Issues: (i) whether import duty borne on imported traded goods should be excluded from the operating cost for comparability analysis under the Resale Price Method; (ii) whether working capital adjustment should be allowed in the transfer pricing analysis.

Issue (i): whether import duty borne on imported traded goods should be excluded from the operating cost for comparability analysis under the Resale Price Method.

Analysis: Rule 10B(3) of the Income-tax Rules, 1962 requires uncontrolled transactions to be compared only where material differences do not affect price or profit, or where reasonably accurate adjustments can eliminate such differences. Rule 10B(1)(b)(iv) similarly requires adjustment for functional and other differences affecting gross profit margin. Since the tested party's purchases were predominantly imports and the comparables had negligible import content, the import duty element materially affected comparability. A suitable adjustment was therefore necessary to align the tested party with the uncontrolled comparables.

Conclusion: The exclusion of import duty from the assessee's operating cost was warranted, and the adjustment was directed to be made in favour of the assessee.

Issue (ii): whether working capital adjustment should be allowed in the transfer pricing analysis.

Analysis: Working capital differences can materially affect margins and are a recognised comparability factor where the relevant data is available. The record showed that the assessee had furnished the necessary details before the transfer pricing authorities, and the objection that the claim lacked supporting evidence was not sustainable on the facts. In these circumstances, working capital adjustment was required to be considered while determining the arm's length price.

Conclusion: Working capital adjustment was allowed in favour of the assessee, with the matter directed to be verified for the necessary details before the transfer pricing authority.

Final Conclusion: The transfer pricing addition was not sustained in full, as the assessee succeeded on the comparability adjustment relating to import duty and also obtained relief on working capital adjustment, resulting in a partial allowance of the appeal.

Ratio Decidendi: Where material differences between a tested party and comparables materially affect gross profit margins, reasonably accurate comparability adjustments must be made under Rule 10B to ensure arm's length benchmarking.

Issues: (i) Whether online training services delivered through live or recorded digital platforms are classifiable as Online Information and Database Access or Retrieval Services or as Commercial Training and Coaching Services; (ii) whether the tax liability on such supplies made to unregistered students outside Rajasthan is to be discharged as IGST or as CGST and SGST.

Issue (i): Whether online training services delivered through live or recorded digital platforms are classifiable as Online Information and Database Access or Retrieval Services or as Commercial Training and Coaching Services.

Analysis: The service supplied by the applicant was found to be structured coaching for competitive examinations, supported by live classes, recorded lectures, doubt-clearing sessions, mentoring, performance evaluation, mock tests, and dispatch of study material. The digital platform was treated only as the medium of delivery and not as the essential character of the supply. The nature of the service was therefore held to be commercial training and coaching, not a technology-driven retrieval of digital content within the OIDAR category.

Conclusion: The service is classifiable under Commercial Training and Coaching Services and not under OIDAR.

Issue (ii): Whether the tax liability on such supplies made to unregistered students outside Rajasthan is to be discharged as IGST or as CGST and SGST.

Analysis: Once the supply was held to be commercial training and coaching, the place of supply was governed by the specific rule for training services. The applicant's operations, including faculty, content development, billing, platform management, and dispatch of study material, were located in Rajasthan. As the location of the supplier and the place of supply were both in Rajasthan, the supply was treated as intra-State, irrespective of the student's location.

Conclusion: The tax liability is CGST and Rajasthan SGST and not IGST.

Final Conclusion: The ruling holds that the applicant's online coaching model remains a training and coaching supply with place of supply in Rajasthan, so transactions to unregistered students outside the State do not alter the intra-State tax character of the supply.

Ratio Decidendi: A digitally delivered coaching programme does not become OIDAR merely because it is accessed online; where the substance of the service is instructor-led training, the specific place-of-supply rule for training applies and the supply is intra-State if both supplier location and place of supply are in the same State.

Issues: Whether the impugned assessment order under the TNGST Act should be set aside and the matter remanded for fresh consideration.

Analysis: The dispute arose from an assessment order passed under Section 73 of the TNGST Act, 2017, involving reconciliation discrepancies, input tax credit issues, and levy of interest and penalty. The Court noted that the questions regarding penalty and interest involved mixed questions of fact and law. It further observed that the petitioner had reversed the CESS amount and had raised specific objections with reference to the statutory provisions relied upon. In these circumstances, instead of directing the petitioner to pursue the appellate remedy, the matter was considered fit to be sent back to the original authority for reconsideration of the entire issue.

Conclusion: The impugned order was set aside and the matter was remanded to the respondent for fresh consideration.

Issues: (i) Whether the blocking of input tax credit in the electronic credit ledger could continue beyond one year under Rule 86A(3) of the Central Goods and Services Tax Rules, 2017; (ii) Whether a pre-decisional hearing was required before blocking the electronic credit ledger.

Issue (i): Whether the blocking of input tax credit in the electronic credit ledger could continue beyond one year under Rule 86A(3) of the Central Goods and Services Tax Rules, 2017.

Analysis: Rule 86A(3) provides that a restriction on debit of input tax credit in the electronic credit ledger ceases to have effect after the expiry of one year from the date of imposition. The continued blocking beyond that period was held to be contrary to the statutory mandate, and the restriction was treated as having lapsed by operation of law. The Court followed the view that the credit must be unblocked once the one-year period expires.

Conclusion: The continued blocking beyond one year was unlawful and the credit was required to be unblocked.

Issue (ii): Whether a pre-decisional hearing was required before blocking the electronic credit ledger.

Analysis: Blocking of input tax credit in the electronic credit ledger entails serious civil consequences and can materially affect business operations. In such a situation, adherence to natural justice required a prior hearing unless extraordinary circumstances justified immediate action. The absence of such a hearing vitiated the impugned blocking order.

Conclusion: A pre-decisional hearing was required and its absence rendered the blocking action unsustainable.

Final Conclusion: The provisional attachment and the blocking of input tax credit were set aside, and the electronic credit ledger and attached bank accounts were directed to be released in accordance with law.

Ratio Decidendi: A restriction on utilisation of input tax credit under Rule 86A(3) lapses automatically after one year, and blocking of the electronic credit ledger, being an action with civil consequences, requires observance of natural justice by affording a pre-decisional hearing unless exceptional circumstances exist.

Issues: Whether the assessment order and consequential demand and penalty notices were liable to be quashed for non-compliance with the mandatory procedure under section 144C when the so-called draft assessment order itself determined tax liability and was accompanied by demand and penalty notices.

Analysis: The procedure under section 144C is mandatory and requires the Assessing Officer, in the first instance, to forward only a draft order to the eligible assessee and complete the assessment only after the statutory process is followed. Where the order described as a draft assessment order itself computes taxable income, determines tax payable, issues a notice of demand, and initiates penalty proceedings, the order is in substance a final assessment order and not a draft order. Such a breach goes to jurisdiction and cannot be cured by section 292B. The issuance of demand and penalty notices is permissible only after completion of assessment in accordance with section 144C.

Conclusion: The assessment proceedings were void for breach of section 144C, and the impugned final assessment order together with the consequential demand and penalty notices were quashed.

Issues: Whether the applicant was entitled to bail in a case arising from alleged GST-related fraud and whether the nature of the alleged offence, including the monetary threshold and the statutory scheme under the goods and services tax law, justified enlargement on bail.

Analysis: The application was considered in light of the allegations, the absence of the applicant's name in the FIR, the claim of limited linkage through call detail records, and the contention that the alleged conduct, even if accepted, would fall within the offence framework under the Central Goods and Services Tax Act, 2017. The Court noted the argument that the GST framework is a complete code and that the alleged amount involved was below the threshold said to attract a bailable and compoundable offence under section 132(1)(iii) of the Central Goods and Services Tax Act, 2017. The prosecution could not dislodge these submissions, and the Court found that the nature of accusations, severity of punishment, supporting material, and apprehension of witness tampering, viewed prima facie and without expressing any opinion on merits, justified grant of bail.

Conclusion: Bail was granted to the applicant.

Final Conclusion: The applicant was directed to be released on bail subject to conditions safeguarding the trial and the integrity of the evidence.

Ratio Decidendi: Where the allegations, if taken at face value, disclose a GST-related offence of limited monetary value and the material does not justify continued custody, bail may be granted subject to conditions to secure the trial.

Issues: Whether the addition made under section 69B on the basis of a seized paper reflecting alleged cash payment towards purchase of property was sustainable, and whether the statutory presumptions under sections 132(4A) and 292C stood rebutted.

Analysis: The seized paper was treated as an unauthenticated and non-corroborated document lacking name, date, property particulars and signatures, and therefore not sufficient by itself to establish unaccounted investment. No inquiry was made from the seller, and the assessee placed the seller's affidavit confirming receipt of consideration as per the registered sale deeds. The valuation report also supported the declared consideration. In these circumstances, the presumption arising from the search material stood rebutted and the addition could not rest on conjecture.

Conclusion: The addition under section 69B was rightly deleted, and the Revenue's challenge failed.

Final Conclusion: The Revenue's appeals were dismissed and the deletions made by the first appellate authority were upheld.

Ratio Decidendi: A seized paper without corroboration, particulars of the transaction, or supporting inquiry cannot by itself justify an addition for unexplained investment where the statutory presumption is rebutted by contrary evidence.

Issues: (i) Whether the addition sustained on account of cash deposits during the demonetisation period was justified where the assessee claimed availability of cash from the proprietorship concern and realisation from debtors. (ii) Whether the addition on account of unexplained investment in acquisition of immovable property required interference or remand for verification.

Issue (i): Whether the addition sustained on account of cash deposits during the demonetisation period was justified where the assessee claimed availability of cash from the proprietorship concern and realisation from debtors.

Analysis: The assessee's claim rested on a reconciliation of capital balance and alleged realisation from debtors of the closed proprietorship concern. No supporting evidence of realisation from debtors was produced, and the attempt to rely on a cash book at the appellate stage was not accepted, particularly since regular books of account were not maintained. Credit had already been granted for the cash in hand reflected in the assessee's balance sheet, and no further infirmity was shown in the appellate order sustaining the balance addition.

Conclusion: The sustained addition was upheld and remained against the assessee.

Issue (ii): Whether the addition on account of unexplained investment in acquisition of immovable property required interference or remand for verification.

Analysis: The assessee asserted that the property had been booked earlier and that payments were made in prior years, but the material produced did not substantiate the claim. In the absence of adequate supporting evidence, the matter required factual verification by the Assessing Officer to examine the source and timing of the payments in accordance with law.

Conclusion: The issue was remanded to the Assessing Officer for fresh examination, with the assessee required to furnish supporting details.

Final Conclusion: The assessee obtained relief only on the property-investment issue by way of remand, while the cash-deposit addition was sustained.

Ratio Decidendi: A claim explaining cash deposits or investment must be supported by credible evidence; where the explanation is unsubstantiated, the addition may be sustained, while inadequately verified factual claims may be remanded for fresh examination.

Issues: (i) Whether disallowance under section 40(a)(ia) of the Income-tax Act, 1961 was sustainable where tax was deducted at source and reflected in the recipient's Form 26AS; (ii) whether the addition treating agricultural income from apple sales as unexplained income under section 69A of the Income-tax Act, 1961 was justified.

Issue (i): Whether disallowance under section 40(a)(ia) of the Income-tax Act, 1961 was sustainable where tax was deducted at source and reflected in the recipient's Form 26AS.

Analysis: The assessee produced the ledger account, TDS return and the recipient's Form 26AS showing deduction and deposit of tax on the interest payment. These materials established compliance with the tax deduction and deposit requirement and removed the basis for the disallowance.

Conclusion: The disallowance under section 40(a)(ia) was deleted and the issue was decided in favour of the assessee.

Issue (ii): Whether the addition treating agricultural income from apple sales as unexplained income under section 69A of the Income-tax Act, 1961 was justified.

Analysis: The assessee substantiated ownership of 7,500 apple trees through the will and related land records, and the Revenue did not dispute that ownership. The declared agricultural income was also consistent with earlier accepted years, and no corroborative material was brought to show that the receipts were unexplained or non-genuine.

Conclusion: The addition treating the agricultural income as unexplained income was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The assessee succeeded on both substantive issues, and the tax additions in dispute did not survive.

Ratio Decidendi: A disallowance or addition cannot be sustained merely on suspicion when the assessee produces primary documentary evidence establishing TDS compliance or the genuineness of agricultural receipts, and the Revenue brings no contrary corroborative material.

Issues: Whether the appellate order dismissing the assessee's appeal without granting effective opportunity of hearing, despite the assessee having declined service of notices through email in the appeal form, warranted interference and remand.

Analysis: The appeal form contained the assessee's email address, but the option to receive notices through email had been marked as not consented to. Notwithstanding this, notices were issued only through email. In the circumstances, the assessee could not be faulted for non-response, and the appellate authority ought to have adopted an alternative mode of service consistent with the assessee's stated choice. The absence of a proper opportunity rendered the disposal unsustainable on procedural fairness grounds.

Conclusion: The matter was restored to the appellate authority for fresh adjudication after giving the assessee an effective opportunity to respond. The issue was decided in favour of the assessee.

Issues: Whether the disallowance of Rs. 9.02 crores made by restricting the loss claimed from discontinued operations was justified, and whether the audited financial statements and supporting disclosures established the allowability of the expenditure.

Analysis: The assessee had sold a business segment and its subsidiary under a slump sale arrangement, and the discontinued operations were separately disclosed in the audited accounts. The loss from discontinued operations reflected in the financial statements was supported by the note disclosures, segmental presentation, and the year-end accounts. The valuation report used for determining sale consideration did not govern the tax allowability of the expenditure, which was to be tested independently under section 37(1) of the Income-tax Act, 1961. No material was brought to show that the expenses were unvouched, unsupported, or not incurred for business purposes. The proportionate restriction made by the Assessing Officer was therefore unsupported by any adverse finding on genuineness or veracity of the expenditure.

Conclusion: The disallowance was not sustainable and the deletion made by the CIT(A) was upheld. The addition of Rs. 9.02 crores was directed to be deleted.

Issues: Whether interest income earned by a credit co-operative society from deposits with banks and co-operative societies is attributable to its business of providing credit facilities to members and qualifies for deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961.

Analysis: The assessee is a credit co-operative society engaged in providing credit facilities to its members. The interest income arose from deployment of working capital and surplus funds not immediately required for lending to members. The controlling principle applied was that the expression "attributable to" is wider than "derived from", and interest earned on such deposits is part of the profits and gains of the business of providing credit facilities. The distinguishing feature of interest on amounts that are mere liabilities or amounts due to members was absent on the facts, and the contrary view based on treatment as income from other sources was not accepted for the assessee's claim under section 80P(2)(a)(i).

Conclusion: The interest income was held to be business income attributable to the assessee's credit business, and deduction under section 80P(2)(a)(i) was allowed in favour of the assessee.

Issues: Validity of reopening under section 147 and notice under section 148 on the basis of the same material already examined in the original assessment.

Analysis: The reassessment was founded on the survey material, the partner's statement, the investigation report and the alleged penny stock loss in the same scrip that had already been specifically called for, furnished and examined during the original scrutiny assessment under section 143(3). The record showed repeated notices, detailed replies, demat statements, broker ledgers, contract notes, bank statements, volatility charts and the survey statement itself having been filed before completion of the original assessment. On those facts, the reopening did not rest on fresh tangible material but on a revisit of the very same material previously considered, which amounts to a prohibited review of a concluded assessment.

Conclusion: The reopening under section 147 and the notice under section 148 were invalid and were quashed. The reassessment order did not survive.

Issues: Whether the orders treating the assessee as an assessee in default under section 201(1) of the Income-tax Act, 1961, together with interest under section 201(1A), were sustainable where the declarations in Forms 15G and 15H were said to be defective and the electronic filing of Form 26Q was not examined by the lower authorities.

Analysis: The assessee produced Forms 15G and 15H and, before the Tribunal, also placed acknowledgements showing electronic filing of Form 26Q under Rule 31A of the Income-tax Rules, 1962. These documents had not been placed before the Assessing Officer or the first appellate authority, so the factual claim of due filing had not been verified at the assessment stage. In these circumstances, the proper course was to afford the assessee another opportunity and to require the Assessing Officer to examine the declarations and the e-filed statement afresh.

Conclusion: The matter was remitted to the Assessing Officer for de novo consideration after giving the assessee an opportunity to produce the relevant forms and statement, and the earlier orders under sections 201(1) and 201(1A) were set aside for that purpose.

Final Conclusion: The controversy on TDS default was not finally decided on merits and was sent back for fresh adjudication after verification of the assessee's compliance documents.

Ratio Decidendi: Where material documents bearing on TDS compliance were not examined by the lower authorities, the issue should be restored for fresh adjudication after verification rather than finally sustained on an unverified record.

Issues: Whether the demand, interest and penalties could be sustained when SSI exemption was denied to a unit that was not made a party to the show cause notice and its clearances were clubbed with those of the noticee.

Analysis: The denial of SSI exemption to LASTPL and the clubbing of its clearances with LSCPL were found to be beyond the scope of the proceedings, since LASTPL was not made a noticee in the show cause notice. An adjudication that proceeds against a non-noticee on the basis of denial of exemption to that entity cannot be sustained in law. Once the clubbing itself was held unsustainable, the demand raised against LSCPL and the penalties imposed on the appellants also could not survive.

Conclusion: The demand and penalties were held to be unsustainable, and the appeals were allowed.

Ratio Decidendi: Duty demand cannot be sustained on the basis of denial of exemption and clubbing of clearances of an entity that was not made a party to the show cause notice.

Issues: (i) Whether the ex parte order passed under Section 74 of the Central Goods and Services Tax Act, 2017 was liable to be set aside for want of an opportunity to reply to the show cause notice. (ii) Whether the proceeding reflected in the subsequent notice should be clubbed with the remitted show cause notice in view of overlapping subject matter.

Issue (i): Whether the ex parte order passed under Section 74 of the Central Goods and Services Tax Act, 2017 was liable to be set aside for want of an opportunity to reply to the show cause notice.

Analysis: The order was passed without the benefit of any reply from the petitioner and was treated as an ex parte adjudication. In view of the serious civil consequences flowing from the demand, the absence of an effective opportunity to place a reply and supporting material justified interference and remand.

Conclusion: The ex parte order was set aside and the matter was remitted to the stage of reply to the show cause notice.

Issue (ii): Whether the proceeding reflected in the subsequent notice should be clubbed with the remitted show cause notice in view of overlapping subject matter.

Analysis: The later proceeding was still at the stage of reply and the subject matter overlapped with the earlier notice. To avoid parallel adjudication and to enable a composite consideration of the petitioner's response, both notices were directed to be taken up together before the same authority.

Conclusion: The subsequent proceeding was directed to be clubbed with the remitted show cause notice and both were to be pursued together.

Final Conclusion: The writ petition resulted in setting aside the impugned adjudication and a remand for fresh consideration after reply, with the connected notice also brought into the same proceedings.

Ratio Decidendi: An ex parte GST adjudication passed without a reply to the show cause notice may be set aside and remitted when fairness requires an opportunity to respond, and overlapping proceedings may be clubbed to ensure coherent adjudication.

Issues: Whether the addition made by processing the return under section 143(1) on account of foreign contribution shown in the wrong schedule, despite disclosure in the books and return, was sustainable.

Analysis: The assessee had accounted for the foreign contribution in its books and had disclosed it in the return of income, but had mentioned it in the wrong schedule. The rejection of the claim rested only on the ground that a revised return had not been filed. The governing principle applied was that tax cannot be collected beyond what is legitimately due, and an inadvertent clerical or schedule-entry error, when the income is otherwise disclosed, does not justify sustaining an addition.

Conclusion: The addition was not sustainable and was deleted.

Final Conclusion: The assessee succeeded on the sole issue, and the assessed addition relating to foreign contribution was set aside.

Ratio Decidendi: Where income is fully disclosed in the return and books, a mere mistake in placing it in the wrong schedule cannot, by itself, justify an addition in processing or assessment.

Issues: (i) Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was vitiated because the penalty proceedings were initiated on one limb but the penalty was levied on another limb; (ii) Whether penalty could be sustained for additions made under the normal provisions where the assessed tax was finally determined under section 115JB of the Income-tax Act, 1961 for the relevant year.

Issue (i): Whether penalty under section 271(1)(c) of the Income-tax Act, 1961 was vitiated because the penalty proceedings were initiated on one limb but the penalty was levied on another limb.

Analysis: The assessment orders and notices recorded initiation of penalty on one footing, while the penalty orders proceeded on a different footing. The statutory scheme required a clear satisfaction and a specific notice on the precise charge so that the assessee could meet the allegation effectively. A notice issued for one limb and a penalty order passed on another limb offended the requirement of certainty in penalty proceedings and the principles of natural justice.

Conclusion: The penalty proceedings were invalid and the penalty was liable to be quashed.

Issue (ii): Whether penalty could be sustained for additions made under the normal provisions where the assessed tax was finally determined under section 115JB of the Income-tax Act, 1961 for the relevant year.

Analysis: For the assessment years concerned, the law as it then stood did not permit penalty to be imposed on additions under the normal computation when the tax liability was finally determined under the MAT regime. The pre-amended machinery for quantifying tax sought to be evaded did not make such penalty workable, and the later amendment was prospective. On that basis, additions under the normal provisions did not support penalty once assessment was completed under section 115JB.

Conclusion: The penalty could not be sustained on that basis either.

Final Conclusion: The penalty orders for all the assessment years were set aside, and the assessee obtained complete relief.

Ratio Decidendi: Penalty under section 271(1)(c) requires a specific and consistent charge from initiation to levy, and for the years governed by the pre-amended law, additions under the normal provisions could not sustain penalty where tax was ultimately assessed under section 115JB.

Issues: Whether penalty under section 271(1)(c) was leviable where the assessee had disclosed the capital gains, deposited the sale consideration in the Capital Gains Account Scheme within time, failed to utilise the entire amount within the stipulated period due to circumstances beyond control, and voluntarily informed the department before reassessment that the unutilised amount had become taxable.

Analysis: The assessee had disclosed the capital gains arising from sale of property and had complied with the primary requirement of section 54(2) by depositing the amount in the Capital Gains Account Scheme. The shortfall in utilisation was attributable to disputes with the builder, and the unutilised amount remained in the specified account without being diverted for any other purpose. The assessee had suo motu informed the department about the expiry of the prescribed period and the resulting taxability before reassessment proceedings were initiated. On these facts, the conduct reflected bona fides and there was no material to show concealment of income or furnishing of inaccurate particulars. Penalty could not be sustained merely because the amount became taxable as a consequence of non-utilisation within time.

Conclusion: Penalty under section 271(1)(c) was not leviable and was directed to be deleted, in favour of the assessee.

Ratio Decidendi: Penalty for concealment cannot be imposed where the income and relevant facts were fully disclosed and the addition arises only from a legal consequence of non-compliance with a statutory time condition, absent concealment or inaccurate particulars.

Issues: Whether the petitioner should be permitted to re-export the seized imported goods, and if so, on what conditions.

Analysis: The goods had remained under seizure for more than a year, samples had already been drawn, and the Court found that no useful purpose would be served by continuing the seizure. The respondents did not seriously oppose re-export. The Court therefore directed permission for re-export, while balancing the interests of revenue by requiring security for the differential duty and a bank guarantee.

Conclusion: The petitioner was permitted to re-export the goods on executing a bond for the total value of the differential duty payable and furnishing a bank guarantee equivalent to 5% of the re-determined value, with re-export to be completed within 12 days of compliance.

Ratio Decidendi: Where seized imported goods have remained in custody for a prolonged period and continued detention serves no useful purpose, re-export may be permitted on conditions securing the revenue interest pending adjudication.