Issues: (i) Whether a demand for non-deduction of tax at source under section 201 could be raised on year-end expense provisions that had been disallowed under section 40(a)(i)/40(a)(ia); (ii) Whether interest under section 201(1A), including its recomputation, was leviable in relation to such year-end provisions.

Issue (i): Whether a demand for non-deduction of tax at source under section 201 could be raised on year-end expense provisions that had been disallowed under section 40(a)(i)/40(a)(ia).

Analysis: The entire year-end provision had been disallowed in computing business income for non-deduction of tax, and that disallowance had been accepted. Applying the consistent decisions in the assessee's earlier assessment years on identical facts, the same amount could not again be subjected to a tax-deduction demand under section 201.

Conclusion: No demand under section 201 was sustainable on the year-end expense provisions. The issue was decided in favour of the assessee.

Issue (ii): Whether interest under section 201(1A), including its recomputation, was leviable in relation to such year-end provisions.

Analysis: As no tax-deduction demand survived in respect of the year-end provisions, the foundation for charging interest under section 201(1A) did not exist. Consequently, a direction to recompute such interest could not operate.

Conclusion: Interest under section 201(1A) was not leviable, and no recomputation of that interest was warranted. The issue was decided in favour of the assessee.

Final Conclusion: The accepted disallowance of the year-end provisions for non-deduction of tax precluded a further tax-deduction demand and consequential interest on those very provisions.

Ratio Decidendi: Where an expense provision has been disallowed under section 40(a)(i)/40(a)(ia) for non-deduction of tax and the disallowance is accepted, the same amount cannot again found a demand under section 201 or consequential interest under section 201(1A).

Issues: (i) Whether the objects concerning satsang, daily worship, and accommodation and food for Vaishnavs rendered the trust religious and ineligible for approval under section 80G(5); (ii) Whether the trust's religious expenditure exceeded the prescribed limit for such approval.

Issue (i): Whether the objects concerning satsang, daily worship, and accommodation and food for Vaishnavs rendered the trust religious and ineligible for approval under section 80G(5).

Analysis: The objects of organising satsang and establishing satsang halls were directed towards the upliftment of human life and public benefit, without propagation of a particular religion. Accommodation and food facilities for Vaishnavs were available irrespective of caste, creed, community or sex. Any daily worship element was subsidiary to the trust's predominant educational, medical-aid and relief-to-the-poor activities. A limited religious element was incidental to its overall charitable objects.

Conclusion: The stated objects did not render the trust religious or justify denial of approval on that ground, in favour of the assessee.

Issue (ii): Whether the trust's religious expenditure exceeded the prescribed limit for such approval.

Analysis: The categorisation of celebration, printing and decoration expenses as religious expenditure was based on presumption without factual verification. The trust disputed that those expenses were religious and asserted that its religious expenditure remained within the prescribed limit. Verification of the nature and quantum of such expenditure was therefore required.

Conclusion: The issue of compliance with the prescribed religious-expenditure limit requires fresh verification by the approving authority, in favour of the assessee to the extent of the remand.

Final Conclusion: Refusal of approval merely because of the identified objects was unsustainable; the trust's entitlement is to be determined after verification of whether its religious expenditure is within the statutory limit.

Ratio Decidendi: A trust predominantly pursuing charitable purposes is not disqualified from approval merely because its objects contain incidental religious activities; disqualification on expenditure grounds requires factual verification that religious expenditure exceeds the prescribed limit.

Issues: Whether the applicant was entitled to discretionary bail in the prosecution for alleged GST evasion.

Analysis: The bail jurisdiction was exercised having regard to the seriousness of the alleged large-scale tax evasion, the applicant's undisclosed pending criminal cases, including earlier GST-evasion matters, and the alleged prison misconduct resulting in a separate case. The non-disclosure of material antecedents and the prospect of recurrence of similar activity weighed against the grant of discretionary relief.

Conclusion: The applicant was not entitled to discretionary bail at this stage.

Issues: (i) Whether the addition made under section 68 on account of demonetized cash deposited in the society's bank account was sustainable when the amount was found to belong to members; (ii) whether interest earned on bank deposits was eligible for deduction under section 80P(2)(a)(i); and (iii) whether the assessee was entitled to similar relief for the subsequent assessment year on the same issue.

Issue (i): Whether the addition made under section 68 on account of demonetized cash deposited in the society's bank account was sustainable when the amount was found to belong to members.

Analysis: The amount deposited during demonetization was ably received from the members of the society, and the Assessing Officer had accepted that factual position. Once the cash was established to belong to the members, the addition as unexplained cash credit in the hands of the society could not survive.

Conclusion: The addition under section 68 was deleted, in favour of the assessee.

Issue (ii): Whether interest earned on bank deposits was eligible for deduction under section 80P(2)(a)(i).

Analysis: The interest income was earned from deposits with banks out of funds connected with the assessee's cooperative activities. The decision treated the income as retaining its character as business income attributable to the assessee's activities, and applied the principle that the character of such income does not change merely because it is temporarily placed in bank deposits. On that basis, deduction under section 80P was held admissible.

Conclusion: The interest income qualified for deduction under section 80P(2)(a)(i), in favour of the assessee.

Issue (iii): Whether the subsequent assessment year was entitled to the same relief on the interest-income issue.

Analysis: The later appeal involved the same disallowance on identical facts, and the decision in the lead appeal was applied mutatis mutandis.

Conclusion: The assessee obtained the same relief for the subsequent assessment year, in favour of the assessee.

Final Conclusion: The additions and disallowance challenged in both appeals were set aside, and the assessee succeeded on the substantive tax issues.

Ratio Decidendi: Where cash deposited in the assessee's account is established to belong to members, no addition as unexplained cash credit survives in the assessee's hands; and interest earned on deposits linked to cooperative business activities may retain its business character and qualify for deduction under section 80P.

Issues: (i) Whether the reassessment jurisdiction under section 147 of the Income-tax Act, 1961 was invalid; (ii) whether the addition made by treating the purchases as bogus was sustainable.

Issue (i): Whether the reassessment jurisdiction under section 147 of the Income-tax Act, 1961 was invalid.

Analysis: The reopening was based on information from the Investigation Wing relating to alleged accommodation entries in the guise of purchases. The order, however, proceeds principally on the merits of the additions and records that the assessee had placed extensive documentary material before the authorities. The jurisdictional challenge was raised, but the final relief turned on the evidentiary sufficiency of the purchases and the absence of adverse verification by the Revenue.

Conclusion: The reassessment challenge did not survive to sustain the addition, and no separate adverse finding was maintained against the assessee on this issue.

Issue (ii): Whether the addition made by treating the purchases as bogus was sustainable.

Analysis: The assessee furnished purchase invoices, confirmations, bank statements, affidavits, income-tax acknowledgements, and quantitative reconciliation linking purchases with sales, stock movement, and exports. The Revenue did not dispute the stock tally, corresponding sales, export realisation, or bring any independent material to show cash backflow or non-receipt of goods. In such circumstances, the evidentiary burden lay on the Revenue to rebut the assessee's material through inquiry and tangible evidence, which was not done. Mere third-party information and general allegations were held insufficient to displace the contemporaneous evidence, particularly where the declared gross profit and export-linked turnover supported the trading results.

Conclusion: The addition treating the purchases as bogus was deleted and the assessee succeeded on the merits.

Final Conclusion: The assessment addition was set aside because the purchase transactions were supported by contemporaneous evidence and were not discredited by independent inquiry or contrary material.

Ratio Decidendi: Once an assessee substantiates purchases with primary documentary evidence, quantitative reconciliation, and accepted sales or exports, the Revenue must rebut that material by independent inquiry and cogent evidence; suspicion or third-party information alone cannot justify disallowance of the entire purchases.

Issues: Whether service tax demand was sustainable where the appellant's activity involved composite works contract with deemed sale of materials and VAT payment, but the department classified the service as completion and finishing service under commercial or industrial construction service to deny abatement.

Analysis: The services were found to involve transfer of property in goods as well as labour and services, with deemed sale of materials not disputed. The governing principle from the Supreme Court decision in Larsen & Toubro was applied, namely that prior to 01.06.2007 the Finance Act, 1994 did not provide a charge or machinery to levy service tax on indivisible composite works contracts, and such contracts could not be treated as mere service contracts simpliciter. Once the basic levy failed, the classification adopted to sustain the demand and deny the notification benefit could not survive. The Tribunal therefore did not examine limitation in detail.

Conclusion: The service tax demand was not sustainable and the impugned order was set aside in favour of the assessee.

Issues: Whether the assessment framed under section 153C read with section 143(3) of the Income-tax Act, 1961 was valid when the recorded satisfaction did not properly state that the seized material pertained to or related to the assessee.

Analysis: The Tribunal noted that the search was conducted in the case of another person and that the Assessing Officer recorded satisfaction for initiating proceedings against the assessee as a third party. It held that section 153C requires a proper satisfaction that the seized material pertains to or relates to the person other than the searched person, and that a mere reference that the material belonged to the assessee was insufficient to meet the statutory condition for assuming jurisdiction.

Conclusion: The assessment was held to be unsustainable and was quashed for want of a proper section 153C satisfaction, in favour of the assessee.

Issues: (i) Whether the show-cause notice issued under the PMLA was liable to be quashed on the ground that the adjudicating authority acted coram non judice and that the notice was issued by a non-judicial member or a single-member bench; (ii) Whether the writ petition was maintainable in view of the availability of an alternative statutory remedy under the PMLA.

Issue (i): Whether the show-cause notice issued under the PMLA was liable to be quashed on the ground that the adjudicating authority acted coram non judice and that the notice was issued by a non-judicial member or a single-member bench?

Analysis: Section 6 of the PMLA was read as a whole. The composition provision in sub-section (2) does not exclude functioning through benches, because sub-sections (5), (6), (7), (13) and (14) expressly permit constitution of benches with one or two members, transfer between benches, and discharge of the Chairperson's functions by the senior-most member when required. On that construction, a proceeding is not vitiated merely because it is taken up by a single member or by a member who is not a judicial officer. The earlier decisions relied on by the Court supported the view that the statutory scheme permits single-member functioning and that the adjudicating authority is not rendered without jurisdiction for that reason.

Conclusion: The challenge based on coram non judice and improper composition of the adjudicating authority was rejected.

Issue (ii): Whether the writ petition was maintainable in view of the availability of an alternative statutory remedy under the PMLA?

Analysis: The PMLA provides an internal adjudicatory and appellate framework, including adjudication under Section 8 and further statutory challenge before the Appellate Tribunal under Section 26. The writ jurisdiction under Article 226 is ordinarily not to be invoked where an effective remedy exists, especially where the statute creates a complete mechanism for redress. No exceptional ground warranting bypass of that mechanism was found.

Conclusion: The writ petition was held to be not entertainable in view of the available alternative statutory remedy.

Final Conclusion: The impugned show-cause notice was not quashed, and the writ petition failed on both the jurisdictional challenge and the maintainability objection.

Ratio Decidendi: Under Section 6 of the PMLA, the adjudicating authority may validly function through benches, including a single-member bench, and writ interference is ordinarily barred where the statute provides an effective appellate remedy.

Issues: (i) Whether the reopening of assessment by issuance of notice under section 148 pursuant to direction under section 150(1) is valid; (ii) Whether the addition of Rs. 14,08,400 for unsecured loans is justified; (iii) Whether the disallowance of Rs. 1,16,417 as undisclosed commission income is justified.

Issue (i): Whether the Assessing Officer could validly issue notice under section 148 in consequence of a direction contained in the order of the Commissioner (Appeals) under section 150(1) of the Income-tax Act, 1961.

Analysis: Section 251 empowers the Commissioner (Appeals) to confirm, reduce, enhance or annul an assessment. Section 150(1) permits issuance of notice under section 148 at any time to make assessment, reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by an authority in any proceeding under the Act. The appellate direction to reopen was not challenged before the Tribunal in the present appeal. The Assessing Officer acted pursuant to the appellate direction and section 150(1) applies to permit reopening in consequence of that direction.

Conclusion: The reopening of assessment by issuing notice under section 148 in consequence of the Commissioner (Appeals) direction under section 150(1) is valid; grounds challenging reopening are rejected.

Issue (ii): Whether the addition of Rs. 14,08,400 relating to unsecured loans should be sustained.

Analysis: The assessee produced loan confirmations and relevant bank details evidencing identity, genuineness and creditworthiness of creditors. The Revenue did not produce material to controvert those evidences. The primary onus in respect of identity and genuineness was discharged by the assessee and the authorities below did not have contrary material to sustain the addition.

Conclusion: The addition of Rs. 14,08,400 for unsecured loans is deleted and the ground is allowed in favour of the assessee.

Issue (iii): Whether the disallowance of Rs. 1,16,417 on account of undisclosed commission income is sustainable.

Analysis: The Assessing Officer identified a reconciliation discrepancy of Rs. 1,16,417 between disclosed and actual receipts. The assessee failed to provide satisfactory explanation or reconciliation before the authorities and before the Tribunal. In absence of satisfactory documentary reconciliation, the addition is supported by the record.

Conclusion: The disallowance of Rs. 1,16,417 as undisclosed commission income is sustained and the ground is dismissed against the assessee.

Final Conclusion: The appeal is partly allowed by deleting the addition relating to unsecured loans while sustaining the addition relating to undisclosed commission income; the reopening of assessment in consequence of the Commissioner (Appeals) direction under section 150(1) is valid.

Ratio Decidendi: Section 150(1) permits issuance of a notice under section 148 at any time to make assessment or reassessment in consequence of or to give effect to a direction contained in an appellate order; where the assessee discharges the primary onus regarding identity and genuineness of loans and the Revenue produces no contradicting material, additions based on absence of supporting evidence cannot be sustained.

Issues: (i) Whether the service tax deposits made during the relevant period and by the later challan could be appropriated against the confirmed demand. (ii) Whether the extended period of limitation and the penalty for suppression were sustainable. (iii) Whether interest and the late fee penalty were leviable on the remaining tax liability.

Issue (i): Whether the service tax deposits made during the relevant period and by the later challan could be appropriated against the confirmed demand.

Analysis: The deposited amounts were traced to the appellant's challans and were linked to the taxable services in dispute. The amounts deposited during 2016-17 and the later deposit were treated as available for adjustment against the demand, to the extent established from the records.

Conclusion: The deposits were directed to be appropriated against the demand, and the demand stood reduced to the extent of such adjustment, in favour of the assessee.

Issue (ii): Whether the extended period of limitation and the penalty for suppression were sustainable.

Analysis: The appellant did not establish full reconciliation of the tax deposits with the liability for the relevant period. The records showed a shortfall between the service tax collected and deposited, and the non-filing of returns supported invocation of the extended period. Penalty under section 78 was upheld for the unpaid balance only.

Conclusion: The extended period was sustained, and penalty under section 78 was upheld but restricted to the balance demand, in favour of the Revenue.

Issue (iii): Whether interest and the late fee penalty were leviable on the remaining tax liability.

Analysis: Interest followed from delayed payment of the tax that remained unpaid by the due date. The late fee penalty under section 70 read with rule 7C had already attained finality and was maintained.

Conclusion: Interest and the late fee penalty were upheld, in favour of the Revenue.

Final Conclusion: The appeal succeeded only to the limited extent of giving credit for tax deposits already made, while the balance demand, interest, and penalty were maintained.

Ratio Decidendi: Tax deposits can be appropriated only to the extent they are duly correlated to the liability for the relevant period, and where the records show suppression and non-filing of returns, the extended limitation, interest, and reduced penalty are sustainable.

Issues: Whether the order under section 148A(d) and the notice under section 148 issued by the Jurisdictional Assessing Officer, instead of through the faceless mechanism, were valid in law.

Analysis: The writ petition was decided by following the earlier order of the Court holding that reassessment notices and orders issued by the Jurisdictional Assessing Officer, or outside the faceless mechanism contemplated under section 144B read with section 151A and the notified scheme for income escaping assessment, were bad in law. On that basis, the issuance of the impugned order and notice by the JAO was treated as lacking jurisdiction.

Conclusion: The impugned order under section 148A(d) and the notice under section 148 were invalid and liable to be set aside, in favour of the petitioner.

Ratio Decidendi: Where the statute and the notified faceless reassessment scheme require action through the faceless mechanism, an order or notice issued by the Jurisdictional Assessing Officer outside that mechanism is without jurisdiction and unsustainable.

Outcome: The writ petition was disposed of by relegating the petitioner to the statutory appellate remedy under the Uttar Pradesh Goods and Services Tax Act, 2017.

Issues: Whether a registered cooperative society providing lending and deposit-related services exclusively to its members is liable to service tax under the category of Banking and Other Financial Services.

Analysis: The dispute was governed by the principle of mutuality and the treatment of incorporated bodies under the service tax law. The Tribunal followed the binding view that a cooperative society registered under the relevant cooperative societies law is an incorporated entity and that services rendered exclusively to members do not amount to taxable service in the hands of such an incorporated association when the statutory scheme uses expressions like "body of persons" and "person" in a manner that does not bring such entities within the tax net for the relevant period. The Tribunal also applied the earlier decision already taken in a similar batch of appeals involving cooperative societies, which had held that member-only services of an incorporated cooperative society were not exigible to service tax.

Conclusion: The society was not liable to service tax on the impugned member-only activities, and the demand, confirmation of tax, and penalties could not be sustained.

Final Conclusion: The impugned order was set aside and the appeal succeeded with consequential relief according to law.

Ratio Decidendi: An incorporated cooperative society rendering services only to its members does not fall within the service tax net on the basis of mutuality for the relevant statutory scheme.

Issues: (i) Whether any further profit could be attributed to the assessee's Indian dependent agent permanent establishment after the Indian associated enterprise had been remunerated at arm's length.

Analysis: The assessment records showed that the assessee had furnished transfer pricing material to demonstrate that the transactions with its Indian associated enterprise were at arm's length, and that this position was not doubted by the assessing authority. The Tribunal relied on the settled principle that where the Indian entity constituting the permanent establishment or dependent agent is already compensated at arm's length, no further profit can be attributed to the foreign enterprise merely on the basis of the existence of a permanent establishment. The ad hoc attribution of revenue and profits under Rule 10 was therefore unsupported on the facts and contrary to the settled legal position.

Conclusion: No further profit was liable to be attributed to the assessee's permanent establishment in India, and the addition was deleted.

Issues: Whether the deletion by the Commissioner of Income-tax (Appeals) of an addition made by the Assessing Officer under Section 69 of the Income-tax Act, 1961 relating to alleged undisclosed freight income for AY 2016-17 was correct.

Analysis: The appeal concerns an addition of Rs. 3,52,44,796/- on account of alleged undisclosed freight income purportedly received from a third party shown to have made bogus transportation bookings. The Tribunal examined whether Revenue had established receipts by the assessee from the said third party and whether Revenue had properly claimed or verified tax deducted at source against the assessee's earlier PAN. The record did not demonstrate any proved receipts to the assessee from the third party, nor did Revenue establish that it had rightly examined TDS claims in the assessee's old PAN or traced payments through the third party's bank accounts. In the absence of such proof, the appellate authority's deletion of the addition was found supportable. The Tribunal recorded that Revenue may further investigate the TDS claim and fund movements for exchequer interest, but such examination does not warrant interference with the CIT(A)'s order in the appeal before the Tribunal.

Conclusion: The deletion of the addition under Section 69 of the Income-tax Act, 1961 is upheld and the Revenue's appeal is dismissed.

Ratio Decidendi: An addition under Section 69 of the Income-tax Act, 1961 cannot be sustained where Revenue fails to prove receipts by the assessee from the alleged payer and does not establish entitlement to or examination of corresponding TDS or traceability of funds through bank records.

Issues: (i) Whether the reopening of assessment under Section 147 of the Income-tax Act, 1961 for assessment year 2013-14 was valid when the assessee had filed a return and furnished reconciliation and explanations during original scrutiny assessment; (ii) Whether the rectification order under Section 154 of the Income-tax Act, 1961 disallowing attributable expenses is sustainable where the reassessment on which it is based is quashed.

Issue (i): Whether reopening under Section 147 of the Income-tax Act, 1961 was justified.

Analysis: The assessee followed cash system of accounting and had furnished detailed reconciliation of professional receipts vis-a -vis Form 26AS and explanations during the original assessment completed under Section 143(3) of the Income-tax Act, 1961. Material relied upon by the assessing officer for reopening was already on record at the time of original scrutiny assessment. Comparable precedents of the jurisdictional High Court indicate that reopening where no new tangible material emerges and where there is no failure to disclose amounts to a change of opinion, which is impermissible for invoking Section 147 of the Income-tax Act, 1961.

Conclusion: Reopening under Section 147 of the Income-tax Act, 1961 is not valid; issue decided in favour of the assessee.

Issue (ii): Whether the rectification under Section 154 of the Income-tax Act, 1961 disallowing attributable expenses of Rs. 36,97,051/- is sustainable.

Analysis: The rectification was consequent to and grounded on the reassessment order under Section 147. With the reassessment quashed as a change of opinion and no mistake apparent justifying Section 154, the rectification lacks independent basis. The factual reconciliation and absence of interest expenses relevant to Section 14A were considered and no addition under Section 14A was ultimately made during reassessment.

Conclusion: Rectification under Section 154 of the Income-tax Act, 1961 is not sustainable; issue decided in favour of the assessee.

Final Conclusion: The reassessment initiated under Section 147 and the consequent rectification under Section 154 are set aside; the additions made in reassessment and rectification are deleted and both appeals are allowed in favour of the assessee.

Ratio Decidendi: Where material relied upon for reopening is already placed before the assessing officer at the time of original assessment and there is no failure to make full and true disclosure, reopening under Section 147 of the Income-tax Act, 1961 constitutes an impermissible change of opinion and must be quashed.

Issues: Whether exemption under Sections 11 and 12 of the Income-tax Act, 1961 can be denied to a trust registered under Section 12A/12AA for the assessment year 2016-17 where (a) the trust sold trust land and donated the entire sale proceeds to other registered charitable trusts and (b) the trust had a break in carrying out charitable activities in preceding years.

Analysis: The Tribunal examined whether the Assessing Officer could deny exemption under Section 11 of the Income-tax Act, 1961 despite an operative registration under Section 12A/12AA. The Court reviewed authority establishing that registration under Section 12A operates as a condition precedent to claim exemptions and that an Assessing Officer ordinarily cannot re-open or traverse the objects of a trust granted registration unless statutory conditions for denial under Sections 11 or 13 are shown to be violated. The decision considered whether donations of sale proceeds to other registered charitable trusts could constitute valid application of income under Section 11, including reliance on precedent holding inter-trust donations can be application of income, and whether mere absence of active charitable operations for some years justifies denial of exemption. The Tribunal also considered the lack of positive evidence by the AO showing misuse by the donee trusts and the absence of adequate inquiry or show-cause foundation to treat the donations as not genuine or as misapplication. The factual findings of the Commissioner (Appeals) that no contravention of Sections 11 or 13 was established were not controverted and were supported by binding and persuasive decisions recognizing inter-charity donations as application of income and that break in activity alone does not negate exemption.

Conclusion: Exemption under Sections 11 and 12 of the Income-tax Act, 1961 is not denied. The donations of the sale proceeds to other registered charitable trusts constitute application of income; the Assessing Officer's denial of exemption and taxation of Rs. 2,60,00,000/- is unsustainable and the Revenue's appeal is dismissed.

Ratio Decidendi: Where a trust holds an operative registration under Section 12A/12AA, the Assessing Officer cannot deny exemption under Sections 11 and 12 absent concrete proof of violation of those sections (including misapplication under Section 13); donations of sale proceeds to other registered charitable trusts amount to application of income when there is no evidence of misuse, and a mere temporary break in carrying out charitable activities does not, by itself, justify denial of exemption.

Issues: Whether penalty under Section 271(1)(c) of the Income-tax Act, 1961 can be levied where income surrendered during survey was disclosed in the return filed within time and accepted as business income in the regular assessment under Section 143(3) of the Income-tax Act, 1961.

Analysis: The facts show admission of undisclosed stock and cash during survey under Section 133A of the Income-tax Act, 1961, the amounts were recorded in the books, declared in the return filed for the relevant assessment year and treated as business income in the assessment completed under Section 143(3) of the Income-tax Act, 1961. No separate additions were made under Sections 68 to 69D of the Income-tax Act, 1961 and the assessing officer did not dispute the source or classification of the disclosed amounts as business income. Penal liability under Section 271(1)(c) of the Income-tax Act, 1961 requires proof of concealment or furnishing of inaccurate particulars; penal provisions are to be strictly construed and cannot be imposed on the basis of mere presumption, surmise or conjecture. Judicial authorities applying similar facts hold that where surrender in survey is followed by disclosure in the return filed within time and acceptance in assessment, penalty under Section 271(1)(c) is not exigible.

Conclusion: Penalty under Section 271(1)(c) of the Income-tax Act, 1961 deleted; appeal by the Revenue dismissed in favour of the assessee.

Issues: Whether the Learned Commissioner of Income Tax (Appeals) was justified in deleting the Assessing Officer's disallowance of depreciation claimed on expenditure incurred for construction of a highway project for assessment year 2016-17.

Analysis: The dispute required examination of whether the assessee, a special purpose vehicle undertaking a DBOT highway project, could claim depreciation under the Income-tax Act, 1961 on project expenditure capitalized as intangible assets. The Assessing Officer disallowed depreciation and allowed amortization by reference to CBDT Circular No. 9/2014 and supporting authority that ownership is a prerequisite for claiming depreciation under Section 32 of the Income-tax Act, 1961. The Commissioner (Appeals) deleted the disallowance by following this Tribunal's earlier orders in the assessee's own case for AY 2014-15 and AY 2015-16. The Tribunal found the issue squarely covered by prior tribunal precedent, including the Special Bench decision in Progressive Constructions Limited and this Tribunal's earlier decisions for the assessee, and noted that depreciation had been allowed in earlier assessment years on the opening written down value. Having regard to the consistent tribunal precedent and the facts of the case, the Tribunal saw no infirmity in the Commissioner (Appeals) order deleting the disallowance.

Conclusion: The deletion of the disallowance of depreciation by the Commissioner (Appeals) is upheld; the revenue's appeal is dismissed and the decision is in favour of the assessee.

Issues: (i) Whether addition of Rs. 40,00,000/- made by the Assessing Officer treating cash deposits as unexplained cash credit is sustainable; (ii) Whether addition of Rs. 7,88,943/- made on account of excess stock found during survey as unexplained investment is sustainable.

Issue (i): Whether the cash deposits of Rs. 40,00,000/- can be treated as unexplained cash credit when the books of account, cash sales, stock movements and GST returns recording those sales have been accepted.

Analysis: The books of account were not rejected and the net profit declared was accepted. Cash sales are recorded in the books, corresponding stock reduction is reflected in stock records and sales are reported in GST returns. No defect in the books, stock records or GST returns was pointed out by the Assessing Officer. Treating deposits arising from recorded and taxed sales as unexplained cash credit without rejecting the books would amount to taxing the same income twice.

Conclusion: Deletion of the addition of Rs. 40,00,000/- is directed; this part of the appeal is allowed in favour of the assessee.

Issue (ii): Whether the addition of Rs. 7,88,943/- on account of excess stock found during survey can be sustained in view of the assessee's explanations.

Analysis: During survey the assessee attributed the stock variation to inaccurate physical stock counting in the statement recorded at survey. The later explanation that the excess stock represented non-dispatched goods against accounted sales is contrary to the contemporaneous statement and is unsupported by documentary evidence before the authorities. The revised explanation is therefore an afterthought and not substantiated.

Conclusion: The addition of Rs. 7,88,943/- on account of unexplained investment in stock is upheld; this part of the appeal is dismissed in favour of the revenue.

Final Conclusion: The appeal is partly allowed by deleting the addition of Rs. 40,00,000/- and upholding the addition of Rs. 7,88,943/-, resulting in a partial relief to the assessee.

Ratio Decidendi: Where the assessing authority accepts the books of account and the profit element of recorded sales has been taxed, cash deposits arising from those recorded sales cannot be treated as unexplained cash credit without rejecting the books of account, otherwise the same income would be taxed twice.