Issues: Whether the penalties imposed on the Jammu and Kashmir manufacturers could be sustained on the allegation that they had only issued invoices without manufacturing or supplying goods, and whether the proceedings were vitiated for want of concrete evidence and denial of cross-examination.

Analysis: The Tribunal noted that the dispute arose from a common investigation relating to menthol manufacturers claiming exemption under Notification No. 56/2002-CE dated 14.11.2002. It found that the allegations against the appellants rested substantially on statements and assumptions drawn from proceedings against other noticees, without independent investigation at the appellants' end and without concrete corroborative material to establish that they were non-manufacturing units or that no goods moved from their premises. The Tribunal also relied on its earlier line of decisions holding that such allegations of bogus procurement and clandestine activity require tangible evidence, and that statements relied upon without effective cross-examination cannot safely form the sole basis of adverse findings.

Conclusion: The Tribunal held that the allegations were not proved, the impugned penalties were unsustainable, and the appeals were liable to be allowed.

Issues: (i) whether the appellant's conduct attracted penalty under Section 112(a) and Section 112(b) of the Customs Act, 1962 for keeping, harbouring or dealing with smuggled gold found in premises under his control; (ii) whether the penalty required reduction in view of the mitigating circumstances noticed by the Tribunal.

Issue (i): whether the appellant's conduct attracted penalty under Section 112(a) and Section 112(b) of the Customs Act, 1962 for keeping, harbouring or dealing with smuggled gold found in premises under his control.

Analysis: Gold was recovered from the godown premises under the appellant's custody and control, and no licit documents were produced to show lawful importation, acquisition or possession. The Tribunal treated gold as a notified commodity and held that once notified goods are recovered from premises in the possession, custody or control of a person, the burden shifts to that person to establish lawful possession. The appellant failed to discharge that burden, and the surrounding circumstances, including his association with the premises and his statements during investigation, supported conscious involvement in keeping, harbouring and dealing with goods liable to confiscation. The absence of full evidentiary compliance regarding the statements did not dislodge the Revenue's case.

Conclusion: The appellant was held liable to penalty under Section 112(a) and Section 112(b) of the Customs Act, 1962.

Issue (ii): whether the penalty required reduction in view of the mitigating circumstances noticed by the Tribunal.

Analysis: Although liability for penalty was sustained, the Tribunal took note that the seized gold did not bear foreign markings on record and that the statements relied upon had not been tested with the safeguards contemplated by Section 138B of the Customs Act, 1962. These circumstances were considered relevant to the quantum of penalty and justified a lenient approach.

Conclusion: The penalty was reduced from Rs. 8,00,000 to Rs. 2,00,000.

Final Conclusion: The impugned order was modified only to the extent of reducing the penalty, while maintaining the finding of liability under Section 112(a) and Section 112(b) of the Customs Act, 1962.

Ratio Decidendi: Where notified goods are recovered from premises under a person's possession, custody or control and no lawful source is established, the statutory burden remains undischarged and penalty under Section 112 of the Customs Act, 1962 is sustainable, though the quantum may be moderated on mitigating circumstances.

Issues: (i) Whether the seizure of gold and the consequent invocation of the presumption under Section 123 of the Customs Act, 1962 were valid in the absence of a reasonable belief that the goods were smuggled. (ii) Whether the statements recorded during investigation, including those relied upon to allege forged documents, were legally admissible and sufficiently corroborated to sustain confiscation and penalties.

Issue (i): Whether the seizure of gold and the consequent invocation of the presumption under Section 123 of the Customs Act, 1962 were valid in the absence of a reasonable belief that the goods were smuggled.

Analysis: The statutory burden under Section 123 can arise only when the goods are seized on a reasonable belief that they are smuggled. The gold bars were seized in a town interception, bore no foreign markings or other intrinsic indicators of foreign origin, and the record did not disclose objective contemporaneous material supporting the asserted foreign source. The purity report by itself was not treated as proof of smuggled origin. The appellants also produced commercial records, stock registers and melting invoices that prima facie explained the source and movement of the gold, while the Revenue did not produce independent evidence to dislodge those records or to establish smuggling by legally admissible material.

Conclusion: The reasonable belief necessary to invoke Section 123 was not established, and the presumption under that provision could not be sustained against the appellants.

Issue (ii): Whether the statements recorded during investigation, including those relied upon to allege forged documents, were legally admissible and sufficiently corroborated to sustain confiscation and penalties.

Analysis: The Revenue's case rested substantially on statements recorded during investigation, but those statements were not shown to have been tested in the manner required by Section 138B of the Customs Act, 1962. No forensic examination, handwriting analysis, expert opinion or comparable independent material was produced to prove that the invoices or other records were forged or fabricated. The statement of the first appellant, whose voluntariness was disputed, was also not independently corroborated. In such circumstances, the statements were treated as insufficient to sustain findings of smuggling, confiscation or penal liability.

Conclusion: The statements were not enough, by themselves, to uphold confiscation or the penalties under Sections 112 and 114AA.

Final Conclusion: The confiscation of the gold and the penalties imposed on both appellants were unsustainable in law and were set aside, with the appeals being allowed.

Ratio Decidendi: The presumption under Section 123 of the Customs Act, 1962 arises only on a demonstrable reasonable belief at the time of seizure, and confiscation or penalty cannot rest merely on uncorroborated investigation statements without independent admissible evidence establishing smuggling or document falsity.

Issues: Whether the Revenue was justified in disturbing the classification declared for the imported goods.

Analysis: The dispute concerned the classification of the imported nickel-chromium wire product, which had been declared by the importer under one tariff heading and reclassified by the department under another. The earlier decision in the importer's own case for an earlier period, involving the same goods and materially similar facts, had already examined the mill test certificate and the relevant chapter notes and sub-heading notes, and had held that the attempted reclassification could not be sustained. No factual distinction or change in law was shown to justify taking a different view in the present matter.

Conclusion: The reclassification made by the Revenue was not justified, and the classification declared by the importer was accepted.

Issues: Whether adjudicatory orders founded on fake, non-existent or hallucinated AI-generated precedents can be sustained in law, and whether such orders require to be set aside.

Analysis: The judgment records that the adjudicating authority relied upon citations and passages that were non-existent, incorrectly attributed, or otherwise hallucinated, and that the appellate tribunal failed to detect the defect. It holds that a decision based on fake or hallucinated material as precedent contaminates the adjudicatory process, subverts the integrity of judicial determination, and amounts to no decision in the eyes of law. The Court also emphasises zero tolerance for the citation or reliance on such material by both the Bar and the Bench.

Conclusion: The impugned orders were unsustainable and were set aside, with the matter restored for fresh consideration in accordance with law.

Issues: (i) Whether the appellants could avoid attachment merely because they were not accused in the scheduled offence case; (ii) whether the material on record, including the Casana audit report and the statement of Christian Michel, furnished the requisite reason to believe for attachment and confirmation; (iii) whether the attached property of the company could be sustained on the basis of the beneficial ownership and ownership interest of Siddharth Sareen.

Issue (i): Whether the appellants could avoid attachment merely because they were not accused in the scheduled offence case.

Analysis: The attachment and confiscation scheme under the Prevention of Money-Laundering Act is directed against proceeds of crime wherever they are found, and it is not necessary that the person in whose hands the property is found must also be an in the scheduled offence case. The existence of a pending charge-sheet and prosecution under the money-laundering law was sufficient for consideration of attachment in these proceedings.

Conclusion: The contention was rejected; the appellants' non-impleadment as accused in the scheduled offence did not bar attachment.

Issue (ii): Whether the material on record, including the Casana audit report and the statement of Christian Michel, furnished the requisite reason to believe for attachment and confirmation.

Analysis: The Tribunal held that the audit material, supplied through the defence of the principal accused and coupled with the statement acknowledging the correctness of the amounts transferred, constituted sufficient material at the provisional attachment stage. The authority was not required to prove the proceeds of crime beyond doubt, but only to show substantially probable cause to form the statutory belief required for attachment and confirmation.

Conclusion: The requirement of reason to believe under the money-laundering law was held to be satisfied.

Issue (iii): Whether the attached property of the company could be sustained on the basis of the beneficial ownership and ownership interest of Siddharth Sareen.

Analysis: The Tribunal treated property under the money-laundering law as including ownership rights and beneficial interests, and held that proceeds of crime can be reached irrespective of the name in which they are held. In view of the admitted substantial ownership interest and beneficial control, the corporate personality argument was held to be unavailable, and continued attachment was viewed as consistent with the statutory object of preserving proceeds of crime pending trial.

Conclusion: The attachment of the company's property was upheld and the corporate veil objection was rejected.

Final Conclusion: No interference was called for with the impugned attachment and confirmation order, and the appeals failed in their entirety.

Ratio Decidendi: For attachment under the money-laundering law, the authority need only have substantially probable cause to believe that the property represents proceeds of crime, and such property may be attached and retained even in the hands of a person who is not an accused in the scheduled offence, including through beneficial ownership structures.

Issues: (i) Whether interest paid or credited to statutory universities and the Tamil Nadu Water Supply and Drainage Board was exempt from tax deduction at source as paid to corporations established by a State Act; (ii) whether interest paid or credited to wholly Government-owned companies was covered by the notified exemption; (iii) whether interest on deposits representing Government funds held by Government companies in a fiduciary capacity constituted income of those companies for purposes of tax deduction at source; (iv) whether the assessee's claim concerning interest paid or credited to temples required verification of the statutory declarations and recipient-tax records.

Issue (i): Whether interest paid or credited to statutory universities and the Tamil Nadu Water Supply and Drainage Board was exempt from tax deduction at source as paid to corporations established by a State Act.

Analysis: Section 194A(3)(iii)(f) read with Notification No. S.O. 3489 excludes interest paid to a corporation established by a Central, State or Provincial Act. The controlling test is whether the entity owes its existence to the statute, rather than being merely incorporated or governed under a general law. The universities and the Board were constituted under State enactments as bodies corporate with statutory existence; they were therefore statutory corporations within the notification.

Conclusion: Interest paid or credited to the statutory universities and the Board was not subject to tax deduction at source, and the related default demands were unsustainable, in favour of the assessee.

Issue (ii): Whether interest paid or credited to wholly Government-owned companies was covered by the notified exemption.

Analysis: Clause (ii) of Notification No. S.O. 3489 independently covers a company whose entire share capital is held by the Government, the Reserve Bank of India, or a corporation owned by that Bank. The material established that the recipient companies' shares were wholly Government-held. Their incorporation under company law did not detract from satisfaction of this separate ownership-based condition.

Conclusion: Interest paid or credited to the wholly Government-owned companies was covered by the notification and attracted no tax-deduction obligation, in favour of the assessee.

Issue (iii): Whether interest on deposits representing Government funds held by Government companies in a fiduciary capacity constituted income of those companies for purposes of tax deduction at source.

Analysis: Section 194A(1) operates only where the amount is income by way of interest in the hands of the recipient. The Government orders and contemporaneous records showed that the companies held the scheme funds solely as nodal or implementing agencies, without beneficial ownership or freedom to appropriate the corpus. Applying the real character of the transaction, the interest beneficially accrued to the Government and not to the companies' independent account.

Conclusion: The interest on Government funds did not constitute income of the recipient companies and could not give rise to a tax-deduction default, in favour of the assessee.

Issue (iv): Whether the assessee's claim concerning interest paid or credited to temples required verification of the statutory declarations and recipient-tax records.

Analysis: The claim rested on Forms No. 26A, Forms No. 15G, returns filed by recipient temples, condonation materials and related evidence. As the documents required recipient-wise factual verification, their effect under the first proviso to Section 201(1) could not be determined on the existing record.

Conclusion: The evidentiary claim concerning temple payments requires fresh verification and adjudication in accordance with law; no final entitlement was determined on this issue.

Final Conclusion: The demands relating to payments to statutory corporations, wholly Government-owned companies, and custodians of Government funds cannot survive, while the treatment of temple payments depends upon statutory verification of the supporting material.

Issues: Whether, where a refund comprising tax and interest is paid only partly, the amount must be appropriated first towards interest under Section 244A of the Income-tax Act, 1961.

Analysis: Section 244A provides for interest on amounts refundable to an assessee and treats the amount due as encompassing both the refundable tax and accrued interest. The statutory object is to compensate for the Revenue's retention of money lawfully refundable. Appropriating a partial refund first towards tax would prevent further accrual on the unpaid interest component and confer an unjust advantage on the Revenue, whereas appropriation first towards interest ensures full compensation for the time value of money and accords with equitable treatment in tax administration.

Conclusion: A partial refund must be adjusted first towards the interest component and thereafter towards the principal tax component. The issue is decided in favour of the assessee.

Issues: Whether additions for alleged bogus long-term capital gains from penny-stock share transactions, including estimated commission expenditure, were sustainable without evidence connecting the assessees to share-price manipulation or entry providers.

Analysis: The share purchases and sales were through the stock exchange, recorded in demat accounts, and paid for through banking channels. The Revenue did not produce material establishing conscious participation in manipulation of the scrip, dealings with brokers or entry providers for accommodation entries, or a pattern of regular share transactions. The allegation rested solely on the scrip being identified as a penny stock and on presumptions based on human probabilities. Such presumptions could not substitute for direct evidence of the assessees' involvement. The estimated commission addition was also unsupported by evidence of any services obtained or commission paid.

Conclusion: The additions towards alleged bogus long-term capital gains and estimated commission were unsustainable and were deleted in favour of the assessees.

Issues: Whether a best-judgment assessment order is deemed withdrawn when the registered person subsequently furnishes the valid return with applicable late fee and interest.

Analysis: A best-judgment assessment may be made for non-furnishing of returns. However, where the registered person furnishes a valid return within the statutory period contemplated by Section 62(2), the assessment is deemed withdrawn, while liability for interest and late fee continues. The undisputed filing of the return for the relevant tax period with late fee and interest attracted this consequence.

Conclusion: The assessment order stood deemed withdrawn and was set aside in favour of the assessee.

Issues: (i) Whether deemed consideration for capital-gains computation under the joint development agreement should be valued at Rs. 760 per sq. ft. or Rs. 1,100 per sq. ft.; (ii) Whether exemption for reinvestment in two residential flats was allowable under Section 54F of the Income-tax Act, 1961; (iii) Whether capital gains for the subsequent assessment year required fresh computation consequent upon the determination of the earlier-year exemption claim; (iv) Whether penalties under Section 271(1)(c) of the Income-tax Act, 1961 could survive while the underlying quantum additions were deleted or restored for fresh adjudication.

Issue (i): Whether deemed consideration for capital-gains computation under the joint development agreement should be valued at Rs. 760 per sq. ft. or Rs. 1,100 per sq. ft.

Analysis: The rate of Rs. 1,100 per sq. ft. specified in the development agreement represented an estimated construction cost and did not establish the market value on the transfer date. The assessee's rate of Rs. 760 per sq. ft. was supported by the Sub-Registrar's circle-rate certificate for stamp-duty purposes.

Conclusion: Deemed consideration must be computed at Rs. 760 per sq. ft. This issue is decided in favour of the assessee.

Issue (ii): Whether exemption for reinvestment in two residential flats was allowable under Section 54F of the Income-tax Act, 1961.

Analysis: Where capital gains were taxed on the deemed transfer under the development agreement although consideration had not been received, the corresponding investment represented by the two flats allotted and retained for residential use was eligible for exemption. Delay in completion by the developer was not wholly within the assessee's control. However, factual verification regarding completion of construction remained necessary.

Conclusion: The exemption claim is acceptable in principle, but is restored to the Assessing Officer for limited factual verification and consequential allowance. This issue is partly in favour of the assessee.

Issue (iii): Whether capital gains for the subsequent assessment year required fresh computation consequent upon the determination of the earlier-year exemption claim.

Analysis: The computation of capital gains on sale of the flats in the subsequent year depended upon the outcome of the earlier-year Section 54F claim and the corresponding cost of acquisition. The valuation rate for deemed consideration was also required to be adopted at Rs. 760 per sq. ft.

Conclusion: The subsequent-year capital-gains computation is restored to the Assessing Officer for recomputation after giving effect to the earlier-year proceedings. This issue is partly in favour of the assessee.

Issue (iv): Whether penalties under Section 271(1)(c) of the Income-tax Act, 1961 could survive while the underlying quantum additions were deleted or restored for fresh adjudication.

Analysis: One quantum addition did not survive following acceptance of the valuation rate, while the remaining quantum matters required fresh verification and had not attained finality. Penalty proceedings could not independently stand in those circumstances.

Conclusion: The penalty matters are restored to the Assessing Officer for reconsideration after giving effect to the quantum proceedings. This issue is in favour of the assessee.

Final Conclusion: The valuation adopted by the assessee is accepted, while the exemption, consequential capital-gains computation, and penalties require fresh determination in accordance with the directions issued.

Ratio Decidendi: Where capital gains are taxed on deemed consideration under a development agreement, the corresponding residential-flat investment may qualify for exemption, and penalty cannot survive independently when the underlying quantum addition is deleted or remains unsettled.

Issues: Whether the proposed entities alleged to have benefited from diversion of the company's funds and business were required to be impleaded at the advanced stage of an oppression and mismanagement petition.

Analysis: Impleadment is governed by the necessary-party test: a person should be added only where effective adjudication cannot be made in that person's absence. The principal allegations in the company petition concerned the conduct of the existing respondent. The proposed entities were independent entities, were not subsidiaries of the company, and no evidence had established their collusion with the existing respondent. Their alleged status as beneficiaries of the impugned conduct did not make them necessary parties, particularly when the pleadings in the main petition were complete and the alleged misconduct remained to be established against the existing respondent. The need for their participation was appropriately left open for consideration at the final hearing if it became necessary for effective adjudication.

Conclusion: The proposed entities need not be impleaded at this stage; the appellant's request for their impleadment was rightly deferred, with the question remaining open if necessity arises during final hearing.

Issues: Whether a consolidated show-cause notice covering multiple financial years is legally sustainable.

Analysis: The binding principles laid down by the High Court treat a composite notice issued for multiple assessment years as legally unsustainable. The consequential summary notice and orders founded on that composite notice could not survive independently.

Conclusion: The consolidated show-cause notice, summary notice and consequential summary orders for the multiple financial years were quashed. The Revenue may initiate fresh proceedings by issuing separate notices for the relevant assessment years.

Issues: Whether reversal of input tax credit could be sustained solely because the supplier was subsequently treated as non-existent, without due consideration of the purchaser's documentary evidence.

Analysis: The burden to establish eligibility for input tax credit rests on the claimant, and the assessing authority was entitled to seek evidence that the supplies were genuine. The claimant had produced bank statements, tax invoices, e-way bills, ledger extracts and GSTR-2A and GSTR-2B records. Such material required due consideration; if it was insufficient, a reasonable opportunity to furnish further evidence was required. Confirmation solely on the supplier's subsequent cancellation as non-existent was untenable, particularly where the notice referred to Section 73 while the order was made under Section 74.

Conclusion: The input tax credit reversal could not be sustained on the stated basis; the assessment required fresh consideration after affording reasonable opportunity.

Issues: Whether sales of blended coffee marketed under the dealer's own trademark at a point other than the first sale are taxable under Section 5AA.

Analysis: Section 5AA deems a trademark or patent holder selling non-declared goods at a point other than the first sale to be the first seller and permits deduction of tax collected at the preceding point on the same goods. Blended coffee, produced from taxed coffee seeds and chicory and marketed under the dealer's own brand, attracted this deeming levy. Registration of the trademark was immaterial.

Conclusion: Sales of blended coffee under the dealer's own trademark were taxable under Section 5AA; the issue was decided against the assessee and in favour of the Revenue.

Issues: Whether the Tribunal has jurisdiction to condone delay beyond the statutory cap under Section 107(4) of the Central Goods and Services Tax Act, 2017.

Outcome: The matters were listed for hearing on 20.07.2026, and the Registry was directed to obtain particulars of analogous appeals from State Benches.

Issues: (i) Whether retention of the seized records, cash, jewellery and electronic devices was validly authorised under the Prevention of Money Laundering Act, 2002; (ii) Whether quashing of the ECIR precluded continuation of the retention proceedings when operation of the quashing judgment had been stayed by the Supreme Court; (iii) Whether the proceedings were barred by limitation.

Issue (i): Whether retention of the seized records, cash, jewellery and electronic devices was validly authorised under the Prevention of Money Laundering Act, 2002.

Analysis: An order under Section 17(4), read with Section 20(1), concerns retention for adjudication and requires material giving rise to recorded reasons to believe that the property is required for proceedings under Section 8. The material disclosed unexplained capital contributions and unsecured loans, financial links with entities under investigation, and an absence of satisfactory evidence regarding the source and flow of funds. The statutory requirements for retention were therefore met.

Conclusion: The retention order was validly made and was rightly affirmed.

Issue (ii): Whether quashing of the ECIR precluded continuation of the retention proceedings when operation of the quashing judgment had been stayed by the Supreme Court.

Analysis: Stay of the operation of the judgment quashing the ECIR rendered that judgment ineffective during the pendency of the Supreme Court proceedings. The position preceding the quashing consequently continued, and the ECIR could not be treated as remaining quashed for purposes of the retention proceedings.

Conclusion: Continuation of the retention proceedings was not invalidated by the quashing judgment.

Issue (iii): Whether the proceedings were barred by limitation.

Analysis: The Explanation to Section 8(3) excludes the period during which investigation remains stayed by a court when computing the 365-day period. Upon excluding the operative stay period, the prosecution complaint was filed within the prescribed period.

Conclusion: The proceedings were within limitation.

Final Conclusion: The statutory retention process and its appellate confirmation remained legally sustainable.

Ratio Decidendi: Where the statutory material establishes recorded reasons to believe that seized property may be involved in money laundering, retention may continue for adjudication; a stayed quashing order cannot defeat the underlying proceedings, and the period of judicial stay is excluded in computing the statutory limitation period.

Issues: (i) Whether the demand relating to delayed availment and utilisation of input tax credit for the tax period 2018-19 survived after the retrospective insertion of Section 16(5); (ii) whether the alleged short payment of tax required reconsideration on the basis of voluntary payment; (iii) whether the input tax credit mismatch issue required reconsideration; and (iv) whether the penalty imposed and enhanced by the authorities could be sustained.

Issue (i): Validity of the demand based on delayed availment and utilisation of input tax credit for 2018-19 after the insertion of Section 16(5).

Analysis: The restriction arising from delayed filing under Section 16(4) was affected by the subsequent insertion of Section 16(5) with retrospective effect. Since the relevant returns for 2018-19 had been filed before 30 November 2021, the statutory benefit under Section 16(5) applied.

Conclusion: The demand relating to input tax credit of Rs. 33,49,590 for 2018-19 was quashed.

Issue (ii): Whether the alleged short payment of tax was established notwithstanding the voluntary payment relied upon.

Analysis: The material relied upon indicated that the figures of the alleged short payment and the voluntary payment matched, but determination of the issue required factual verification by the adjudicating authority.

Conclusion: The short-payment issue was remanded to the adjudicating authority for reconsideration.

Issue (iii): Whether the input tax credit mismatch arising from non-reflection of the supplier's transactions required reconsideration.

Analysis: The mismatch issue involved the effect of the supplier's failure to upload returns and the pending insolvency-related circumstances. The existing orders did not contain sufficient discussion or determination of this issue.

Conclusion: The input tax credit mismatch issue was remanded to the proper officer for reconsideration.

Issue (iv): Whether the penalty imposed and subsequently enhanced could be sustained after setting aside the related demand.

Analysis: The penalty was dependent upon the tax demand. Since the demand concerning the first issue was set aside and the remaining issues required fresh determination, the penalty could not be sustained in its existing form.

Conclusion: The penalty imposed and enhanced by the authorities was set aside, with the issue of penalty remanded for re-adjudication.

Final Conclusion: The statutory benefit concerning the delayed input tax credit was granted, while the unresolved factual issues and consequential penalty were left for fresh determination by the competent authority.

Ratio Decidendi: A retrospective statutory provision conferring eligibility for input tax credit must be applied to pending demands where its prescribed conditions are satisfied, while factual issues requiring verification must be remanded for fresh adjudication.

Issues: Whether an enterprise executing infrastructure projects qualified as a developer, rather than a works contractor, for deduction under Section 80-IA(4) of the Income-tax Act, 1961, including whether a direct agreement with the Government or a local authority was necessary.

Analysis: Section 80-IA(4) permits deduction to an enterprise engaged in developing, operating and maintaining, or developing, operating and maintaining an infrastructure facility, subject to the statutory conditions including the prescribed agreement. The Explanation to Section 80-IA(13), inserted retrospectively by the Finance (No. 2) Act, 2009, excludes businesses in the nature of works contracts. The character of the activity depends on the substance of the contractual obligations and the enterprise's role in developing the infrastructure facility. The concurrent factual findings showed that the assessee undertook substantial development responsibilities, including investment, procurement, security obligations, liability for defects and delay, deployment of personnel, and associated project risks. The activity was therefore development of infrastructure facilities and not mere execution of a works contract.

Conclusion: The assessee was eligible for deduction under Section 80-IA(4) of the Income-tax Act, 1961, and the questions of law were answered in favour of the assessee and against the Revenue.

Ratio Decidendi: An enterprise undertaking the substantive risks and responsibilities of developing infrastructure facilities is eligible for deduction under Section 80-IA(4), notwithstanding the exclusion of works contracts under the Explanation to Section 80-IA(13).

Issues: Whether consideration received on transfer of Transferable Development Rights/Development Right Certificate was chargeable to tax under the head Capital Gains for Assessment Year 2016-17.

Analysis: Sections 45 and 48 of the Income-tax Act, 1961 operate as an integrated code, and capital gains taxation requires an ascertainable cost of acquisition or a statutory deeming provision. The Transferable Development Rights/Development Right Certificate was a statutory entitlement that was not acquired for monetary consideration, and the pre-amendment Section 55(2)(a) did not include such development rights or provide a mechanism to ascertain or deem their cost. The subsequent amendment introducing "any other intangible asset or any other right" was prospective from Assessment Year 2024-25 and could not be applied to Assessment Year 2016-17. As the computation mechanism failed, the capital gains charge failed. The alternative exemption and cost-quantification pleas were left open as academic.

Conclusion: Consideration received on transfer of the Transferable Development Rights/Development Right Certificate was not chargeable to tax under the head Capital Gains for Assessment Year 2016-17.