Issues: Whether the addition made on account of cash deposits in the assessee's bank account was sustainable, where the assessee claimed to have acted as a commission agent collecting cash from customers and remitting the amounts to payment service companies through banking channels.

Analysis: The assessee was found to be engaged in facilitating money transfer services for two companies and to have received commission income from those transactions, which was accepted by the assessing authority. The bank statement showed regular deposits followed by remittances, with no significant accumulation of funds, and the surrounding evidence, including the 26AS and transaction pattern, supported the explanation that the cash deposits represented customer collections routed onward to the companies. In these circumstances, the absence of written agreements was not sufficient to dislodge the explanation when the material on record substantiated the source of the deposits.

Conclusion: The addition in respect of cash deposits was unsustainable and was directed to be deleted, in favour of the assessee.

Final Conclusion: The appeal succeeded and the assessment addition arising from the bank deposits was deleted.

Ratio Decidendi: Where the surrounding evidence, banking pattern, and accepted commission receipts substantiate that cash deposits were received from customers and promptly remitted in the course of agency operations, such deposits cannot be treated as unexplained income merely for want of formal agreements.

Issues: (i) Whether the reassessment notice issued beyond four years was valid in the absence of tangible material and in the absence of any failure by the assessee to disclose fully and truly all material facts; (ii) Whether the addition made under section 68 on account of share capital and share premium was sustainable.

Issue (i): Whether the reassessment notice issued beyond four years was valid in the absence of tangible material and in the absence of any failure by the assessee to disclose fully and truly all material facts.

Analysis: The reopening was based on the same material already examined in the earlier assessment, with no independent enquiry showing any new tangible material. The recorded reasons did not refer to any specific omission by the assessee or any live link between the material and escapement of income. Since the reopening was beyond four years, the jurisdictional requirement of both reason to believe and failure to disclose fully and truly material facts had to be satisfied, which was not done. The reopening was therefore treated as a case of change of opinion and borrowed satisfaction.

Conclusion: The reassessment was invalid and the notice under section 148 was held to be without jurisdiction.

Issue (ii): Whether the addition made under section 68 on account of share capital and share premium was sustainable.

Analysis: The assessee had furnished documentary evidence relating to the share subscribers, including bank records, PAN, returns and financial statements, and the subscribers had responded to notices issued during the earlier proceedings. No specific discrepancy or adverse material was brought out by the Assessing Officer, and no further enquiry was made to dislodge the evidence already on record. In these circumstances, the initial onus under section 68 stood discharged and the Revenue failed to rebut the explanation by cogent material.

Conclusion: The addition under section 68 was unsustainable and was rightly deleted.

Final Conclusion: The Revenue's appeal failed both on jurisdiction and on merits, and the order deleting the reassessment and the addition was sustained.

Ratio Decidendi: A reassessment beyond four years cannot be sustained on mere change of opinion or borrowed satisfaction without tangible new material and a recorded failure to disclose material facts, and an addition under section 68 cannot stand where the assessee has substantiated the share credits with documentary evidence and the Revenue brings no contrary material.

Issues: Whether the assessee was entitled to credit of tax deducted at source under section 194Q of the Income-tax Act, 1961, read with section 199 and rule 37BA of the Income Tax Rules, 1962, where the deduction had been made in the assessee's PAN although the underlying income was claimed to belong to the seller and the assessee acted only as a commission agent.

Analysis: The Tribunal noted that the deduction had admittedly been made and deposited in the Government treasury in the assessee's PAN as reflected in Form 26AS. It held that once tax has been deducted from income attributable to the assessee and paid to the Central Government, the assessee cannot be denied credit merely because the deduction ought to have been made in some other person's hands. The Tribunal disagreed with the view that credit could be refused on the ground that the corresponding income was assessable in another person's hands, and held that the deduction in the assessee's PAN constituted tax paid on his behalf for credit purposes.

Conclusion: The assessee was entitled to TDS credit under section 194Q, and the denial of such credit by the lower authorities was held to be unsustainable in law.

Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 was sustainable where the assessee had originally filed a return under Section 139, later disclosed long-term capital gains in a revised computation during reassessment proceedings under Sections 147 and 148, and Explanation 3 to Section 271(1)(c) was invoked.

Analysis: The return originally filed under Section 139 had omitted the long-term capital gains, but the assessee disclosed the income in the revised computation filed in response to notice under Section 148 before the reasons for reopening were known. Explanation 3 to Section 271(1)(c) applies where no return is furnished within the period specified under Section 153 and the return is filed only after notice under Section 148. Since the assessee had already filed a return under Section 139, the deeming fiction of concealment under Explanation 3 was not attracted. The disclosure made in reassessment proceedings therefore did not amount to concealment or furnishing of inaccurate particulars for penalty purposes.

Conclusion: The penalty under Section 271(1)(c) was not justified and was directed to be deleted.

Issues: Whether the Commissioner (Appeals) could validly set aside an ex parte assessment made under section 144 of the Income-tax Act, 1961 after admitting additional evidence and obtaining a remand report, and whether the addition on account of long-term capital gain was sustainable.

Analysis: The assessment had been framed ex parte under section 144. The assessee produced additional evidence before the appellate authority under Rule 46A of the Income-tax Rules, 1962, and the Assessing Officer examined the material in remand proceedings. The record showed that the assessee had supported the claim of indexed cost of construction and exemption under section 54, and the Assessing Officer did not record any adverse finding against the material relating to the constructed house, valuation report, purchase of the new property, and withdrawals claimed for construction. In these circumstances, the issue stood substantially examined in the assessment and remand proceedings, leaving no basis to send the matter back for a fresh assessment.

Conclusion: The set-aside by the Commissioner (Appeals) was held to be unjustified, the assessee's claim of nil long-term capital gain was accepted, and no addition on this issue was warranted.

Issues: (i) Whether the notice under section 148 was barred by limitation under section 149 of the Income-tax Act, 1961; (ii) whether the addition of Rs. 33,00,190 under section 69A was sustainable.

Issue (i): Whether the notice under section 148 was barred by limitation under section 149 of the Income-tax Act, 1961.

Analysis: The notice under section 148 was issued on 31.03.2022. The period of limitation applicable to the reassessment notice was examined with reference to section 149, and the objection that the notice was time-barred was found untenable on the facts placed before the Tribunal.

Conclusion: The limitation challenge failed and the notice under section 148 was upheld as within time.

Issue (ii): Whether the addition of Rs. 33,00,190 under section 69A was sustainable.

Analysis: The assessment was based on alleged bogus transactions with two parties, but the assessee produced books of account and supporting material showing that the receipts represented business sales recorded in the regular accounts. The Tribunal found that the Assessing Officer had not properly considered the documentary evidence and that the amounts were duly credited in the books. On that basis, the application of section 69A was held unsustainable.

Conclusion: The addition under section 69A was deleted and the assessee succeeded on merits.

Final Conclusion: The reassessment proceedings were not invalidated on limitation, but the impugned addition was set aside, resulting in partial relief to the assessee.

Ratio Decidendi: An addition under section 69A cannot be sustained where the impugned receipts are shown by books and supporting evidence to be accounted business transactions, and a reassessment notice issued within the applicable limitation cannot be invalidated on a bare plea of time bar.

Issues: (i) Whether the Tribunal was justified in reducing the penalty imposed on the Chairman and Managing Director despite upholding the acts of commission and omission on their part. (ii) Whether the Tribunal was justified in setting aside the penalty imposed on the officers of the company despite upholding their indulgence in malpractice.

Issue (i): Whether the Tribunal was justified in reducing the penalty imposed on the Chairman and Managing Director despite upholding the acts of commission and omission on their part.

Analysis: The penalties arose from import and export transactions in which the goods were held liable to confiscation under Sections 111 and 113 of the Customs Act, 1962, attracting penalty under Sections 112 and 114 of the Customs Act, 1962. The Tribunal found the levy of penalty sustainable but considered the quantum excessive and reduced it. The reduction was treated as an exercise of discretion based on the facts found, and no perversity or substantial question of law was shown in that approach.

Conclusion: The reduction of penalty on the Chairman and Managing Director was upheld and was not interfered with.

Issue (ii): Whether the Tribunal was justified in setting aside the penalty imposed on the officers of the company despite upholding their indulgence in malpractice.

Analysis: The Tribunal found that the officers were employees acting in their official capacity, without independent dealing in the goods apart from the company's business. On that factual basis, it held that the penalty provisions could not be applied to them personally. The High Court accepted that finding and found no error in the Tribunal's view that personal penalty was not warranted on those facts.

Conclusion: The setting aside of penalty on the officers of the company was upheld.

Final Conclusion: The appeals failed and the Tribunal's order was sustained in full, with the questions answered against the Revenue.

Ratio Decidendi: When the Tribunal sustains confiscability and the legal basis for penalty under the Customs Act but reduces or deletes penalty on factual findings as to role, capacity, and extent of participation, such interference is a discretionary fact-based determination not giving rise to a substantial question of law absent perversity.

Issues: Whether the writ appeal deserved to be allowed by setting aside the order quashing the reassessment notices and remitting the matter for fresh consideration, while reserving liberty to the assessees to challenge Section 147A.

Analysis: In view of the order of the Supreme Court in an identical fact situation and the intervening amendment inserting Section 147A, the Court declined to examine the merits of the rival contentions at this stage. The earlier order of the learned Single Judge, which had quashed the notices on the footing that the jurisdictional Assessing Officers lacked competence, was set aside. The matter was remitted to the learned Single Judge for fresh consideration, with liberty to the assessees to amend the writ petitions and challenge Section 147A and with all contentions kept open.

Conclusion: The writ appeal was allowed, the order of the learned Single Judge was set aside, and the matter was remitted for fresh consideration with liberty to challenge Section 147A.

Issues: Whether the applicant was entitled to regular bail in a prosecution alleging evasion of GST and cess under the Health Security and National Security Cess Act, 2025.

Analysis: The application arose from allegations that the applicant was manufacturing pan masala while declaring scented supari and that the case involved seizure of machinery, documents, electronic records and finished goods. The material relied upon was predominantly documentary and electronic in nature. The complaint had already been filed, the applicant had remained in judicial custody since 21.03.2026, and no police custody was sought after judicial remand. The seizure memo did not show recovery of tobacco, nicotine, khaini, zarda or gutkha, and whether the seized goods fell within the prosecution's classification remained a matter for trial. The settled principles governing bail in economic offences, including the relevance of the nature of accusation, custodial interrogation, tampering with evidence and the triple test, were applied in favour of release, along with the safeguard of personal liberty under Article 21 of the Constitution of India.

Conclusion: Bail was granted on the ground that continued detention was not shown to be necessary and the applicant satisfied the settled bail parameters.

Issues: Whether the purported transfer of the company's immovable property to its promoters, effected through resolutions and mutation entries without a registered conveyance and in the shadow of winding-up proceedings, amounted to a fraudulent preference under Section 531(1) of the Companies Act, 1956 and was liable to be declared void, with consequential reversal of the mutation entries.

Analysis: The transfer was recorded in the land records after presentation of the winding-up petition and without any executed instrument of transfer or disclosure of genuine consideration. The promoters' case rested on a shareholder resolution and an asserted but unquantified past indebtedness, while the company was under their control. The statutory protection under Section 531(1) is directed to the interests of creditors, and a transaction that allows shareholders to appropriate company assets, particularly on no stated or proven consideration, falls within the mischief of fraudulent preference. The standard is preponderance of probability, and on the facts, the absence of good faith and the attempt to keep the property beyond the reach of creditors were established.

Conclusion: The transaction was held to be a fraudulent preference and void, and the mutation entries were directed to be reversed with the company's name restored in the land records.

Issues: (i) Whether the nil-rated intermediate product cleared from one unit of the same manufacturer ceased to be an intermediate product and became the final product for CENVAT credit purposes; (ii) Whether its movement from one unit to another was a stock transfer and not a sale; (iii) Whether CENVAT credit on fuel used in one unit could be denied merely because the dutiable final products were manufactured in another unit of the same manufacturer.

Issue (i): Whether the nil-rated intermediate product cleared from one unit of the same manufacturer ceased to be an intermediate product and became the final product for CENVAT credit purposes.

Analysis: The scheme of credit was held to operate on the basis of the real final product and the avoidance of cascading. The intermediate product, though nil-rated and moved out of the Salem unit, was used only for further manufacture of dutiable goods at the Belpahar unit. On that footing, the intermediate product did not become the final product merely because it was cleared from one unit.

Conclusion: The nil-rated product was an intermediate product, and the dutiable goods manufactured after its use were the relevant final products. The finding was in favour of the assessee.

Issue (ii): Whether its movement from one unit to another was a stock transfer and not a sale.

Analysis: The transfer was between units of the same manufacturer, without consideration and without any third-party sale element. The common ownership and common accounts supported the character of a stock transfer. The department did not establish any sale transaction.

Conclusion: The movement was held to be a stock transfer and not a sale. The finding was in favour of the assessee.

Issue (iii): Whether CENVAT credit on fuel used in one unit could be denied merely because the dutiable final products were manufactured in another unit of the same manufacturer.

Analysis: Rule 57AD and Rule 6 were construed as denying credit only where exempted final goods were involved, while the fuel exception could not be used to create an absolute bar. The definition of input under Rule 57AA(d) was interpreted liberally so as not to defeat the credit scheme by a rigid factory-by-factory approach. Since the final goods were dutiable and the units belonged to the same manufacturer, the physical separation of units did not justify denial of credit.

Conclusion: CENVAT credit on furnace oil could not be denied on the ground that the intermediate product was manufactured in one unit and the dutiable final products in another. The finding was in favour of the assessee.

Final Conclusion: The appeal succeeded, the Tribunal's order denying credit was set aside, and the assessee's entitlement to CENVAT credit on the fuel was restored because the credit scheme could not be defeated by treating a stock transfer between units of the same manufacturer as the final taxable event.

Ratio Decidendi: Where an intermediate nil-rated product is transferred between units of the same manufacturer for further manufacture of dutiable final goods, CENVAT credit on fuel used in its manufacture cannot be denied merely because the final manufacture occurs in another unit, provided the transaction is a stock transfer and the final goods are dutiable.

Issues: Whether cancellation of GST registration for non-filing of returns should be interfered with and registration restored with permission to file returns on payment of dues.

Analysis: The registration was cancelled for failure to furnish monthly returns under Section 29(2)(c) of the Central Goods and Services Tax Act, 2017. The petitioner asserted that the default was procedural and that the authority had not adequately considered the detailed representation. The Court found a prima facie case for interference, noting that complete denial of an opportunity to file returns after payment would cause irreparable harm to the business and livelihood. To balance the equities, the authority was directed to compute the tax and penalties, if payable, and the portal was to remain active for making such payment.

Conclusion: The cancellation was interfered with and the registration was directed to be restored from the date of registration, with liberty to file the pending returns on regular basis upon payment of the dues, if any.

Issues: Whether the addition made under section 68 of the Income-tax Act, 1961 in respect of unsecured loans was sustainable when the assessee produced confirmations, bank statements, ledger accounts and evidence of subsequent repayment with interest.

Analysis: The sustained addition was founded mainly on the lenders' earning capacity. The record showed that the loans were received through banking channels, confirmations were filed, and the assessee produced bank statements, ledger accounts and evidence of repayment along with interest. The Tribunal treated these materials as sufficient to establish the genuineness of the transactions and held that earning capacity alone does not conclude the issue of creditworthiness, which depends on the ability to arrange funds for lending.

Conclusion: The addition under section 68 was deleted and the assessee succeeded on the issue.

Issues: (i) Whether reassessment initiated under sections 147 and 148 was valid when the trigger material emanated from a search on a third party and the case attracted the search assessment regime under section 153C; (ii) Whether additions based on seized third-party material and statements could be sustained without confronting the material to the assessee and without affording cross-examination.

Issue (i): Whether reassessment initiated under sections 147 and 148 was valid when the trigger material emanated from a search on a third party and the case attracted the search assessment regime under section 153C.

Analysis: The reopening was founded on information and seized documents arising from a search on another group. The relevant assessment year fell within the regime where, on facts of a search on a third party and seized material relatable to the assessee, the special machinery under section 153C, read with the proviso to section 149(1), governed the proceedings. In such circumstances, recourse to reassessment under sections 147 and 148 was held to be impermissible.

Conclusion: The reassessment notice and the consequential assessment were invalid and unsustainable in law, and the finding was in favour of the assessee.

Issue (ii): Whether additions based on seized third-party material and statements could be sustained without confronting the material to the assessee and without affording cross-examination.

Analysis: The additions were based on documents and statements recovered in a third-party search, but the material was not confronted to the assessee and the deponents were not produced for cross-examination. The estimate of alleged purchases and income was thus founded on untested material, contrary to the requirements of fair procedure and natural justice.

Conclusion: The additions were deleted and the relief was granted in favour of the assessee.

Final Conclusion: The assessee succeeded on both jurisdictional and merits grounds, and the Revenue's connected appeals did not survive.

Ratio Decidendi: Where the foundation of reopening is material seized in a third-party search, the exclusive route is the search assessment mechanism under section 153C, and additions based on such material cannot stand unless the material is disclosed to the assessee and tested by cross-examination where relied upon.

Issues: (i) whether prior period expenses required verification and could be allowed on proof of crystallisation during the relevant year; (ii) whether employee stock option plan expenditure was allowable as business expenditure; (iii) whether carry forward and set off of accumulated business loss and unabsorbed depreciation arising from the demerger were permissible; and (iv) whether the deferred income addition was sustainable.

Issue (i): Whether prior period expenses required verification and could be allowed on proof of crystallisation during the relevant year.

Analysis: The lower authorities had disallowed the claim mainly on the basis that the expenses related to earlier years and supporting evidence was not produced. The assessee furnished details and sought verification, contending that the liabilities had crystallised during the relevant year and that certain items were allowable on payment or on accrual principles depending on their nature.

Conclusion: The disallowance was set aside and the matter was restored to the Assessing Officer for verification. The issue was allowed for statistical purposes and is in favour of the assessee to that extent.

Issue (ii): Whether employee stock option plan expenditure was allowable as business expenditure.

Analysis: The claim was examined in the light of the settled line of authority which treats ESOP discount, when recognised over the vesting period and actually incurred on exercise, as expenditure incurred wholly and exclusively for business purposes. The reasoning accepted that the benefit formed part of employee remuneration and was not contingent in nature.

Conclusion: The disallowance of ESOP expenditure was deleted and deduction under section 37(1) was directed to be allowed. This issue is in favour of the assessee.

Issue (iii): Whether carry forward and set off of accumulated business loss and unabsorbed depreciation arising from the demerger were permissible.

Analysis: The relevant provisions governing demerger and resulting company were construed strictly. The condition that the resulting company must issue shares to the shareholders of the demerged company was held to be mandatory. As the assessee did not itself issue the requisite shares and reliance on issue by the holding company did not satisfy the statutory language, the conditions for the benefit under the demerger provisions were held not to be fulfilled.

Conclusion: The denial of carry forward and set off of losses and unabsorbed depreciation was upheld. This issue is against the assessee.

Issue (iv): Whether the deferred income addition was sustainable.

Analysis: The addition was deleted by following the Tribunal's earlier view in the assessee's own case, and no material was shown to dislodge that position or to demonstrate any stay or reversal of the earlier ruling.

Conclusion: The deletion of the deferred income addition was upheld. This issue is in favour of the assessee and against the Revenue.

Final Conclusion: The assessee succeeded on the ESOP and deferred income issues, obtained remand on prior period expenses, and failed on the demerger-linked loss and depreciation claim; the Revenue's cross-appeal did not survive.

Ratio Decidendi: Taxing provisions governing demerger benefits must be applied on their plain terms, and the statutory condition requiring the resulting company to issue shares to the demerged company's shareholders cannot be diluted by reference to a holding company or by purposive expansion inconsistent with the text.

Issues: Whether rebate under section 87A of the Income-tax Act, 1961 is allowable against tax payable on short-term capital gains taxable under section 111A of the Income-tax Act, 1961 for an individual assessee opting for section 115BAC of the Income-tax Act, 1961.

Analysis: The assessee's total income was below the threshold for rebate and the denial arose only in relation to tax computed at the special rate on short-term capital gains. The Tribunal noted that consistent co-ordinate bench decisions had held such rebate to be available where the statutory conditions for section 87A were otherwise satisfied, and no contrary binding authority was shown.

Conclusion: The denial of rebate under section 87A on tax payable under section 111A was held to be unsustainable, and the assessee was directed to be granted the rebate.

Issues: Whether the petitioner's claim for CENVAT credit was wrongly denied while determining tax dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and whether the impugned order deserved to be set aside.

Analysis: The earlier remand confined consideration to whether CENVAT credit had been validly availed. The impugned order itself recorded that, for the relevant period, there was no time limit for availment of credit and that the restriction introduced later did not apply. Rule 9 of the CENVAT Credit Rules, 2004 does not make receipt of goods at the registered premises a condition for credit, and the Committee could not deny credit on a ground different from the one set out in the show cause notice. The Scheme also contemplates determination by the Designated Committee under Section 127, including hearing where its estimate differs from the declarant's.

Conclusion: The denial of CENVAT credit was erroneous and the impugned order was liable to be set aside. The petitioner was entitled to consequential action on the declaration and issuance of the discharge certificate under the Scheme.

Final Conclusion: The writ petition succeeded, the impugned order was quashed, and the matter was directed to proceed on the petitioner's declaration for issuance of the discharge certificate.

Ratio Decidendi: Where a statutory scheme requires determination of tax dues on the basis of a declarant's claim, credit cannot be denied on a ground not proposed in the show cause notice or on an unstated requirement not found in the governing credit rules.

Issues: Whether the petitioner established that the tax, interest and penalty were extracted under coercion so as to justify refund under section 54, and whether the rejection of the refund claim was liable to be interfered with in writ jurisdiction.

Analysis: The search proceedings, panchnamas and recorded statements showed that the petitioner, who was operating without GST registration, voluntarily agreed to discharge the quantified liability and requested a temporary registration for payment. The Court found no contemporaneous complaint, protest or representation alleging threat or coercion during or immediately after the proceedings, and treated the later allegation as an afterthought. The refund claim under section 54 could succeed only if the amount was shown to be not payable or paid in excess, which was not established on the material recorded during the search. The Court also relied on the settled principle that a disputed factual controversy as to coercive recovery is not ordinarily amenable to adjudication in writ proceedings.

Conclusion: The allegation of coercive recovery was disbelieved, and the rejection of the refund application was upheld.

Final Conclusion: The writ petition failed, and the impugned refund rejection remained undisturbed.

Ratio Decidendi: A refund claim founded on alleged coercive recovery cannot be granted in writ jurisdiction where the contemporaneous record s voluntary payment and the allegation raises a disputed question of fact unsupported by timely protest or complaint.

Issues: Whether the appeal was liable to be disposed of on the ground that the tax effect was below the prescribed monetary limit, and whether the exceptions introduced by the CBDT letter dated 20 August 2018 could be applied retrospectively to pending appeals.

Analysis: The appeal was instituted before 20 August 2018. The later CBDT modification creating exceptions was held to operate from the date of issuance and not retrospectively. The monetary limit for maintainability applied to pending appeals, but the newly introduced exceptions could not be invoked for appeals already filed before that date.

Conclusion: The appeal was disposed of as not maintainable on account of the low tax effect, and the question of law was left open.

Issues: Whether the Revenue could assail the percentage of addition sustained by the Tribunal when it had not challenged the order of the Commissioner (Appeals), and whether any substantial question of law arose in the appeal.

Analysis: The appeal arose under Section 260A of the Income-tax Act, 1961, from an assessment concerning addition for unexplained expenditure on alleged bogus purchases. The Commissioner (Appeals) had restricted the addition to 12.5% and the Tribunal had further reduced it to 10%. The Revenue had not filed any appeal against the order of the Commissioner (Appeals). In these circumstances, the Court held that the Revenue was precluded from questioning the percentage of addition fixed by the Tribunal, and no substantial question of law arose for consideration.

Conclusion: The issue was answered against the Revenue and in favour of the Assessee.

Final Conclusion: The Revenue's appeal failed on the ground that, having not challenged the order of the Commissioner (Appeals), it could not seek enhancement of the addition before the High Court.

Ratio Decidendi: A party that does not challenge an adverse appellate order cannot later seek to reopen the settled quantum of addition in further appeal, and no substantial question of law arises on that basis.