion: The assessing authority must verify the available surrendered cash and cash balance and allow telescoping or set-off against the deposit to the extent the cash remained available and was not otherwise utilised. This issue is decided in favour of the assessee for statistical purposes.

Final Conclusion: The tax on the surrendered income is restricted to the pre-amendment rate, and the cash-deposit addition requires verification for appropriate credit of already surrendered cash.

Ratio Decidendi: In the absence of express retrospective language, an amendment increasing the tax rate operates prospectively and cannot govern income of an earlier financial year.

Issues: (i) Whether Cenvat credit on fuel oil received under duty-paid invoices can be denied to the recipient on the ground that the supplier's activity did not amount to manufacture; (ii) Whether the demand invoking the extended period was sustainable where the credit had been disclosed in ER-1 returns.

Issue (i): Whether Cenvat credit on fuel oil received under duty-paid invoices can be denied to the recipient on the ground that the supplier's activity did not amount to manufacture.

Analysis: Under the Cenvat credit framework, the supplier is responsible for assessing and paying excise duty, while the recipient must establish receipt, accounting and use of duty-paid inputs. As receipt and use of the fuel oil in manufacture were undisputed, the recipient was not required to reassess whether the supplier's process constituted manufacture under Section 2(f) of the Central Excise Act, 1944.

Conclusion: Cenvat credit could not be denied to the assessee by questioning the duty paid by the supplier; the issue is decided in favour of the assessee.

Issue (ii): Whether the demand invoking the extended period was sustainable where the credit had been disclosed in ER-1 returns.

Analysis: The Cenvat credit had been taken during 2007-08 and disclosed in the ER-1 returns. This disclosure negatived suppression of facts by the assessee, whereas the show-cause notice was issued only on 21.08.2012.

Conclusion: The extended period was unavailable and the demand was time-barred; the issue is decided in favour of the assessee.

Final Conclusion: The confirmed excise-duty demand is unsustainable both on the recipient's substantive entitlement to credit and on limitation.

Ratio Decidendi: A recipient of inputs under duty-paid invoices is entitled to Cenvat credit upon establishing receipt and use of the inputs, and cannot be required to reassess the supplier's duty liability; disclosed credit cannot support an allegation of suppression for invoking extended limitation.

Issues: Whether the applicants were entitled to bail in a prosecution for alleged fraudulent availment and passing of input tax credit.

Analysis: The investigation was complete and the complaint had been filed, while the trial had not commenced and was unlikely to conclude within a reasonable period. The alleged offences were triable by a Magistrate and carried a maximum punishment of five years. The evidence was substantially documentary, and no material indicated a likelihood of absconding, tampering with evidence, intimidating witnesses, or otherwise subverting the trial. Criminal antecedents alone, without exceptional circumstances demonstrating such risks, were insufficient to deny bail. Pre-trial detention could not be punitive and had to be assessed consistently with the presumption of innocence, personal liberty, and the right to a speedy trial.

Conclusion: Continued pre-trial custody was unwarranted, and the applicants were entitled to release pending trial on appropriate safeguards.

Issues: Whether the writ petition challenging an assessment under Section 63 could be entertained despite the statutory appellate remedy where determination of the jurisdictional objection required factual inquiry.

Analysis: Section 107 provides an efficacious first appellate remedy against an assessment under Section 63. Availability of such remedy is not an absolute bar to writ jurisdiction, which may be exercised for an ex facie illegality or jurisdictional error requiring no factual investigation. Whether transactions in the pre-registration period fall within Section 63 in the case of an existing registered person requires fact-finding and proper adjudication; the assessment order was therefore not ex facie without jurisdiction. The appellate authority also has statutory power to consider delay on sufficient cause.

Conclusion: The jurisdictional objection to the assessment was left open for determination in the statutory appeal, and the petitioner was granted liberty to pursue that remedy within six weeks.

Issues: Whether revision of the assessment under section 263 was valid where the assessment order failed to invoke the applicable deeming provisions for undisclosed investment and cash, apply the special tax rate, and initiate the corresponding penalty proceedings.

Analysis: An assessment order is erroneous and prejudicial to Revenue where omission to apply the correct statutory provisions results in non-levy or short levy of tax lawfully payable. The additions for excess cash consideration and undisclosed cash attracted sections 69B and 69A respectively, with consequential application of section 115BBE and consideration of penalty under section 271AAC. The omission to identify and apply these provisions demonstrated non-application of mind and justified revisionary jurisdiction under section 263. The direction for fresh inquiry and a reasoned reassessment was within the revisional authority's powers.

Conclusion: The revision under section 263 was valid; the assessment order was erroneous and prejudicial to the interests of Revenue. The issue is decided against the assessee.

Issues: Whether the challenge to the penalty proceedings on the ground that the Deputy Commissioner lacked jurisdiction should be entertained in writ jurisdiction despite an available statutory appeal.

Analysis: The applicable State circulars vested the Deputy Commissioner with authority to issue notice under the penalty provision and conferred jurisdiction in cases involving turnover above the prescribed threshold. The jurisdictional objection was not raised during the proceedings, in which the petitioner participated on merits. Although jurisdiction may be raised before a constitutional court at any stage, writ jurisdiction is discretionary; the petitioner was therefore directed to pursue the statutory appellate remedy.

Outcome: The writ petition was disposed of with liberty to avail the statutory appellate remedy; the period during which the writ petition remained pending may be claimed under Section 14 of the Limitation Act, 1963, subject to fulfilment of its requirements.

Issues: Whether penalty for alleged cash receipt in contravention of Section 269ST could survive after deletion of the quantum addition forming its sole foundation.

Analysis: The penalty was founded exclusively on the addition alleging that the assessee received cash through the producer entity. The quantum addition had been deleted on concurrent findings that the underlying transaction was between the producer and co-producer and that the assessee was not involved in it. A penalty under Section 271DA requires establishment of an actual cash receipt by the assessee in breach of Section 269ST; deletion of that factual foundation leaves no basis for the penalty. The presumptions under Sections 132(4A) and 292C were inapplicable because the seized material was recovered from the producer's premises, did not refer to the assessee, and was not supported by any admission from the assessee. The pending further appeal against the quantum deletion did not displace the binding effect of the existing appellate findings in the absence of a stay.

Conclusion: The penalty under Section 271DA was not sustainable and was rightly deleted, in favour of the assessee.

Issues: Whether expenditure incurred after purchase of a residential house on its reconstruction, renovation, alterations and improvements can be included in the cost of the new asset for exemption under Section 54F.

Analysis: Section 54F permits exemption by reference to the cost of the new asset and is intended to encourage investment in residential housing. The statutory expression does not confine qualifying investment to the bare consideration paid for acquiring a completed house. The accepted principle that the cost of land and construction may be aggregated for a newly constructed house equally supports inclusion of bona fide post-purchase construction and improvement expenditure. A purchased house may require additions, alterations or reconstruction to render it suitable for the assessee's residential requirements; its prior habitability or the scale of expenditure does not by itself exclude such expenditure. Expenses on items of personal comfort, rather than construction, would not qualify, but no such objection or doubt regarding genuineness arose here.

Conclusion: The purchase cost together with the genuine reconstruction and renovation expenditure constitutes the cost of the new asset, and the full deduction claimed under Section 54F is allowable.

Issues: Whether the entire alleged bogus purchases could be disallowed where payments, purchase and GST records, and corresponding sales were available, though adverse material existed against the supplier and transport documents contained discrepancies.

Analysis: The purchases were recorded in the books, paid through banking channels, reflected in GST records, and supported by invoices, delivery challans, stock and sales registers. Although the supplier was implicated in providing accommodation entries and deficiencies existed in transport documentation, the books of account were not rejected and the corresponding sales and turnover remained accepted. In those circumstances, disallowance of the whole purchase amount was unwarranted; only the profit element attributable to the unverifiable purchases was taxable. Having regard to the nature of business and documentary deficiencies, the profit element was estimated at 12.5%.

Conclusion: The addition was restricted to 12.5% of the alleged bogus purchases, amounting to INR 9,57,812, and the balance addition was deleted, in favour of the assessee.

Ratio Decidendi: Where corresponding sales are accepted and purchases are supported by accounting, banking and tax records, alleged bogus purchases may warrant taxation only of the embedded profit element rather than disallowance of the entire purchase amount.

Issues: (i) Whether interest income of a primary agricultural credit society qualifies for deduction under section 80P(2)(a)(i). (ii) Whether the disallowances for non-deduction of tax at source and the taxability of miscellaneous income required fresh verification.

Issue (i): Whether interest income of a primary agricultural credit society qualifies for deduction under section 80P(2)(a)(i).

Analysis: Jurisdictional High Court decisions establish that interest earned by a co-operative society on deposits of surplus profits, where the deposits are connected with and permitted or required by its lending business, retains the character of profits attributable to providing credit facilities to members. Such interest is distinguishable from income derived from funds belonging to members or otherwise lacking a nexus with the society's business. The claim nevertheless requires examination of the relevant factual details.

Conclusion: The claim for deduction under section 80P(2)(a)(i) is governed by the jurisdictional High Court rulings and is in favour of the assessee, subject to factual verification.

Issue (ii): Whether the disallowances for non-deduction of tax at source and the taxability of miscellaneous income required fresh verification.

Analysis: The disallowances were sustained because the requisite particulars of expenditure, tax deduction and miscellaneous income were not furnished. The assessee asserted that the show-cause notice was not served and that it consequently lacked an effective opportunity to provide the details. Fresh examination of the relevant records is necessary in accordance with natural justice.

Conclusion: The disallowances and taxability of miscellaneous income require fresh examination after the assessee furnishes the relevant details; this issue is remitted for adjudication in accordance with law.

Final Conclusion: The deduction claim must be considered consistently with the binding jurisdictional interpretation, while the related factual claims require verification on the materials to be produced.

Ratio Decidendi: Interest earned on deposits of surplus profits that remains attributable to a co-operative society's business of providing credit facilities to its members qualifies for the business-profit deduction.

Issues: (i) Whether Indian currency seized during investigation into fraudulent customs-scheme claims was liable to be treated as confiscable goods under Section 110(1) of the Customs Act, 1962 and released for want of notice under Section 110(2). (ii) Whether release of the seized currency could be directed in writ jurisdiction while the investigation into connected economic offences remained pending.

Issue (i): Whether Indian currency seized during investigation into fraudulent customs-scheme claims was liable to be treated as confiscable goods under Section 110(1) of the Customs Act, 1962 and released for want of notice under Section 110(2).

Analysis: Section 110(1) permits seizure of goods liable to confiscation, and Section 110(2) requires their return if notice under Section 124(a) is not issued within the prescribed period. Section 110(3), in contrast, permits seizure and retention of documents or things useful or relevant to proceedings without prescribing such period. Currency is goods under Section 110(1) where it is itself the subject of a customs violation, such as undeclared cross-border carriage. Currency seized as material connected with investigation into fabricated documents, illegal gratification and hawala transactions is a thing under Section 110(3), rather than confiscable goods under Section 110(1).

Conclusion: The seized currency was a thing under Section 110(3) of the Customs Act, 1962 and was not required to be released under Section 110(2); this issue was decided in favour of Revenue.

Issue (ii): Whether release of the seized currency could be directed in writ jurisdiction while the investigation into connected economic offences remained pending.

Analysis: The seizure arose from an ongoing investigation which disclosed possible violations extending beyond customs law, including offences concerning unaccounted funds, illegal gratification and related economic wrongdoing. Releasing material reasonably believed to be connected with such transactions before completion of investigation would preclude and foreclose effective investigation. Exercise of writ jurisdiction under Article 226 of the Constitution of India was therefore unwarranted to order release of the suspected crime proceeds at that stage.

Conclusion: Release of the seized currency during the pending investigation was impermissible; this issue was decided in favour of Revenue.

Final Conclusion: The currency may be retained as evidentiary material for completion of the investigation and is to be kept in an interest-bearing deposit with a nationalised bank pending its completion.

Ratio Decidendi: Currency seized as material evidence relevant to customs proceedings and connected economic-offence investigation constitutes a thing under Section 110(3), not confiscable goods under Section 110(1), unless the currency itself is the subject of the customs violation.

Issues: (i) Whether the Deputy Commissioner of State Tax lacked jurisdiction to issue the show-cause notice and impose penalty under Section 122 of the Uttar Pradesh Goods and Services Tax Act, 2017; (ii) Whether the writ petition should be entertained despite the available statutory appellate remedy.

Issue (i): Whether the Deputy Commissioner of State Tax lacked jurisdiction to issue the show-cause notice and impose penalty under Section 122 of the Uttar Pradesh Goods and Services Tax Act, 2017.

Analysis: The applicable State circulars identify the officer competent to proceed under Section 122 by reference to Section 127 and confer jurisdiction upon the Deputy Commissioner in cases involving turnover exceeding Rs. 2.5 crores. The Central circular concerning allocation of functions under the Central and Integrated GST enactments did not displace the State-issued jurisdictional framework. The petitioner had also participated on merits before the issuing authority without objecting to jurisdiction.

Conclusion: The issuing authority was prima facie not lacking jurisdiction; the issue is against the assessee.

Issue (ii): Whether the writ petition should be entertained despite the available statutory appellate remedy.

Analysis: Although a jurisdictional objection may be raised before a constitutional court at any stage, exercise of writ jurisdiction is discretionary. In the circumstances, including the absence of prima facie jurisdictional defect and the petitioner's prior participation in the proceedings, the doctrine of election warranted recourse to the statutory appeal.

Conclusion: The petitioner must pursue the statutory appellate remedy; the issue is against the assessee.

Final Conclusion: The challenge to the penalty proceedings is to be pursued through the prescribed appellate mechanism, with the period spent in the writ proceedings eligible for exclusion under the applicable limitation law, subject to satisfaction of its requirements.

Ratio Decidendi: Where the designated State tax officer has jurisdiction under the applicable statutory and administrative framework and an effective statutory appeal is available, discretionary writ jurisdiction need not be exercised merely because a jurisdictional objection is asserted after participation in the original proceedings.

Issues: Whether refund earlier re-credited as input tax credit could be paid in cash where the assessee had discontinued business and its Electronic Credit Ledger was non-functional.

Analysis: No statutory prohibition was identified against cash payment of the amount earlier directed to be re-credited as input tax credit. Since the assessee had ceased business operations and could not utilise the credit ledger, re-credit would confer no effective benefit.

Conclusion: The amount re-credited as input tax credit is to be refunded in cash to the assessee, with applicable interest, if any, in accordance with law.

Issues: Whether mandatory pre-deposit for a service-tax appeal under Section 35F of the Central Excise Act, 1944, may be paid by utilising CENVAT credit transitioned to the Electronic Credit Ledger under Section 140 of the Central Goods and Services Tax Act, 2017.

Analysis: Section 35F requires deposit of the prescribed percentage as a condition for entertaining an appeal but specifies no exclusive cash-payment mode. Validly earned CENVAT credit was available for pre-deposit under the earlier regime, and its transition under Section 140(1) preserved rather than extinguished that vested credit. Rule 142(3) recognises electronic payment of tax, interest and penalty through the prescribed mechanism. A pre-deposit, being an advance deposit of disputed tax, interest or penalty, can therefore be discharged from transitioned credit reflected in the Electronic Credit Ledger.

Analysis: The administrative instruction prescribing cash payment through a designated portal regulated only procedure and did not prohibit use of transitioned credit. It could not override the statutory scheme, binding judicial precedent, or the vested right in validly transitioned credit. Debit of the Electronic Credit Ledger and credit of the amount to the Government sufficiently secures Revenue's interest and fulfils the pre-deposit requirement.

Conclusion: Transitioned CENVAT credit reflected in the Electronic Credit Ledger is a valid source for payment of the mandatory pre-deposit under Section 35F in service-tax appeals; the petitioner's electronic-credit-ledger debit constituted valid compliance.

Ratio Decidendi: Where the statute prescribing pre-deposit does not mandate cash payment, validly transitioned input-tax credit may be utilised for that deposit, and an administrative instruction cannot restrict that statutory mode of payment.

Issues: Whether an ex parte adjudication based on a show cause notice uploaded only on the common portal warranted fresh adjudication.

Analysis: The impugned order was passed ex parte after the show cause notice was uploaded on the web portal. The applicable principle is that portal upload alone, without acknowledgement of receipt or a response from the assessee, is insufficient service for sustaining an ex parte adjudication. The proceedings were therefore required to be restored to the show cause notice stage, with an opportunity to file a reply and be heard. The adjudicating authority may also consider the stated proceedings concerning alleged fraud.

Conclusion: The ex parte adjudication cannot stand on service solely through portal upload; the petitioner is entitled to fresh adjudication after an opportunity to submit a reply and be heard.

Issues: Whether a delayed statutory appeal against cancellation of GST registration, rejected solely as time-barred, should be reopened for adjudication on merits.

Analysis: The adopted ruling recognizes that, although the Appellate Authority cannot itself condone delay beyond the statutory outer limit under Section 107, constitutional writ jurisdiction may be exercised in an appropriate case to prevent disproportionate hardship arising from denial of an effective appellate remedy. Cancellation of registration seriously affects the conduct of taxable business; where the delay is plausibly explained and no serious prejudice to revenue is shown, the merits of cancellation should be determined by the statutory appellate forum. Questions concerning the show-cause notice, service, cancellation and compliance are to remain open before that forum.

Conclusion: The delayed appeal shall be restored and adjudicated on merits without rejection on the ground of limitation.

Issues: Whether the Bright Line Test could sustain an adjustment for advertising, marketing and promotion expenditure.

Analysis: The Tribunal's rejection of the adjustment accorded with the binding decisions holding that the Bright Line Test is not a method sanctioned by law for determining an adjustment concerning advertising, marketing and promotion expenditure.

Conclusion: The advertising, marketing and promotion adjustment based on the Bright Line Test was rightly rejected, in favour of the assessee.

Issues: Whether the Tribunal could decide the assessee's appeal ex parte on merits without issuing and serving notice of the adjourned hearing.

Analysis: Rule 20 requires the Tribunal to fix the hearing with sufficient time for service of notice so that parties may appear and be heard. The matter had been adjourned on prior dates because the Tribunal did not function, and no notice of the hearing fixed thereafter was issued to the assessee. Proceeding to decide the appeal on merits without verifying service of notice constituted non-compliance with the Rule and resulted in failure of justice.

Conclusion: The ex parte appellate order was contrary to law and was set aside; the appeal was restored to the Tribunal for fresh adjudication after notice to both parties, in favour of the assessee.

Issues: (i) Whether unpaid GST liability not debited to the profit and loss account or claimed as a deduction could be disallowed under Section 43B; (ii) Whether disallowance of payments claimed as reimbursement of legal and professional expenses was sustainable under Section 40(a)(ia).

Issue (i): Whether unpaid GST liability not debited to the profit and loss account or claimed as a deduction could be disallowed under Section 43B.

Analysis: Section 43B governs the allowance of specified deductions based on payment. The GST amount represented tax collected from customers and remained an outstanding liability; it was neither routed through the profit and loss account nor claimed as expenditure. A disallowance cannot be made of a deduction that was never claimed.

Conclusion: The GST liability was not disallowable under Section 43B; the addition was deleted in favour of the assessee.

Issue (ii): Whether disallowance of payments claimed as reimbursement of legal and professional expenses was sustainable under Section 40(a)(ia).

Analysis: Although the payments to the Netherlands parent company were described in Form 15CA as reimbursement of expenses, no supporting material was produced to establish that they were actual reimbursements without any markup. The claimed character of the payments was therefore not substantiated.

Conclusion: The disallowance of the unsubstantiated reimbursement payments was sustained against the assessee.

Final Conclusion: The GST addition was removed, while the disallowance relating to the claimed reimbursement payments remained sustained.

Ratio Decidendi: A statutory payment-based disallowance cannot be invoked where the relevant liability has not been claimed as a deduction in computing income.

Issues: (i) Whether profits attributable to the Indian dependent agency permanent establishment should be computed at 15% rather than 8.75% of advertisement revenue; (ii) Whether arm's length remuneration of the dependent agency permanent establishment precluded further profit attribution; (iii) Whether credit for tax paid by the Indian dependent agency permanent establishment in relation to advertisement income was allowable.

Issue (i): Whether profits attributable to the Indian dependent agency permanent establishment should be computed at 15% rather than 8.75% of advertisement revenue.

Analysis: The earlier mutual agreement procedure rate of 8.75% applied only to the years covered by that arrangement and could extend to later years only where facts and the scope of activities remained unchanged. Survey material showed that the Indian permanent establishment performed functions beyond those disclosed in the transfer-pricing study report. A higher attribution was therefore warranted, but 15% was found excessive and based on estimation.

Conclusion: Profit attribution to the Indian dependent agency permanent establishment is restricted to 12% of advertisement revenue, in favour of the assessee.

Issue (ii): Whether arm's length remuneration of the dependent agency permanent establishment precluded further profit attribution.

Analysis: Further attribution is ordinarily unnecessary where arm's length remuneration reflects all functions performed and risks assumed. That principle does not apply where the transfer-pricing analysis fails adequately to reflect the actual functions and risks of the permanent establishment. The Indian permanent establishment carried out functions beyond those reported in the transfer-pricing study.

Conclusion: Arm's length remuneration did not preclude further profit attribution, against the assessee.

Issue (iii): Whether credit for tax paid by the Indian dependent agency permanent establishment in relation to advertisement income was allowable.

Analysis: Although the mutual agreement procedure did not bind years outside its express coverage, no material showed any factual basis to deny the credit where it had been accepted in principle for tax paid by the Indian permanent establishment in relation to advertisement income. Verification and quantification of the eligible credit remained necessary.

Conclusion: Credit for eligible tax paid by the Indian dependent agency permanent establishment is to be verified and quantified by the Assessing Officer, in favour of the assessee.

Final Conclusion: The attribution rate is reduced, the claim that no residual attribution could arise is rejected, and the tax-credit claim requires verification and quantification.

Ratio Decidendi: A mutual agreement procedure outcome does not govern unlisted assessment years where the permanent establishment's actual functions differ materially, and arm's length remuneration does not eliminate further attribution when the transfer-pricing analysis fails to capture those functions and risks.