Issues: Whether the acquittal of the respondent under the Customs Act could be interfered with on the basis of the statement recorded under Section 108 of the Customs Act, 1962 and the inculpatory statements of the co-accused, despite the non-production of the recording witness for post-charge cross-examination and the absence of independent corroboration.

Analysis: The statement of a co-accused under Section 108 of the Customs Act, 1962 cannot be treated as substantive evidence against another accused. Such a confession can, at the highest, lend assurance to other admissible evidence, but it cannot by itself found a conviction. The Court held that the witness who recorded the statement of the respondent was not shown to be unavailable, incapable of giving evidence, or otherwise covered by Section 33 of the Indian Evidence Act, 1872. The complainant also did not establish admissibility through Section 32(2) read with Sections 47 and 67 of the Indian Evidence Act, 1872. In the absence of such proof, the testimony recorded at the earlier stage could not be used against the respondent to sustain guilt. The remaining material, after excluding the confessional statements, was insufficient to dislodge the acquittal.

Conclusion: The respondent was rightly acquitted, and the appeal did not justify interference.

Ratio Decidendi: A confession or inculpatory statement under Section 108 of the Customs Act, 1962 is not substantive evidence against a co-accused and can be used only to lend assurance to otherwise admissible evidence; where the recording witness is not proved unavailable, earlier testimony cannot be relied upon under Section 33 of the Indian Evidence Act, 1872.

Issues: Whether the writ court should interfere with the tax demand order and permit the petitioner to pursue an appeal beyond limitation on the plea that the show cause notices and order were not brought to its knowledge.

Analysis: The notices and the impugned order were sent to the e-mail address furnished by the petitioner to the Department, and the petitioner admitted that the account handling was with its chartered accountant. The order also recorded issuance of the initial intimation, absence of reply, issuance of the show cause notice, grant of further opportunities, and failure to respond or deposit the amount. In these circumstances, the Court held that due service had been effected and that no exceptional ground existed for exercise of writ jurisdiction under Article 226 of the Constitution of India. The plea that the documents were also uploaded on the GST portal was not accepted as a basis for interference.

Conclusion: The petitioner was not entitled to writ interference or to the relief of being permitted to file an appeal by the High Court in these proceedings.

Issues: (i) Whether any substantial question of law arose from the Tribunal's order in the appeal under Section 68 of the Punjab Value Added Tax Act, 2005. (ii) Whether penalty under Section 14B(7)(ii) of the Punjab General Sales Tax Act, 1948 was justified on the facts of the case.

Issue (i): Whether any substantial question of law arose from the Tribunal's order in the appeal under Section 68 of the Punjab Value Added Tax Act, 2005.

Analysis: The appeal was required to disclose a real substantial question of law. The questions framed by the appellant did not address the core finding of alleged tax evasion and merely complained that the Tribunal had not discussed the arguments in detail. The record showed that the Tribunal had examined the factual and legal material and had not ignored any material issue warranting interference.

Conclusion: No substantial question of law arose, and the challenge to the Tribunal's order failed on that ground.

Issue (ii): Whether penalty under Section 14B(7)(ii) of the Punjab General Sales Tax Act, 1948 was justified on the facts of the case.

Analysis: Penalty under Section 14B(7)(ii) could be imposed only where there was an intention to evade tax. The goods were produced at the information collection centre and were entered in the record, and the discrepancy in the invoice concerning the handwriting or truck details did not by itself establish evasion. On the facts found, the goods travelled in the same truck and with the same GR disclosed in the invoice, so the inference of deliberate evasion was not sustainable.

Conclusion: The penalty was not justified, and the Tribunal's order setting it aside was in substance.

Final Conclusion: The appeals were liable to fail because the Tribunal's view on absence of tax evasion and consequent penalty interference disclosed no legal or factual infirmity.

Ratio Decidendi: Penalty for alleged tax evasion cannot be sustained unless the material establishes a deliberate intention to evade tax, and a mere discrepancy in invoice particulars without such intention does not justify appellate interference with the Tribunal's factual finding.

Issues: (i) Whether a demand notice issued in Form B under Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 can be treated as a notice invoking a continuing guarantee for the purpose of initiating proceedings under Section 95 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The statutory scheme requires that an application under Section 95 of the Insolvency and Bankruptcy Code, 2016 be accompanied by particulars demonstrating (inter alia) the debt owed by the debtor, failure to pay within fourteen days of service of a notice of demand and relevant evidence of default. Rule 7(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019 prescribes service of a demand notice under clause (b) of sub-section (4) of Section 95 in Form B. Rule 3(1)(e) of the 2019 Rules defines 'guarantor' as a person in respect of whom the guarantee has been invoked by the creditor and remains unpaid in full or part. The definitions of "debt" and "default" in Sections 3(11) and 3(12) of the Code indicate that debt must be due and default is non-payment when the debt is due and payable. The deed of guarantee in the case is a continuing on-demand guarantee which makes the guarantor liable only upon demand in terms of the guarantee deed. Coordinate decisions of this Tribunal have held that where the deed of guarantee makes liability contingent on a demand, default on the part of the guarantor arises only after invocation/demand as per the guarantee, and that notice in Form B under Rule 7(1) is not a separate substitute for a prior invocation when the guarantee requires an explicit demand. Applying these principles to the admitted facts that no separate invocation/demand preceded issuance of Form B, the requirement that the guarantor's liability be invoked before initiating Section 95 proceedings is not satisfied.

Conclusion: Issue (i) is answered in favour of the appellant. A demand notice in Form B under Rule 7(1) of the 2019 Rules cannot be treated as a notice invoking a continuing guarantee where the deed of guarantee requires a distinct invocation; in absence of prior invocation and resultant default by the guarantor, initiation of proceedings under Section 95 is impermissible.

Issues: (i) Whether the Appellate Tribunal under Section 112 of the Central Goods and Services Tax Act, 2017 can examine questions of fact in a second appeal under the GST regime; (ii) whether the demand originally proceeded under Section 74 could be sustained in the absence of established fraud, wilful misstatement or suppression of facts, and whether the matter required remand for re-determination under Section 73.

Issue (i): Whether the Appellate Tribunal under Section 112 of the Central Goods and Services Tax Act, 2017 can examine questions of fact in a second appeal under the GST regime.

Analysis: The Tribunal contrasted the restricted second appeal jurisdiction under Section 100 of the Code of Civil Procedure, 1908 with the scheme of Section 112 of the Central Goods and Services Tax Act, 2017 and Rule 112 of the Central Goods and Services Tax Rules, 2017. It noted that the GST appellate framework does not impose the same limitation to substantial questions of law and that the Tribunal is competent to scrutinise factual issues arising from the record.

Conclusion: The Tribunal held that it can examine questions of fact in an appeal under Section 112.

Issue (ii): Whether the demand originally proceeded under Section 74 could be sustained in the absence of established fraud, wilful misstatement or suppression of facts, and whether the matter required remand for re-determination under Section 73.

Analysis: The Tribunal accepted the finding that the ingredients for Section 74 were not established, but also noted that the dispute regarding mismatch between GSTR-1 and GSTR-3B, credit notes, debit notes, annual return reconciliation and ITC reversal required fresh factual examination. It further relied on Section 75(2) of the Central Goods and Services Tax Act, 2017 to hold that where a notice under Section 74 is not sustainable for want of fraud or suppression, the proper officer must determine the tax as if the notice were under Section 73. Since such re-determination has to be undertaken by the proper officer, the matter could not be finally concluded at the appellate stage.

Conclusion: The Tribunal set aside the treatment of the matter as one under Section 73 at the appellate stage and remanded the case to the proper officer for fresh consideration under Section 73 after affording opportunity to the appellant.

Final Conclusion: The appeal succeeded to the extent that the impugned orders were interfered with on the reclassification issue and the matter was sent back for fresh adjudication by the proper officer under the correct statutory framework.

Issues: Whether the appellate authority's dismissal of the appeal for failure to make the prescribed 10% pre-deposit should be quashed and the appeal restored with an opportunity to make the pre-deposit.

Analysis: The petition seeks setting aside of the appellate order of dismissal for non-payment of the pre-deposit on the ground that the appeal was instituted offline and the petitioner was not intimated of the default nor heard before dismissal. The relief proposed is restoration of the appeal on the file of the Appellate Authority subject to the petitioner making the required pre-deposit within a specified short period, failing which the appeal would stand dismissed without further reference.

Conclusion: The appellate authority's order dated 28.11.2025 is quashed and the appeal is restored to the file of the Appellate Authority on condition that the petitioner makes the required pre-deposit within three weeks from the date of uploading of this order; failure to comply will result in dismissal of the appeal and the impugned order remaining undisturbed.

Ratio Decidendi: Where an appeal is dismissed for non-payment of a statutory pre-deposit without intimation or hearing and the default can be cured, a court may quash the dismissal and restore the appeal on terms permitting a short opportunity to make the pre-deposit, subject to a clear timeline and consequence for non-compliance.

Issues: Whether the 2nd respondent is obliged to consider and dispose of the petitioner's rectification application dated 11th December, 2025 filed for grant of input tax credit in view of the retrospective insertion of Section 16(5) of the Central Goods and Services Tax Act, 2017 and related circulars.

Analysis: The petition challenges an order-in-original rejecting input tax credit for 2017-18 issued under Section 73(9) of the Central Goods and Services Tax Act, 2017 read with Section 20 of the Integrated Goods and Services Tax Act, 2017. After the impugned order, Section 16(5) of the Central Goods and Services Tax Act, 2017 was inserted with retrospective effect (Finance Act, 2024) permitting input tax credit claims for specified financial years if returns were filed up to 30 November 2021; additionally, Circular No. 237/31/2024-GST dated 15.10.2024 contains a para (clause 3.5) prescribing a six-month period for seeking rectification to avail the retrospective amendment. The Court examined competing contentions: the petitioner's submission that the retrospective amendment potentially overturns the impugned rejection and the respondents' reliance on the circular and prescribed six-month rectification window. The Court did not decide the merits of the rectification claim or the applicability of the circular; instead, it confined itself to the procedural question whether the rectification application should be considered and directed the 2nd respondent to decide the application on merits and in accordance with law after affording hearing within a specified timeframe. The Court expressly left open substantive contentions including the applicability of the circular and limitation period for determination by the 2nd respondent.

Conclusion: The Court directed issuance of a limited mandamus requiring the 2nd respondent to afford the petitioner an opportunity of hearing and to decide the rectification application dated 11th December, 2025 on its merits and in accordance with law within two months from uploading of the order; the petition is disposed of in these terms.

Issues: (i) Whether the disallowance of business expenses under section 37 should be sustained where complete supporting details were not produced; (ii) Whether additions under section 68 in respect of unsecured loans should be sustained where identity, creditworthiness and genuineness of lenders were supported by documents and confirmations u/s 133(6).

Issue (i): Disallowance of business expenses under section 37 in respect of purchase of construction material and travelling expenses.

Analysis: The assessee submitted partial voucher evidence for construction materials and did not produce complete primary details for travelling expenses. The Assessing Officer disallowed the full amounts but did not reject books of account or make specific adverse findings that entirely negated the claimed expenditures. Considering that both sides had some justification and in the interest of equity, a proportionate adjustment was considered appropriate.

Conclusion: The disallowance is reduced by allowing 80% of the unsubstantiated balance for building materials and 80% of the travelling expense; 20% of each such unsubstantiated amount is disallowed. The grounds on this issue are partly allowed in favour of the assessee.

Issue (ii): Additions made under section 68 in respect of unsecured loans from five lenders.

Analysis: The assessee furnished copies of income-tax returns, computations, balance sheets, confirmations and bank statements for the lenders; loans were made by banking channels and lenders replied to notices u/s 133(6). Repayments were made in subsequent years and no material discrepancies were pointed out by the Assessing Officer. The requirement to explain the source of source was not applicable to the assessment year in question.

Conclusion: The additions under section 68 are deleted and the grounds on this issue are allowed in favour of the assessee.

Final Conclusion: The appeal is partly allowed: the additions under section 68 are deleted while limited disallowances under section 37 are sustained at an adhoc rate of 20% on the unsubstantiated portions.

Ratio Decidendi: Where identity, creditworthiness and genuineness of creditors are supported by documentary evidence and banking transactions and no discrepancies are pointed out, additions under section 68 are not sustainable; absence of complete vouchers for business expenditure may justify a proportionate disallowance under section 37 rather than a total disallowance.

Issues: (i) Whether the delay of 542/543 days in filing the appeal should be condoned; (ii) Whether the assessee is entitled to full exemption under Section 10(10AA) of the Income-tax Act, 1961 in view of CBDT Notification No.31/2023 dated 24.05.2023 which enhanced the monetary limit.

Issue (i): Whether the delay in filing the appeal should be condoned.

Analysis: The application for condonation set out medical treatment of the appellant and his mother, death of the mother, marriage-related family commitments, breakdown of prior counsel-client communication, and reliance on fresh counsel. Documentary evidence in support of medical treatment and related events was placed on record.

Conclusion: Delay condoned and the appeal admitted for adjudication.

Issue (ii): Whether the assessee is entitled to the claimed exemption under Section 10(10AA) of the Income-tax Act, 1961 up to the enhanced limit specified by CBDT Notification No.31/2023 dated 24.05.2023.

Analysis: The assessing officer applied an earlier monetary ceiling of Rs.3,00,000/-, whereas the CBDT Notification No.31/2023 dated 24.05.2023 raised the ceiling to Rs.25,00,000/-. The claimed leave encashment amount was less than the enhanced limit. Coordinate bench decisions on identical issues were referenced in support.

Conclusion: The assessing officer's restriction to Rs.3,00,000/- is set aside; relief under Section 10(10AA) is to be granted to the full extent claimed by the assessee, subject to the enhanced limit in the cited notification.

Final Conclusion: The appeal is allowed on merits after condonation of delay, resulting in full grant of the claimed exemption under Section 10(10AA) within the enhanced monetary limit prescribed by CBDT Notification No.31/2023 dated 24.05.2023.

Ratio Decidendi: Where a statutory or administrative instrument (here, CBDT Notification No.31/2023 dated 24.05.2023) increases the monetary ceiling applicable to an exemption, the enhanced limit applies to claims falling within that amount and the assessing officer must allow the exemption up to the enhanced limit under Section 10(10AA) of the Income-tax Act, 1961.

Issues: (i) Whether the appellate authority erred in admitting or considering additional material/evidence without remanding the matter to the assessing officer under Rule 46A of the Income-tax Rules; (ii) Whether the deletion of the addition of Rs. 12.30 crores by the first appellate authority was unsustainable for lack of verification of the nature of funds received and the creditworthiness of the payer.

Issue (i): Whether additional material was admitted or considered in breach of Rule 46A of the Income-tax Rules.

Analysis: The file shows that the first appellate authority requested and received bank statements, mutual fund statements, tax returns and financial statements which were produced during appellate proceedings and reproduced in the appellate order. The material was not placed before the appellate authority by invoking procedural provision for belated evidence alone; rather, the authority exercised its discretion to call for and examine substantiating material furnished during appeal.

Conclusion: The admission and consideration of the additional material did not violate Rule 46A and was within the appellate authority's discretion.

Issue (ii): Whether deletion of the unexplained investment addition of Rs. 12.30 crores was incorrect for want of verification of the source and payer's creditworthiness.

Analysis: The appellate record contains the assessee's bank statements reflecting receipts from and repayment to the payer, mutual fund investment and redemption entries, and the payer's financial statements showing sufficient surplus. Those materials were relied upon to establish that the receipts were received and returned within the year and that the payer had capacity to advance the funds. The payer's project not proceeding to fruition does not, by itself, render the transaction sham or unexplained where source documentation supports the transaction.

Conclusion: The deletion of the addition of Rs. 12.30 crores is sustained and the finding that the investment was not unexplained is affirmed in favour of the assessee.

Final Conclusion: The revenue's appeal is without merit and is dismissed; the appellate authority's exercise of discretion to call for and rely upon substantiating material is upheld and the assessment addition is correctly deleted.

Ratio Decidendi: Where substantiating bank records, mutual fund statements and the payer's financials are produced and relied upon on appeal, the appellate authority may, in exercise of its discretion, admit and consider such material and delete an unexplained investment addition if those materials establish the source and genuineness of the transaction.

Issues: Whether the ICDS adjustment of Rs. 1284.66 crores, made while processing the return under section 143(1)(a), was required to be deleted from the computation of total income in the scrutiny assessment under section 143(3) after the intimation under section 143(1)(a) had been quashed by the High Court.

Analysis: The adjustment had been carried forward into the assessment order under section 143(3), but the earlier intimation under section 143(1)(a) making the disputed ICDS addition had already been quashed by the jurisdictional High Court. Once the foundational intimation was set aside, the same adjustment could not survive in the later computation of income. The appellate authority's jurisdictional objection did not prevent grant of consequential relief in the assessment proceedings.

Conclusion: The ICDS adjustment was directed to be deleted from the assessment computation, and the issue was answered in favour of the assessee.

Final Conclusion: The appeal succeeded to the extent that the disputed ICDS addition was removed from the scrutiny assessment, and the remaining matters were only consequential.

Ratio Decidendi: Where an adjustment made under section 143(1)(a) has been quashed, the same adjustment cannot be retained in the assessment under section 143(3) and consequential deletion must follow.

Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 on 20-07-2022 was barred by limitation and, if so, whether the reassessment proceedings were void ab initio.

Analysis: The assessment year involved was 2013-14. The reassessment notice had earlier been issued under the old regime on 07-06-2021, and the subsequent proceedings were undertaken pursuant to the Supreme Court directions in Ashish Agarwal. Applying the limitation principles explained in Rajeev Bansal, the period between the deemed notice and the supply of information, as well as the statutory reply period, had to be excluded while computing the surviving time for issuance of notice under the new regime. On that computation, the extended date for issuance of notice expired on 25-06-2022. The notice actually issued on 20-07-2022 was therefore beyond the permissible period.

Conclusion: The notice under section 148 was time barred and the reassessment proceedings were liable to be quashed as void ab initio; the legal ground was allowed in favour of the assessee.

Ratio Decidendi: Where a reassessment notice under the new regime is issued after the surviving limitation period computed by excluding the legally mandated intervals, the notice is invalid and the consequential reassessment cannot stand.

Issues: (i) Whether the assessment framed under section 153A of the Income-tax Act, 1961 was without jurisdiction for want of incriminating material; (ii) whether additions based on seized loose sheets and rough papers were sustainable; (iii) whether the addition relating to loan from Muthoot Finance Ltd. was justified; and (iv) whether the ad hoc addition as deemed house property income could be sustained.

Issue (i): Whether the assessment framed under section 153A of the Income-tax Act, 1961 was without jurisdiction for want of incriminating material.

Analysis: The search yielded seized material that the Tribunal found to constitute incriminating documents for assumption of jurisdiction under section 153A. On that basis, the challenge that the assessment lacked jurisdiction merely because no incriminating material existed was rejected.

Conclusion: The challenge to the assessment under section 153A failed and was decided against the assessee.

Issue (ii): Whether additions based on seized loose sheets and rough papers were sustainable.

Analysis: The seized papers were found to contain mere jottings and rough estimates, often without dates, signatures, names, or any reliable link to the relevant assessment year. Such loose sheets, uncorroborated by books of account or independent evidence, were treated as unreliable and incapable of supporting the additions.

Conclusion: The additions founded on the loose sheets were deleted and this issue was decided in favour of the assessee.

Issue (iii): Whether the addition relating to loan from Muthoot Finance Ltd. was justified.

Analysis: The amount was claimed to be a loan against jewellery security. The record showed that the revenue authorities did not effectively examine whether the loan was reflected in the assessee's books or whether the explanation was incorrect. In the absence of such verification, the addition could not stand.

Conclusion: The addition relating to the loan was deleted and this issue was decided in favour of the assessee.

Issue (iv): Whether the ad hoc addition as deemed house property income could be sustained.

Analysis: The addition was made merely on an ad hoc basis without proper verification of the assessee's explanation that the relevant flat formed part of trading inventory and had been rented out. Since the factual position was not examined, the addition was found unsustainable.

Conclusion: The ad hoc addition as deemed house property income was deleted and this issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded only in part, with the jurisdictional challenge rejected but the disputed additions deleted.

Ratio Decidendi: Seized loose sheets or rough papers, when not supported by dates, authorship, books of account, or independent corroboration, cannot by themselves justify income additions; ad hoc additions also cannot be sustained without factual verification.

Issues: Whether the addition of Rs. 2,97,66,224/- made by the Assessing Officer under Section 69C of the Income-tax Act, 1961 treating purchases as unexplained expenditure is sustainable.

Analysis: Section 69C applies where an assessee has incurred an expenditure and offers no explanation about the source of such expenditure; the statutory focus is on the source of expenditure and not on the authenticity of the expenditure recorded in books. In the present case the purchases were recorded in the assessee's audited books of account and supporting material (invoices, bank statements, shipping bills) was produced and independently authenticated by Customs authorities for SEZ exports. Coordinate and High Court precedents establish that where expenditure is recorded in regular books and the source is explained, Section 69C is not attracted. Non-response of creditors to notices issued under Section 133(6) does not, by itself, permit adverse inference to treat recorded purchases as unexplained expenditure when books are not rejected and no material demonstrates falsehood of books. The Assessing Officer did not point to rejection of books or specific discrepancies undermining the source of purchases; appellate findings relying on documentary and Customs verification were not misplaced.

Conclusion: The addition of Rs. 2,97,66,224/- under Section 69C is unsustainable and is deleted; the Revenue appeal is dismissed and the assessee's cross-objection is allowed (decision in favour of the assessee).

Issues: Whether the payment of Rs. 20,00,000 made pursuant to contractual shortage of goods in transit is allowable as business expenditure under Section 37(1) of the Income-tax Act, 1961, or is disallowed as a penalty under the Explanation to Section 37(1).

Analysis: The payment was supported by the transportation contract clause allocating responsibility for shortage in transit, email correspondence evidencing the claim, ledger entries and bank statements showing payment through banking channels. There is no material or finding that the payment arose from violation of any statutory provision or law. The payment was made to indemnify the principal for loss of entrusted goods and thus arose from contractual obligations intrinsic to the business of transporting goods. The Explanation to Section 37(1) disallows expenditures that are penalties for infraction of law; payments that are compensatory under contract and not imposed for statutory contraventions are not caught by that Explanation. Judicial authorities recognizing that compensatory contractual damages incurred in the course of business are deductible under Section 37(1) were applied to the facts.

Conclusion: The payment of Rs. 20,00,000 is compensatory in nature, incurred wholly and exclusively for the purpose of business and does not fall within the Explanation to Section 37(1) of the Income-tax Act, 1961; therefore the disallowance is unsustainable and the appeal is allowed.

Ratio Decidendi: A payment made pursuant to contractual liability to compensate for shortage of goods in transit, supported by contemporaneous documentary and banking evidence and not arising from breach of statutory law, is compensatory and deductible as a business expenditure under Section 37(1) of the Income-tax Act, 1961.

Issues: Whether the assessee is entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961 in respect of interest of Rs. 17,64,987/- received from nationalized banks, the same being attributable to profits and gains of business.

Analysis: The assessee, a co-operative society carrying on credit business to members, treated bank interest as business income and claimed deduction under section 80P(2)(a)(i). The assessing authority and the lower appellate authority held the interest taxable as income from other sources and denied deduction. The Tribunal noted decisions of the Karnataka High Court (including Tumkur Merchants Souharda Credit Cooperative Ltd. and Totgars Co-Operative Sale Society Ltd.) holding similar interest to be attributable to business and eligible for deduction under section 80P(2)(a)(i), and observed that these decisions have not been overruled by a larger bench of the Karnataka High Court or by the Supreme Court. The subsequent Karnataka High Court decision distinguishing those precedents concerned section 80P(2)(d) and does not negate the earlier High Court rulings relied upon by the assessee. The Tribunal also noted absence of any finding by the assessing officer that the interest was chargeable under the head "income from other sources" rather than business income.

Conclusion: The assessee is entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961 in respect of the interest income of Rs. 17,64,987/- received from nationalized banks, as such interest is attributable to the profits and gains of the assessee's business. The appeal is partly allowed to this extent.

Issues: (i) Whether reassessment proceedings initiated under section 148 read with section 144B are valid where the alleged escaped income, calculated by excluding IGST and applying GP rate, is below the monetary threshold of Rs. 50,00,000 under section 149(1)(b); (ii) Whether the addition of gross profit element on purchases treated as bogus is sustainable on merits when primary transactional evidence exists and books of account have not been rejected under section 145(3).

Issue (i): Whether the reassessment under section 148 is valid given the alleged escaped income falls below the statutory threshold.

Analysis: The reassessment was based on information alleging bogus purchases of Rs. 4,09,76,267/-. The assessee's audited books show IGST of Rs. 62,50,617/- separately accounted and purchases debited at Rs. 3,47,25,650/-. Applying the adopted GP rate of 13.85% to Rs. 3,47,25,650/- yields escaped income of Rs. 48,09,503/-, which is below Rs. 50,00,000/-. The statutory threshold in section 149(1)(b) refers to income chargeable to tax which has escaped assessment, not the gross value of transactions. Jurisdiction under section 148 depends on the existence of escaped income meeting the statutory criterion; if the real escaped income does not meet the threshold, the assumption of jurisdiction is invalid.

Conclusion: The reassessment proceedings under section 148 are invalid as the alleged escaped income, computed on the real value of purchases (excluding IGST) at the accepted GP rate, is below Rs. 50,00,000/-, and therefore jurisdiction under section 148 is lacking in favour of the assessee.

Issue (ii): Whether the addition of the gross profit element on the purchases should be sustained on merits.

Analysis: The assessee placed primary transactional evidence on record including purchase orders, invoices, e-way bills, bank RTGS/NEFT payments and goods received notes. The books of account were not rejected under section 145(3). The Assessing Officer relied primarily on an investigation report without conducting independent verification to disprove the transactional evidence. The gross profit component on the purchases was already reflected in the returned income; adding the same amount separately without rejecting books and without independent disproof results in double taxation.

Conclusion: The addition of the gross profit element is unsustainable on merits and is deleted in favour of the assessee.

Final Conclusion: The appeal is allowed on both jurisdictional and merit grounds, resulting in quashing of the reassessment and deletion of the addition; the reassessment proceedings do not survive and the impugned addition is not sustained.

Ratio Decidendi: For the purpose of jurisdiction under section 148, escaped income must be measured by the real income chargeable to tax (net of taxes like IGST where not part of purchases); if such escaped income is below the statutory monetary threshold in section 149(1)(b), reassessment proceedings under section 148 cannot be validly initiated.

Issues: Whether the assessee is entitled to deduction of Rs.2,03,70,390 claimed under section 35(2AB) of the Income-tax Act, 1961 for in-house R&D expenditure for Assessment Year 2012-13.

Analysis: The assessment was earlier set aside for de novo adjudication; the assessing officer did not independently examine the revised claim but reproduced findings from the quashed order. Delay in DSIR approval is procedural and, where approval is ultimately granted covering the relevant period, does not bar entitlement to the deduction. Continuation of manufacturing activity despite transfer of assets to R&D does not, by itself, negate existence of bona fide R&D activity. The statute does not mandate patents or publications as the sole proof; what is required is that expenditure be incurred for an approved in-house R&D facility and be supported by records. No specific falsity or material defect was pointed out in the R&D expenditure details furnished. No evidence was shown of a double claim of deduction in the same assessment year on the same expenditure.

Conclusion: The claim of Rs.2,03,70,390 under section 35(2AB) is allowed in favour of the assessee.

Issues: (i) Whether the amounts credited to the assessee's bank account from exhibition sales organised by M/s PHI Events, Singapore are unexplained cash credits liable to addition under Section 68 read with Section 115BBE of the Income-tax Act, 1961; (ii) Whether the learned NFAC's appreciation of documents violated Rule 46A of the Income-tax Rules, 1962 / principles of natural justice by admitting additional evidence not put to the Assessing Officer.

Issue (i): Whether the impugned credits are unexplained cash credits under Section 68 read with Section 115BBE of the Income-tax Act, 1961.

Analysis: The Court examined documentary evidence including invitation/confirmation letters from PHI Events Singapore, invoices issued by the assessee to the consignee, shipping bill and airway bills evidencing export, customs/packing lists, transit insurance, Foreign Bill Transaction Advice and bank advices showing realization of SGD 686,812 (equivalent to Rs. 3,05,81,848) into the assessee's IDBI account, correspondence for Bank Realisation Certificate on DGFT portal, records of remittances from Deutsche Bank Singapore, invoices of sale at the exhibition site, lists of buyers and artists, and ledger entries showing payments to artists after deductions. The NFAC's detailed factual appreciation found the exhibition and sales genuine, the remittances traceable to PHI Events, and that the assessee had substantiated the nature and source of the credits beyond reasonable doubt. The Assessing Officer's adverse inferences were not supported by contrary evidence and were based on suspicion; the Court accepted NFAC's finding that documentary proof discharged the assessee's burden under Section 68.

Conclusion: The addition under Section 68 read with Section 115BBE is deleted; the credits are held explained in favour of the assessee.

Issue (ii): Whether admission or reliance on documents by the NFAC violated Rule 46A of the Income-tax Rules, 1962 / principles of natural justice because such documents were not put to the Assessing Officer.

Analysis: The Court considered whether the documents relied upon by the NFAC were newly filed before NFAC or were already placed before the Assessing Officer. On the record, the assessee certified and produced a paper book showing that bank statements and artists' ledger accounts were contemporaneously furnished before the Assessing Officer; the Court found that no additional evidence was introduced before NFAC that was not available to the AO. Consequently the contention of violation of Rule 46A failed.

Conclusion: There is no breach of Rule 46A or natural justice; NFAC's reliance on the documents did not vitiate the appellate decision and the argument is dismissed.

Final Conclusion: The aggregate effect of the decision is that the revenue's appeal against deletion of addition under Section 68 is dismissed and the NFAC order deleting the addition is upheld; the assessee's cross-objection is dismissed as infructuous.

Ratio Decidendi: Where an assessee adduces contemporaneous and verifiable documentary evidence (invoices, shipping bills, airway bills, bank transaction advices, customs/packing lists, and confirmations from the intermediary/agent) tracing foreign remittances to exhibition sales, such evidence suffices to explain credits within the meaning of Section 68 of the Income-tax Act, 1961 and additions based on mere suspicion cannot be sustained.

Issues: Whether the contract for mud engineering services together with supply of mud chemicals/additives (consumed in execution) qualifies as a composite supply under Section 2(30) of the Goods and Services Tax Act, 2017.

Analysis: Section 2(30) defines composite supply as two or more taxable supplies that are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one being a principal supply. The enquiry requires examining whether the supply of services and the supply of chemicals are mutually essential and intertwined parts of a single contractual obligation such that the goods are supplied in conjunction with the services and are necessary for execution of the contract. The contractual scope requires provision of mud engineering expertise together with provision and injection of formulated drilling fluids and chemicals tailored to the drilling activity; the chemicals are not off the shelf items but are prepared/used as part of the engineering service to maintain drilling parameters. The separate billing or issuance of distinct invoices does not by itself render the supplies separate if the goods and services are integral to achieving the contractual objective and are supplied in conjunction with each other.

Conclusion: The supply of mud engineering services together with the associated mud chemicals/additives consumed during execution constitutes a composite supply under Section 2(30) of the Goods and Services Tax Act, 2017; the impugned advance ruling and appellate advance ruling holding otherwise are set aside.