Issues: (i) Whether, in completed assessments, additions under Section 153A could be made by treating sale proceeds of flats as business income when no incriminating material was found in the search; (ii) Whether disallowance of interest expenditure could be sustained in a completed assessment under Section 153A without incriminating material.

Issue (i): Whether, in completed assessments, additions under Section 153A could be made by treating sale proceeds of flats as business income when no incriminating material was found in the search.

Analysis: The assessments had been completed before the search. The documents relied upon for recharacterising the sale proceeds were part of the regular books and records, and no incriminating material relating to the addition was found or relied upon in the assessment order. Under the settled scope of Section 153A, a completed or unabated assessment cannot be disturbed in the absence of incriminating material unearthed in the search.

Conclusion: The addition by recharacterising sale proceeds as business income was impermissible; the issue is in favour of the assessee.

Issue (ii): Whether disallowance of interest expenditure could be sustained in a completed assessment under Section 153A without incriminating material.

Analysis: The interest disallowance was likewise not founded on incriminating material seized during the search. The restriction on making additions in completed assessments under Section 153A therefore applied equally to that disallowance.

Conclusion: The interest disallowance could not be sustained; the issue is in favour of the assessee.

Final Conclusion: No substantial question of law arose from the Tribunal's application of the settled limitation on search assessments concerning completed years.

Ratio Decidendi: In a completed or unabated assessment, an addition under Section 153A is sustainable only where it is founded on incriminating material unearthed during the search.

Issues: Whether the Tribunal's orders allowing the Revenue's appeal, dismissing the assessee's cross-objections, and rejecting rectification applications could stand without considering material evidence and the legal contentions concerning reassessment.

Analysis: The record indicated that the appellate findings on the identity and creditworthiness of the investors and the genuineness of the share-application transactions were founded on documentary material, including reassessment orders of investor entities. The Tribunal's observations did not reflect a holistic consideration of that material. The cross-objections also raised challenges to reopening, including that reassessment cannot be initiated merely for verification and that the statutory route applicable to search-related material required consideration. The rectification applications required examination of these contentions and of the relevant legal principles, since they could materially affect the Tribunal's earlier conclusions. The merits, however, required comprehensive factual examination and were left open.

Conclusion: The Tribunal's orders were set aside, and the Revenue's appeal with the assessee's cross-objections was restored for fresh adjudication after consideration of the relevant material and applicable law; substantial question of law (f) was answered in favour of the assessee.

Issues: (i) Whether a return for assessment year 2021-22 could be processed under section 143(1) after issuance of a scrutiny notice under section 143(2), and whether the resulting CPC adjustments were required to be reconsidered in the assessment under section 143(3). (ii) Whether the ESOP cost reimbursed by the assessee to its foreign parent for options exercised by its employees was deductible as revenue expenditure.

Issue (i): Whether a return for assessment year 2021-22 could be processed under section 143(1) after issuance of a scrutiny notice under section 143(2), and whether the resulting CPC adjustments were required to be reconsidered in the assessment under section 143(3).

Analysis: The statutory position applicable from assessment year 2017-18 permitted processing under section 143(1) notwithstanding issuance of notice under section 143(2). The processing and intimation were completed within the prescribed nine-month period. An assessment under section 143(3) does not cause automatic merger of all adjustments in the section 143(1) intimation; merger is confined to matters actually examined and decided in the later proceeding. As the CPC adjustments were not examined in the scrutiny assessment, they remained separately operative and challengeable against the section 143(1) order.

Conclusion: The processing under section 143(1) and the CPC adjustments were valid, and no reassessment of those adjustments was required in the section 143(3) assessment. This issue is against the assessee.

Issue (ii): Whether the ESOP cost reimbursed by the assessee to its foreign parent for options exercised by its employees was deductible as revenue expenditure.

Analysis: The shares were issued by the foreign parent and not by the assessee. The reimbursement represented the cost of employee stock options exercised by the assessee's employees under a cross-charge arrangement, without creating share capital or any capital asset or advantage for the assessee. The expenditure was employee compensation incurred wholly and exclusively for business purposes.

Conclusion: The ESOP reimbursement was allowable as revenue expenditure, and the disallowance was deleted. This issue is in favour of the assessee.

Final Conclusion: The section 143(1) adjustments remain independently enforceable, while the ESOP employee-compensation claim is deductible.

Ratio Decidendi: For assessment years from 2017-18 onward, processing under section 143(1) may follow a scrutiny notice under section 143(2), and such intimation does not automatically merge into a section 143(3) assessment except as to matters actually examined; ESOP reimbursement for employees of an Indian subsidiary, where shares are issued by its parent, is revenue employee-compensation expenditure.

Issues: Whether penalty under section 271(1)(c) could be levied on disallowance of employees' provident-fund contribution where no satisfaction for initiating penalty proceedings on that disallowance was recorded in the assessment order.

Analysis: The recorded satisfaction expressly concerned only the transfer-pricing adjustment. No satisfaction was recorded for the separate disallowance of employees' contribution to provident fund under section 36(1)(va). Initiation of penalty proceedings must be founded upon satisfaction relating to the particular addition for which penalty is proposed.

Conclusion: The penalty on the provident-fund disallowance was invalid for want of recorded satisfaction and was quashed, in favour of the assessee.

Issues: Whether a criminal proceeding for cheque dishonour against a company director can continue where the complaint contains only general assertions about the directors managing the company, without specific averments identifying the director's responsibility for the conduct of the company's business or role in the issuance of the dishonoured cheque.

Analysis: Vicarious criminal liability for an offence by a company arises only on fulfilment of the cumulative conditions under Section 141: the person must, when the offence was committed, have been both in charge of and responsible to the company for the conduct of its business. Directorship alone does not establish those conditions. The complaint made only a general allegation that the directors managed the day-to-day business and regular affairs of the company; it did not attribute an individual role, identify the cheque signatory, or state how the petitioner was responsible for the relevant transaction or business conduct. Such general averments did not satisfy the foundational requirements for prosecution of the petitioner.

Conclusion: The statutory requirements for fastening vicarious liability upon the petitioner were absent, and continuation of the proceeding against him constituted abuse of process of law.

Issues: Whether the Revenue could pursue or enforce an income-tax claim for a pre-resolution-plan period when no claim was lodged or included in the resolution plan approved under the insolvency process.

Analysis: An approved resolution plan binds all creditors, including governmental authorities. Statutory dues not forming part of the approved plan stand extinguished, and proceedings concerning those pre-approval dues cannot continue. The Revenue had not lodged its claim during the corporate insolvency resolution process; accordingly, even a possible success in its challenge to the appellate tax order could not yield a recoverable demand outside the approved plan.

Conclusion: The Revenue could not assert or recover the alleged tax dues outside the approved resolution plan; the proposed questions of law were academic and required no adjudication.

Issues: Whether the entire purchases treated as bogus could be disallowed under Section 69C where the assessee's sales were not disputed and purchases from unregistered dealers could not be ruled out.

Analysis: The assessee carried on civil-contracting and engineering activities involving diverse projects. The corresponding sales were not questioned in the assessment or appellate proceedings, and procurement from unregistered dealers was a plausible possibility. In these circumstances, disallowance of the entire alleged bogus purchases was not appropriate. The profit element embedded in such purchases was required to be estimated with reference to the accepted profit rates for the respective assessment years.

Conclusion: The additions for alleged bogus purchases were restricted to net-profit rates of 4.35%, 4.09%, 3.50% and 3.60% of the impugned purchases for assessment years 2017-18, 2018-19, 2019-20 and 2020-21 respectively, in favour of the assessee.

Issues: Whether penalty for non-compliance with the tax-audit requirement was sustainable where particulars in column 40 of Form 3CD were inadvertently left unfilled because of a software error.

Analysis: The omission in the audit report was supported by the auditor's affidavit and was attributable to an inadvertent software-related error, without mala fides. The circumstances constituted reasonable cause within the meaning of Section 273B of the Income-tax Act, 1961, which protects an assessee from penalty where the failure is supported by reasonable cause.

Conclusion: The penalty was not sustainable; the issue was decided in favour of the assessee.

Issues: (i) Whether the transfer-pricing comparables and working-capital adjustment for the domestic manufacturing and distribution segment were proper; (ii) Whether particular comparables for the Hub Services segment were to be included or reconsidered; (iii) Whether the profit margin stipulated in a bilateral advance pricing agreement for earlier years could be applied to determine the arm's length price for the export manufacturing and distribution segment for the relevant year.

Issue (i): Whether the transfer-pricing comparables and working-capital adjustment for the domestic manufacturing and distribution segment were proper.

Analysis: Companies engaged in holograms, paper, kraft paper, decorative automotive components, specialty polyester films, BOPET films, or paper manufactured from waste paper were functionally dissimilar to a manufacturer of aseptic carton packaging. Broad comparability could not overcome material differences in products, business profile, intangibles, export orientation, absence of segmental data, and use of recycled raw material. A comparable following a different financial year could nevertheless be used where corresponding-period data was available and could be extrapolated. Working-capital adjustment had been allowed in the Hub Services segment and was required to be examined and granted for the domestic segment consistently.

Conclusion: The identified functionally dissimilar companies shall be excluded, Huhtamaki PPL Ltd. shall be included using extrapolated corresponding-period data, and the domestic-segment working-capital adjustment shall be allowed after verification. The issue is decided in favour of the assessee.

Issue (ii): Whether particular comparables for the Hub Services segment were to be included or reconsidered.

Analysis: Medical transcription is included within information technology enabled services. Accordingly, the medical-transcription segment of Bhilwara Infotechnology Ltd. was functionally comparable and satisfied the relevant export filter. The related-party transaction position of Ideavate Solutions Pvt. Ltd. required verification against the 25% filter. The functional, assets and risks comparability of Thomson Reuters International Services Pvt. Ltd. and Global Healthcare Billing Partners Pvt. Ltd. had not been examined; an assessee is not barred from seeking inclusion of an otherwise comparable company omitted from its transfer-pricing study.

Conclusion: Bhilwara Infotechnology Ltd. shall be included as a comparable; the eligibility of Ideavate Solutions Pvt. Ltd. and the two additional proposed comparables shall be verified and determined afresh. The issue is decided in favour of the assessee.

Issue (iii): Whether the profit margin stipulated in a bilateral advance pricing agreement for earlier years could be applied to determine the arm's length price for the export manufacturing and distribution segment for the relevant year.

Analysis: An advance pricing agreement operates only for its specified period, subject to the statutory limit. Its agreed margin cannot be extended to an assessment year outside that period. The arm's length price for an uncovered year must be determined under the transfer-pricing provisions and applicable comparability rules. Since the originally proposed benchmarking adjustment was not adjudicated after the later reliance on the bilateral advance pricing agreement, fresh determination was necessary.

Conclusion: The earlier bilateral advance pricing agreement margin cannot be applied to assessment year 2020-21; the arm's length price of the export segment shall be redetermined afresh. The issue is decided in favour of the assessee.

Final Conclusion: The transfer-pricing analysis requires recomputation after exclusion and inclusion of the directed comparables, grant of working-capital adjustment, verification of specified Hub Services comparables, and fresh determination of the export-segment arm's length price without applying an advance pricing agreement outside its stipulated period.

Ratio Decidendi: Transfer-pricing comparability must rest on material functional and economic similarity, and an advance pricing agreement margin is confined to its stipulated period and cannot substitute an arm's length price determination for an uncovered year.

Issues: (i) Whether outstanding foreign trade payables could be taxed as deemed income on alleged cessation of liability; (ii) Whether domestic sundry creditors could be added as bogus merely because the creditors did not comply with summons or enquiry notices.

Issue (i): Whether outstanding foreign trade payables could be taxed as deemed income on alleged cessation of liability.

Analysis: Section 41(1) requires that the assessee must obtain a benefit through remission or cessation of a trading liability. The liabilities continued to be recorded as payable in the books, had not been written back, and no benefit from their remission or cessation arose during the relevant year. Suspension of the assessee's operations and the alleged non-functioning of the foreign creditors did not by themselves establish that the legally payable liabilities had ceased.

Conclusion: The addition for alleged cessation of foreign trade payables was not sustainable and was deleted, in favour of the assessee.

Issue (ii): Whether domestic sundry creditors could be added as bogus merely because the creditors did not comply with summons or enquiry notices.

Analysis: The assessee had furnished supporting material for the creditors, while the appellate order did not deal with that evidence. Non-compliance by creditors with notices under Sections 131 or 133(6), without defects being identified in the evidence furnished, was insufficient to treat the liabilities as bogus. The liabilities remained recorded as subsisting, and subsequent bank and ledger material showed that two creditors were fully paid and one was partly paid.

Conclusion: The addition in respect of the domestic sundry creditors was not sustainable and was deleted, in favour of the assessee.

Final Conclusion: Outstanding trade liabilities that remain acknowledged and unpaid cannot be brought to tax in the absence of an actual remission, cessation, or demonstrated falsity of the liability.

Ratio Decidendi: A trading liability is taxable under Section 41(1) only upon an actual benefit arising from its remission or cessation; continued book recognition and non-response by creditors to notices do not, without more, establish cessation or bogusness.

Issues: (i) Whether, for applying Section 56(2)(x) to acquisition of immovable property, the stamp-duty value should be determined as on the date of the memorandum of understanding fixing consideration or the later date of registration; (ii) Whether penalty for under-reporting of income could survive after deletion of the underlying addition.

Issue (i): Whether, for applying Section 56(2)(x) to acquisition of immovable property, the stamp-duty value should be determined as on the date of the memorandum of understanding fixing consideration or the later date of registration.

Analysis: The first proviso to Section 56(2)(x) permits adoption of the stamp-duty value on the agreement date where the agreement fixing consideration and registration occur on different dates. The memorandum of understanding fixed the consideration and payment was made in October 2013; the subsequent 2017 agreement and registration could not justify adoption of the later ready-reckoner value.

Conclusion: The stamp-duty value relevant to Section 56(2)(x) was that on the 2013 agreement date; the addition based on the 2017 ready-reckoner value was deleted, in favour of the assessee.

Issue (ii): Whether penalty for under-reporting of income could survive after deletion of the underlying addition.

Analysis: The penalty under Section 270A was founded solely on the addition made under Section 56(2)(x).

Conclusion: On deletion of the underlying addition, the penalty could not survive and was deleted, in favour of the assessee.

Final Conclusion: The valuation for the property transaction must be governed by the agreement-date value where statutory conditions for applying the first proviso to Section 56(2)(x) are met, and the consequential penalty lacks an independent basis.

Ratio Decidendi: Where consideration for immovable property is fixed under an agreement and registration occurs later, the first proviso to Section 56(2)(x) requires the agreement-date stamp-duty value to be applied, provided the stipulated consideration has been paid in accordance with that proviso.

Issues: Whether the delay in filing the first appeal should be condoned and whether the first appellate authority could dismiss the appeal in limine without adjudicating the grounds on merits.

Analysis: Medical certificates and the affidavit explaining the illness of the assessee's Chartered Accountant and his wife furnished corroborative material for the delay. The first appellate authority was required to decide the appeal on merits and could not dismiss it for non-prosecution under Section 250(6) of the Income-tax Act, 1961. The delay was condoned, while costs were imposed to meet the ends of justice.

Conclusion: The delay was condoned and the matter was remitted to the first appellate authority for adjudication on merits; the conclusion is in favour of the assessee.

Issues: Whether the extended period of limitation for recovery of service tax on security agency services was validly invoked and whether penalty was sustainable.

Analysis: The appellant accepted receipt of consideration for taxable security agency services and had paid service tax on only part of the receipts during the same financial year. This conduct negatived the asserted bona fide belief that, as a welfare-oriented cooperative society, it had no service-tax liability. Its bye-laws also contemplated net profit, and its cooperative character did not distinguish it from a commercial entity for this purpose. Tax was payable on the gross amount received for the taxable service under Section 67 of the Finance Act, 1994. The non-payment of tax on the balance receipts was found to evince an intent to evade payment, justifying invocation of the extended limitation period and imposition of penalty.

Conclusion: The extended period was validly invoked, and the service-tax demand and penalty were sustainable against the assessee.

Issues: Whether an appeal under Section 107 of the Central Goods and Services Tax Act, 2017 can be entertained beyond the prescribed three-month period and the further condonable period of one month by applying Section 5 of the Limitation Act, 1963.

Analysis: Section 107 creates a specific appellate regime, prescribing three months for appeal and permitting condonation only for a further period of one month upon sufficient cause. The fiscal statute is a self-contained code intended to ensure certainty, finality and expeditious resolution of tax disputes. Under Section 29(2) of the Limitation Act, 1963, exclusion of Section 5 may arise by necessary implication from the statutory scheme; an express exclusion is not indispensable. The scheme of Section 107 manifests legislative intent to restrict the Appellate Authority's condonation power to the expressly stipulated additional period. The ruling concerning appeals under the beneficial land-acquisition legislation was distinguished as dependent on its materially different statutory object and framework.

Conclusion: Section 5 of the Limitation Act, 1963 is excluded by necessary implication, and the Appellate Authority has no jurisdiction to entertain an appeal filed beyond the periods prescribed by Section 107(1) and Section 107(4) of the Central Goods and Services Tax Act, 2017.

Issues: (i) Whether Rule 12(4) of the Health Security Se National Security Cess Rules, 2026, requiring cess computation based on the maximum number of machines installed on any day in a month, is ultra vires the charging and computation scheme, Schedule II, and Articles 14 and 19(1)(g) of the Constitution of India; (ii) Whether cess on machines installed and made operational during the month is proportionately abatable for the period before their installation.

Issue (i): Whether Rule 12(4) of the Health Security Se National Security Cess Rules, 2026, requiring cess computation based on the maximum number of machines installed on any day in a month, is ultra vires the charging and computation scheme, Schedule II, and Articles 14 and 19(1)(g) of the Constitution of India.

Analysis: Sections 4 and 5, read with Schedule II, establish a capacity-based cess regime in which the monthly levy is determined by the installed operational machines' maximum rated speed and the weight of the goods packed. Rule 12(4) operates with Rule 12(1), and its direction to adopt the maximum number of machines installed on any day in the month is linked to the monthly computation of cess under Schedule II. The rule does not impose cess on non-existent machines; it includes machines installed and used for manufacture during that month within the monthly capacity-based computation. A subordinate rule is invalid only where it conflicts with the parent enactment, exceeds delegated authority, infringes constitutional limitations, or is manifestly arbitrary. Rule 12(4) conforms to the statutory object of charging cess on production capacity represented by installed operational machines during the month.

Conclusion: Rule 12(4) is not ultra vires Sections 4, 5 or 35, Schedule II of the Health Security Se National Security Cess Act, 2025, or Articles 14 and 19(1)(g) of the Constitution of India. This issue is against the assessee.

Issue (ii): Whether cess on machines installed and made operational during the month is proportionately abatable for the period before their installation.

Analysis: Section 5(7) allows proportionate abatement only where a machine remains inoperative continuously for at least fifteen days. This applies to a machine that, after installation, remains non-operative; it does not extend to a machine newly installed later in the month and thereafter operated. The machines in question were operational upon installation, and their prior non-existence cannot be treated as inoperativeness through a deeming construction. The statutory exception for a newly registered person does not alter the treatment prescribed under Rule 12(4) for an existing registered person adding machines during a month.

Conclusion: No proportionate abatement is available for the period preceding installation of machines that were installed and operational during the month. This issue is against the assessee.

Final Conclusion: The monthly cess computation validly includes machines installed and operated at any time during the relevant month, and the statutory abatement mechanism is confined to installed machines that subsequently remain inoperative for the prescribed continuous period.

Ratio Decidendi: In a monthly capacity-based cess regime, a rule requiring computation with reference to the maximum number of machines installed during the month is valid where it accords with the parent statute's production-capacity framework; abatement for inoperative machines cannot be extended to the pre-installation period of newly added operational machines.

Issues: Whether the petitioner's claim for refund of cash seized during search should be considered by the competent income-tax authority in light of the Settlement Commission's order.

Analysis: The dispute between the assessee and the Revenue had been settled by the Settlement Commission, while the seized cash had not been refunded. The claim required consideration by the designated authority with reference to the Settlement Commission's order.

Outcome: Liberty was granted to submit a detailed representation to the competent authority, which was directed to decide it in accordance with law within the stipulated period.

Issues: (i) Whether receipts from sale of software, SaaS and related services were taxable as fees for technical services under Article 12 of the India-Ireland DTAA; (ii) Whether the treaty rate of 10% on fees for technical services was inclusive of surcharge and cess.

Issue (i): Whether receipts from sale of software, SaaS and related services were taxable as fees for technical services under Article 12 of the India-Ireland DTAA.

Analysis: The royalty character of software payments and the characterisation of receipts as fees for technical services are distinct questions under Article 12. The relevant test for technical services requires examination of whether the services were specialised, exclusive and specifically sought by the customer, as distinct from a standard facility uniformly available to all users. Automated delivery does not by itself resolve the issue; the factual nature of the automated services, the extent of human intervention in training or support, and the exclusivity of the services had not been adequately established.

Conclusion: The assessment treating the receipts as fees for technical services was set aside for fresh adjudication by the Assessing Officer; the issue is remanded, without a final determination on taxability, in favour of the assessee.

Issue (ii): Whether the treaty rate of 10% on fees for technical services was inclusive of surcharge and cess.

Analysis: Article 2 defines covered taxes to include income-tax and surcharge, and extends to identical or substantially similar taxes imposed subsequently. The authorities cited by the assessee supported treating education cess as an additional surcharge and the stipulated treaty rate as a capped rate. No contrary authority was produced.

Conclusion: If the receipts are found taxable in the remanded proceedings, tax must be charged at the beneficial Article 12 rate of 10%, without additional surcharge or cess, in favour of the assessee.

Final Conclusion: The substantive taxability issue requires fresh factual determination, while the applicable treaty tax rate is capped at 10% if taxability is established.

Ratio Decidendi: A standard automated facility available uniformly to users is not fees for technical services unless the facts establish specialised and exclusive services specifically sought by the recipient; where the treaty rate includes surcharge, that capped rate cannot be increased by surcharge or cess.

Issues: Whether interest under Section 61(2) of the Customs Act, 1962 is payable when capital goods imported into a warehouse licensed for manufacture or other operations under Section 65 are cleared for home consumption without having been actually used in the warehouse.

Analysis: Section 61(1)(a) permits capital goods intended for use in a Section 65 warehouse to remain warehoused until clearance. The statutory expression "intended for use" does not require actual installation or use of the capital goods. The imported cooler gearbox was admittedly capital goods brought into the licensed warehouse for use in the manufacturing operations; its subsequent clearance owing to operational reasons did not negate that original intended use. The departmental demand proceeded solely on non-use, rather than absence of intention to use. The later clarification concerning interest conflicted with the earlier circular and did not govern the statutory interpretation. The applicable principle is that clearance of such capital goods after fulfilment of the intended-use condition attracts duty but not interest.

Conclusion: Interest under Section 61(2) of the Customs Act, 1962 was not payable on clearance of the capital goods for home consumption; the interest demand was unsustainable.

Issues: Whether lithium-ion cells initially warehoused under Serial No. 325 of Notification No. 45/2025-Customs can claim the concessional rate under Serial No. 320 at the ex-bond stage for domestic clearance.

Analysis: Section 15(1)(b) fixes the applicable rate for warehoused goods with reference to the date of presentation of the ex-bond bill of entry. Although a MOOWR unit may simultaneously obtain IGCR exemption and duty deferment, Serial No. 320 is a conditional end-use exemption requiring compliance with the IGCR Rules from the import stage, including prescribed procedural obligations. The earlier import under Serial No. 325 carried no such conditions. A conditional exemption under Serial No. 320 cannot therefore be adopted at ex-bonding where the mandatory IGCR requirements were not followed from the stage of warehousing import.

Conclusion: The applicant is not eligible to claim the Serial No. 320 concessional rate at the ex-bond stage for cells imported under Serial No. 325 without compliance with the IGCR Rules from import.