Issues: Whether the revisionary order under section 263 could be sustained on the ground that the assessment lacked proper inquiry and verification in respect of the claim of balance written off.

Analysis: The assessment record showed that the Assessing Officer had raised specific queries regarding the impugned claim and the assessee had furnished replies along with supporting details. Where the assessment order reflects inquiry on the relevant issue, invocation of Explanation 2 to section 263 is not justified merely on a general assertion that further verification ought to have been made. For revision under section 263, the revisional authority must demonstrate that the assessment order was not only erroneous but also prejudicial to the interests of revenue. A mere allegation that verification was insufficient is not enough unless some material is brought on record showing that the claimed verification would have led to a contrary result.

Conclusion: The revision under section 263 was not sustainable on the issue of balance written off, and the assessee succeeded on this ground.

Ratio Decidendi: Where the Assessing Officer has made relevant inquiries and the assessee has responded, revision under section 263 cannot be upheld merely on the basis of a general allegation of inadequate verification without material showing that the assessment order is erroneous and prejudicial to the interests of revenue.

Issues: Whether the reassessment proceedings were valid where approval for issuance of notice was obtained from the Principal Commissioner instead of the prescribed higher authority after the expiry of three years from the end of the relevant assessment year.

Analysis: The record showed that the statutory approval for issuing notice under the reassessment provisions had been taken from the Principal Commissioner, whereas the governing approval requirement was that of the Principal Chief Commissioner in a case falling beyond three years from the end of the relevant assessment year and within the monetary threshold considered by the provisions. This defect went to the root of jurisdiction. The notice and the consequential assessment proceedings were therefore not in conformity with the mandatory preconditions for valid reassessment.

Conclusion: The reassessment proceedings were invalid and the assessment order was liable to be quashed in favour of the assessee.

Issues: (i) Whether compensation received on vacating the flat under the redevelopment arrangement was taxable as capital gains; (ii) Whether the direction to compute capital gain on the additional carpet area could stand without prior notice and opportunity under the enhancement power.

Issue (i): Whether compensation received on vacating the flat under the redevelopment arrangement was taxable as capital gains.

Analysis: The lump-sum payment was found to be a predetermined amount paid for hardship, shifting and re-shifting, and for enabling demolition and redevelopment, rather than consideration for sale or transfer of the flat. On the terms of the agreement and the nature of the payment, the receipt was treated as a capital receipt and not as consideration arising from transfer of a capital asset.

Conclusion: The compensation of Rs. 82,00,000 was held not taxable in the assessee's hands.

Issue (ii): Whether the direction to compute capital gain on the additional carpet area could stand without prior notice and opportunity under the enhancement power.

Analysis: The addition relating to the additional carpet area was introduced for the first time at the first appellate stage and therefore amounted to enhancement of income. Since enhancement under the appellate power requires a reasonable opportunity to show cause, and no such opportunity was shown to have been granted, the direction could not be sustained as made.

Conclusion: The enhancement on account of the additional 56% carpet area was set aside and the matter was remitted for reconsideration after affording due opportunity.

Final Conclusion: The assessee succeeded on the taxability of the monetary compensation, while the issue relating to the additional carpet area was sent back for fresh consideration with notice and hearing.

Ratio Decidendi: A redevelopment-related lump-sum paid for hardship and displacement is a capital receipt and not consideration for transfer, and any appellate enhancement of income must be preceded by a reasonable opportunity of being heard.

Issues: (i) Whether the revisionary order under section 263 of the Income-tax Act, 1961 could be sustained on the ground that the Assessing Officer had not made proper enquiry into the assessee's claim of deduction under section 80G in respect of CSR-related donations; (ii) Whether deduction under section 80G of the Income-tax Act, 1961 is allowable on donations made out of CSR expenditure, notwithstanding disallowance of CSR expenditure under section 37(1).

Issue (i): Whether the revisionary order under section 263 of the Income-tax Act, 1961 could be sustained on the ground that the Assessing Officer had not made proper enquiry into the assessee's claim of deduction under section 80G in respect of CSR-related donations.

Analysis: The record showed that the Assessing Officer had issued specific queries regarding the section 80G claim linked to CSR expenses and the assessee had furnished a detailed reply with supporting material. In such circumstances, the matter was not one of absence of enquiry. The revisional authority did not demonstrate any defect in the enquiry or bring on record any independent factual basis to show that the assessment order was unsustainable. A revision under section 263 cannot be founded merely on a different view where enquiry was in fact made and the Assessing Officer had taken a possible view.

Conclusion: The revision under section 263 could not be sustained on the ground of lack of enquiry.

Issue (ii): Whether deduction under section 80G of the Income-tax Act, 1961 is allowable on donations made out of CSR expenditure, notwithstanding disallowance of CSR expenditure under section 37(1).

Analysis: CSR expenditure disallowed under section 37(1) is a computation restriction for business income, whereas deduction under section 80G operates independently at the stage of gross total income under Chapter VI-A. The fact that the payment arose from CSR obligation does not by itself negate its character as a donation for section 80G purposes, provided the donation is made to an eligible institution and the statutory conditions are fulfilled. No statutory embargo was shown that barred such deduction merely because the amount was spent as part of CSR compliance.

Conclusion: Deduction under section 80G was allowable on the CSR-linked donations in the present case.

Final Conclusion: The revisional order was unsustainable and the assessee's claim for deduction under section 80G on CSR-related donations was upheld.

Ratio Decidendi: Where the Assessing Officer has conducted enquiry and taken a possible view, section 263 cannot be invoked merely to substitute a different opinion, and CSR-linked donations remain eligible for deduction under section 80G if the statutory conditions for that deduction are otherwise satisfied.

Issues: (i) whether the long-term capital gain from sale of shares of Lifeline Drugs and Pharma Ltd. was bogus and the exemption under section 10(38) of the Income Tax Act, 1961 could be denied on the basis of the investigation report and surrounding circumstances; (ii) whether the addition made under section 68 of the Income Tax Act, 1961 and the consequential addition towards alleged commission for accommodation entry were sustainable.

Issue (i): whether the long-term capital gain from sale of shares of Lifeline Drugs and Pharma Ltd. was bogus and the exemption under section 10(38) of the Income Tax Act, 1961 could be denied on the basis of the investigation report and surrounding circumstances.

Analysis: The assessee produced documentary evidence showing acquisition of shares, demat credit, sale through a listed exchange, and routing of transactions through SEBI-registered brokers and banking channels. The Department relied mainly on the investigation report and the general allegation that the scrip was a penny stock. The material on record did not show any defect in the assessee's documents, and the share allotment and sale transactions were not shown to be null or unverifiable. The fact that trading in the scrip was suspended later did not by itself discredit transactions already completed earlier. On the facts, the assessee's share dealings stood supported by contemporaneous evidence and were not rebutted by any independent adverse material.

Conclusion: The share transactions were held to be genuine and the exemption claim under section 10(38) could not be denied.

Issue (ii): whether the addition made under section 68 of the Income Tax Act, 1961 and the consequential addition towards alleged commission for accommodation entry were sustainable.

Analysis: Once the share transactions were accepted as genuine, the foundation for treating the sale proceeds as unexplained cash credit failed. The additions rested on the same third-party material and presumptions that were not independently corroborated against the assessee's evidence. As the primary addition itself could not survive, the ancillary addition for alleged commission also lacked support.

Conclusion: The addition under section 68 and the consequential commission addition were not sustainable and were directed to be deleted.

Final Conclusion: The assessee succeeded on the substantive controversy, the LTCG exemption claim was accepted, the additions were deleted, and the revenue's appeal did not survive.

Ratio Decidendi: When an assessee substantiates share transactions with contemporaneous documentary evidence, demat and banking records, and exchange-based dealings, a general investigation report or uncorroborated suspicion about a penny stock cannot, by itself, justify denial of exemption or addition under section 68.

Issues: Whether the demand was barred by limitation and the extended period could be invoked in the facts of the case.

Analysis: The appeal was confined to limitation, and the classification dispute was not gone into. The show cause notice was issued about four years after the initial clearance. The appellant's prior and subsequent imports were consistently classified in the same manner without objection, which supported a bona fide belief. Non-imposition of penalty under Section 114AA of the Customs Act, 1962 was held not to amount to an admission that there was no suppression. Even so, on the facts, the record did not justify invoking the extended period, and the demand could not survive on limitation. Reliance was also placed on the principle that the extended period under Section 28(1) of the Customs Act, 1962 is available only where suppression or wilful misstatement is established.

Conclusion: The demand was held to be time-barred, and the appeal was allowed on limitation.

Issues: (i) whether the extended period of limitation could be invoked and the show cause notice was time-barred; (ii) whether CENVAT credit could be denied on the ground of delayed availment.

Issue (i): whether the extended period of limitation could be invoked and the show cause notice was time-barred.

Analysis: The appellant had commenced taxable activity, availed input services, utilised the credit for payment of service tax, and had also approached the Department for migration to GST. The record showed that the registration had been suo motu cancelled and the appellant could not file ST-3 returns on that account. In these circumstances, the conduct disclosed bona fides rather than suppression. The Department also remained inactive for a substantial period before issuing the notice.

Conclusion: The extended period of limitation was not invocable and the show cause notice was barred by limitation, in favour of the assessee.

Issue (ii): whether CENVAT credit could be denied on the ground of delayed availment.

Analysis: The appellant received input services during the relevant period and utilised the credit for payment of service tax within the period examined by the Tribunal. The objection that the credit was taken beyond the permissible period was found factually incorrect on the record as considered by the Tribunal.

Conclusion: CENVAT credit could not be denied, in favour of the assessee.

Final Conclusion: The demand could not survive once limitation was found to be barred and the credit denial was unsustainable, so the impugned order was set aside with consequential relief.

Ratio Decidendi: Where the taxpayer's conduct establishes bona fides and the Department issues a notice after remaining silent despite knowledge of the facts, the extended period of limitation cannot be invoked and the demand must fail; a factually unsupported objection to credit timing cannot justify denial of CENVAT credit.

Issues: (i) Whether the secured creditor's measures under the SARFAESI Act, including the possession notice and the order under Section 14, were liable to be set aside for non-compliance with the statutory procedure. (ii) Whether the contempt petition was maintainable before the Tribunal in respect of the alleged violation of the stay order.

Issue (i): Whether the secured creditor's measures under the SARFAESI Act, including the possession notice and the order under Section 14, were liable to be set aside for non-compliance with the statutory procedure.

Analysis: The application was filed under Section 17(1) of the SARFAESI Act challenging the demand notice, possession notice and the order obtained under Section 14. The Tribunal noted that the borrower had received the demand notice, but no material was produced to show any objection or representation under Section 13(3A). At the same time, the secured creditor remained absent and led no evidence to rebut the specific allegations that the possession notice was not properly served, not affixed, and not published in the prescribed manner, and that the application under Section 14 had been mechanically entertained without due verification of compliance with the Act and Rules.

Conclusion: The challenge under Section 17(1) succeeded. The possession notice and the order passed by the Chief Judicial Magistrate were set aside, and the borrower obtained relief in the SARFAESI application.

Issue (ii): Whether the contempt petition was maintainable before the Tribunal in respect of the alleged violation of the stay order.

Analysis: The Tribunal recorded that, although a sale notice had been issued during the subsistence of the stay, the Tribunal was not a court and therefore lacked jurisdiction to initiate contempt proceedings for contempt of court. On that basis, the complaint of disobedience was not entertained as contempt.

Conclusion: The contempt petition was not maintainable before the Tribunal and was closed.

Final Conclusion: The SARFAESI challenge was allowed, the impugned possession and magistrate's orders were annulled, and the contempt complaint was not entertained for want of jurisdiction.

Ratio Decidendi: In a SARFAESI challenge, failure of the secured creditor to establish compliance with the mandatory statutory procedure can justify setting aside the enforcement measures, while a tribunal lacking contempt jurisdiction cannot entertain a contempt petition for breach of its stay order.

Issues: Whether the transfer pricing adjustment made in respect of ESOP or RSU benefits granted by the foreign parent company to the assessee's employees could be sustained when no cost was incurred by the assessee and no corresponding liability was recorded in its accounts.

Analysis: The adjustment was based on a notional valuation of employee perquisite cost and a mark-up thereon. The relevant transfer pricing rule requires the net profit margin to be computed in relation to costs incurred, and the expression "incurred" denotes an actual financial obligation or outflow. The assessee neither acquired the shares nor bore the cost of the ESOP or RSU grant, and the TDS reimbursement was treated as a reimbursement without mark-up. In the absence of any real cost or contractual liability to bear such expenditure, a hypothetical or opportunity-based cost could not be imputed for transfer pricing purposes.

Conclusion: The transfer pricing adjustment in respect of the ESOP or RSU-related perquisite value was not sustainable and was directed to be deleted.

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.