Issues: (i) Whether reassessment initiated beyond four years, on the basis of Investigation Wing information and without independent enquiry, was valid; (ii) whether the additions treating share sale proceeds as unexplained credits and the related commission as unexplained expenditure were sustainable.

Issue (i): Whether reassessment initiated beyond four years, on the basis of Investigation Wing information and without independent enquiry, was valid.

Analysis: The original assessments had been completed under section 143(3) of the Income-tax Act, 1961 after examination of the relevant facts. The reasons recorded for reopening were founded on general Investigation Wing material relating to penny stock scripts, without specific material linking the assessees to any accommodation entry or showing any independent application of mind. In the cases where reopening was beyond four years, the reasons also failed to identify any specific primary fact that had not been fully and truly disclosed by the assessees. The reopening was thus held to rest on borrowed satisfaction, lacking tangible material and the necessary live link with alleged escapement of income.

Conclusion: The reassessment proceedings were invalid and the consequent reassessment orders were quashed, in favour of the assessees.

Issue (ii): Whether the additions treating share sale proceeds as unexplained credits and the related commission as unexplained expenditure were sustainable.

Analysis: The assessees had furnished contract notes, demat statements, bank records, broker ledgers, STT evidence and other contemporaneous documents to support the share transactions. The Tribunal found that the sale proceeds had already been taken into account in the declared capital gains or losses, and therefore taxing the entire sale consideration again would amount to double addition. It also found that the Revenue had not produced any specific material showing the assessees as beneficiaries of the alleged penny stock scheme, and no defect was established in the documentary evidence. Once the share transactions were accepted as genuine, the consequential commission additions could not survive.

Conclusion: The additions under sections 68 and 69C were deleted, in favour of the assessees.

Final Conclusion: All the connected appeals were allowed, with both the reassessment jurisdiction and the substantive additions set aside.

Ratio Decidendi: Reassessment cannot be sustained on general investigative allegations without independent application of mind, specific material linking the assessee to escapement of income, and compliance with the statutory preconditions where reopening is beyond four years; once genuine share transactions are supported by primary evidence, the same sale proceeds cannot again be brought to tax as unexplained credits and no consequential commission addition can survive.

Outcome: The applications were heard, further filings were permitted in one matter, orders were reserved in two matters, and the connected applications were directed to be listed on 09.06.2026.

Issues: Whether the disallowance of business expenditure claimed under section 37(1) of the Income-tax Act, 1961, in multiple assessment years could be sustained in the absence of any specific adverse finding on the genuineness of the expenses, and whether the interest under sections 234B and 234C survived as a consequential issue.

Analysis: The appeals involved identical facts and were decided together. The disputed expenditure comprised salary, rent, travelling, conveyance, telephone, office and similar administrative outlays. The decisive consideration was that the lower authorities did not identify any specific defect in the books, any particular bogus or inflated item, or any personal/non-business element in the claimed expenditure. The record also showed that statutory and compliance-related expenses had been accepted, while operational expenses necessary for carrying on the business were disallowed on a broad presumption of minimal activity. In the absence of concrete adverse material, the disallowance could not be sustained. The levy of interest under sections 234B and 234C was consequential and did not call for separate adjudication.

Conclusion: The disallowance of business expenditure was deleted and the assessee succeeded. The interest ground was treated as consequential and not separately adjudicated.

Issues: Whether the Principal Commissioner was justified in exercising revisional jurisdiction under section 263 on the ground that the assessment order was passed without making the requisite inquiries or verifications in relation to the claim under section 54B and the alleged excess evaporation loss of petrol and diesel.

Analysis: The assessment record did not disclose any specific inquiry or verification by the Assessing Officer on the disputed claims. General call for details, without meaningful examination of the material or follow-up verification, was treated as insufficient. The order was therefore found to attract Explanation 2(a) to section 263, under which an order passed without inquiries or verification which should have been made is deemed to be erroneous insofar as it is prejudicial to the interests of the Revenue. The plea of change of opinion was rejected because the record did not show that the Assessing Officer had applied his mind to the specific issues now revised.

Conclusion: The revisional order was held to be valid, and the challenge to the exercise of jurisdiction under section 263 failed.

Final Conclusion: The assessment was validly set aside for fresh examination of the disputed claims, and the assessee obtained no relief.

Ratio Decidendi: Where the assessment order is passed without conducting the inquiries or verifications that ought to have been made on material issues, the order is deemed erroneous and prejudicial to the interests of the Revenue and is amenable to revision under section 263.

Issues: Whether denial of cross-examination of a person whose statement was relied upon vitiated the assessment proceedings; and whether the writ petitioners should be relegated to the statutory appellate remedy.

Analysis: The challenge arose in the context of alleged fraudulent availment of Input Tax Credit and the resulting tax liability. The Court held that in quasi-judicial proceedings the right of cross-examination is not absolute, and that the alleged irregular availment of ITC could have been met by documentary proof such as invoices, e-way bills and transportation records. On that factual basis, the absence of cross-examination by itself did not render the proceedings invalid. As the dispute turned on factual questions, the Court found it appropriate to leave the petitioners to the statutory appellate forum.

Outcome: The Court declined to interfere in writ jurisdiction and directed the petitioners to pursue the statutory appeal, with a direction that an appeal filed within the stated time be received and decided on merits subject to pre-deposit compliance.

Issues: Whether the order blocking the electronic credit ledger under Rule 86A, passed without notice to the petitioner, could be sustained and, if not, what relief should follow.

Analysis: The blocking of input tax credit is within jurisdiction, but such a drastic measure must conform to the principles of natural justice. Since the impugned action was taken without issuing notice or affording an opportunity to show cause, the procedural infirmity vitiated the order.

Conclusion: The blocking order was quashed. The authority was permitted to initiate fresh proceedings only after giving due notice and an opportunity of hearing.

Issues: (i) Whether the assessment order was jurisdiction, the case having been assessed at Delhi despite the assessee's contention that jurisdiction vested at Mumbai and no transfer order under section 127 had been passed.

Analysis: The assessee's jurisdictional objection went to the very authority to frame the assessment, not merely to territorial venue. No order transferring the case from Mumbai to Delhi was shown for the relevant assessment year. The Tribunal followed the principle that a defect going to the root of inherent jurisdiction cannot be cured by participation in proceedings or by the bar of limitation meant for territorial objections under section 124(3). On the facts, the assumption of jurisdiction at Delhi was not sustainable.

Conclusion: The jurisdictional objection was upheld and the assessment order, as affirmed by the first appellate authority, was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded on the jurisdictional ground, and the transfer pricing and interest grounds were left undecided as academic.

Ratio Decidendi: An assessment framed by an who lacks inherent jurisdiction is a nullity, and the bar under section 124(3) applies only to objections as to territorial jurisdiction, not to a challenge to the very authority to act.

Issues: (i) Whether the writ petition was maintainable in view of the earlier withdrawal and fresh institution on the same cause of action; (ii) whether the petitioners had approached the proper forum for the reliefs sought.

Issue (i): Whether the writ petition was maintainable in view of the earlier withdrawal and fresh institution on the same cause of action.

Analysis: The petitioners had earlier filed a writ petition on the same factual matrix and for the same reliefs, which was dismissed as withdrawn without liberty to file a fresh petition. The subsequent filing of the present writ petition on the very next day, without any leave to institute a fresh proceeding, offended the doctrine of finality and the principle that litigation must come to an end.

Conclusion: The writ petition was not maintainable.

Issue (ii): Whether the petitioners had approached the proper forum for the reliefs sought.

Analysis: The pleadings themselves showed that the connected criminal and insolvency proceedings were pending in Bangalore, including the FIR and the proceedings before the NCLT. In that background, the chosen forum was held to be inappropriate for the reliefs claimed, and continuation of the proceedings was found unsustainable.

Conclusion: The petitioners had approached the wrong forum.

Final Conclusion: The writ petition could not be entertained and was brought to an end on maintainability grounds arising from prior withdrawal and improper forum selection.

Ratio Decidendi: A writ petition filed on the same cause of action after an earlier petition was withdrawn without liberty, and instituted before an inappropriate forum, is not maintainable.

Issues: Whether the adjudication order passed by an Assistant Commissioner was without jurisdiction under the notification framework governing notices issued by officers of the Directorate General of Goods and Services Tax Intelligence.

Analysis: Notification No. 02/2017-Central Tax appointed specified officers as proper officers. Notification No. 02/2022-Central Tax inserted Clause 3A and Table V, under which, for notices issued by DGGI officers, the power to pass an order or decision was vested in the Additional Commissioner or Joint Commissioner of Central Tax. The impugned order was passed by the Assistant Commissioner, who was not the notified authority for such DGGI notices. This was held to be contrary to the governing notification and a procedural irregularity affecting the validity of the order.

Conclusion: The impugned order was quashed and the matter was remitted for fresh adjudication by a competent authority after hearing the petitioner.

Issues: Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was leviable where the assessee claimed that the addition represented exempt agricultural income, the explanation remained unsubstantiated, and the disclosure was made only after reopening of assessment.

Analysis: The assessee did not disclose the impugned income in the original return or in the return filed in response to notice under section 148 of the Income-tax Act, 1961. The claim that the amount represented agricultural income was not supported by any documentary evidence even before the lower authorities or the Tribunal. The explanation that the addition was agreed to buy peace with the Department could not, by itself, excuse the default. In the absence of proof that the explanation was bona fide and fully supported, Explanation 1 to section 271(1)(c) of the Income-tax Act, 1961 operated to deem the addition as concealed income.

Conclusion: The penalty under section 271(1)(c) of the Income-tax Act, 1961 was rightly sustained and is not liable to be deleted.

Ratio Decidendi: A claim of exempt income will not defeat penalty under section 271(1)(c) of the Income-tax Act, 1961 unless the assessee substantiates the explanation and proves it to be bona fide; an unsubstantiated disclosure made after detection attracts Explanation 1 and constitutes concealed income for penalty purposes.

Issues: Whether the accused was entitled to regular bail in a customs smuggling case under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Analysis: The accused was in judicial custody, the investigation was stated to be almost over, the vehicles had already been recovered, and no criminal antecedents were shown. In these circumstances, the Court found no necessity for further detention for investigation purposes.

Conclusion: Bail was granted, subject to conditions.

Issues: (i) Whether, on an application under Section 94 of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority can examine the applicant's locus standi and the existence of the foundational jurisdictional facts; and (ii) whether the petitioner established that he was a personal guarantor so as to maintain the application under Section 94.

Issue (i): Whether, on an application under Section 94 of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority can examine the applicant's locus standi and the existence of the foundational jurisdictional facts.

Analysis: Section 94 contemplates invocation of the insolvency resolution process only by a debtor who satisfies the statutory conditions and is not hit by the prescribed disqualifications. The statutory scheme does not permit automatic movement to the next stage merely on filing of an application. The Adjudicating Authority is entitled, indeed obliged, to verify whether the applicant has crossed the threshold required to invoke the jurisdiction, and such scrutiny is confined to maintainability and jurisdictional facts. That exercise does not amount to adjudication on the merits of the insolvency claim.

Conclusion: The Adjudicating Authority is empowered to examine locus standi and jurisdictional facts at the threshold, and such examination is a permissible preliminary scrutiny, not a decision on merits.

Issue (ii): Whether the petitioner established that he was a personal guarantor so as to maintain the application under Section 94.

Analysis: The sanction letter and facility agreement described the petitioner as a co-borrower, and the mortgage documents also did not record a contract of guarantee. No deed of guarantee or similar instrument was produced to show that the petitioner had assumed liability as a personal guarantor. A unilateral description in a demand notice under the personal guarantor rules could not by itself create or prove that status. On the materials placed, the petitioner failed to establish the foundational fact necessary for maintainability.

Conclusion: The petitioner did not establish that he was a personal guarantor, and the application under Section 94 was not maintainable.

Final Conclusion: The impugned order rejecting the application for want of locus standi was upheld, and the writ petition was dismissed with costs.

Ratio Decidendi: In proceedings under Section 94 of the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority may first determine whether the applicant has the requisite legal status and jurisdictional facts to invoke the provision, and failure to establish that foundation renders the application not maintainable.

Issues: Whether letters issued by the GST authorities to the petitioners' customers, before the issuance of orders-in-original determining tax liability, were valid and could support further coercive action, and whether the revenue retained liberty to proceed with recovery after adjudication.

Analysis: The communication to customers was issued when only a tax proposal was pending and no tax liability had crystallised. In that situation, the prior communication could not be treated as a valid basis for coercive recovery or further action. At the same time, the disposal preserved the revenue's right to initiate lawful recovery proceedings after orders-in-original, including action under Section 79(1)(c) of the applicable GST enactments, and the earlier availability of refund proceedings under Section 54 remained unaffected.

Conclusion: Letters issued before adjudication determining tax liability were held invalid and incapable of sustaining further action, but the revenue was left free to pursue recovery in accordance with law after the orders-in-original.

Issues: (i) Whether the reassessment proceedings under Sections 148A(b), 148A(d) and 148 of the Income-tax Act, 1961 were barred by limitation under Section 149 of the Income-tax Act, 1961. (ii) Whether the reopening based on audit objection and the alleged non-disclosure of advance fees and other receipts was jurisdiction or otherwise unsustainable on merits.

Issue (i): Whether the reassessment proceedings under Sections 148A(b), 148A(d) and 148 of the Income-tax Act, 1961 were barred by limitation under Section 149 of the Income-tax Act, 1961.

Analysis: The dispute related to Assessment Year 2015-16. The Court held that the amended regime permits initiation of reassessment within the statutory period under Section 149 of the Income-tax Act, 1961, and that the period between the Section 148A(b) notice and the assessee's reply is to be excluded for computing limitation. Relying on the finality of the law declared in the Supreme Court decisions governing notices issued during the transition from the old regime to the new regime, the Court found the impugned proceedings to be within time.

Conclusion: The limitation challenge failed and the reassessment proceedings were held to be in time.

Issue (ii): Whether the reopening based on audit objection and the alleged non-disclosure of advance fees and other receipts was jurisdiction or otherwise unsustainable on merits.

Analysis: The Court noted that the amount alleged to have escaped assessment had not been included in the return and was not part of the earlier scrutiny assessment under Section 143(3) of the Income-tax Act, 1961. It also recorded prima facie material indicating non-disclosure of certain receipts and other expenditure-related discrepancies. On that basis, the Court found no jurisdictional infirmity in invoking the reassessment machinery merely because the proceedings were triggered in the background of audit-related material.

Conclusion: The challenge on merits and jurisdiction failed, and the reopening was upheld.

Final Conclusion: The writ petition was rejected, and the reassessment notice and order were sustained, with liberty reserved to raise all other issues before the assessing authority.

Ratio Decidendi: Reassessment under the amended regime is valid when initiated within the statutory time after exclusion of the period consumed by the Section 148A process, and audit-related material coupled with prima facie escaped income can lawfully support reopening.

Issues: Whether the assessee-trust was entitled to approval under section 80G(5) of the Income-tax Act, 1961.

Analysis: The trust was constituted with objects directed towards relief of the poor, empowerment of disadvantaged women and children, employment generation, training, village industries, publication and natural dyeing activities. The denial of approval was based on the view that no separate charitable expenditure was shown and that the activities were commercial in nature. The Tribunal held that this approach was too narrow. It found that the publication division and natural dyeing centres were carried on as means of achieving the stated charitable objects, particularly livelihood support, skill development and employment for weaker sections, and that the financial statements showed substantial salary and wage expenditure and, in some years, excess expenditure over income. The genuineness of the trust was not doubted and no adverse material showed diversion of funds or non-charitable use.

Conclusion: The assessee satisfied the conditions for approval under section 80G(5), and the rejection order was set aside with a direction to grant approval.

Ratio Decidendi: An institution does not lose eligibility for approval under section 80G merely because its charitable objects are pursued through revenue-generating activities, so long as those activities are intrinsically connected with and carried on in furtherance of the charitable objects and the institution remains genuine.

Issues: (i) Whether handling and transportation of gypsum for fertilizer use was covered by the exemption for services relating to transport of chemical fertilizer under the relevant notification. (ii) Whether the amounts received towards renting of immovable property were merely reimbursements and therefore not liable to service tax.

Issue (i): Whether handling and transportation of gypsum for fertilizer use was covered by the exemption for services relating to transport of chemical fertilizer under the relevant notification.

Analysis: The relevant exemption under Notification No. 5/2012-ST, as amended by Notification No. 3/2013-ST, applied to services provided by a goods transport agency by way of transport of chemical fertilizer, organic manure and oil cakes. Gypsum was found to be a fertilizer supplying calcium and sulphur, and the mere absence of gypsum from the Fertilizers (Control) Order, 1985 did not exclude it from the exemption. The exclusion urged by the department was therefore not accepted.

Conclusion: The exemption was available to the appellant for the gypsum handling and transportation service, and the service tax demand on that component was set aside.

Issue (ii): Whether the amounts received towards renting of immovable property were merely reimbursements and therefore not liable to service tax.

Analysis: The claim that the receipts were only reimbursements was not supported by any documents before the lower authorities or before the Tribunal. In the absence of documentary proof, the receipts could not be treated as mere reimbursements.

Conclusion: The demand relating to renting of immovable property was upheld.

Final Conclusion: The appeal succeeded only to the extent of the gypsum-related demand, with the corresponding penalty reduced proportionately, while the remaining demand was sustained and the matter was sent back only for recalculation and consequential relief.

Ratio Decidendi: A service falling within the substantive ambit of a statutory exemption cannot be denied the benefit merely because the commodity is not expressly named in a control order, where the commodity is in fact a fertilizer for the purpose of the exemption.

Issues: (i) whether the transfer-pricing adjustment on account of intra-group management services was justified, (ii) whether the royalty adjustments on sales to associated enterprises and third parties were sustainable, (iii) whether interest on outstanding receivables from associated enterprises was separately chargeable, and (iv) whether the disallowance of employees' contribution to PF and ESI deposited beyond the statutory due date was liable to be upheld.

Issue (i): whether the transfer-pricing adjustment on account of intra-group management services was justified.

Analysis: The adjustment was made by rejecting the assessee's aggregation approach and valuing the services at nil under the CUP method. The Tribunal followed its earlier coordinate bench decision in the assessee's own case and held that the services were supported by evidence and that the DRP/TPO could not mechanically sustain a nil valuation without proper appreciation of the factual matrix and comparable material.

Conclusion: The adjustment on account of intra-group management services was deleted in favour of the assessee.

Issue (ii): whether the royalty adjustments on sales to associated enterprises and third parties were sustainable.

Analysis: The Tribunal followed its earlier order for a subsequent assessment year and held that the entire royalty payment could not be disallowed. It accepted that the assessee was not to be treated as a contract manufacturer for this purpose and directed that royalty be allowed at 5% on all sales transactions, including sales to associated enterprises and third parties.

Conclusion: The royalty adjustments were partly deleted and the issue was decided partly in favour of the assessee.

Issue (iii): whether interest on outstanding receivables from associated enterprises was separately chargeable.

Analysis: The Tribunal applied the settled principle that working capital adjustment must first be given effect while testing the arm's length nature of receivables. Relying on its earlier decisions and the Delhi High Court decision in Kusum Healthcare, it held that the receivables adjustment could not stand in isolation without recomputation after giving working capital adjustment.

Conclusion: The adjustment for interest on outstanding receivables was deleted in favour of the assessee.

Issue (iv): whether the disallowance of employees' contribution to PF and ESI deposited beyond the statutory due date was liable to be upheld.

Analysis: The Tribunal followed the Supreme Court ruling in Checkmate Services and held that employees' contribution deposited beyond the due date under the PF and ESI law was not allowable, notwithstanding the assessee's contention regarding the Income-tax Act due date.

Conclusion: The disallowance of employees' contribution to PF and ESI was upheld against the assessee.

Final Conclusion: The appeal succeeded on the transfer-pricing adjustments relating to management services, royalty and receivables, but failed on the disallowance of employees' contribution to PF and ESI, resulting in partial relief to the assessee.

Ratio Decidendi: A nil transfer-pricing valuation cannot be sustained mechanically where services are evidenced; royalty cannot be wholly disallowed where a reasonable benchmarking basis is accepted; receivables must be tested after working capital adjustment; and employees' contribution to welfare funds paid beyond the statutory due date remains inadmissible.

Issues: (i) whether advertisement, marketing and promotion expenses and research and training expenditure constituted international transactions for transfer pricing purposes; (ii) whether intra-group services could be benchmarked at nil ALP or required fresh adjudication; (iii) whether royalty paid to associated enterprises was capital or revenue expenditure; (iv) whether depreciation on electrical fittings and the balance additional depreciation were allowable; (v) whether scientific research and development expenditure was deductible despite alleged absence of approval of the recipient facility; (vi) whether CSR-linked donations and expenditure were eligible for deduction under section 80G and section 35AC; (vii) whether section 32AC deduction was allowable for colour solution and mixing machines installed at dealers' premises; (viii) whether dividend distribution tax could be restricted to the applicable treaty rate and related DDT credit and interest claims required further verification; and (ix) whether bad debt and foreign tax credit claims not made in the return could still be entertained, and whether duty drawback was taxable on receipt basis in view of past acceptance.

Issue (i): whether advertisement, marketing and promotion expenses and research and training expenditure constituted international transactions for transfer pricing purposes.

Analysis: The disputed AMP and research and training outlays were found to be incurred for the assessee's own business, without evidence of any separate international transaction with associated enterprises. The decision followed the assessee's own earlier years and relied on the settled view that, absent a demonstrated cross-border arrangement or service element, such expenditure cannot be treated as an international transaction under transfer pricing law.

Conclusion: The issue was decided in favour of the assessee and the transfer pricing adjustments on these counts were deleted.

Issue (ii): whether intra-group services could be benchmarked at nil ALP or required fresh adjudication.

Analysis: For the intra-group services issue, part of the services had already been granted relief, while the balance required fresh examination in line with the coordinate bench decisions in earlier years. The TPO had not carried out the exercise in the manner required for determining arm's length price on the disputed balance.

Conclusion: The matter was restored to the Assessing Officer / Transfer Pricing Officer for fresh adjudication and was treated as allowed for statistical purposes in favour of the assessee.

Issue (iii): whether royalty paid to associated enterprises was capital or revenue expenditure.

Analysis: The royalty was paid for a non-exclusive right to use technology, trademarks, know-how and related intellectual property for the existing business. The payments were linked to sales, no ownership or new asset was acquired, and similar claims had been accepted in earlier years. The distinction from the cited contrary authority was accepted.

Conclusion: The royalty expenditure was held to be revenue in nature and the disallowance was deleted in favour of the assessee.

Issue (iv): whether depreciation on electrical fittings and the balance additional depreciation were allowable.

Analysis: The electrical cables, wires, DG sets and related installations were treated as integral to the manufacturing apparatus and not as mere furniture and fittings. The balance additional depreciation was also held allowable, the relevant proviso being treated as clarificatory and applied in line with the judicial precedents relied upon.

Conclusion: The disallowance was deleted and the issue was decided in favour of the assessee.

Issue (v): whether scientific research and development expenditure was deductible despite alleged absence of approval of the recipient facility.

Analysis: The expenditure was found to have been incurred wholly and exclusively for the assessee's business. The absence of extension of approval to the recipient facility was held not to be a bar to deduction where the genuineness and business nexus of the expenditure were not disputed. The alternative claim under the business deduction provision was also accepted on the same facts.

Conclusion: The deduction was allowed in favour of the assessee and the disallowance was deleted.

Issue (vi): whether CSR-linked donations and expenditure were eligible for deduction under section 80G and section 35AC.

Analysis: The Tribunal accepted that the DRP had already granted relief on the section 35AC claim subject to verification, and held that CSR-related donations may still qualify for section 80G deduction where the statutory conditions are satisfied. The claim was therefore not rejected on the broad ground adopted by the Assessing Officer.

Conclusion: The disallowance was deleted and the issue was decided in favour of the assessee.

Issue (vii): whether section 32AC deduction was allowable for colour solution and mixing machines installed at dealers' premises.

Analysis: The machines were installed for the assessee's business, used exclusively for the assessee's products, and formed part of the business value chain. The provision did not require that the machinery be installed on the assessee's own premises, and the investment threshold condition was otherwise satisfied.

Conclusion: The deduction was allowed in favour of the assessee.

Issue (viii): whether dividend distribution tax could be restricted to the applicable treaty rate and related DDT credit and interest claims required further verification.

Analysis: It was held that dividend distribution tax, for treaty purposes, could not exceed the rate under the applicable double taxation avoidance agreement and that the assessee was entitled to seek the more beneficial treaty rate. However, as the issue had not been examined by the Assessing Officer, the claim for refund / credit and consequential relief was restored for verification.

Conclusion: The matter was restored to the Assessing Officer and was treated as allowed for statistical purposes in favour of the assessee.

Issue (ix): whether bad debt and foreign tax credit claims not made in the return could still be entertained, and whether duty drawback was taxable on receipt basis in view of past acceptance.

Analysis: The bad debt and foreign tax credit claims were held to be capable of consideration despite not being raised in the return, subject to verification by the Assessing Officer. As regards duty drawback, the consistent receipt-based method previously accepted by the revenue was followed, and a change to accrual treatment for the year under appeal was disapproved on consistency grounds.

Conclusion: The bad debt and foreign tax credit issues were restored for verification and treated as partly allowed for statistical purposes, while the duty drawback addition was deleted in favour of the assessee.

Final Conclusion: The appeals were substantially allowed in the assessee's favour on the main transfer pricing and deduction issues, with several matters either deleted outright or remanded for verification and fresh adjudication.

Ratio Decidendi: Expenditure incurred for the assessee's own business cannot be treated as an international transaction without proof of a corresponding cross-border arrangement, and royalty or scientific research payments that merely secure a right to use technology or support business operations are revenue in nature where no ownership or enduring capital asset is acquired.

Issues: Whether input tax credit can be denied to a bona fide purchasing dealer merely because the selling dealer failed to deposit the tax collected, and whether the impugned order confirming demand and penalty could be sustained on that basis.

Analysis: The controlling principle applied was that a bona fide purchaser who has transacted with a registered supplier, received goods, paid through banking channels and complied with the statutory requirements cannot be penalised for the default of the selling dealer in remitting tax to the Government. In such a situation, the Department's remedy lies against the defaulting supplier. The exception recognised is where material exists showing that the transactions were not bona fide or were entered into in collusion, in which event proceedings may be taken in accordance with law.

Conclusion: The demand founded solely on the alleged failure of the supplier to deposit tax could not be sustained against the petitioner, and the impugned order was set aside and quashed.

Ratio Decidendi: Input tax credit cannot be denied to a bona fide purchasing dealer merely because the supplier failed to deposit tax collected on the transaction, unless the Department establishes lack of bona fides or collusion.

Issues: Whether the assessment order passed under section 73 could be sustained when the date of personal hearing was fixed before the last date for filing reply to the show cause notice, thereby rendering the hearing illusory and contrary to the prescribed procedure.

Analysis: The writ petition challenged the assessment order on the ground of breach of natural justice. The factual position noticed was that the date of personal hearing was fixed 18 days before the last date granted for filing the reply. The Revenue fairly conceded that, in such circumstances, the hearing offered was illusory and not in conformity with the prescribed procedure. On that basis, the procedural defect was treated as fatal to the assessment order.

Conclusion: The assessment order was quashed and the matter was remitted to the adjudicating officer to proceed afresh from the stage of the show cause notice after fixing a proper date for personal hearing.