Issues: (i) Whether the addition made under section 56(2) by treating the entire difference between stamp duty valuation and declared consideration as the assessee's income was justified without considering joint ownership, appropriate valuation by the District Valuation Officer (DVO) and the assessee's additional evidence; (ii) Whether the assessee was denied a reasonable opportunity of being heard and the admission and consideration of additional evidence due to technical glitches in e-proceedings.

Issue (i): Whether the addition under section 56(2) treating the full difference as the assessee's income was justified without apportioning the share of joint ownership and without referring valuation to the District Valuation Officer.

Analysis: The Tribunal reviewed the record of the assessment and first appellate proceedings, noting documented submissions by the assessee that the property was purchased jointly with her son (equal shares) and repeated requests for reference to the DVO for appropriate valuation. The authorities below had made the addition of the entire difference and did not act upon the request for DVO valuation. The Tribunal also observed that a similar addition had been made in the son's assessment considering his 50% share.

Conclusion: The matter on the question of addition under section 56(2), valuation and share apportionment is remitted to the Assessing Officer for de novo adjudication, including consideration of the assessee's additional evidence and making reference to the District Valuation Officer as appropriate. The conclusion operates in favour of the assessee to the extent of ordering fresh adjudication.

Issue (ii): Whether the assessee was denied reasonable opportunity of being heard and whether her additional evidence should be admitted and considered.

Analysis: The Tribunal noted e-proceedings acknowledgements and an affidavit explaining non-compliances linked to illness and technical difficulties. The record showed that the assessee had attempted to file responses and additional valuation evidence which were not considered by the authorities below. The Tribunal emphasised the requirement to afford reasonable opportunity and to consider the additional evidence placed on record.

Conclusion: The Tribunal directed that the Assessing Officer afford the assessee a reasonable opportunity of being heard and consider the additional evidence filed. This conclusion is in favour of the assessee.

Final Conclusion: The appeal is allowed for statistical purposes and the assessment is remitted to the Assessing Officer for fresh merits adjudication taking into account the additional evidence and for making reference to the District Valuation Officer for appropriate valuation; the Assessing Officer shall afford the assessee a reasonable opportunity of being heard for expeditious disposal.

Ratio Decidendi: Where an assessee submits admissible additional evidence and requests statutory valuation, the assessing authority must consider such evidence and, if appropriate, refer valuation to the competent valuation officer and afford a reasonable opportunity of hearing before making additions under section 56(2) of the Income-tax Act, 1961.

Issues: Whether the amount of Rs. 16,53,076 received by the assessee under the BSNL Voluntary Retirement Scheme-2019, granted as retrenchment compensation under a Government-approved scheme, is exempt from income tax under Section 10(10B) of the Income-tax Act, 1961.

Analysis: The assessee received compensation under a Government-approved VRS implemented for BSNL employees. The legal framework for exemption of retrenchment/voluntary retirement compensation under a government-approved scheme is Section 10(10B) of the Income-tax Act, 1961. A coordinate bench of the Tribunal had considered identical facts and law in ITA Nos. 2387 & 2388/Ahd/2025 for AYs 2020-21 & 2021-22 and allowed relief by holding such compensation exempt under Section 10(10B). The present matter involves the same legal proposition and substantially similar factual matrix; consequently the prior coordinate-bench ruling applies mutatis mutandis. The question of delay and condonation under Section 249(3) was considered in the coordinate-bench decision and did not preclude adjudication on merits; accordingly the exemption claim merits allowance on the merits.

Conclusion: The amount of Rs. 16,53,076 received under the BSNL VRS-2019 is exempt from income tax under Section 10(10B) of the Income-tax Act, 1961. The appeals are allowed in favour of the assessee.

Ratio Decidendi: Retrenchment compensation paid under a Government-approved voluntary retirement/retrenchment scheme falls within the exemption provided by Section 10(10B) of the Income-tax Act, 1961 and is not includible in the recipient's taxable income.

Issues: Whether the assessee was liable to be treated as in default under section 206C(6A) read with section 206C(7) of the Income-tax Act, 1961, and whether the demand raised on account of alleged short collection of tax collected at source was sustainable.

Analysis: The assessee produced the quarterly TCS returns, reconciliation statement, and supporting details showing that tax had already been collected and deposited on the relevant scrap sales. The figures placed on record indicated that the amount treated as short collection by the Assessing Officer arose from a mismatch between the audited profit and loss account and the figures reported in the TCS return, including treatment of roll scrap sale and duty and tax components. On the material available, the Tribunal found that there was no factual default in collection and payment of TCS warranting the impugned demand.

Conclusion: The demand under section 206C(6A) read with section 206C(7) was not sustainable and the issue was decided in favour of the assessee.

Final Conclusion: The assessee succeeded and the impugned tax demand was deleted.

Ratio Decidendi: Where the record shows that tax collected at source has already been collected and deposited, a demand for alleged short collection cannot be sustained merely because of a reconciliation mismatch between return figures and book figures.

Issues: (i) Whether the assessable value of the imported goods could be enhanced by 25% on the basis of retracted statements and without proper contemporaneous import comparison. (ii) Whether the penalties imposed on the individuals could be sustained.

Issue (i): Whether the assessable value of the imported goods could be enhanced by 25% on the basis of retracted statements and without proper contemporaneous import comparison.

Analysis: The valuation enhancement was founded mainly on statements recorded during investigation, which had been retracted and were not tested by cross-examination. The orders did not contain a detailed examination of contemporaneous imports, the nature of the goods, or any sound basis for applying a uniform 25% enhancement. The comparison materials relied upon did not satisfactorily establish similarity of goods or value, and the valuation exercise lacked adequate corroboration.

Conclusion: The enhancement of assessable value was unsustainable and the related differential duty demand could not be upheld.

Issue (ii): Whether the penalties imposed on the individuals could be sustained.

Analysis: The penalty on one alleged intermediary had already been dropped and that order had attained finality. In that backdrop, sustaining penalty on the other person on the same factual basis of having received or transmitted the differential amount was not justified. The penalty findings were therefore not supportable on the material on record.

Conclusion: The penalties imposed on the individuals were unsustainable.

Final Conclusion: The valuation enhancement, the duty demand based on it, and the connected penalties were all set aside, and the appeals succeeded.

Ratio Decidendi: A customs valuation enhancement cannot rest merely on retracted and uncorroborated statements without reliable contemporaneous import evidence, and penalties premised on the same unsubstantiated foundation cannot survive.

Issues: (i) Whether the reassessment/enhancement of assessable value based solely on an empanelled Chartered Engineer's certificate (without following the sequential application of the Customs Valuation Rules, 2007 and without adequate market evidence) is sustainable; (ii) Whether the quantum of redemption fine and penalty imposed should be sustained or reduced.

Issue (i): Whether the enhanced assessable value determined on the basis of the Chartered Engineer's report is sustainable.

Analysis: The Tribunal examined the record and found that the enhanced value was determined without following the sequential application of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, and that the Chartered Engineer's certificate did not establish current market value or adequate supporting data as required under the Rules. The Tribunal noted that the impugned order did not indicate the specific Rule under the CVR, 2007 relied upon for the revision and found flaws in the Chartered Engineer's methodology and evidence for reassessment.

Conclusion: The enhancement of assessable value based solely on the Chartered Engineer's certificate is not sustainable; the declared transaction value is accepted and the revision of value is set aside in favour of the assessee.

Issue (ii): Whether the redemption fine and penalty imposed should be upheld or reduced.

Analysis: The Tribunal considered prior decisions of the Tribunal and the Apex Court addressing similar consignments of used MFDs, which approved release on redemption with fines and penalties calibrated to past practice. The Tribunal relied on principles governing Section 125 of the Customs Act and on precedent approving approximate redemption fines around 10% of assessable value and penalties around 5% of assessable value where confiscation is not required to be absolute. The Tribunal found no basis to impose confiscation absolutely and concluded that the fines and penalties should be aligned with the established practice in comparable cases.

Conclusion: Redemption fine is reduced to 10% of the assessable value and penalty under Section 112(a) is reduced to 5% of the assessable value, in favour of the assessee.

Final Conclusion: The appeals are partly allowed; the reassessment of value is set aside and the quantum of redemption fine and penalty is moderated to 10% and 5% of assessable value respectively, resulting in relief to the assessee while leaving the adjudicatory framework for fines and penalties intact.

Ratio Decidendi: Where reassessment of customs value rests solely on an expert certificate that fails to apply the sequential valuation rules or to establish current market data for similar or identical goods, such enhancement is unsustainable and the declared transaction value must be accepted; redemption fines and penalties should be proportionate to established practice (approximately 10% and 5% respectively) where confiscation need not be absolute.

Issues: Whether the NCLT was correct in rejecting the Section 9 application filed by the operational creditor on the ground of a pre-existing dispute raised prior to issuance of the Section 8 demand notice.

Analysis: The dispute concerns warranty claims arising from sale of batteries and whether those claims constituted a genuine pre-existing dispute prior to the demand notice dated 28.12.2022. Relevant communications include a credit note dated 07.11.2019 and an email dated 08.12.2022 asserting coercion in issuance of the credit note, which preceded the demand notice. The admitted jurisprudential tests require the adjudicating forum to determine if a real, non-spurious dispute is discernible from the reply and records, without entering into final adjudication on merits or assessing likelihood of success. Applying those tests to the record, the facts disclose material communications and contentions between the parties showing a live controversy about liability that was raised before the Section 8 notice.

Conclusion: The rejection of the Operational Creditor's Section 9 application by the NCLT on the ground of a genuine pre-existing dispute raised prior to the issuance of the Section 8 notice is upheld; the appeal is dismissed in favour of the Respondent.

Ratio Decidendi: Where a genuine dispute on an operational claim is shown to exist prior to the issuance of the demand notice, the adjudicating authority must reject a Section 9 application without entering into a final adjudication of the dispute; it is sufficient that the dispute is real and not patently feeble.

Issues: (i) Whether the CIRP initiated by the Appellant was fraudulently and/or with malicious intent attracting liability under Section 65 of the Insolvency and Bankruptcy Code, 2016; (ii) Whether the Adjudicating Authority was justified in directing the Appellant to bear penalty and the Resolution Professional's fees and CIRP expenses.

Issue (i): Whether the CIRP initiated by the Appellant was fraudulently and/or with malicious intent attracting liability under Section 65 of the Insolvency and Bankruptcy Code, 2016.

Analysis: The Tribunal examined (a) the Appellant's omission to file claims after admission of CIRP despite being the petitioner whose Section 9 petition led to admission; (b) timing of CIRP admission vis-a -vis pending tax recoveries and the effect of moratorium; (c) familial and prior directorship links between the Appellant and the corporate debtor; and (d) surrounding facts indicating use of CIRP to frustrate tax recovery. The Tribunal also noted that Section 65 may be invoked at any stage where facts and circumstances show fraudulent or malicious invocation of insolvency process.

Conclusion: The Tribunal affirmed the Adjudicating Authority's finding that the CIRP was initiated for purposes other than genuine insolvency resolution and that Section 65 of the Insolvency and Bankruptcy Code, 2016 applied; this conclusion is against the Appellant.

Issue (ii): Whether the Adjudicating Authority was justified in directing the Appellant to bear penalty and the Resolution Professional's fees and CIRP expenses.

Analysis: The Tribunal considered that the CoC comprised only tax authorities, the CIRP had stagnated, assets were absent and the RP had funded the process. Given the established abuse of CIRP proceedings and the non-functioning CoC, the Tribunal held that equitably the Appellant could be directed to bear penal and compensatory costs and RP fees. The Tribunal accepted that ordinarily such costs are met from corporate assets or by the CoC, but found the present factual matrix justified departure from the ordinary rule.

Conclusion: The Tribunal upheld the Adjudicating Authority's directions imposing a penalty and directing the Appellant to bear RP fees and CIRP expenses; this conclusion is against the Appellant.

Final Conclusion: The Tribunal found no infirmity in the impugned order and dismissed the appeal, thereby upholding the termination of CIRP, the imposition of penalty under Section 65 of the Insolvency and Bankruptcy Code, 2016, and the direction to the Appellant to bear RP fees and CIRP expenses.

Ratio Decidendi: Where surrounding facts and conduct demonstrate that insolvency proceedings were invoked fraudulently or with malicious intent for purposes other than resolution of insolvency, the Adjudicating Authority may, under Section 65 of the Insolvency and Bankruptcy Code, 2016, terminate CIRP and impose penal and compensatory costs including directing the petitioner to bear RP fees and CIRP expenses, even if such measures depart from ordinary cost-bearing norms, provided the factual matrix justifies such relief.

Issues: (i) Whether CENVAT Credit was admissible on capital goods and inputs used for towers and shelters; (ii) Whether CENVAT Credit was admissible on input services used for towers and shelters.

Issue (i): Whether CENVAT Credit was admissible on capital goods and inputs used for towers and shelters.

Analysis: The dispute was governed by the definition of capital goods and inputs under the Cenvat Credit Rules, 2004. The Tribunal noted that telecom towers and prefabricated shelters are not immovable property but goods, and that they are indispensable for the functioning of antennas and the rendering of mobile telecommunication services. The issue had already been settled by the Supreme Court and followed by the jurisdictional High Court and earlier Tribunal decisions.

Conclusion: CENVAT Credit on capital goods and inputs was admissible, and the denial of credit on this issue was unsustainable.

Issue (ii): Whether CENVAT Credit was admissible on input services used for towers and shelters.

Analysis: The Tribunal applied the wide definition of input services under the Cenvat Credit Rules, 2004. It held that services used for installation, maintenance, setting up, and operation of telecom towers are eligible where they are used in the course of providing taxable output services. The issue had already been answered by the Larger Bench and subsequent Tribunal decisions.

Conclusion: CENVAT Credit on input services was admissible, and the denial of credit on this issue was unsustainable.

Final Conclusion: The orders confirming the demands against the assessee were set aside, while the orders dropping the remaining demands were upheld, with the assessee's appeals succeeding and the Revenue's appeals failing.

Ratio Decidendi: Telecom towers and prefabricated shelters, being goods and indispensable infrastructure for providing telecommunication output services, qualify for CENVAT credit as capital goods, inputs, and eligible input services under the Cenvat Credit Rules, 2004.

Issues: (i) Whether CENVAT credit was admissible on telecom towers, prefabricated structures and allied materials, and on input services used for erection and construction of towers. (ii) Whether unutilized CENVAT credit could be transferred on shifting of centralized registration from Jaipur to Gurgaon.

Issue (i): Whether CENVAT credit was admissible on telecom towers, prefabricated structures and allied materials, and on input services used for erection and construction of towers.

Analysis: The applicable credit scheme treats eligible capital goods, inputs and input services as creditable when used for providing output services. The governing legal position, as applied here, is that telecom towers and prefabricated shelters are movable goods and not immovable property, and that they function as components or accessories essential to mobile telecommunication services. The same rationale extends to tower-related input services used for construction and erection, which are integrally connected with the provision of taxable output services.

Conclusion: CENVAT credit on the disputed towers, allied materials and input services was admissible, and the disallowance could not be sustained.

Issue (ii): Whether unutilized CENVAT credit could be transferred on shifting of centralized registration from Jaipur to Gurgaon.

Analysis: Rule 10 permits transfer of unutilized credit in cases of shifting or transfer of business in the situations contemplated by the rule. On the facts found, the assessee had not lost the originally availed credit, the credit was not shown to be wrongly taken, and the change was only in centralized accounting and registration. The substantive credit entitlement was therefore not defeated by the absence of a technical objection, and the procedural objection to transfer of credit was not accepted.

Conclusion: The transferred credit was legally sustainable and the Revenue's challenge to the dropped demand failed.

Final Conclusion: The credit denials were set aside, the assessees' appeals succeeded, and the Revenue's appeal was rejected.

Ratio Decidendi: Telecom towers, prefabricated shelters and tower-related services used in providing mobile telecommunication output services qualify for CENVAT credit, and unutilized credit cannot be denied merely because it is moved with a centralized registration change when the underlying credit is otherwise validly availed.

Issues: (i) Whether the demands confirmed by the adjudicating authority and sustained on appeal invoking the extended period of limitation are sustainable; (ii) Whether the appellant's activities are taxable as business auxiliary services as a commission agent; (iii) Whether cenvat credit denial and consequent interest and penalties are sustainable.

Issue (i): Whether the extended period of limitation was correctly invoked to sustain the demands.

Analysis: The extended period was invoked without evidence of suppression or wilful misstatement with intent to evade tax. The demands were based primarily on a difference between amounts declared in periodical returns and the balance sheet without independent evidence (such as agreements or documents) proving that the excess reflected consideration for taxable services. Earlier show cause notices on similar matters were issued by the department and no positive act of suppression was established to justify invocation of the extended period afresh.

Conclusion: The extended period of limitation was wrongly invoked and the demands are barred by limitation.

Issue (ii): Whether the appellant acted as a commission agent rendering business auxiliary services attracting service tax.

Analysis: The finding that the appellant acted as a commission agent was not supported by evidence showing that the appellant acted on behalf of the alleged principals. The appellate orders traversed beyond the scope of the show cause notices and the adjudicating findings, and the show cause notices did not put the appellant on notice of applicable provisions for the post-01-07-2012 period. The record lacked documents establishing a principal-agent/service recipient relationship or other material proving that the appellant procured orders on behalf of clients.

Conclusion: The classification of the appellant as a commission agent providing business auxiliary services is unsustainable for lack of evidence and for traversion beyond the show cause notice.

Issue (iii): Whether denial of cenvat credit and imposition of interest and penalties stand where the primary demands are unsustainable.

Analysis: The denial of cenvat credit was premised on the same unsupported allegations of taxable BAS and commission agency. With the primary demands and extended period invocation held unsustainable, the consequential denial of credit, interest and penalties lacks foundation. Distinguishing case law relied upon by revenue shows those decisions involved proven fraud or positive suppression, facts not present here.

Conclusion: The denial of cenvat credit and the imposition of consequential interest and penalties are untenable.

Final Conclusion: The impugned appellate orders are unsustainable and are set aside; the appeals are allowed with consequential legal reliefs.

Ratio Decidendi: Where revenue relies solely on discrepancies between return figures and balance sheet entries, the burden to prove taxable service receipt and any wilful suppression rests on the revenue, and absent independent evidence of suppression or of a principal-agent relationship the extended period of limitation and resultant demands cannot be sustained.

Issues: Whether transporting reject/waste materials from captive limestone mines to dumping yards constitutes an "input service" within Rule 2(l) of the Cenvat Credit Rules, 2004 and whether the assessee is eligible to avail cenvat credit on service tax paid for such activity.

Analysis: The Tribunal examined whether removal, loading and transportation of overburden/rejects is integrally connected to the extraction of limestone and thus falls within the ambit of input services under Rule 2(l) of the Cenvat Credit Rules, 2004. The factual finding is that removal of overburden/rejects is a technical and essential requirement for unearthing limestone and that loading and transport to dump yards is part of that process. The Tribunal considered earlier decisions addressing classification of such activities under service tax (including Thriveni Earthmovers (P) Ltd.) and found no binding distinction for purposes of cenvat credit under central excise; a prior Tribunal classification of the activity as mining-related service supports treating the activity as connected to production. The Commissioner's reasons - lack of nexus, disconnection from manufacturing, and non-classification as input service - were held to be legally unsustainable on the facts and authority relied upon was inapplicable or not distinguishing.

Conclusion: The transporting of rejects/waste from the mines to dumping yards is an "input service" within Rule 2(l) of the Cenvat Credit Rules, 2004 and the assessee is entitled to avail cenvat credit on the service tax paid for such activities; the impugned order is set aside and the appeals are allowed with consequential benefits, if any, as per law.

Issues: (i) Whether confiscation of imported goods under Section 111(m) of the Customs Act, 1962 is sustainable where the declared transaction value is accepted; (ii) Whether the consequential redemption fine and penalties imposed under Section 125(1), Section 112(a) and Section 114AA of the Customs Act, 1962 can survive if confiscation is held unsustainable.

Issue (i): Whether confiscation of imported goods under Section 111(m) of the Customs Act, 1962 is sustainable where the declared transaction value is accepted.

Analysis: Section 111(m) targets discrepancies or misdeclarations that are material in nature and that affect assessment or cause loss of revenue. The issue requires examination of whether any misdeclaration in description or thickness amounted to a material particular affecting classification, assessment or revenue, given that the transaction value was subsequently accepted and the Bill of Entry was finalised at the declared value. The factual record shows acceptance of the declared value and absence of any differential duty demand or dispute on classification; the only differences alleged relate to description or thickness without proof of revenue impact.

Conclusion: Confiscation under Section 111(m) is not sustainable as no material misdeclaration affecting assessment or revenue has been established in the facts of the case. The conclusion is in favour of the assessee.

Issue (ii): Whether the consequential redemption fine and penalties imposed under Section 125(1), Section 112(a) and Section 114AA of the Customs Act, 1962 can survive if confiscation is held unsustainable.

Analysis: Redemption fine and penalties are consequential upon valid confiscation. If the foundational requirement for confiscation (a material misdeclaration causing revenue impact) is absent, the statutory basis for imposing redemption fine and the specified penalties is removed. The acceptance of the transaction value negates the essential ingredient required to uphold such consequential measures.

Conclusion: The redemption fine and penalties consequential to confiscation do not survive once confiscation under Section 111(m) is held unsustainable. The conclusion is in favour of the assessee.

Final Conclusion: The appeal is allowed by setting aside the order upholding confiscation, redemption fine and penalties; the acceptance of declared transaction value precludes confiscation and its consequential fiscal sanctions.

Ratio Decidendi: Confiscation under Section 111(m) of the Customs Act, 1962 requires a material misdeclaration that affects assessment or causes loss of revenue; where the declared transaction value is accepted and no revenue impact is shown, confiscation and consequential redemption fine and penalties cannot be sustained.

Issues: (i) Whether goods cleared from SEZ to DTA to end customers are classifiable under Heading 9804 90 00 as "dutiable articles intended for personal use" or under their specific tariff headings (CTH 8471 30 10, 8471 50 00, 8528 52 00)?

Analysis: Heading 9804 applies only where three conjunctive ingredients are satisfied: the goods are "dutiable goods", they are "imported", and the importation is for "personal use." "Dutiable goods" is defined as goods chargeable to duty under the Customs Act and on which duty has not been paid. IGST and other levies under the IGST Act are distinct from Customs duty levied under Section 12 of the Customs Act; levy of IGST therefore does not, by itself, render goods "dutiable goods" under the Customs Act. The tariff schedule shows that the contested specific headings prescribe either a free rate or an exemption (Notification No. 24/2005-Cus) for the items in question; goods on which no Customs duty is leviable are not "dutiable goods." The characterization of importation as "for personal use" must relate to use by the importer and not to subsequent purchasers; goods manufactured and sold in the ordinary course of business to customers are not imports for the personal use of the importer. The legal fiction treating SEZ-DTA removals as comparable to imports cannot be extended to create a Customs levy where none exists under the Customs Act and cannot displace the identity and specific classification of goods under the tariff headings. Chapter and section notes, subheading descriptions, and the General Rules for Interpretation require classification by specific headings when applicable; the Revenue bears the burden to demonstrate that the declared classification is incorrect and justify the alternative classification under Heading 9804. Rule 47(5) of the SEZ Rules and the SEZ Act do not provide an independent mechanism to levy Customs interest, penalty or confiscation contrary to the authorization under the Customs Act.

Conclusion: The goods are not "dutiable goods" within the meaning of Section 2(14) of the Customs Act, 1962 and are not imported for the personal use of the importer; therefore Heading 9804 90 00 does not apply. The impugned classification, demand, and consequential orders are set aside and the appeal is allowed in favour of the assessee.

Issues: (i) Whether the demand for duty under Rule 3(5A) of the Cenvat Credit Rules, 2004 for the period 17.03.2012 to 27.09.2013 is barred by limitation; (ii) Whether the demand (including interest and penalty) can be sustained on merits in the absence of a recovery mechanism for amounts payable under Rule 3(5A) during the relevant period.

Issue (i): Whether the demand is barred by limitation.

Analysis: The period in dispute is 17.03.2012 to 27.09.2013 and the show cause notice was issued on 31.03.2017 based on audit objections and figures from returns. The department did not produce evidence of suppression with intent to evade payment of duty. Reliance is placed on precedents holding that extended period of limitation cannot be invoked solely on the basis of audit where returns were filed and no suppression is shown. The appellant's bona fide belief regarding non-liability for clearance as waste/scrap during the relevant period is noted.

Conclusion: The demand is barred by limitation and cannot be sustained on the ground of extended limitation.

Issue (ii): Whether the demand, interest and penalty are sustainable on merits given the absence of a recovery mechanism for amounts payable under Rule 3(5A) during the relevant period.

Analysis: During the relevant period there was no statutory mechanism to recover amounts payable under Rule 3(5A); a recovery provision was introduced later (2014). In the absence of a recovery mechanism for the period in question, the substantive demand cannot be enforced. If the substantive demand is unsustainable, consequential interest and penalty lack a basis. The decision of a coordinate bench in Prism Johnson Ltd on similar facts is treated as applicable.

Conclusion: The demand is unsustainable on merits for lack of a recovery mechanism; consequential interest and penalty also do not survive.

Final Conclusion: The impugned order is set aside on both limitation and merits and the appeal is allowed, resulting in cancellation of the confirmed demand, interest and penalty.

Ratio Decidendi: Where a duty demand for a past period is issued based solely on audit objections without evidence of suppression and where no statutory recovery mechanism existed for that period, extended limitation cannot be invoked and the substantive demand (and consequential interest and penalty) cannot be sustained.

Outcome: The writ petition was disposed of with liberty to file an appeal within two weeks, to be entertained without reference to limitation subject to compliance with applicable conditions.

Issues: Whether a reassessment completed under Sections 143(3) read with 147 without issuance of a notice under Section 143(2) is valid.

Analysis: Issuance of notice under Section 143(2) is a mandatory jurisdictional precondition for an assessment under Section 143(3), including a reassessment under Section 147. The assessment record contained no reference to issuance of such notice, and the absence of its issuance was conceded. This defect is not a curable procedural irregularity.

Conclusion: Non-issuance of the mandatory notice under Section 143(2) rendered the reassessment jurisdictionally invalid, arbitrary, bad in law and void ab initio; the reassessment was quashed in favour of the assessee.

Issues: (i) Whether assessments of the other person could validly be initiated under Section 153C where the seized material was received and satisfaction was recorded after 1 April 2021; (ii) Whether an addition founded solely on a conditional voluntary disclosure of alleged unaccounted jewellery purchases could be sustained in full.

Issue (i): Whether assessments of the other person could validly be initiated under Section 153C where the seized material was received and satisfaction was recorded after 1 April 2021.

Analysis: Under the first proviso to Section 153C(1), the relevant search date for the other person is the date on which the seized books, documents or assets are received by that person's jurisdictional Assessing Officer. The satisfaction recorded on 7 March 2023, after receipt of the seized material, was therefore the relevant date. Section 153C(3) excludes application of that provision to searches initiated on or after 1 April 2021. The jurisdictional precedent applied this statutory date uniformly for the other person, including for determining whether Section 153C proceedings may be commenced.

Conclusion: The Section 153C notices and consequential assessments for assessment years 2017-18 to 2020-21 were without jurisdiction and were quashed, in favour of the assessee.

Issue (ii): Whether an addition founded solely on a conditional voluntary disclosure of alleged unaccounted jewellery purchases could be sustained in full.

Analysis: The disclosure was made to avoid litigation while the assessee maintained that the transactions were recorded and furnished reconciliations, payment details, metal-exchange details and invoices. No independent material established unaccounted purchases. A conditional admission, without corroborative evidence, could not justify taxation of the entire alleged purchase value. Where unaccounted purchases are assumed, only the profit element embedded in them is taxable. A 2% rate was regarded as reasonable for the disputed jewellery transactions, rather than the 23% gross-profit rate offered by the assessee.

Conclusion: The full addition was unsustainable; the addition was restricted to 2% of the value of the alleged unaccounted purchases, in favour of the assessee.

Final Conclusion: The assessments for the four earlier years lack statutory jurisdiction, while the surviving addition for assessment year 2021-22 is confined to the estimated profit component of the disputed purchases.

Ratio Decidendi: For an other person under Section 153C, receipt of seized material by the jurisdictional Assessing Officer determines the relevant search date; where that date is on or after 1 April 2021, Section 153C proceedings are barred. A conditional disclosure unsupported by corroborative evidence cannot sustain addition of the full alleged unaccounted purchase value, and only the embedded profit may be assessed.

Issues: (i) Whether the manufacturing-segment arm's length margin for the pandemic-affected assessment year should be compared with the comparable companies' results for that year alone; (ii) Whether payment for sourcing support services to the associated enterprise could be treated as a shareholder activity and benchmarked separately at nil; (iii) Whether the assessed income required recomputation after deleting deductions already found allowable under Section 35(1)(i) and Section 35(1)(iv).

Issue (i): Whether the manufacturing-segment arm's length margin for the pandemic-affected assessment year should be compared with the comparable companies' results for that year alone.

Analysis: Rule 10B requires comparability adjustments for material differences arising from market conditions. The assessee's operations and sales were adversely affected by the COVID-19 pandemic during the relevant year. Comparing its single-year margin with the comparables' weighted average margins for three years, including normal years, was not an equitable comparison. Consistent single-year data of both the assessee and comparables was required.

Conclusion: The arm's length price for the manufacturing segment shall be recomputed by comparing the assessee's results for the impugned year with the comparable companies' results for that year alone, in favour of the assessee.

Issue (ii): Whether payment for sourcing support services to the associated enterprise could be treated as a shareholder activity and benchmarked separately at nil.

Analysis: Separate benchmarking is appropriate where the costs, revenues and risks of a controlled transaction can be separately identified and reliably compared with uncontrolled transactions. The additional evidence concerning sourcing support required examination. The services involved identifying suppliers, facilitating procurement and customs clearance, and supporting the assessee's manufacturing operations. Applying the benefit test, these were services for which an independent enterprise would be willing to pay and were not shareholder activities.

Conclusion: The sourcing-support payment is not a shareholder activity. The matter is remanded for examination of the evidence and determination of whether separate benchmarking is warranted; if so, a proper arm's length benchmarking exercise shall be undertaken, in favour of the assessee.

Issue (iii): Whether the assessed income required recomputation after deleting deductions already found allowable under Section 35(1)(i) and Section 35(1)(iv).

Analysis: Although the assessment findings accepted the deductions, the computation adopted income processed under Section 143(1), which included the disallowances. This was an inadvertent computational error inconsistent with the assessment findings.

Conclusion: The assessed income shall be recomputed after deleting the disallowances under Section 35(1)(i) and Section 35(1)(iv), in favour of the assessee.

Final Conclusion: The transfer-pricing margin is to be determined on a consistent single-year basis, the sourcing-services adjustment requires fresh examination subject to the finding that it is not a shareholder activity, and the admitted research deductions must be reflected in the income computation.

Ratio Decidendi: Where exceptional market conditions materially affect the tested party's results, transfer-pricing comparability must employ consistent data or appropriate adjustment; services yielding a benefit for which an independent enterprise would pay are not shareholder activities.