Issues: Whether the activities undertaken by the appellant in relation to Buckingham Canal constitute 'dredging service' as defined in Section 65(36a) of the Finance Act, 1994 and are therefore taxable.

Analysis: The statutory definition of 'dredging' in Section 65(36a) requires (i) removal of material such as silt, sediments, rocks, sand, refuse, debris, plant or animal matter and (ii) that such removal be carried out in the course of excavating, cleaning, deepening, widening or lengthening of a river, port, harbour, backwater or estuary. The tribunal considered dictionary meanings and etymology but confined interpretation to the statutory text, noting that the statute limits dredging to the listed water bodies. The activities in question involved widening, deepening, construction of flood protection walls, inlet arrangements and packing bottoms/sides with concrete in the Buckingham Canal and connected channels, with no use of boats, barges or dredging apparatus recorded. A coordinate bench decision (Ramalingam Construction Company) addressing identical activities on Buckingham Canal concluded such works do not fall within Section 65(36a). No stay of that decision was shown; the coordinate bench precedent was followed.

Conclusion: The activities undertaken by the appellant do not constitute 'dredging service' under Section 65(36a) of the Finance Act, 1994 and therefore are not exigible to service tax; the appeal is allowed in favour of the assessee.

Issues: Whether, in respect of the specified real estate project and investigation period, the supplier contravened Section 171 of the Central Goods and Services Tax Act, 2017 by failing to pass on the benefit of input tax credit to buyers.

Analysis: Applicable legal framework comprised Section 171 of the CGST Act, 2017 and Rule 129 of the CGST Rules, with the methodology mandated by the court in paragraph 129 of the cited High Court judgment endorsing an area-based, project-wise computation and rejecting the ITC-to-turnover ratio method. The investigating authority adopted a project-level computation using certified pre-GST and post-GST credit and purchase values to derive an incremental ITC benefit (4.92 percentage points), computed total project savings, converted the savings into a uniform per-square-foot benefit, and applied that to the complainant's booked area to arrive at a profiteering amount of Rs. 1,37,672 (base Rs. 1,22,921 plus GST Rs. 14,751). The supplier furnished verified documentary evidence including GST returns, transitional credit records, certified ledgers, architect certificates, occupancy certificate, sale agreement area, and bank evidence of payment. The supplier acknowledged the computation and produced documentary proof of transferring Rs. 1,40,732 to the buyer, an amount exceeding the computed profiteering, which was authenticated by the investigating authority. The investigation confined scope to units within the occupancy cutoff and excluded units sold after issuance of the occupancy certificate or otherwise falling outside Section 171 by operation of Schedule III and Sections 172-173 regarding reversal on exempt supplies.

Conclusion: The investigation establishes that while a computable profiteering amount arose, the supplier has voluntarily and fully discharged the obligation under Section 171 by passing on an amount exceeding the computed benefit; accordingly no contravention of Section 171 is established and no further remedial action is required.

Issues: (i) Whether the imported ship-breaking shaft pieces were classifiable under heading 7326 as declared or under heading 8483 as proposed by the Revenue; (ii) whether the show cause notice was barred by limitation and whether the extended period could be invoked on the basis of suppression or mis-declaration.

Issue (i): Whether the imported ship-breaking shaft pieces were classifiable under heading 7326 as declared or under heading 8483 as proposed by the Revenue.

Analysis: The goods were described in the commercial invoice and import documents as iron and steel shaft parts obtained from ship breaking. After salvage and breaking, the goods lost their original identity as shafts and acquired the character of iron and steel articles falling within the specific description applicable to parts of ship. The Revenue did not show any sustainable basis for reclassification under heading 8483, and the assessment made at clearance had not been disturbed in accordance with law.

Conclusion: The goods were correctly classifiable under heading 7326 and the Revenue's proposed classification under heading 8483 was not sustainable.

Issue (ii): Whether the show cause notice was barred by limitation and whether the extended period could be invoked on the basis of suppression or mis-declaration.

Analysis: The record did not disclose concealment or misrepresentation by the importer. The import documents themselves reflected the relevant classification, and the authorities had assessed the goods at clearance. In such circumstances, the extended period under section 28(4) of the Customs Act, 1962 was not available. The case was also revenue neutral, which negatived any allegation of deliberate mis-declaration.

Conclusion: The show cause notice was time barred and invocation of the extended period was not justified.

Final Conclusion: The impugned order was unsustainable and was set aside, with the appeal being allowed and consequential relief granted as per law.

Ratio Decidendi: Where the import documents and assessment at clearance support the declared classification, and no suppression or deliberate mis-declaration is established, reclassification and invocation of the extended limitation period cannot be sustained, especially in a revenue-neutral situation.

Issues: (i) Whether a Service Tax demand raised and confirmed solely on the basis of Form 26AS / CBDT data without independent verification is sustainable; (ii) Whether the Show Cause Notice issued without following the mandatory pre-Show Cause Notice consultation (for demands above Rs.50 lakhs) is sustainable; (iii) Whether interest, penalty under Section 78, penalty under Section 77(1)(c) and late fee under Rule 7(C) can be sustained once the primary tax demand is set aside.

Issue (i): Whether a Service Tax demand raised and confirmed solely on the basis of Form 26AS / CBDT data without independent verification is sustainable.

Analysis: The demand and adjudication relied exclusively on Form 26AS / CBDT data without independent enquiry or corroborative evidence to establish rendition of taxable services; prior Tribunal decisions cited apply the principle that entries in income-tax records do not by themselves establish liability under the Finance Act, 1994. The facts include issuance of notice within a week of seeking documents and absence of supporting work orders or other corroboration showing taxable transactions outside exempted government/local authority works.

Conclusion: The demand confirmed solely on the basis of CBDT / Form 26AS data without independent verification is not sustainable and is set aside (in favour of the assessee).

Issue (ii): Whether the Show Cause Notice issued without following the mandatory pre-Show Cause Notice consultation (for demands above Rs.50 lakhs) is sustainable.

Analysis: Board instructions and Circulars required pre-show cause consultation with Principal Commissioner/Commissioner for demands above Rs.50 lakhs except in specified offence/suppression cases; the Show Cause Notice was issued on 28.04.2021 for a demand exceeding Rs.50 lakhs without conducting the mandated pre-consultation and without awaiting the appellant's documentary response. The subsequent Circular making exceptions was issued later and cannot be given retrospective effect to validate pre-existing non-compliance.

Conclusion: The Show Cause Notice issued without the mandated pre-show cause consultation is legally unsustainable and vitiates the proceedings (in favour of the assessee).

Issue (iii): Whether interest, penalties under Section 78 and Section 77(1)(c) and late fee under Rule 7(C) can be sustained once the primary Service Tax demand is set aside.

Analysis: The challenged interest and penalties arise solely from the confirmed Service Tax demand; with the primary demand and liability set aside on substantive and procedural grounds, the foundational basis for interest and statutory penalties vanishes. The appellants lack of registration and non-filing of returns was held to flow from the bona fide view of exemption once liability is negated.

Conclusion: Interest and penalties under Section 78, Section 77(1)(c) and late fee under Rule 7(C) are not sustainable and are set aside (in favour of the assessee).

Final Conclusion: The impugned order confirming Service Tax demand, interest and penalties is set aside and the appeal is allowed, with consequential reliefs as per law.

Ratio Decidendi: A Service Tax demand cannot be sustained solely on Form 26AS / income-tax data without independent verification or corroborative evidence of taxable services, and a Show Cause Notice issued in breach of mandatory pre-show cause consultation required for demands exceeding Rs.50 lakhs renders the proceedings legally untenable.

Issues: Whether the supply/hire of cranes, forklifts and material handling equipment along with crew for shifting machinery/materials is taxable under the category of "Business Support Services" (Section 65(104c)) or is classifiable as "Supply of tangible goods service" (Section 65(105)(zzzzj)) for the period under dispute.

Analysis: The Tribunal examined whether the activity of providing cranes/forklifts with crew falls within the inclusive description of Business Support Services under Section 65(104c) or is covered by the supply of tangible goods entry introduced by Section 65(105)(zzzzj) w.e.f. 16.05.2008. The Tribunal followed a coordinate-bench decision in the appellant's own earlier proceedings holding that the provision of material handling equipment is classifiable as supply of tangible goods and that the new entry (zzzzj) brought such services into the service tax net only from 16.05.2008. Applying the principle of judicial discipline to follow a coordinate bench where facts are not distinguished, the Tribunal held that the impugned demand under Business Support Services for the period prior to the effective date of entry (zzzzj) is not maintainable and that identical demands should be set aside with consequential relief as per law.

Conclusion: The appeal is allowed; the demands confirmed under the impugned order under the category of Business Support Services are set aside and the appellant is entitled to consequential relief, in favour of the assessee.

Issues: Whether reversal of Cenvat credit at 6% was required on clearance of bagasse.

Analysis: Bagasse was treated as non-excisable, to which the Cenvat Credit Rules, 2004 do not apply. The departmental basis treating bagasse as an exempted item and requiring reversal of credit was no longer sustainable; the contrary circular had also been rescinded following the governing Supreme Court position.

Conclusion: No reversal of Cenvat credit at 6% is payable on clearance of bagasse.

Issues: (i) Whether levy and collection of building-workers welfare cess could operate before constitution of a Welfare Board, and whether subsequent operationalisation of the statutory machinery attracted the contractual subsequent-legislation clause; (ii) Whether cess could be retrospectively adjusted from amounts payable under an arbitral award in respect of a contract terminated before the Uttar Pradesh cess regime became operative; (iii) Whether the contractual foreign-currency price-adjustment formula permitted an additional 85% adjustment over the adjustable Euro component.

Issue (i): Whether levy and collection of building-workers welfare cess could operate before constitution of a Welfare Board, and whether subsequent operationalisation of the statutory machinery attracted the contractual subsequent-legislation clause.

Analysis: The welfare cess legislation was enacted to augment the resources of Welfare Boards. Although the enactments formally commenced on their notified dates, their effective operation required the statutory machinery for levy, collection, deposit and utilisation of cess, including constitution of Welfare Boards. In the absence of a Board, cess collected could not be transferred and applied for the statutorily intended welfare purpose. Constitution of the Board was therefore a condition precedent to levy and collection; registration of workers and provision of welfare benefits were not.

Analysis: Contractors could not reasonably include cess in bid prices when no enforceable collection mechanism existed at the relevant bid date. The subsequent establishment of the machinery and implementation of cess in the relevant States fell within the contractual framework for subsequent legislation. Mere inclusion of the enactments among labour laws in certain contracts did not alter this position. The arbitral interpretation was plausible, justified and neither perverse nor patently illegal, and did not warrant interference under the limited review available under the Arbitration and Conciliation Act, 1996.

Conclusion: The cess became leviable and collectible only after constitution of the relevant Welfare Board and operationalisation of the statutory machinery; the contractors were entitled to relief under the subsequent-legislation clause. This conclusion is in favour of the assessee.

Issue (ii): Whether cess could be retrospectively adjusted from amounts payable under an arbitral award in respect of a contract terminated before the Uttar Pradesh cess regime became operative.

Analysis: The contract had been entered into and terminated before Uttar Pradesh implemented the cess regime for ongoing projects. The cess issue was not raised during arbitration, the challenge proceedings, or review proceedings, and was raised only during execution to reduce the award liability. The contractor could not have factored a non-operative cess liability into its 2001 bid, and retrospective adjustment after termination of the contract was impermissible.

Conclusion: The contractor was not liable for cess in relation to the terminated contract, and the adjusted amount with award interest was required to be released. This conclusion is in favour of the assessee.

Issue (iii): Whether the contractual foreign-currency price-adjustment formula permitted an additional 85% adjustment over the adjustable Euro component.

Analysis: A harmonious reading of the payment and price-adjustment clauses showed that 85% of the Euro component was already adjustable, with 15% being non-adjustable. A further 85% adjustment would produce an impermissible compounded adjustment. The arbitral construction of the formula was reasonable, and no correction of an alleged contractual drafting error could be undertaken in arbitral-review proceedings.

Conclusion: The formula permitted adjustment only of 85% of the Euro component and not an additional 85% adjustment. This conclusion is in favour of the assessee.

Final Conclusion: The welfare cess could not be imposed on contractors for bid-period costs before the legally required Welfare Board and collection mechanism existed, and the reasoned arbitral constructions allocating the resulting burden were maintained.

Ratio Decidendi: Where a welfare cess is statutorily intended to fund Welfare Boards, constitution of the Board and operational statutory machinery are indispensable to its levy and collection; a plausible arbitral interpretation treating later operationalisation as subsequent legislation cannot be displaced in limited arbitral review.

Issues: Whether the addition for alleged unexplained investment in the purchase of a shop could be sustained solely on the basis of third-party digital records and statements, without independent corroboration and without effective cross-examination of the person whose statement was relied upon.

Analysis: The impugned addition rested on an Excel sheet recovered from a third party during search and the statement of a key employee who explained the entries. No receipt, diary, acknowledgement, or other contemporaneous document was found from the assessee linking the assessee to any cash payment. The evidentiary material did not independently prove actual payment by the assessee and derived its force from the explanation of the very person whose statement was relied upon. The assessee had specifically sought cross-examination, but that opportunity was denied. In income-tax proceedings, though strict rules of evidence do not apply, adverse third-party material used against an assessee must still be reliable, cogent, and capable of rebuttal. The absence of corroboration and denial of cross-examination caused serious prejudice and violated the principles of natural justice.

Conclusion: The addition could not be sustained and was rightly deleted.

Issues: Whether the addition made under section 69 of the Income-tax Act, 1961 on alleged cash on-money payments for purchase of a shop was sustainable.

Analysis: The appeals were found to involve identical facts to earlier coordinate bench decisions concerning alleged cash payments in the same project. The Revenue did not bring any new material, fact, or contrary decision to distinguish those rulings. The Tribunal therefore followed the earlier view and accepted the assessee's contention that the impugned addition could not be sustained on the record before it.

Conclusion: The addition under section 69 was deleted and the issue was decided in favour of the assessee.

Issues: Whether a three-member arbitral tribunal should be constituted under Section 11 of the Arbitration and Conciliation Act, 1996 for disputes arising under the sale and purchase contract and the connected agreements, with the parties having consented to a common reference and to Mumbai as the seat of arbitration.

Analysis: The arbitration clause contemplated a three-member tribunal. In view of the respondent's request and the applicant's consent, the disputes arising from the listed contracts and agreements were referred together to a common arbitral tribunal. The parties also agreed on Mumbai as the seat of arbitration. Each side nominated its respective arbitrator, and those nominee arbitrators were directed to appoint the presiding arbitrator expeditiously. The arbitrators' fees were directed to be governed by the Bombay High Court (Fee Payable to Arbitrators) Rules, 2018, with costs to be shared equally subject to the award.

Conclusion: A three-member arbitral tribunal was constituted by consent for adjudication of the disputes arising out of the specified contracts and agreements.

Issues: Whether the deduction under Section 36(1)(viia)(c) of the Income-tax Act, 1961 is to be computed only after reducing from the assessee's income the deduction allowable under Section 36(1)(viii) of the Income-tax Act, 1961, or whether the two deductions operate independently.

Analysis: The deduction under Section 36(1)(viii) is computed on profits derived from business, while the deduction under Section 36(1)(viia)(c) is computed on total income. The clauses in Section 36(1) are independent and do not make one deduction dependent on another. The amendment to Section 36(1)(viii) altered only the method of computation and did not change the character of the deduction. The legislative intent was to confine the deduction under clause (viii) to business income, and the rival interpretation would improperly make the benefit under clause (viia)(c) contingent on clause (viii).

Conclusion: The deduction under Section 36(1)(viia)(c) is not to be reduced by the deduction under Section 36(1)(viii), and the issue is answered in favour of the assessee.

Issues: (i) Whether bail could be granted under Section 45 of the Prevention of Money Laundering Act, 2002 despite the prima facie material, including on the ground of prolonged incarceration and speedy trial; (ii) Whether the petitioner was entitled to default bail under Section 167(2) of the Code of Criminal Procedure, 1973; (iii) Whether medical grounds justified release on bail; (iv) Whether alleged procedural lapses in arrest under Section 19 of the Prevention of Money Laundering Act, 2002 warranted bail.

Issue (i): Whether bail could be granted under Section 45 of the Prevention of Money Laundering Act, 2002 despite the prima facie material, including on the ground of prolonged incarceration and speedy trial.

Analysis: The twin conditions under Section 45 require reasonable grounds for believing that the accused is not guilty and is not likely to commit an offence while on bail. On the material placed, the Prosecution Complaint disclosed a detailed prima facie case of money laundering, including alleged illegal allotments, layering of proceeds of crime, and role attributed to the petitioner. The Court held that the record did not permit a finding that there were reasonable grounds for believing that the petitioner was not guilty. As to long incarceration and delay, the Court accepted that Article 21 and speedy-trial concerns can, in appropriate cases, override the statutory restrictions, but found that 127 days of custody did not amount to such prolonged incarceration as would justify bail at that stage.

Conclusion: Bail was not granted on merits or on the ground of prolonged incarceration.

Issue (ii): Whether the petitioner was entitled to default bail under Section 167(2) of the Code of Criminal Procedure, 1973.

Analysis: The Prosecution Complaint was found to have been filed within the statutory period and to contain the essential ingredients of a final report. The Court treated the noted defects as formal and curable, not fatal to the complaint. It further held that pendency of investigation against other accused did not revive or preserve the right to default bail once a complete complaint had been filed against the petitioner, and that the reservation of liberty for further investigation did not make the complaint incomplete.

Conclusion: The claim for default bail was rejected.

Issue (iii): Whether medical grounds justified release on bail.

Analysis: The ailments pleaded were considered capable of treatment in Government or prison hospitals. The material did not show a serious life-threatening condition or infirmity that could not be managed in custody. The Court therefore held that the medical ground was not sufficient for bail, while directing that appropriate treatment be ensured.

Conclusion: Bail on medical grounds was refused.

Issue (iv): Whether alleged procedural lapses in arrest under Section 19 of the Prevention of Money Laundering Act, 2002 warranted bail.

Analysis: The Court accepted the findings of the trial court that the grounds of arrest and reasons to believe were communicated and that the arrest procedure was not shown to have violated the statutory safeguards. The record was held to disclose compliance with the safeguards and no ground for a contrary view.

Conclusion: The alleged arrest irregularities did not entitle the petitioner to bail.

Final Conclusion: The petition was rejected, though liberty was reserved to renew the request after three months if circumstances changed or the trial was shown to be unduly delayed.

Ratio Decidendi: In a PMLA bail matter, a prima facie complaint disclosing money-laundering activity defeats bail under Section 45 unless the twin conditions are met, and short custody not amounting to prolonged incarceration will not justify release merely by invoking Article 21 or speedy-trial concerns.

Issues: Whether an assessment under Section 143(3) read with Section 153A could be quashed without verifying whether it was founded on the original defective notice or the subsequent notice issued under Section 153A.

Analysis: The record indicated that the initial proceedings under Section 153A were dropped after it was found that the original search authorisation did not cover the assessee, and a fresh notice under Section 153A was thereafter issued. Notices under Section 142(1) were issued after the fresh notice. The factual basis on which the assessment was completed, including whether it rested on the earlier notice or the subsequent notice and whether a return was filed in response to the latter, required verification. Section 250(4) empowers the appellate authority to make or cause further inquiry, including by obtaining a remand report, before deciding such jurisdictional objections.

Conclusion: The assessment could not be invalidated without the requisite factual inquiry. The jurisdictional issue and the remaining grounds require fresh adjudication after obtaining the relevant factual report and affording due opportunity of hearing.

Issues: (i) Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 could be imposed on a 2% estimated disallowance of alleged bogus purchases for Assessment Years 2014-2015 to 2016-2017; (ii) Whether penalty for misreporting under Section 270A(9)(c) of the Income-tax Act, 1961 could be sustained on a 2% estimated addition for alleged inflated purchases for Assessment Years 2017-2018 to 2020-2021; (iii) Whether the Section 270A penalty for Assessment Year 2019-2020 was barred by the Section 271AAC penalty imposed on the Section 69C addition involving the same suppliers.

Issue (i): Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 could be imposed on a 2% estimated disallowance of alleged bogus purchases for Assessment Years 2014-2015 to 2016-2017.

Analysis: The quantum disallowances were restricted to 2% because no material established the actual extent of inflation in purchase expenses. The estimate rested on the inference that a system of inflating expenses found in a later period probably continued during the relevant years. The additions therefore remained estimated additions rather than determinations of the precise concealed income.

Conclusion: Penalty under Section 271(1)(c) of the Income-tax Act, 1961 was not leviable on the estimated disallowances, and its deletion was sustained in favour of the assessee.

Issue (ii): Whether penalty for misreporting under Section 270A(9)(c) of the Income-tax Act, 1961 could be sustained on a 2% estimated addition for alleged inflated purchases for Assessment Years 2017-2018 to 2020-2021.

Analysis: The assessee could not obtain the benefit of Section 270A(6) of the Income-tax Act, 1961 because its explanation that purchases were not inflated had been rejected in the quantum proceedings and was not a bona fide explanation satisfying the statutory conditions. Nevertheless, the expenditure claims had evidentiary substantiation through purchase invoices, vehicle details, and ledgers of the assessee and vendors; those materials were rejected in light of the director's statement. The claim was consequently not one for expenditure not substantiated by any evidence, as required for misreporting under Section 270A(9)(c). For Assessment Year 2019-2020, the recorded initiation was also for concealment and furnishing inaccurate particulars under Section 271(1)(c), rather than for under-reporting or misreporting under Section 270A.

Conclusion: The under-reporting could not be treated as misreporting under Section 270A(9)(c) of the Income-tax Act, 1961, and the penalty deletions were sustained in favour of the assessee.

Issue (iii): Whether the Section 270A penalty for Assessment Year 2019-2020 was barred by the Section 271AAC penalty imposed on the Section 69C addition involving the same suppliers.

Analysis: The Section 271AAC penalty related to the addition for cash received back from suppliers during identified transactions, whereas the Section 270A proceeding related to an estimated 2% inflation in aggregate purchases from those suppliers. In the absence of a one-to-one correlation between the respective additions, the two did not represent double taxation of the same income.

Conclusion: The Section 271AAC levy did not bar a penalty under Section 270A of the Income-tax Act, 1961; this contention was rejected against the assessee.

Final Conclusion: The penalty deletions for the relevant assessment years remain effective on their respective statutory grounds, while the objection based on duplication of the Assessment Year 2019-2020 additions affords no independent relief.

Ratio Decidendi: An estimated purchase disallowance, where the extent of inflation is unproved and the expenditure claim is supported by documents, does not by itself establish concealment under Section 271(1)(c) or misreporting under Section 270A(9)(c) of the Income-tax Act, 1961.

Issues: Whether penalty for under-reporting of income under section 270A was leviable in respect of a claim for deduction of Health and Education Cess that was withdrawn following the retrospective insertion of Explanation 3 to section 40(a)(ii).

Analysis: The deduction claim had been made on the basis of favourable judicial decisions, including an earlier decision in the assessee's own case. Upon the retrospective amendment clarifying that tax includes surcharge and cess, the claim was voluntarily withdrawn during assessment. Applying the earlier coordinate-bench decisions, a bona fide claim rendered inadmissible by a retrospective amendment did not warrant penalty for under-reporting of income.

Conclusion: Penalty under section 270A was not leviable and was directed to be deleted, in favour of the assessee.

Issues: Whether the pending regular assessment for the relevant assessment year abated upon the search under the second proviso to section 153A(1), rendering the later assessment under section 143(3) without jurisdiction.

Analysis: The assessment proceedings were pending on the date of the search, and the assessment year fell within the six assessment years covered by section 153A. The second proviso to section 153A(1) mandates abatement of such pending assessments. Following abatement, the Assessing Officer lacked jurisdiction to complete the regular assessment under section 143(3).

Conclusion: The assessment under section 143(3) was non est, and the consequential proceedings founded on it were also non est, in favour of the assessee.

Issues: Whether Cenvat credit on input services used for construction of a commercial complex is admissible where the completed complex is rented out for providing taxable renting of immovable property service.

Analysis: Rule 2(l) of the Cenvat Credit Rules, 2004 covers services used by a provider for providing an output service. The construction-related input services were used to create the commercial premises from which the taxable renting service was provided and on which service tax was discharged. The fact that the constructed building is immovable property does not break the nexus between those input services and the taxable output service; a one-to-one correlation is not required in these circumstances.

Conclusion: Cenvat credit on the disputed input services is admissible; the denial and recovery of credit, interest and penalties are unsustainable, in favour of the assessee.

Issues: (i) Whether interest attributable to borrowed funds invested in dividend-yielding units could be deducted while computing deduction on dividend income; (ii) Whether deduction under Section 80-I was allowable for the relevant industrial unit; (iii) Whether notional interest on security deposits given to landlords for employees' leased accommodation was taxable; (iv) Whether interest on borrowings for new machinery and overhead expenditure during trial run constituted revenue expenditure.

Issue (i): Whether interest attributable to borrowed funds invested in dividend-yielding units could be deducted while computing deduction on dividend income.

Analysis: The appellate authorities identified a direct nexus between the Bank of America borrowing and one specific purchase of UTI units, but found no nexus between the remaining borrowings and other investments, which were financed from sale proceeds and available interest-free funds. The extent to which borrowed funds related to investments was a factual determination based on the evidence concerning each investment.

Conclusion: Only interest directly attributable to the identified borrowed investment was deductible from dividend income; the balance interest could not be deducted. The finding is in favour of the assessee.

Issue (ii): Whether deduction under Section 80-I was allowable for the relevant industrial unit.

Analysis: The Tribunal's decision followed its earlier decision on the same issue for prior assessment years. The corresponding decision for Assessment Year 1989-90 had not been challenged because of low tax effect, and no basis was found to depart from that position.

Conclusion: The deduction under Section 80-I remained allowable. The finding is in favour of the assessee.

Issue (iii): Whether notional interest on security deposits given to landlords for employees' leased accommodation was taxable.

Analysis: The deposits were made in the ordinary course of obtaining leased premises for employees' use. Tax liability requires actual income and cannot rest on an assumption that the deposited funds would otherwise have earned a specified return in the business.

Conclusion: No deemed or notional interest income arose from the security deposits. The finding is in favour of the assessee.

Issue (iv): Whether interest on borrowings for new machinery and overhead expenditure during trial run constituted revenue expenditure.

Analysis: The governing Supreme Court precedent had settled the issue against the Revenue.

Conclusion: The interest and trial-run overhead expenditure were revenue in nature. The finding is in favour of the assessee.

Final Conclusion: The fact-based findings on the nexus of borrowings, the allowance of the industrial-unit deduction, the absence of taxable notional income, and the revenue character of the disputed expenditure were sustained in favour of the assessee.

Issues: Whether cancellation of GST registration and alleged non-access to the common portal warranted interference with the assessment order imposing tax and penalty for an earlier tax period.

Analysis: Cancellation of registration does not extinguish a taxpayer's liability for a period preceding cancellation. The assessment concerned alleged incorrect declaration of input and output tax for 2018-19. The record showed service of the show-cause notice and DRC-01 through the common portal, opportunity to pay the proposed tax, reminder notices, and opportunities of personal hearing, none of which were availed. The challenge therefore disclosed no infirmity requiring writ interference; the statutory appellate remedy remained available.

Conclusion: The assessment order was not liable to be interfered with; the issue was decided against the assessee.

Issues: Whether the additional evidence concerning the distance and agricultural character of the land should be admitted and the assessment remanded for verification.

Analysis: The purchase deed and the valuation report described the subject land as agricultural land. The distance certificate tendered before the Tribunal was relevant to the applicability of the definition of capital asset under section 2(14)(iii) of the Income-tax Act, 1961. The additional evidence was admitted, but its verification and the determination of the land's character were required to be undertaken by the Assessing Officer after affording the assessee an opportunity of hearing.

Outcome: The matter was remanded to the Assessing Officer for limited verification of the additional evidence and determination of the nature of the land in accordance with law.