Issues: Whether recorded and pre-recorded audio/video CDs and DVDs were taxable at 5% under Entry 68(5)(d) rather than at 14.5% as DVDs and CDs under Entry 68(30) of the First Schedule.

Analysis: Entry 68(5) covers information-technology software and the media on which it is embedded, including recorded and pre-recorded DVDs and CDs under clause (d). The expression "on other media" and the placement of clause (d) within the software entry distinguish recorded media containing software from blank DVDs and CDs. The principle of noscitur a sociis supports this construction, as the recorded and pre-recorded media take their character from the associated software-related clauses. The clarification issued by the Authority for Clarification and Advance Rulings, the Commissioner's clarification, and consistent assessments of similar goods corroborated this classification. Since the material facts were undisputed, recourse to the statutory appellate remedy was unnecessary.

Conclusion: Recorded and pre-recorded audio/video CDs and DVDs are taxable at 5% under Entry 68(5)(d) of Part B of the First Schedule to the Tamil Nadu Value Added Tax Act, 2006, and are not taxable as blank DVDs and CDs at 14.5%.

Issues: Whether, upon transition from an export-oriented unit to the Export Promotion Capital Goods scheme, non-registration of the EPCG authorisation at the original port of import, non-production of the authorisation for debit, and non-submission of an undertaking in the prescribed form disentitled the assessee to exemption under Notification No. 16/2015-Customs dated 01.04.2015.

Analysis: Condition 2 of the notification ordinarily requires registration of the authorisation at the specified port of import and its production for debit at clearance. The capital goods had, however, already been imported under the export-oriented unit scheme and were being dealt with at the stage of debonding and transition to the EPCG scheme. The required particulars and EPCG authorisation had been furnished to the jurisdictional authorities, the exit and no-dues permissions were issued, and the export obligation was undertaken. The authorisation was available for debit, while the undertaking furnished for discharge of any future duty shortfall substantially met the relevant requirement.

Conclusion: The alleged failures were procedural lapses in the circumstances and did not constitute a substantive breach warranting denial of the EPCG exemption; no substantial question of law arose.

Issues: Whether registration under Section 12AB and approval under Section 80G could be granted subject to a condition that their applicability and consequential tax benefits would depend on the outcome of future Supreme Court proceedings.

Analysis: The statutory framework permits the Commissioner to grant or reject registration and approval in accordance with law; it does not authorise conditional registration or approval whose efficacy is kept contingent upon a future judicial outcome. A quasi-judicial authority may exercise only powers expressly conferred by statute. Once registration and approval are granted, their legal consequences must operate according to law, and any future cancellation or withdrawal can occur only through the statutory mechanism.

Conclusion: The contingent conditions attached to the registration and approval were beyond statutory jurisdiction and were directed to be deleted; the registration and approval shall operate in accordance with law without those conditions.

Issues: (i) Whether the applicant's ex-works supply of forty aircraft to the government purchaser from Gujarat is liable to GST in India; (ii) Whether the applicant must obtain GST registration in Gujarat for that supply.

Issue (i): Whether the applicant's ex-works supply of forty aircraft to the government purchaser from Gujarat is liable to GST in India.

Analysis: Section 7(1)(a) of the Central Goods and Services Tax Act, 2017 covers supplies of goods made for consideration in the course or furtherance of business. Aircraft are movable goods under Section 2(52), and transfer of title is treated as a supply of goods under Section 7(1A) read with Entry 1(a) of Schedule II. The aircraft are manufactured in Gujarat, procured by the applicant from the Indian aircraft contractor, and supplied ex-works in Gujarat to the government purchaser for contractual consideration. Notification No. 10/2025-Central Tax (Rate) dated 17.09.2025 does not provide an exemption for aircraft.

Conclusion: The supply of forty aircraft is liable to GST in India and is not exempt. This is against the assessee.

Issue (ii): Whether the applicant must obtain GST registration in Gujarat for that supply.

Analysis: Sections 22 and 25 of the Central Goods and Services Tax Act, 2017 require registration in the State from which taxable supplies are made once the applicable aggregate-turnover threshold is exceeded. The outward supply is made from Gujarat, and its stated transaction value exceeds the registration threshold.

Conclusion: GST registration in Gujarat is required. This is against the assessee.

Final Conclusion: The domestic procurement and onward ex-works supply of the aircraft constitute a taxable supply chain situated in Gujarat, with the corresponding registration nexus in that State.

Ratio Decidendi: A transfer of title in movable goods for consideration in the course of business is a taxable supply under GST, and the supplier must register in the State from which the taxable supply is made once the statutory threshold is crossed.

Issues: Whether cognizance on the complaint could validly be taken without affording the accused an opportunity of hearing as required by Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Analysis: The first proviso to Section 223(1) mandates that cognizance of an offence on a complaint shall not be taken without giving the accused an opportunity of being heard. The cognizance order was passed without such opportunity.

Conclusion: Cognizance taken without granting the accused the mandatory opportunity of hearing was invalid.

Issues: Whether reassessment notice issued more than three years after the relevant assessment year satisfied the monetary threshold under Section 149(1)(b) of the Income-tax Act, 1961.

Analysis: For a notice issued beyond three years, Section 149(1)(b) requires, cumulatively, that income chargeable to tax which escaped assessment is represented in the form of an asset and amounts to or is likely to amount to at least Rs. 50 lakh. The recorded basis treated the alleged escaped income as the income embedded in contractual receipts. The assessing authority subsequently estimated that income at 8% of the gross receipts and made an addition of Rs. 26,06,420. The actual alleged escaped income was therefore below the statutory threshold.

Conclusion: The jurisdictional requirements of Section 149(1)(b) were not met; the notice under Section 148 and consequential reassessment proceedings were invalid and liable to be quashed.

Issues: Whether an assessment made under the faceless assessment framework could be sustained when the assessee's specific request for a personal hearing through video conferencing was not effectively granted.

Analysis: The record showed that, after the requested video-conference hearing did not commence, the assessee sought rescheduling. The portal material reflected no further hearing notices, and the Revenue did not place any such notices on record. Where a personal hearing is specifically sought, an effective opportunity of hearing is required before finalising the assessment; its denial violates the requirements of Section 144B of the Income-tax Act, 1961 and the principles of natural justice.

Conclusion: The assessment and consequential demand and penalty proceedings could not be sustained. Fresh assessment is required after permitting a further reply, granting an effective personal hearing, disclosing any material proposed to be relied upon, and issuing a reasoned order.

Issues: Whether the assessment and consequential demand and penalty notices were vitiated by denial of adequate opportunity under the faceless-assessment procedure.

Analysis: The show-cause notice, issued late on a Friday, allowed effectively only one working day for a response, contrary to the National Faceless Assessment Centre SOP requiring a minimum of seven working days. The personal-hearing notice was issued late on a Sunday for a hearing the following afternoon, before expiry of the reply period. The request for a one-day adjournment was reasonably made but refused, and the portal was closed when the reply was sought to be uploaded. These circumstances denied a meaningful opportunity to respond and be heard.

Conclusion: The assessment order and consequential demand and penalty notices were invalid for breach of the principles of natural justice. The assessment proceedings were required to recommence from the show-cause-notice stage with prescribed time for reply, prior notice of video-conference hearing, disclosure of material relied upon, and a speaking assessment order.

Issues: Whether a first appellate authority may dismiss an income-tax appeal solely because the appellant did not appear for hearing, without deciding the grounds of appeal.

Analysis: Section 250(6) of the Income-tax Act, 1961 requires the appellate authority to formulate points for determination and decide them by recording reasons. This statutory obligation applies even where the appellant remains absent, and requires adjudication on the grounds raised in the appeal rather than dismissal merely for non-appearance.

Conclusion: An appellate dismissal solely for the appellant's non-appearance, without determination of the appeal grounds and recorded reasons, is contrary to Section 250(6) of the Income-tax Act, 1961.

Issues: Whether the assessee established entitlement to exemption for salary income under Section 10(26) by proving that the income accrued or arose from a source situated in the specified area or State.

Analysis: Section 10(26) requires, among other conditions, that the income must accrue or arise from a source situated in the notified area or State. The burden lies on the claimant to establish fulfilment of every prescribed condition for exemption. The employer's letter merely recorded an updated residential address in Shillong; it did not certify employment in Meghalaya or establish that the salary arose from a source situated in the specified area. No appointment letter or other material substantiating that requirement was furnished.

Conclusion: The assessee failed to establish eligibility for exemption under Section 10(26); the claimed salary exemption was therefore unavailable.

Issues: Whether the imported two-mole lauryl alcohol ethoxylate was classifiable under CTI 3402 1300 as an organic surface-active agent or under CTI 3824 9090/3824 9990, and whether the consequential duty demand, interest, confiscation and penalties were sustainable.

Analysis: Classification under GIR 1 is governed by the tariff headings and relevant Chapter Notes. Chapter Note 3 to Chapter 34 requires cumulative fulfilment of the prescribed conditions for an organic surface-active agent. Although the samples reduced the surface tension of water, the departmental test reports recorded that they produced a translucent liquid with separation of insoluble matter. The goods therefore failed the water-solubility requirement under Chapter Note 3(a). The HSN explanatory notes also exclude water-insoluble surface-active products from Heading 3402 and place them under Heading 3824.

Conclusion: The imported goods are classifiable under CTI 3824 9090/3824 9990, not CTI 3402 1300; consequently, the customs-duty demand, interest, confiscation and penalties are unsustainable.

Issues: Whether a detailed GST adjudication order issued without a physical signature, digital signature or e-signature is valid and protected as a curable defect.

Analysis: Rule 26(3) requires orders to be electronically issued with a digital signature certificate, e-signature, or another notified mode of verification. The signature requirement fixes authorship and accountability. The saving provision for defects applies only where the proceeding is in substance and effect compliant with the statutory requirements; a signed DRC-07 does not cure the absence of a signature on the detailed adjudication order.

Conclusion: A detailed adjudication order without a physical or electronic signature is not in substantive compliance with Rule 26(3) and is invalid; the defect is not saved as a mere mistake, defect or omission.

Issues: Whether imported vitamin premixes and enzyme preparations intended solely for animal feeding are classifiable under Customs Tariff Heading 2309 rather than headings 2936 and 3507.

Analysis: The goods comprised vitamins or enzymes combined with carriers, fillers, stabilisers and other additives for exclusive use in animal feed. Under the First Schedule to the Customs Tariff Act, 1975, read with the Harmonized System Explanatory Notes, the classification of such composite animal-feed preparations required assessment of their character and intended use. Binding precedent and the applicable departmental clarification recognised that vitamin and enzyme premixes used in animal feeding fall within the animal-feed preparation heading. The contrary classification under the specific headings for vitamins and enzymes lacked a comprehensive comparative analysis of the competing tariff entries and their explanatory notes.

Conclusion: The imported vitamin and enzyme premixes are classifiable under Customs Tariff Heading 2309 and not under headings 2936 or 3507.

Ratio Decidendi: Premixes containing vitamins or enzymes together with additives, when formulated exclusively for animal feeding, are classifiable as preparations of a kind used in animal feeding under Customs Tariff Heading 2309.

Issues: Whether an advance-ruling application is maintainable when the questions concern a purported supply by a faculty member to the applicant rather than a supply undertaken or proposed by the applicant.

Analysis: Section 95(a) of the Central Goods and Services Tax Act, 2017 requires an advance-ruling question to relate to a supply of goods or services undertaken or proposed to be undertaken by the applicant. The questions presented concerned the alleged supply by the Consultancy In-charge to the Institute, including that individual's registration and invoicing liability, rather than a supply by the applicant.

Conclusion: Questions concerning a supply by a faculty member to the applicant fall outside the statutory scope of an advance ruling available to the applicant.

Issues: Whether the penalty order for concealment of income was barred by limitation.

Analysis: Under Section 275(1)(c), a penalty order must be made within six months from the end of the month in which penalty proceedings are initiated, or by the end of the relevant financial year, whichever expires later. Penalty proceedings were initiated in the assessment order dated 19.09.2024; therefore, the six-month limitation period expired on 31.03.2025. The penalty order dated 17.04.2025 was made after expiry of that period.

Conclusion: The penalty order was barred by limitation and the penalty was deleted, in favour of the assessee.

Issues: Whether the Customs Broker breached Regulations 10(a), 10(d), 10(e), 10(m), 10(n) and 10(q) of the Customs Brokers Licensing Regulations, 2018 so as to justify revocation of its licence, forfeiture of security deposit and penalty.

Analysis: Regulation 14 permits action against a Customs Broker only on established regulatory failure or misconduct, and not on an apprehension of possible future conduct. The importer had issued a valid authorisation for clearance of consignments, satisfying Regulation 10(a). The Bill of Entry and BIS certificate were filed on the documents supplied by the importer; the discrepancy in the brand of the goods could be detected only upon physical examination. This did not establish lack of due diligence or failure to advise the importer under Regulations 10(d) and 10(e). Regulation 10(m), concerning speed and efficiency in discharge of customs-broker duties, was unrelated to the alleged inaccuracy in the BIS certificate. For Regulation 10(n), the Customs Broker had obtained and verified reliable KYC documents, including IEC, GST registration, UDYAM registration and PAN documents; the prescribed KYC verification requirement was therefore met. Participation in examination, seizure proceedings, statement recording, search and hearing negated the alleged breach of record-maintenance and cooperation obligations under Regulation 10(q).

Conclusion: No contravention of Regulations 10(a), 10(d), 10(e), 10(m), 10(n) or 10(q) was established; consequently, revocation of licence, forfeiture of security deposit and penalty lacked legal basis. The issue is answered in favour of the Customs Broker.

Issues: (i) Whether enhancement of the assessable value and confirmation of the resultant duty demand were sustainable under the prescribed customs valuation framework; (ii) Whether confiscation, redemption fine and penalty consequential to the valuation enhancement were sustainable.

Issue (i): Whether enhancement of the assessable value and confirmation of the resultant duty demand were sustainable under the prescribed customs valuation framework.

Analysis: Section 14 establishes transaction value as the primary basis of valuation. Under Rules 3 and 12 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, the declared value can be rejected only upon reasonable grounds to doubt its truth or accuracy, followed by valuation under Rules 4 to 9 sequentially. The invoice value was remitted through banking channels, and no material established additional consideration or misdeclaration of the imported goods. No contemporaneous import data or stated basis for rejecting the declared value was disclosed, while comparable imports furnished by the importer were not addressed. The market inquiry and reverse calculation from retail prices could not replace the mandatory sequential valuation process. Payment of differential duty for provisional release did not amount to acceptance of the enhanced value.

Conclusion: The enhancement of assessable value and the consequential duty demand were not sustainable.

Issue (ii): Whether confiscation, redemption fine and penalty consequential to the valuation enhancement were sustainable.

Analysis: The record did not establish misdescription, under-valuation, additional payment to the overseas supplier, or conduct showing an intent to evade duty. With the valuation enhancement lacking a lawful basis, the statutory foundation for confiscation, redemption fine and penalty did not subsist.

Conclusion: The confiscation, redemption fine and penalty were not sustainable.

Final Conclusion: The imported goods are assessable on the declared transaction value unless that value is lawfully displaced through the prescribed valuation procedure.

Ratio Decidendi: A declared transaction value cannot be discarded merely on the basis of a market inquiry; rejection requires stated reasonable grounds under Rule 12 and any redetermination must follow the valuation rules sequentially.

Issues: Whether reassessment proceedings initiated against an amalgamating company can survive after the same income for the same assessment year has been assessed in the hands of its amalgamated successor.

Analysis: The Revenue issued a reassessment notice to the amalgamating company regarding alleged accommodation entries. Subsequently, it initiated reassessment against the amalgamated company for the same assessment year and assessed the identical share application money in the successor's hands. By doing so, the Revenue unequivocally treated the successor as the proper person liable to assessment after amalgamation. The same income cannot be subjected to parallel reassessment proceedings or taxed twice, particularly where one proceeding is against an entity that has ceased to exist.

Conclusion: The reassessment notice and consequential proceedings against the amalgamating company cannot survive and were quashed. The issue was decided in favour of the assessee.

Issues: Whether the penalty order under section 271D was barred by limitation under section 275(1)(c) of the Income-tax Act, 1961.

Analysis: Section 275(1)(c) prescribes the later of two limitation periods for penalties falling outside clauses (a) and (b): the end of the relevant financial year or six months from the end of the month in which penalty action is initiated. As no assessment or other order existed in the course of which the penalty proceedings were initiated, the first limb was inapplicable. The show-cause notice under section 274 read with section 271D, issued on 29.08.2022, constituted initiation of penalty action at the latest; therefore, the six-month limitation expired on 28.02.2023. The penalty order dated 11.03.2023 was beyond that period.

Conclusion: The penalty order under section 271D was time-barred and was quashed; the sustained penalty was deleted, in favour of the assessee.

Issues: (i) Arm's-length mark-up for technical and information technology-enabled services supplied to associated enterprises; (ii) Deductibility of actuarially valued pension provision; (iii) Disallowance of expenditure relating to exempt income under section 14A and Rule 8D; (iv) Depreciation on leased assets; (v) Valuation of banking securities, including AFS, HFT and HTM securities, and amortisation of premium; (vi) Deduction for provision concerning standard assets under section 36(1)(viia); (vii) Taxability of interest on non-performing assets and non-performing investments; (viii) Deductibility of contribution to the retired employees medical benefit scheme; (ix) Taxability in India of foreign-branch income; (x) Taxability of recoveries from bad debts written off in earlier years; (xi) Deduction for windmill income under section 80-IA; (xii) Disallowance under section 40(a)(ia) for short deduction of tax at source; (xiii) Deduction under section 80LA; (xiv) Disallowance of interest expenditure and delayed-payment compensation; (xv) Additional deduction under section 36(1)(viii); (xvi) Quantification of deduction under section 36(1)(viia); (xvii) Deduction for bad debts relating to non-rural advances; (xviii) Deductibility of provisions for other employee benefits and privilege-leave encashment; (xix) Allowability of broken-period interest and staff-welfare expenditure; (xx) Taxability of interest on securities and deferred-payment guarantee commission; (xxi) Deductibility of other long-term employee-benefit liabilities.

Issue (i): Arm's-length mark-up for technical and information technology-enabled services supplied to associated enterprises.

Analysis: The Safe Harbour Rules prescribing a 20% mark-up were inapplicable to the relevant year and could not be mechanically adopted. Nevertheless, services rendered through deputed personnel involved value addition and required Arm's Length Price remuneration. In the absence of reliable contemporaneous comparables and owing to the elapsed period, a 10% mark-up on relevant costs was considered reasonable.

Conclusion: The transfer-pricing adjustment shall be recomputed by applying a 10% mark-up on relevant costs and granting credit for amounts already recovered. This issue is partly in favour of the assessee.

Issue (ii): Deductibility of actuarially valued pension provision.

Analysis: Pension obligations arose from employee services already rendered, while actuarial valuation only quantified their present value. The provision therefore represented an Accrued Liability rather than a contingent liability.

Conclusion: The actuarially valued pension provision is allowable as a deduction. This issue is in favour of the assessee.

Issue (iii): Disallowance of expenditure relating to exempt income under section 14A and Rule 8D.

Analysis: The interest component was not sustainable on the applicable facts. Recomputation must be confined to investments which actually yielded exempt income, with credit for the voluntary disallowance, and cannot exceed exempt income.

Conclusion: The disallowance is restored for limited recomputation on the stated basis. This issue is in favour of the assessee to that extent.

Issue (iv): Depreciation on leased assets.

Analysis: The leasing transactions were found to be financing arrangements in substance, with the lessees being the real owners and the assessee only a nominal owner.

Conclusion: Depreciation on the leased assets is not allowable. This issue is against the assessee.

Issue (v): Valuation of banking securities, including AFS, HFT and HTM securities, and amortisation of premium.

Analysis: Securities held in banking operations form part of circulating capital. Regulatory classification does not conclusively determine their tax character. A consistently followed recognised valuation method reflects Real Income and permits valuation at cost or market value, whichever is lower.

Conclusion: Depreciation, loss on valuation and amortisation claims relating to the securities are allowable. This issue is in favour of the assessee.

Issue (vi): Deduction for provision concerning standard assets under section 36(1)(viia).

Analysis: The expression concerning bad and doubtful debts is not confined to assets classified as non-performing under regulatory norms. Regulatory classifications cannot restrict the statutory deduction, though the provision created and statutory limits require verification.

Conclusion: Inclusion of standard assets does not by itself bar deduction; the issue is restored solely for quantification. This issue is in favour of the assessee on principle.

Issue (vii): Taxability of interest on non-performing assets and non-performing investments.

Analysis: Where recovery is uncertain and interest is not recognised under binding prudential norms, notional interest has not accrued in real terms. The Real Income principle applies notwithstanding the mercantile accounting method.

Conclusion: Interest on non-performing assets and non-performing investments cannot be taxed until realisation. This issue is in favour of the assessee.

Issue (viii): Deductibility of contribution to the retired employees medical benefit scheme.

Analysis: The actual contribution formed part of a structured employee-welfare scheme and had a direct nexus with workforce morale, industrial harmony and business operations. It was supported by Business Expediency and was not merely a prohibited fund contribution.

Conclusion: The contribution is allowable as business expenditure. This issue is in favour of the assessee.

Issue (ix): Taxability in India of foreign-branch income.

Analysis: Income which may be taxed in the other contracting jurisdiction remains includible in Indian total income under the statutory notification framework, with double-taxation relief available in accordance with the applicable treaty method.

Conclusion: Foreign-branch income is taxable in India. This issue is against the assessee.

Issue (x): Taxability of recoveries from bad debts written off in earlier years.

Analysis: Section 41(4) applies only where a corresponding deduction for the written-off debt had been allowed earlier. Whether such deduction was in fact allowed requires factual verification.

Conclusion: The issue is restored for verification; recoveries are taxable only to the extent of prior allowed deductions. This issue is in favour of the assessee on the governing principle.

Issue (xi): Deduction for windmill income under section 80-IA.

Analysis: Eligibility depends upon verification of the statutory conditions, including the nature of the undertaking, power generation and computation of eligible profits.

Conclusion: The claim is restored for verification and recomputation in accordance with law. No final entitlement is determined.

Issue (xii): Disallowance under section 40(a)(ia) for short deduction of tax at source.

Analysis: A claim raised through a note cannot be rejected solely on that basis before appellate authorities. The nature of payments, the extent of deduction and the applicability of the provision to short deduction require examination.

Conclusion: The issue is restored for factual and legal examination. No final entitlement is determined.

Issue (xiii): Deduction under section 80LA.

Analysis: The claim lacked material showing eligibility, the nature of qualifying income and computation of the deduction.

Conclusion: The deduction claim is not entertained. This issue is against the assessee.

Issue (xiv): Disallowance of interest expenditure and delayed-payment compensation.

Analysis: The allowability of the interest claim and the alleged compensatory character of delayed-payment compensation depend upon the relevant facts, supporting documentation and the statutory basis of the claim.

Conclusion: Both matters are restored for verification and fresh determination in accordance with law. No final entitlement is determined.

Issue (xv): Additional deduction under section 36(1)(viii).

Analysis: No complete and verifiable computation established attribution of non-interest income to the eligible long-term finance business or quantified the resulting additional deduction. The existence of a special reserve alone does not establish entitlement.

Conclusion: The additional deduction claim is disallowed. This issue is against the assessee.

Issue (xvi): Quantification of deduction under section 36(1)(viia).

Analysis: Quantification requires verification of the actual provision created, total income before the specified deductions, rural advances and the applicable statutory ceilings.

Conclusion: The issue is restored for recomputation of the allowable deduction. No final quantum is determined.

Issue (xvii): Deduction for bad debts relating to non-rural advances.

Analysis: Deductions under sections 36(1)(vii) and 36(1)(viia) operate in distinct fields, subject to conditions and prevention of Double Deduction. A deduction for actual write-off of non-rural advances is not automatically barred, but requires factual verification.

Conclusion: The claim is restored for verification and fresh adjudication. This issue is in favour of the assessee on the legal principle.

Issue (xviii): Deductibility of provisions for other employee benefits and privilege-leave encashment.

Analysis: Provisions for earned leave-related benefits, other than leave encashment, represented scientifically determined present obligations from past service and constituted Accrued Liability. Privilege-leave encashment is governed by the Actual Payment Basis mandated by section 43B(f).

Conclusion: Other employee-benefit provisions are allowable, while privilege-leave encashment is allowable only in the year of actual payment subject to statutory conditions. This issue is partly in favour of the assessee.

Issue (xix): Allowability of broken-period interest and staff-welfare expenditure.

Analysis: Broken-period interest paid on purchase of securities is Revenue Expenditure where corresponding receipt is taxed as business income; disallowance would violate the Real Income and Matching Principle. Staff-welfare expenditure having a direct business nexus is incurred wholly and exclusively for business purposes.

Conclusion: Broken-period interest and staff-welfare expenditure are allowable. This issue is in favour of the assessee.

Issue (xx): Taxability of interest on securities and deferred-payment guarantee commission.

Analysis: Interest on securities was accepted on due basis because of binding earlier determinations and Judicial Discipline, notwithstanding the accrual-based accounting treatment. Guarantee commission received upon issue of a non-refundable deferred guarantee accrues at that time and cannot be spread over the guarantee period.

Conclusion: Interest on securities remains taxable on due basis, whereas deferred-payment guarantee commission is taxable in the year of receipt. The former is in favour of the assessee and the latter is against the assessee.

Issue (xxi): Deductibility of other long-term employee-benefit liabilities.

Analysis: Allowability of bonus and other employee liabilities depends upon actual payment by the statutory due date; leave encashment additionally requires compliance with the specific actual-payment requirement. Verification is necessary.

Conclusion: The issue is restored for limited verification under the Actual Payment Basis. No final entitlement is determined.

Final Conclusion: The assessment is to be recomputed by giving effect to the allowed claims and the limited verification directions, while the disallowed claims remain governed by the findings recorded above.