Issues: (i) Whether expenditure on replacement of dies and moulds was allowable as revenue expenditure under section 31 of the Income-tax Act, 1961; (ii) Whether 100% depreciation on temporary structures incurred for area offices was allowable; (iii) Whether weighted deduction under section 35(2AB) could be denied in respect of work-in-progress; (iv) Whether entry tax paid and set off against sales tax could also be claimed as a deduction; (v) Whether the difference arising on prepayment of sales tax deferred loan on net present value basis was taxable as income or to be treated on capital account; (vi) Whether upfront fee paid to foreign entities for ECB processing attracted disallowance for failure to deduct tax at source; and (vii) Whether commission paid to foreign agents was liable to disallowance despite earlier final decisions in the assessee's favour.

Issue (i): Whether expenditure on replacement of dies and moulds was allowable as revenue expenditure under section 31 of the Income-tax Act, 1961.

Analysis: The question was governed by the assessee's own earlier case and by the principle that dies and moulds attached to machinery form part of the plant and machinery. Replacement of worn-out dies and moulds was treated as current repairs, and the expenditure was brought within section 31 rather than being characterised as capital outlay.

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

Issue (ii): Whether 100% depreciation on temporary structures incurred for area offices was allowable.

Analysis: The work consisted of interior partitioning, electrical work, wallpapers and similar temporary office improvements. The prior year's order on identical facts had already been accepted, and the factual nature of the work supported the finding that the expenditure did not create a durable capital asset warranting disallowance.

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

Issue (iii): Whether weighted deduction under section 35(2AB) could be denied in respect of work-in-progress.

Analysis: The issue was stated to be covered by the earlier decision in the assessee's own case on identical facts and legal position. The earlier ruling allowing the claim for research and development expenditure was treated as governing the present assessment year.

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

Issue (iv): Whether entry tax paid and set off against sales tax could also be claimed as a deduction.

Analysis: The adjustment under the Sales Tax law did not control deductibility under the Income-tax Act. Actual payment of entry tax was the relevant consideration, and the earlier final decision on the same issue for the assessee was followed. The contention based on double deduction and section 43B was not accepted.

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

Issue (v): Whether the difference arising on prepayment of sales tax deferred loan on net present value basis was taxable as income or to be treated on capital account.

Analysis: The assessee had merely prepaid the deferred sales tax liability under a government scheme by discharging the balance on an NPV basis. There was no remission or cessation of liability and no receipt of income. The ratio of the Supreme Court's decision on similar deferred sales tax arrangements supported treatment on capital account.

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

Issue (vi): Whether upfront fee paid to foreign entities for ECB processing attracted disallowance for failure to deduct tax at source.

Analysis: The services were technical in nature, but the decisive question under the applicable tax treaties was whether technical knowledge, experience, skill or know-how had been made available to the assessee. As the know-how was not transferred and the make available condition was not satisfied, the amounts were not taxable in India under the relevant treaty articles and the disallowance under the domestic withholding provisions could not stand.

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

Issue (vii): Whether commission paid to foreign agents was liable to disallowance despite earlier final decisions in the assessee's favour.

Analysis: The issue had already been decided in earlier years on identical facts in favour of the assessee, and those decisions had attained finality. No distinguishing factual or legal basis for a different view in the present year was shown.

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

Final Conclusion: All substantial questions of law were answered for the assessee, and the appellate challenge by the Revenue failed in full.

Ratio Decidendi: Where the relevant expenditure or payment is governed by an earlier final decision on identical facts, or where treaty protection applies because technical know-how is not made available to the payer, the corresponding disallowance cannot be sustained under the Income-tax Act, 1961.

Issues: (i) Whether the appellant, acting as consignment agent under the agreement with Rajesh Exports Ltd., is liable to service tax under the category of clearing and forwarding agent services; (ii) Whether invocation of the extended period of limitation is justified for non-disclosure of commission receipts; (iii) What is the entitlement as to penalties and effect of payment made prior to issuance of the show-cause notice.

Issue (i): Whether the appellant is a consignment agent and thus liable to service tax under clearing and forwarding agent services.

Analysis: The agreement between the parties designates the appellant as the "Consignment Agent" and sets out duties including sale at company-recommended prices, custody and banking of sale proceeds, monthly statements, and entitlement to turnover-based commission. Section 65(25) of the Finance Act, 1994 includes a consignment agent within the definition of clearing and forwarding agent, and clause (j) of Section 65(105) makes services provided by a clearing and forwarding agent taxable. The factual matrix and documentary records obtained during investigation demonstrate that the appellant received commission on sales and operated as consignment agent as per the contractual terms.

Conclusion: The appellant is a consignment agent and the demand of service tax classified under clearing and forwarding agent services is upheld (decision in favour of the Revenue on this issue).

Issue (ii): Whether the extended period of limitation could be invoked for assessment of service tax on commission receipts.

Analysis: The Revenue, on investigation and perusal of documents including consignment notes, debit notes, retail invoices and commission details, found that the appellant had filed 'Nil' ST-3 returns and failed to disclose commission receipts. The failure to disclose material facts relating to commission receipts and registration under the relevant category supports invocation of the extended period under the statutory provisions.

Conclusion: Invocation of the extended period of limitation is justified (decision in favour of the Revenue on this issue).

Issue (iii): Whether penalties should be imposed and what effect the appellant's payment of service tax with interest prior to the show-cause notice has on penalties.

Analysis: The appellant had paid service tax with interest on 25.02.2013 prior to issuance of the show-cause notice dated 19.04.2013 and had also paid 25% of the total penalty demanded under Section 78. Taking these facts into account, the Tribunal accepted the demand but adjusted penalty liability: no further amount of penalty under Section 78 is payable beyond the amount already paid, and the penalty under Section 77 for non-filing of returns, originally imposed at Rs.10,000, is reduced to Rs.5,000.

Conclusion: Penalty under Section 78 need not be recovered beyond the 25% amount already paid; penalty under Section 77 is reduced to Rs.5,000 (decision partially in favour of the Appellant on penalties).

Final Conclusion: The Tribunal upholds the service tax demand by classifying the appellant as a consignment agent within clearing and forwarding agent services and sustains invocation of the extended period; however, the Tribunal mitigates penalty consequences by holding no further recovery under Section 78 beyond the sum already paid and by reducing the Section 77 penalty to Rs.5,000, resulting in overall disposal that affirms the tax demand while granting limited relief on penalties.

Ratio Decidendi: A contractual designation and attendant obligations showing custody, sale at company-prescribed prices, banking of proceeds and turnover-based commission establish the status of a consignment agent, and under Section 65(25) and Section 65(105)(j) of the Finance Act, 1994 such services fall within taxable clearing and forwarding agent services; failure to disclose commission receipts and filing of 'Nil' returns justifies invocation of the extended limitation period, while payment of tax with interest prior to issuance of show-cause notice may warrant mitigation of penalties.

Issues: (i) Whether delay in filing the appeal before the learned Commissioner of Income Tax (Appeals) should be condoned where the assessee pursued remedy by filing an application under Section 154 and subsequently filed the appeal, and whether the matter should be restored to the CIT(A) for adjudication on merits.

Analysis: The Tribunal examined the material on record, including the paper book and precedents relied upon, and considered that the assessee had filed application under Section 154 within prescribed time and thereafter filed appeal before the CIT(A). The Tribunal treated the act of pursuing rectification under Section 154 as a reasonable and sufficient cause for delay in instituting the appeal, and found that on the facts and circumstances of the case it was appropriate to allow condonation of delay so that substantial justice may be advanced. The Tribunal set aside the impugned order which had rejected condonation of delay and directed restoration of the matter to the file of the CIT(A) with directions to condone the delay and decide the appeal on merits after giving the assessee reasonable opportunity.

Conclusion: Delay in filing the appeal is condoned; the impugned appellate order is set aside and the matter is restored to the file of the CIT(A) with direction to condone the delay and decide the appeal on merits. The appeal is partly allowed for statistical purposes.

Issues: (i) Whether the disallowance under Section 40(a) of commission payments made to non-resident agents without deduction of tax at source is rightly sustained for A.Y. 2017-18.

Analysis: The appeal concerns commission payments to non-resident agents for services rendered outside India and the consequential invocation of tax deduction at source provisions. The assessing officer applied a provision relating to non-deduction of tax at source and disallowed a portion of the expense; the applicability of Section 40(a)(i) and Section 195 of the Income-tax Act, 1961 was in dispute. The record shows identical payments and identical factual matrix were considered in earlier assessment years where appellate authorities and the DRP directed deletion of the disallowance, relying on the principle that income of non-resident agents for services rendered entirely outside India does not accrue or arise in India. The assessing officer in the impugned assessment applied an incorrect provision and did not distinguish the earlier orders. The revenue representative did not controvert the factual identity or the applicability of the precedents relied upon.

Conclusion: Disallowance of commission expenses paid to non-resident agents without deduction of tax at source is deleted and the appeal is allowed in favour of the assessee.

Issues: Whether the addition on account of unexplained jewellery found during search can be reduced on the ground that part of the jewellery belonged to relatives present at the assessee's premises and whether the deletion granted by the CIT(A) in respect of jewellery shown in a cash flow accepted by the Settlement Commission should be sustained.

Analysis: The facts include jewellery recovered from residential premises and bank lockers during search and from operated lockers, with the assessing officer treating a portion as explained under CBDT Instruction No. 1916 dated 11.05.1994 and making additions in the hands of both spouses, 50% substantive and 50% protective. The CIT(A) accepted a cash flow submitted to the Settlement Commission by an associated partnership firm and deleted additions to the extent matching that cash flow. The assessee claimed that relatives present for family rites and a forthcoming marriage accounted for part of the jewellery recovered; however, no contemporaneous affidavits or corroborative declarations from those relatives were produced. Balancing the admitted presence of relatives (and the practical likelihood that they would possess jewellery) against the absence of direct documentary or third-party corroboration, a judicious reduction of the confirmed addition was directed. The portion corresponding to the cash flow accepted by the Settlement Commission was treated as explained and deleted by the CIT(A), while a partial deletion was allowed by reducing the confirmed addition by Rs. 10,00,000 on account of jewellery plausibly belonging to relatives.

Conclusion: The confirmed addition is reduced by Rs. 10,00,000 on account of jewellery attributable to relatives; the deletion made by the CIT(A) in respect of jewellery reflected in the Settlement Commission cash flow is sustained; the remaining addition is confirmed.

Issues: (i) Whether the delay of 543 days in filing the appeal against the order passed under Section 263 of the Income-tax Act, 1961 should be condoned; (ii) Whether the order passed under Section 263 of the Income-tax Act, 1961 setting aside the assessment and directing de novo enquiries was justified.

Issue (i): Whether the delay of 543 days in filing the appeal should be condoned.

Analysis: The appeal record contains the assessee's sworn affidavit explaining that the delay resulted from incorrect advice by the original consultant and an affidavit by that consultant corroborating limited expertise and failure to advise filing the appeal. Precedents and prior ITAT decisions dealing with similar facts treating wrong legal advice as a sufficient cause for condonation were cited and considered. The respondent did not rebut the factual explanation and submitted authorities emphasizing consideration of length of delay and sufficiency of cause. The Tribunal evaluated plausibility, absence of negligence, and the existence of corroborative affidavits as constituting a bona fide and reasonable explanation.

Conclusion: Delay of 543 days is condoned; the assessee has demonstrated sufficient cause in favour of admission of the delayed appeal.

Issue (ii): Whether the revisionary order under Section 263 directing the Assessing Officer to make further inquiries and potentially make additions was justified.

Analysis: The revisionary order found the assessment erroneous and prejudicial because the Assessing Officer accepted the assessee's explanation for large cash deposits without verifying cash book or utilization, despite bank statements showing withdrawals funded by loans. The Tribunal examined the assessment record, noted absence of cash book and inadequate enquiries by the Assessing Officer, and considered the specific directions issued for summons, examination of cash book, inquiry into withdrawals and possible utilization including investment in property, and making additions under Section 68 if explanations are unsatisfactory.

Conclusion: The order under Section 263 is upheld; the revision and directions to the Assessing Officer for de novo enquiries are justified in favour of Revenue.

Final Conclusion: The Tribunal condoned the delay in admitting the appeal but, on merits, rejected the challenge to the revisionary order under Section 263 and dismissed the appeal, resulting in the upholding of the PCIT's directions for de novo assessment.

Issues: (i) Whether the Transactional Net Margin Method (TNMM) applying aggregation of bundled rights and services is the most appropriate method for benchmarking the international transaction of payment for business services and license of proprietary marks; (ii) Whether the Comparable Uncontrolled Price (CUP) method and the comparables adopted by the Transfer Pricing Officer (TPO) are appropriate and whether the matter should be remitted for fresh benchmarking.

Issue (i): Whether TNMM applied on an aggregated basis to the bundled royalty and business services is the most appropriate method.

Analysis: The transactions consist of a bundle of rights and services (trademark, know-how, business-related services) charged at a consolidated rate of 6% of sales. Aggregation is permissible where transactions are inextricably linked and cannot be reliably tested separately. Traditional transaction methods are generally preferred for direct price comparison where reliable comparables exist. If exact comparables that receive similar bundled services cannot be identified, a reliable TNMM may be appropriate as an alternative.

Conclusion: TNMM applied on an aggregated basis is a permissible and potentially appropriate method where bundled interrelated services cannot be reliably benchmarked by direct methods; however, direct transactional methods remain preferable if proper, directly comparable transactions are available.

Issue (ii): Whether the CUP method and the specific comparables selected by the TPO are appropriate, and whether remand is required.

Analysis: The TPO applied CUP as the most appropriate method but selected comparables drawn from available local data which, on scrutiny, suffer from deficiencies in comparability (nature of royalty, scope of services, and mix of multiple brands). Where CUP is to be applied, comparables must be truly comparable (including similarity of rights/services); if such comparables are not identified, reliance on CUP with inappropriate comparables is unsatisfactory. In such circumstances, it is appropriate to permit the revenue authorities to re-examine comparables and, if necessary, revisit benchmarking using TNMM with suitable comparables after affording the taxpayer opportunity to be heard.

Conclusion: The CUP analysis as applied by the TPO is not sustained due to improper comparables; the matter is remitted to the Assessing Officer/TPO to re-benchmark the transaction afresh, giving the assessee opportunity to be heard and to allow the TPO to seek proper comparables or, if none are found, to apply TNMM with appropriate comparables.

Final Conclusion: The appeal is allowed for statistical purposes and the transfer pricing issue is remitted to the AO/TPO for de novo benchmarking consistent with the preference for direct methods where reliable comparables exist and with allowance for TNMM where exact comparables for the bundled transaction cannot be found; the AO/TPO must give the assessee a proper opportunity to be heard.

Ratio Decidendi: Where bundled rights and services are charged as a consolidated consideration, a direct transactional method (CUP) is preferred if truly comparable transactions (including comparable scope of rights/services) are available; if such comparables cannot be reliably identified, a properly conducted TNMM with suitable comparables is an acceptable alternative, and authorities must re-benchmark after affording the taxpayer an opportunity to be heard.

Issues: (i) Whether documentary evidence (sales bills, purchase bills, receipt vouchers) produced before the Tribunal but not examined by the Assessing Officer should be taken on record and verified; and whether the matter should be set aside/remanded to the Assessing Officer for fresh adjudication after such verification.

Analysis: The materials show admission that the primary documents now produced were not part of the assessment record and were not examined by the Assessing Officer. Documentary evidence admitted for the first time before the appellate forum requires testing for authenticity and genuineness and verification against books of account and stock records at the fact-finding level. Verification of such documents and reconciliation with day-to-day books and stock registers is a ground-level exercise best performed by the Assessing Officer who conducted the assessment and can undertake necessary enquiries and verification. The Tribunal, therefore, exercised its authority to remit the matter for de novo assessment to enable proper examination of the newly produced documents and factual verification, while leaving substantive legal questions open for determination after such verification.

Conclusion: The documents produced before the Tribunal are to be verified at the assessment level; the matter is set aside and remanded to the Assessing Officer for de novo fresh assessment after considering and verifying the documentary evidence. (In favour of the assessee on the procedural relief of admission and remand.)

Ratio Decidendi: Where material documentary evidence is produced before an appellate tribunal but was not examined by the Assessing Officer, the proper course is to remit the matter to the Assessing Officer for verification of authenticity and factual findings and for fresh assessment rather than deciding disputed factual questions without such verification.

Issues: (i) Whether Paddle Wheel Aerators used exclusively in aquaculture are classifiable under HSN 8436 80 90; (ii) What is the applicable CGST rate on such Paddle Wheel Aerators in view of GST Council recommendations and Notification No. 9/2025; (iii) Whether parts exclusively used in Paddle Wheel Aerators are classifiable under HSN 8436 99 90 and attract 5% GST.

Issue (i): Whether Paddle Wheel Aerators used exclusively in aquaculture are classifiable under HSN 8436 80 90.

Analysis: The Authority examined the product description, function, models and components, prior trade classification under HSN 8479 89 99, relevant notifications (Notification No. 1/2017 and Notification No. 9/2025), and submissions including precedents and policy releases. It compared the scope and explanatory reach of Heading 8436 with the residual Heading 8479 and assessed whether paddle wheel aerators fall within the specific descriptive ambit of 8436 or remain machines having individual functions not specified elsewhere in Chapter 84. The Authority noted the Notification No. 9/2025 master schedule and prior classification practice and concluded that the machine fits the residual description in Heading 8479 rather than a specific subheading of 8436.

Conclusion: The Paddle Wheel Aerator is not classifiable under HSN 8436 80 90; it is classifiable under HSN 8479 8999.

Issue (ii): What is the applicable CGST rate on Paddle Wheel Aerators in light of GST Council recommendations and Notification No. 9/2025?

Analysis: The Authority considered the GST Council's rate rationalization, the PIB/departmental communications, and the entries in Notification No. 9/2025. It evaluated whether the 5% concessional rate for "aerators" necessarily effected reclassification to 8436 or applied functionally to existing headings. Having held that the correct tariff heading is 8479 8999, the Authority determined the applicable rate based on the schedule entries linked to that heading in the governing notification.

Conclusion: The applicable CGST rate on the Paddle Wheel Aerator (HSN 8479 8999) is 18%.

Issue (iii): Whether parts exclusively used in Paddle Wheel Aerators are classifiable under HSN 8436 99 90 and attract 5% GST.

Analysis: The Authority applied the rule that parts are generally classified with the principal machine only if the principal machine's classification so warrants. Since the complete aerator was held to be classifiable under HSN 8479, the parts could not be reclassified under HSN 8436 99 90 merely on exclusivity; parts classification must follow the principal machine heading and the relevant tariff entries in the notification.

Conclusion: The parts are not classifiable under HSN 8436 99 90; the Authority assigns HSN 8479 9090 for the parts and they attract the rate applicable to that heading (as held by the Authority).

Final Conclusion: The Advance Ruling answers the applicant's questions by fixing the tariff classification of the complete Paddle Wheel Aerator and its parts under Chapter 84 residual headings (8479 8999 for the machine and 8479 9090 for parts) and by applying the corresponding GST rates under the controlling notification, thereby denying reclassification into Chapter 8436 and the concessional 5% rate sought by the applicant.

Ratio Decidendi: A machine is classifiable under the specific HSN heading whose descriptive scope it satisfies; parts exclusively used with a machine are to be classified with that machine only if the principal machine falls within that heading; rate concessions directed at a function or sector do not automatically mandate reclassification of goods into a different HSN chapter absent explicit tariff entry to that effect.

Issues: (i) Whether contraventions under Section 3(b) of the Foreign Exchange Management Act, 1999 (FEMA) were made out in respect of the transactions described and confirmed by the Special Director (Appeals); (ii) Whether the quantum of penalty imposed by the Adjudicating Authority and affirmed by the Special Director (Appeals) is disproportionate and requires interference.

Issue (i): Whether contraventions under Section 3(b) of FEMA, 1999 were established for the transactions described in the adjudication and appeal records.

Analysis: The Tribunal considered the recital of facts in the impugned order and the Special Director (Appeals)'s findings (paras 6.2.1 and 6.2.2) describing adjustments and transfers of foreign-exchange-linked payments among parties without routing through authorised dealers or obtaining RBI permission. The record showed transactions involving set-off of amounts and transfers of rough diamonds resulting in alleged dealing in foreign exchange outside authorised channels. The appellants did not press for a reversal of the contravention findings before the Tribunal, instead seeking reduction in penalty.

Conclusion: The findings of contravention under Section 3(b) of FEMA, 1999 as recorded by the Adjudicating Authority and affirmed by the Special Director (Appeals) are treated as established for the purposes of these appeals.

Issue (ii): Whether the penalty quantum imposed required interference on grounds of disproportionality.

Analysis: Having regard to the age of the matters, partial payment already made by appellants pursuant to pre-deposit directions, inability of the respondent to recover the balance in the intervening period, and the appellants' election before the Tribunal to seek relief only on proportionality of penalty, the Tribunal examined the fitness of reducing the monetary sanction. The Tribunal did not re-adjudicate the merits of contravention but focused on quantum and equity in disposal.

Conclusion: The Tribunal interfered with the penalty quantum only and reduced the penalty to 50% of the amount imposed by the Adjudicating Authority (equivalent to the amount already paid pursuant to pre-deposit) for the appellants, while maintaining the established contraventions.

Final Conclusion: The appeals are disposed of by confirming the contraventions under Section 3(b) of FEMA, 1999 and by moderating the monetary sanction; interference is limited to reducing the penalty quantum to 50% of the originally imposed amount in the interests of equity and final settlement.

Ratio Decidendi: Transactions constituting dealing in foreign exchange without routing through authorised dealers or without RBI permission fall within Section 3(b) of FEMA, 1999, and where contraventions are treated as established but equitable considerations (age of matter, pre-deposit paid, and recovery failure) apply, a Tribunal may lawfully moderate the penalty quantum to achieve proportionality.

Issues: (i) Whether payments made by the assessee to its US associated enterprise for marketing/support services constitute Fees for Included Services (FIS) or otherwise 'make available' technical services under Article 12 of the IndiaUS DTAA and section 9(1)(vii)/section 195, attracting disallowance under section 40(a)(i); (ii) Whether the provision for refund of Rs. 2,49,11,265/- created by the assessee is allowable as an expenditure; (iii) Whether the Assessing Officer's deletion of disallowance under section 36(1)(va) (ESI/PF late deposit) was incorrect.

Issue (i): Whether payments to Iyogi USA are taxable in India as FIS/make-available services such that the assessee was obliged to deduct tax at source and AO rightly disallowed payments u/s 40(a)(i).

Analysis: The Tribunal examined the master service agreement, invoices and annexures, the absence of a PE of the US entity in India, and the nature of services billed (marketing support, development of promotional components, payments to third-party marketing companies, ancillary services). The TPO made no ALP adjustment. The CIT(A) had allowed the claim primarily on the assessee's submissions that services were rendered outside India and income was taxable in the USA. The Tribunal examined detailed invoice breakups and found large administrative/outsourced costs (including on-ground tech support, payment gateway charges, process outsourcing) insufficiently substantiated and potentially classifiable as FIS. The Tribunal held that pure marketing support rendered outside India and billed as reimbursement plus margin is not per se taxable in India, but where substantial administration or process outsourcing costs are unexplained and may effectively make available technical/other services, partial disallowance/remand is warranted. The Tribunal directed AO to allow clearly substantiated marketing expenses separately and to verify and restrict other administrative expenses if not substantiated (suggested cap of 20% for marketing-linked expenses), after giving the assessee opportunity of being heard.

Conclusion: The Tribunal partly allowed the Revenue's challenge: it rejected a full finding that all payments are taxable as FIS/make-available services but remitted matters to the AO to verify and quantify substantiation of administrative and other expenses and to restrict unsubstantiated expenses; result is partly in favour of the assessee on this issue.

Issue (ii): Whether the provision for refund of Rs. 2,49,11,265/- is an allowable expenditure.

Analysis: The Tribunal considered the business of online subscription technical support where refunds to dissatisfied customers may arise and noted that the assessee created provisions annually based on past experience but failed to supply detailed records during assessment. The Tribunal discussed accounting principles: a provision may be created on a matching/estimate basis in the year of accrual but must be reconciled in subsequent years with actual refunds; excess provision should be reversed when ascertainable. The Tribunal found insufficient verification of historical provisions versus actual refunds on the record and therefore remitted the issue to the AO to examine past provisions and actual refunds, with directions to reverse any excess provision.

Conclusion: The Tribunal allowed this ground for statistical purposes and remitted the matter to the Assessing Officer for verification and adjustment; outcome favours remand for inquiry rather than a conclusive allowance, effectively partly in favour of the assessee for now.

Issue (iii): Whether deletion of disallowance under section 36(1)(va) (late deposit of employees' contribution to PF/ESI) by the CIT(A) was incorrect.

Analysis: The Tribunal admitted the Revenue's additional ground and, considering the law referenced (including Checkmate Services and NTPC principles permitting admission of additional grounds), found the legal position in favour of the Revenue on this issue.

Conclusion: The Tribunal allowed the Revenue's additional ground relating to section 36(1)(va), i.e., the Revenue succeeded on this point.

Final Conclusion: The Tribunal partly allowed the Revenue's appeal and partly allowed the assessee's appeal by applying a fact-sensitive approach: it confirmed that marketing services rendered outside India are not automatically taxable in India but required substantiation of large administrative and outsourcing costs and remitted the verification of marketing/administrative expense substantiation and the provision-for-refund accounting to the Assessing Officer; the Revenue's additional ground on PF/ESI was allowed.

Ratio Decidendi: Marketing/support payments by a foreign associated enterprise are not taxable in India as Fees for Included Services or require TDS merely because of a confidentiality clause or foreign billing; however, where significant administrative/process outsourcing costs are unexplained and may amount to services made available in India, the tax consequence depends on substantiation and verification, and the assessing authority must disallow or restrict unsubstantiated expenditures and verify provisions for refunds against historical actuals.

Issues: (i) Whether the demand of service tax could be sustained after reconciliation of ST-3 returns with ITR/26AS and on the basis of revised 26AS; (ii) Whether extended period of limitation and invocation of penalty for suppression with intent to evade are sustainable; (iii) Whether penalties and late fee imposed under Sections 70, 77 and 78 of the Finance Act, 1994 are liable to be upheld or require modification.

Issue (i): Whether the service tax demand based on third-party data (26AS) and discrepancies with ST-3 is sustainable after the assessee produced revised 26AS and documentary evidence.

Analysis: The Tribunal examined the reconciled figures in ITR, revised 26AS and certificate from the service recipient showing receipts of Rs.26,11,508/-. The ST-3 returns showed lower declared receipts of Rs.16,86,173/-. The Tribunal accepted the revised 26AS and certificate as establishing the correct receipts for 2016-17 and computed service tax liability on Rs.26,11,508/-, noting appellant's admission of liability and payments made before the show cause notice.

Conclusion: Demand computed on the basis of gross receipts of Rs.41,35,964/- is not sustained; service tax liability is fixed on receipts of Rs.26,11,508/- and the differential tax of Rs.18,063/- (after adjusting amounts already deposited) is confirmed along with interest.

Issue (ii): Whether the extended period of limitation and findings of suppression with intent to evade are justified.

Analysis: The Tribunal reviewed the facts that the assessee was registered, received consideration for taxable services, failed to disclose correct receipts initially, and did not participate in the investigation. Relying on statutory provisions and precedent (including principles on burden of proof for exemption claims), the Tribunal found suppression established and concluded that invocation of extended limitation was proper on the facts.

Conclusion: The extended period of limitation is properly invoked and the finding of suppression with intent to evade is sustained in favour of the revenue.

Issue (iii): Whether penalties and late fee under Sections 70, 77 and 78 of the Finance Act, 1994 should be sustained or modified.

Analysis: The Tribunal upheld imposition of penalties and late fee but applied statutory principles governing reduction of penalty where payment is made within prescribed periods and in appeals. It noted that the assessee had deposited substantial tax and interest prior to issuance of the SCN and that statutory provisions allow modification of penalty by appellate authorities.

Conclusion: Penalties and late fee are upheld; penalty under Section 78 is sustained but limited to the amount of demand confirmed and the benefit of reduced penalty (25%) would apply if the conditions for payment under the proviso are met.

Final Conclusion: The appeal is dismissed; the demand for the differential service tax (Rs.18,063/-) with interest is confirmed, penalties and late fees are upheld subject to the statutory reliefs available on payment as provided under the relevant provisions.

Ratio Decidendi: Where reconciled documentary evidence (revised 26AS and recipient certificate) establishes the correct taxable receipts, demand must be based on those receipts; suppression of true receipts supports invocation of extended limitation and penalties, and appellate authorities may modify penalty/interest consistent with statutory provisos including reduction to 25% where conditions for prompt payment are satisfied.

Issues: Whether amounts recovered as forfeiture of security deposits/earnest money, fines/penalties and liquidated damages on breach or delayed performance of contracts are chargeable to service tax as a 'declared service' under Section 66E(e) of the Finance Act, 1994.

Analysis: Section 65B(44) defines 'service' as any activity carried out by a person for another for consideration; Section 66E(e) declares taxable the service of agreeing to refrain from an act, to tolerate an act or situation, or to do an act. For an activity to fall within Section 66E(e) there must be an agreement that specifically contemplates such an obligation and a flow of consideration for that obligation. Amounts recovered under penal clauses (liquidated damages, forfeiture of deposits, fines/penalties) arise as automatic consequences of breach or non-performance under a contract where the primary consideration is for supply of goods or services, not for toleration or refraining; such recoveries are compensatory/penal in nature and lack the requisite nexus as consideration for a declared service. The reasoning in prior Tribunal decisions and subsequent withdrawals by Revenue establish that where no independent agreement contemplates toleration or refraining for consideration, such penal recoveries are not consideration for a taxable declared service.

Conclusion: Amounts recovered as forfeiture of security deposits/earnest money, fines/penalties and liquidated damages for breach or delayed performance are not consideration for a declared service under Section 66E(e) and therefore are not chargeable to service tax. The impugned order is set aside and the appeal is allowed.

Issues: Whether the assessment order required interference in view of the retrospective insertion of Sections 16(5) and 16(6) into the GST regime and whether the matter should be remitted for fresh consideration of the petitioner's entitlement to input tax credit.

Analysis: The assessment order was noticed to have confirmed demand partly on account of matters that could be affected by the statutory insertion of Sections 16(5) and 16(6) with retrospective effect from 01.07.2017. The remaining demand was stated to relate to ineligible input tax credit under Section 17(5). In these circumstances, the matter was considered to require reconsideration by the assessing authority, particularly on the question whether the petitioner was otherwise entitled to input tax credit but for belated availment.

Conclusion: The assessment order was quashed and the matter was remitted to the second respondent for fresh examination and a decision on merits.

Issues: Whether the writ petition challenging the intimation in Form GST DRC-01A (issued under Rule 142(1A) and 142(2A) read with Sections 73(5) and 74(5) of the GST enactments) is maintainable and whether the proceedings should be stayed or stalled pending adjudication.

Analysis: The petitioner challenged the statutory intimation and relied on earlier Supreme Court interim directions; that interim order was limited in scope and not applicable to the present facts. The petitioner had submitted a substantive reply/representation to the impugned notice and participated in the departmental proceedings, which bears on the question of maintainability of the writ petition at the admission stage. Given participation and availability of statutory remedies, the petition cannot be allowed to stay the statutory proceedings. Nonetheless, the reply submitted by the petitioner requires consideration on merits and a decision in accordance with law after affording an opportunity of hearing. The respondent must pass a reasoned order before initiating any coercive steps.

Conclusion: The writ petition is not maintainable for the purpose of stalling the statutory proceedings and is dismissed; however, the respondent is directed to consider the petitioner's reply dated 12.12.2025, afford an opportunity of hearing, and pass a reasoned order on merits before taking any coercive action.

Issues: Whether the impugned GST demand order dated 15.07.2024 can be quashed and the matter remitted for fresh adjudication subject to conditions including a pre-deposit and adjustment of amounts already recovered.

Analysis: The petition challenges the demand confirmed in Form GST DRC-07 following a Show Cause Notice in Form GST DRC-01 for the 2019-2020 tax period. The record shows partial recovery from the partner's bank account but the respondents could not confirm amounts. The Court applied the established approach of balancing revenue interest and assessee's rights by directing quashment of the impugned order and remitting the matter for fresh consideration on merits, conditioned on a specified pre-deposit from the petitioner, verification and adjustment of any amounts already recovered, filing of a reply to the show cause notice, and a time-bound final adjudication by the authority.

Conclusion: Impugned order quashed; matter remitted to the first Respondent for fresh adjudication on merits subject to the petitioner depositing 50% of the disputed tax (with adjustment of amounts already recovered) and filing a reply within thirty days, and the authority to decide the matter expeditiously in accordance with law.

Issues: (i) Whether the writ petitions challenging the assessment orders passed under Section 74 of the GST Act and the rejection of rectification applications under Section 161 of the GST Act are maintainable and whether the impugned orders are liable to be set aside.

Analysis: The challenge concerns assessment orders issued after non-filing of replies to show cause notices and allegations that input tax credit was availed on invoices from non-existing dealers. The evidence presented includes e-way bill statements and subsequently produced invoices and e-way bills; however, e-way bill statements alone do not suffice to prove physical receipt of goods. Documentary proof such as delivery challans and receipts are required to substantiate actual receipt. The remedy of rectification under Section 161 and challenges to assessments under Section 74 were considered in the context of available evidence and the appropriate statutory remedy.

Conclusion: The writ petitions are not maintainable on the merits and are dismissed. Liberty is granted to file a statutory appeal before the Appellate Commissioner within thirty days, and if filed the appeal shall be decided on merits and in accordance with law without regard to limitation and without reliance on observations made in this order.

Issues: Whether the impugned immovable property is a benami property within the meaning of Section 2(9)(A) of the Prohibition of Benami Property Transactions Act, 1988, and whether the appeals against the Adjudicating Authority's declaration of benami transaction succeed.

Analysis: The Tribunal examined evidentiary material concerning the source of consideration and the beneficial interest. Bank statements, admissions, earlier sale agreements and post-registration transactions were analysed to determine whether the purchase consideration originated from persons other than the registered owner and whether the property was held for the benefit of such persons. The Tribunal considered the effect of registered documents (sale deeds, stamp duty payment, TDS and ITR entries) and held that registration and related formalities do not negate a benami transaction where the source of funds and beneficial interest point otherwise. The statutory test under Section 2(9)(A) requires proof that consideration was paid by a person other than the ostensible owner and that the property was held for the benefit of that person; the material on record was found to satisfy both limbs.

Conclusion: The Tribunal concluded that the impugned property is a benami property as the consideration for purchase was provided by persons other than the registered owner and the property was held for their benefit. The appeals challenging the Adjudicating Authority's declaration of benami transaction are dismissed.

Issues: Whether the Initiating Officer discharged the statutory burden under Section 2(9)(A) read with Sections 23 and 24 of the Prohibition of Benami Property Transactions Act, 1988 to establish that M/s Surge Ahead Solutions Pvt. Ltd. and M/s Bajaj Capital Insurance Broking Ltd. are respectively the benamidar and beneficial owner and that the attached bank accounts are benami properties.

Analysis: The statutory definition of benami transaction requires (a) property held by one person, (b) consideration provided by another, and (c) the property held for the immediate or future benefit of the person providing consideration. The material on record showed operational and managerial links between the entities, shared premises and employees, centralized payroll functions, and transfers from Surge to group companies; however, suspicion or regulatory/tax irregularities alone do not satisfy the statutory ingredients of Section 2(9)(A). The Prohibition of Benami Property Transactions statutory scheme requires identification of specific property acquired or held in the name of the putative benamidar with consideration traceable to the alleged beneficial owner and proof of holding for the beneficial owners present or future benefit. The attachment order suffered from infirmities: the Initiating Officer did not identify an original benami property or traceable proceeds, treated bank balances as "equivalent value" contrary to the statutory scheme, and attached accounts some of which were closed prior to the attachment order. The Initiating Officer also largely relied on external investigations without conducting an independent inquiry required under the PBPT Act. These deficiencies meant the Initiating Officer failed to satisfy the statutory burden necessary to establish a benami transaction.

Conclusion: The Initiating Officer failed to discharge the burden under Section 2(9)(A) read with Sections 23 and 24 of the Prohibition of Benami Property Transactions Act, 1988; the attached bank accounts are not benami properties and the Adjudicating Authority's revocation of the attachment is upheld, favouring the respondents.

Issues: Whether the assessment order dated 22.04.2024 should be quashed and the matter remitted to the Original Authority for fresh adjudication subject to deposit of the disputed tax and related conditional reliefs.

Analysis: The Court considered the petitioner's failure to file appeal within the statutory period and the petitioner's submission that the disputed tax was recovered from the petitioner's Electronic Cash Register. The Court, following its consistent view in similar cases, addressed the remedial course available when assessment has been rendered and the assessee seeks relief despite delay. The Court required the petitioner to deposit the entire tax amount confirmed by the impugned order within thirty days and to file a reply to the Show Cause Notice treating the impugned order as an addendum, after which the Original Authority is to pass a fresh order on merits within a stipulated timeframe. The Court also provided for set-off of any amounts already recovered during a specified period and for automatic vacation of bank attachment upon compliance, while preserving the authority's power to proceed if the petitioner fails the stipulated conditions.

Conclusion: The assessment order dated 22.04.2024 is quashed and the matter is remitted to the Original Authority for fresh adjudication on merits, subject to the petitioner depositing the entire disputed tax within thirty days, filing a reply to the Show Cause Notice, and compliance with the Court's stipulated conditions; set-off, vacation of bank attachment, and consequences of non-compliance are as directed by the Court.