Issues: (i) Whether the transfer pricing adjustment on sale of finished goods to the associated enterprise was justified; (ii) whether the expenditure disallowance treated as preliminary or capital in nature could be sustained; (iii) whether the sale of plant and machinery amounted to a slump sale giving rise to short-term capital gains.

Issue (i): Whether the transfer pricing adjustment on sale of finished goods to the associated enterprise was justified.

Analysis: The assessee sold finished goods to its associated enterprise after the shutdown of its predominant customer, and the year was found to be an extraordinary one marked by a substantial fall in sales to the original customer and a corresponding increase in sales to the associated enterprise. The Tribunal accepted that commercial decisions cannot be tested by hindsight and that the transfer pricing analysis must account for the actual business disruption and the reduced absorption of costs arising from the closure of operations.

Conclusion: The transfer pricing adjustment was not sustainable and the deletion was upheld in favour of the assessee.

Issue (ii): Whether the expenditure disallowance treated as preliminary or capital in nature could be sustained.

Analysis: The assessee continued its trading activity and remained a going concern despite the shutdown of its manufacturing line, and the Assessing Officer did not establish any concrete basis to hold that the expenses were incurred for a new business not yet commenced. The Tribunal found that the expenses were regular business outgoings incurred to keep the business running, and that an ad hoc disallowance could not be made merely on an assumption of future expansion.

Conclusion: The disallowance of expenses was not justified and the relief granted to the assessee was affirmed.

Issue (iii): Whether the sale of plant and machinery amounted to a slump sale giving rise to short-term capital gains.

Analysis: The Tribunal noted that the assets were sold item-wise with separate values assigned to individual assets, while the remaining plant and machinery block continued to exist. A slump sale requires transfer of an undertaking for lump sum consideration without values being assigned to individual assets and liabilities, and the facts did not show transfer of an undertaking as a whole.

Conclusion: The transaction was not a slump sale and the addition towards short-term capital gains was correctly deleted.

Final Conclusion: The revenue's challenge failed on all substantive grounds and the assessee's reliefs were sustained, resulting in dismissal of the appeal.

Ratio Decidendi: Transfer pricing benchmarking must reflect extraordinary business circumstances, business expenditure incurred to keep an ongoing concern operational cannot be disallowed on conjecture, and a sale of identified individual assets with retained asset blocks does not constitute a slump sale.

Issues: Whether the adjudication order was vitiated for want of personal hearing in violation of the statutory requirement under section 75(4) of the Goods and Services Tax law.

Analysis: The writ petition challenged the adjudication and summary orders on the ground that the petitioner had specifically sought a personal hearing in its replies, but no hearing notice was issued. The State conceded that no written notice intimating the date of personal hearing had been served. In these circumstances, the absence of opportunity of hearing amounted to breach of the mandatory procedural safeguard and rendered the impugned adjudication unsustainable.

Conclusion: The impugned order was quashed and the matter was remitted to the department for fresh adjudication after granting an opportunity of hearing to the petitioner.

Issues: (i) whether the demand for customs duty was barred, in part, by limitation under Section 28 of the Customs Act, 1962; (ii) whether penalty under Section 114A of the Customs Act, 1962 was leviable for the duty and interest determined under Section 28; and (iii) whether the shortage and duty liability required recomputation by adjusting the available physical stock of re-imported silk fabric.

Issue (i): Whether the demand for customs duty was barred, in part, by limitation under Section 28 of the Customs Act, 1962.

Analysis: The show cause notice covered the period from 1998-99 to 2007-08. The five-year period under Section 28 had to be reckoned with reference to the relevant date, as defined in Explanation 1 to Section 28. On that basis, the period from 2003-04 to 2007-08 fell within limitation, but the period from 1998-99 to 2002-03 did not.

Conclusion: The demand for the period from 1998-99 to 2002-03 was barred by limitation under Section 28(4) of the Customs Act, 1962.

Issue (ii): Whether penalty under Section 114A of the Customs Act, 1962 was leviable for the duty and interest determined under Section 28.

Analysis: The finding sustaining the demand under Section 28 rested on collusion, wilful misstatement, or suppression of facts. Once such a finding was recorded, penalty under Section 114A, being consequential to the duty and interest determined under Section 28(8), could not be deleted.

Conclusion: Penalty under Section 114A was leviable to the extent of the duty and interest determined under Section 28(8) of the Customs Act, 1962.

Issue (iii): Whether the shortage and duty liability required recomputation by adjusting the available physical stock of re-imported silk fabric.

Analysis: The record did not establish the precise period to which the available physical stock related, but the stock of 7,263.60 meters was available and had to be accounted for while determining the shortage for the surviving period. The duty liability therefore required fresh computation after giving due adjustment for that stock.

Conclusion: The shortage and duty liability were directed to be recomputed by giving credit for 7,263.60 meters of re-imported silk fabric for the period from 2003-04 to 2007-08.

Final Conclusion: The decision sustained the duty demand only for the non-barred period, upheld penalty under Section 114A to that extent, and required reassessment after adjusting the available stock.

Ratio Decidendi: Where a duty demand under Section 28 is partly time-barred, penalty under Section 114A survives only to the extent of the duty and interest lawfully determined for the surviving period, and the quantified liability must reflect any proven stock adjustment.

Issues: Whether the applicant, arraigned in respect of alleged GST offences as a transporter, was entitled to bail.

Analysis: The allegations and submissions showed that the applicant was stated to be a transporter, while the supplying persons were identified separately. On the materials placed, the role attributed to the applicant did not prima facie establish that he was the supplier so as to attract the graver non-bailable clauses under Section 132(1)(a) and Section 132(1)(b) of the Central Goods and Services Tax Act, 2017. The Court also noted the absence of criminal antecedents, the lack of any specific material suggesting tampering with evidence, intimidation of witnesses, or flight from justice, and applied the settled principle that bail is the rule and jail is the exception, consistent with Article 21 of the Constitution of India.

Conclusion: Bail was granted to the applicant.

Issues: Whether penalty under Section 125 of the GST Act could be imposed separately under CGST and SGST so as to total Rs. 50,000, and whether the consequential appellate order dismissing the appeal as time-barred could stand after the penalty order was found unsustainable.

Analysis: Section 125 contemplates a maximum penalty of Rs. 25,000. The imposition of Rs. 25,000 under CGST and a further Rs. 25,000 under SGST was therefore inconsistent with the statutory limit. Once the original penalty order was found to be contrary to the statutory mandate, the appellate order dismissing the appeal as beyond limitation could not survive independently and was liable to be set aside as a consequence.

Conclusion: The penalty order was set aside, the appellate order was also set aside, and the matter was remanded to the authority to pass a fresh order in accordance with law.

Issues: Whether cancellation of GST registration and the appellate dismissal could be sustained when the cancellation order recorded no substantive reasons and the matter was remanded for fresh adjudication after hearing.

Analysis: The cancellation was founded on an alleged failure to furnish bank details and was proceeded with under the GST framework. The impugned cancellation order, however, did not contain any meaningful reasoning. In the absence of recorded reasons, the order could not be sustained. Following the earlier view of the Court on the necessity of reasoned decision-making, the appellate order also could not survive.

Conclusion: The cancellation order and the appellate order were quashed and the matter was remanded to the adjudicating authority for fresh consideration after granting an opportunity of hearing.

Final Conclusion: The petitioner obtained relief against the impugned cancellation and appellate orders, but the dispute was left open for fresh adjudication by the authority concerned.

Ratio Decidendi: An order cancelling GST registration must contain reasons and conform to the requirement of fair hearing; a non-speaking cancellation order cannot be sustained.

Issues: Whether the rectification application filed beyond the six-month period prescribed under Notification No. 22/2024 could be rejected when the assessee's entitlement to input tax credit had been subsequently recognised by Sections 16(5) and 16(6), and whether the rejected rectification application should be restored for fresh consideration on merits.

Analysis: The later insertion of Sections 16(5) and 16(6) with retrospective effect was treated as conferring a substantive entitlement which could not be defeated merely on account of delay in invoking the rectification mechanism under the notification. The time limit in Notification No. 22/2024 was treated as a procedural requirement, and procedural stipulations were held not to override substantive relief. The rectification application was therefore directed to be restored, with the respondent required to examine entitlement and other statutory compliance on merits after notice to the petitioner.

Conclusion: The rejection of the rectification application on limitation was not sustained, and the matter was remitted for fresh consideration on merits; the assessee obtained partial relief.

Issues: Whether Generation Based Incentive received under the Government scheme formed profits and gains derived from the eligible wind power business for deduction under section 80-IA of the Income-tax Act, 1961.

Analysis: The incentive was quantified on the basis of electricity generated and fed into the grid, and therefore arose only upon carrying on the core power generation activity. The immediate source being a Government scheme did not by itself break the nexus where the receipt was intrinsically connected with the business operations. The condition relating to foregoing accelerated depreciation was treated as a regulatory condition and not as a factor changing the character of the receipt. The reasoning of the lower authorities was distinguished, and the Tribunal followed the principle that where income emanates directly from the eligible business and is inseparably connected with it, the requirement of derivation is satisfied.

Conclusion: The Generation Based Incentive was held to be eligible for deduction under section 80-IA, and the disallowance was deleted.

Ratio Decidendi: A receipt computed directly with reference to the eligible business activity and inseparably connected with that activity is profits derived from the undertaking, even if paid under a Government incentive scheme.

Issues: Whether the absence of a signature on the sanction granted under Section 151 of the Income-tax Act, 1961 vitiated the reassessment proceedings, and whether the matter required remand in view of the subsequent insertion of Section 292BC of the Act with retrospective effect.

Analysis: The dispute turned on compliance with Section 151 of the Income-tax Act, 1961 and whether approval in a paperless environment, authenticated through a DIN, could stand without a physical signature. During the pendency of the appeal, Section 292BC was inserted with retrospective effect, and its impact on the controversy was held to require reconsideration on appropriate pleadings. The respondent could not be permitted to raise fresh pleas on retrospective applicability in the appeal itself, and if Section 292BC was to be relied upon, a reasonable opportunity had to be afforded to address its applicability in the writ proceedings.

Conclusion: The unsigned sanction issue was not finally adjudicated on merits in the appeal, and the proper course was to set aside the writ order and restore the writ petition for fresh consideration, with liberty to raise the applicability of Section 292BC.

Issues: Whether the allegation of bogus invoicing and wrongful input tax credit, though falling within the GST regime, barred invocation of the general penal law and justified grant of bail.

Analysis: The Court held that the earlier Division Bench decision governing the field permitted registration of FIR and prosecution under the penal law in respect of the same conduct, and that the ratio of the cited Supreme Court decision did not displace that position in view of the express scheme of the U.P. GST Act. The Court further found that the material collected in investigation prima facie showed the applicants' involvement in creating fictitious firms and causing large-scale tax evasion, and therefore the plea for bail was not made out.

Conclusion: The applicants were not entitled to bail and the request for release on bail was rejected.

Issues: Whether the appeal before the Commissioner (Appeals) was barred by limitation on the footing that the order in original had been duly communicated to the appellant at the correct address.

Analysis: The appeal turned on the date and mode of service of the order in original. The record showed that the appellant had a different registered address in Surat, while the show cause notice and adjudication order were sent to an incomplete or incorrect address. The appellate authority's reliance on presumed service through speed post was found unsupported by evidence of dispatch to the correct registered address. The statutory limitation under Section 85(3A) of the Finance Act, 1994 depends on communication of the order, and the presumption of service under Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act, 1872 remained rebutted on the facts.

Conclusion: The dismissal of the appeal as time barred was unsustainable, and the matter had to be sent back for decision on merits.

Issues: Whether the confirmation of provisional attachment of properties could be interfered with when the appellants failed to establish a lawful source of funds and a credible explanation for acquisition of the properties; and whether the appellants had rebutted the statutory presumption under the money-laundering law.

Analysis: The Tribunal noted that the appellant was arrayed as an accused in the underlying investigation and that the attached properties were acquired during or around the relevant period without supporting documentary proof of independent income. The plea that the properties stood in the name of the wife and were acquired from agriculture income or salary contribution was found unsubstantiated, as no bank statements, tax returns, or other material were produced. In the absence of proof of source, the Tribunal applied the statutory presumption against the accused and held that the appellants had not discharged the reverse burden cast upon them. The Tribunal further held that the record did not show any reliable basis to dislodge the finding that the properties were liable to attachment as connected with proceeds of crime.

Conclusion: The challenge to the confirmation of provisional attachment failed, and the properties remained liable to attachment.

Final Conclusion: The Tribunal upheld the attachment order on the ground that the appellants did not rebut the statutory presumption or establish a lawful source for acquisition of the properties.

Ratio Decidendi: In proceedings under the money-laundering law, once material indicates involvement in the scheduled offence and acquisition of property without proved lawful source, the statutory presumption operates and the burden shifts to the accused to rebut it with credible evidence.

Issues: Whether the reassessment proceedings were valid where, for reopening beyond three years from the end of the relevant assessment year, approval under section 151 of the Income-tax Act, 1961 was obtained from the Principal Commissioner of Income Tax instead of the Principal Chief Commissioner of Income Tax.

Analysis: The reassessment related to Assessment Year 2017-18 and was initiated after the expiry of three years from the end of the relevant assessment year. In that situation, the statutorily prescribed sanctioning authority under section 151 of the Income-tax Act, 1961 was the Principal Chief Commissioner of Income Tax. Since the approval was obtained from the Principal Commissioner of Income Tax, the sanction was from a wrong authority and the defect went to the root of the reopening. The reassessment was therefore held to be unsustainable, following the binding jurisdictional precedent relied upon in the order.

Conclusion: The reassessment proceedings were invalid and stood quashed for want of valid sanction by the competent authority.

Final Conclusion: The appeal succeeded and the reassessment was annulled on the jurisdictional defect in sanction under the reopening provisions.

Ratio Decidendi: Where reopening of assessment beyond the prescribed period requires sanction from a specified authority, approval obtained from a different authority is a jurisdictional defect that vitiates the reassessment proceedings.

Issues: (i) Whether compensation paid on cancellation of prior share-sale agreements was a genuine expenditure incurred wholly and exclusively in connection with transfer of shares so as to be deductible in computing long-term capital gains. (ii) Whether the appellate authority erred in considering material during further enquiry without violating the rule against admission of additional evidence.

Issue (i): Whether compensation paid on cancellation of prior share-sale agreements was a genuine expenditure incurred wholly and exclusively in connection with transfer of shares so as to be deductible in computing long-term capital gains.

Analysis: The assessees entered into earlier agreements to sell shares at a lower price and, upon securing a higher price from a third purchaser, cancelled those agreements in terms of the contractual clauses. The recipient companies were genuine, assessed to tax, had substantial turnover, and confirmed receipt through banking channels. The record did not show that the arrangements were sham, that the money came back to the assessee, or that the compensation lacked commercial substance. The payment had a proximate nexus with the eventual transfer of shares at a higher price and was incurred to honour the contractual consequences of the earlier agreements.

Conclusion: The compensation was allowable as expenditure in connection with transfer of shares and was not a colourable device; the issue is decided in favour of the assessee.

Issue (ii): Whether the appellate authority erred in considering material during further enquiry without violating the rule against admission of additional evidence.

Analysis: The material relied upon by the appellate authority consisted of facts already on record or documents available in the public domain, and the authority was entitled to make further enquiry under the appellate powers. The assessee's clarification that the recipient companies were not related parties and the supporting public documents did not amount to impermissible fresh evidence requiring rejection. No prejudice from a procedural breach was established.

Conclusion: There was no violation of the rule against additional evidence, and the procedural objection fails against the assessee.

Final Conclusion: The addition made by the Assessing Officer was not sustainable, and the Revenue's appeal failed.

Ratio Decidendi: A compensation payment made under genuine contractual arrangements to facilitate a higher-value transfer of shares, supported by banking records and absent evidence of sham or round-tripping, is deductible as expenditure incurred in connection with the transfer; further enquiry by the appellate authority on such material does not amount to a Rule 46A violation where the material is already on record or from public sources.

Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 on 31.07.2022 for the assessment year 2013-14 was barred by limitation in the light of the exclusion of time under the TOLA regime and the Supreme Court rulings on the reassessment framework.

Analysis: The reassessment notice dated 21.06.2021 was treated as a deemed notice under section 148A(b) after the Supreme Court's directions, and the assessee was then supplied the material and given time to reply. The limitation for issuance of a fresh notice under section 148 had to be computed by excluding the period during which the deemed show-cause notice remained stayed and the further two weeks allowed for response. Applying that computation, the remaining time available to the Revenue expired before 31.07.2022. The later notice was therefore beyond the permissible limitation period. Since the foundation notice was time-barred, the reassessment proceedings and the consequential assessment could not survive. The cross-objection on merits did not require adjudication after the reassessment itself was quashed.

Conclusion: The notice under section 148 dated 31.07.2022 was barred by limitation and void ab initio, and the quashing of the reassessment was upheld in favour of the assessee.

Issues: (i) Whether the prior approval for initiation of reassessment proceedings was granted by the correct specified authority under the Income-tax Act, 1961; (ii) Whether the first appellate authority could dismiss the appeal ex parte for non-compliance without adjudicating the grounds on merits.

Issue (i): Whether the prior approval for initiation of reassessment proceedings was granted by the correct specified authority under the Income-tax Act, 1961.

Analysis: For an assessment year where more than three years had elapsed from the end of the relevant assessment year, the statute required approval of the higher specified authority. The order under section 148A(d) was shown to have been passed with prior approval of the Chief Commissioner of Income Tax, which satisfied the statutory requirement for approval by the specified authority.

Conclusion: The approval for initiation of reassessment proceedings was valid and the challenge on this ground failed.

Issue (ii): Whether the first appellate authority could dismiss the appeal ex parte for non-compliance without adjudicating the grounds on merits.

Analysis: The appellate authority disposed of the appeal only on account of non-appearance and non-compliance, without deciding the grounds raised on merits as required by section 250(6). The matter also involved the assessee's stated inability to attend on account of medical treatment. An appellate order must contain reasons and adjudication on the issues raised, and the appeal cannot be rejected merely for want of prosecution.

Conclusion: The ex parte dismissal was set aside and the appeal was restored for fresh adjudication on merits with an opportunity of hearing.

Final Conclusion: The challenge to the reassessment approval was rejected, but the appellate order was annulled for want of merits-based adjudication and the matter was sent back for fresh decision.

Ratio Decidendi: Where the statute prescribes approval by a specified authority for reassessment, compliance is satisfied if approval is obtained from the authority designated for the elapsed limitation period; and a first appellate authority cannot dispose of an appeal merely for non-prosecution without adjudicating the grounds on merits and giving a reasonable opportunity of hearing.

Issues: Whether the reassessment under section 147 of the Income-tax Act, 1961 was validly initiated on the basis of material giving rise to a reason to believe that income had escaped assessment, and whether Explanation 2(b) to section 147 could be invoked on the facts.

Analysis: The reasons recorded for reopening were founded on the assessment made for a subsequent year and on the similarity of cash deposits and property transactions, but the recorded material did not establish a live nexus between the information in possession of the Assessing Officer and a formed belief that income had escaped assessment in the year under consideration. The basis disclosed only a suspicion that the transactions might have been sourced from undisclosed income. Mere inadequacy of returned income to explain the investments and deposits, without further enquiry, did not satisfy the statutory requirement of belief. Explanation 2(b) was also inapplicable because the Assessing Officer had only suspected understatement of income and had not recorded a finding that the assessee had understated income within the meaning of that provision.

Conclusion: The reassessment was held to be without valid jurisdiction and the assessment made under section 147 was quashed.

Issues: Whether the penalty orders under section 271(1)(b) and section 271(1)(c) of the Income-tax Act, 1961 could be sustained when the assessee had opted for the Vivad Se Vishwas Scheme, the declaration had been accepted, and the appeal before the first appellate authority was sought to be withdrawn.

Analysis: The appeals concerned penalty demands arising from the same assessment year and were founded on the assessee's request that the appeals be withdrawn after opting for the Vivad Se Vishwas Scheme. The settlement of the quantum dispute and acceptance of the declaration were treated as material facts. In that situation, the continuance of penalty proceedings without first examining whether the underlying quantum stood settled was found to be improper. The appellate authority was held to have acted incorrectly in proceeding to confirm the penalties despite the express withdrawal request and the stated settlement position.

Conclusion: The penalty orders were unsustainable and were set aside, with the result that the assessee succeeded.

Final Conclusion: The common reasoning applied to both appeals resulted in deletion of the impugned penalty confirmations and allowance of the assessee's appeals.

Ratio Decidendi: Where the underlying quantum dispute has been settled under the Vivad Se Vishwas Scheme and the assessee seeks withdrawal of the appeal, penalty connected with that settled dispute cannot be confirmed without first addressing the effect of such settlement.

Issues: Whether the additions made on account of alleged unexplained time deposits and bank credits were liable to be sustained or the matter required restoration for fresh consideration.

Analysis: The additions had been made because the original bank statements relied upon by the assessee were not accepted before the DRP and, on the facts then available, the explanation regarding the source of the deposits and credits was not properly examined. The assessee produced stamped bank statements before the Tribunal and also pointed to material suggesting that the credits in the Kotak Mahindra Bank account were received through NEFT from identifiable parties. In these circumstances, and in the interest of justice, the existing factual position required reappreciation by the assessing authority after considering all evidences and granting due opportunity of hearing.

Conclusion: The additions were not finally affirmed and the matter was remanded to the Assessing Officer for fresh adjudication in accordance with law.

Issues: Whether the assessee was entitled to deduction under section 10A of the Income-tax Act, 1961 despite having originally claimed deduction under section 10B and despite the absence of the corresponding report in the return.

Analysis: The assessee's claim under section 10A had been accepted in earlier scrutiny assessments for the immediately preceding assessment years, and no material was shown to establish that the allowance for those years was erroneous or subsequently revised. The appellate record also showed that the relevant audit report in Form 56F was furnished during the assessment proceedings and that the assessee possessed the requisite STPI registration. In these circumstances, the Revenue could not take a contrary stand in the later year when the same eligibility had already been examined and allowed on scrutiny. The first appellate authority therefore accepted the alternate claim on the basis of the facts on record and the principle that assessment proceedings are intended to determine the correct tax liability in accordance with law.

Conclusion: The alternate claim under section 10A was rightly allowed and the Revenue's challenge failed.

Ratio Decidendi: Where an assessee's eligibility for a deduction has been accepted in earlier scrutiny assessments on the same facts and the requisite supporting report is available during assessment proceedings, the Revenue cannot deny the deduction in a subsequent year merely because the original return claimed a different exemption.