Issues: Whether the addition relating to alleged bogus purchases should be sustained by estimating the gross-profit element, and if so, at what rate.

Analysis: The sales were accepted and the books of account were not rejected. Consequently, the entire purchase amount could not be treated as non-genuine where purchases were required to support the accepted sales. The taxable addition was confined to the profit element embedded in purchases made through non-genuine suppliers. Having regard to the facts, the gross-profit estimate of 12.5% was considered excessive and was reduced to 5% of the disputed purchases.

Conclusion: The addition is restricted to 5% of the disputed purchases under the head business income, in favour of the assessee.

Issues: Whether disallowance under Section 14A read with Rule 8D was sustainable where the investments neither yielded nor were capable of yielding exempt income and the Assessing Officer had not recorded valid satisfaction.

Analysis: Section 14A permits disallowance only of expenditure incurred in relation to income not forming part of total income. The investments concerned did not yield exempt income; further, dividend income was taxable in the relevant assessment year. The expenses recorded in the profit and loss account related to taxable income. The Assessing Officer applied Rule 8D without valid recorded satisfaction, and the disallowance was inconsistent with the assessee's own earlier years and the accepted position in the subsequent year.

Conclusion: The Section 14A disallowance was unsustainable and was deleted, in favour of the assessee.

Issues: (i) Whether Discounted Cash Flow valuation adopted for determining the fair market value of shares could be rejected and replaced with the Net Asset Value method on the basis of subsequent actual financial results; (ii) Whether the difference between expenditure recorded by the assessee and amounts confirmed by vendors constituted unexplained expenditure.

Issue (i): Whether Discounted Cash Flow valuation adopted for determining the fair market value of shares could be rejected and replaced with the Net Asset Value method on the basis of subsequent actual financial results.

Analysis: Section 56(2)(viib) of the Income-tax Act, 1961, read with Rule 11UA(2)(b) of the Income-tax Rules, 1962, permits valuation using the Discounted Cash Flow method. The assessee had furnished an independent valuation certificate and underlying valuation report containing projected cash flows, revenue and cost assumptions, and consideration of compulsorily convertible preference shares and employee stock options. Discounted Cash Flow valuation is inherently forward-looking and must be tested on information available at the valuation date. Subsequent actual cash flows or initial operating losses could not, by themselves, establish that the contemporaneous projections were unreliable or justify substitution of the Net Asset Value method. The same issue price had also been accepted for comparable prior issuances, and the Revenue did not establish that the adopted valuation methodology was demonstrably erroneous.

Conclusion: The rejection of the Discounted Cash Flow method and substitution of the Net Asset Value method was unsustainable; the addition under Section 56(2)(viib) was deleted in favour of the assessee.

Issue (ii): Whether the difference between expenditure recorded by the assessee and amounts confirmed by vendors constituted unexplained expenditure.

Analysis: Section 69C of the Income-tax Act, 1961 applies where the source of expenditure remains unexplained. The relevant expenses were recorded in audited books, payments were made through banking channels, and the Revenue did not dispute either the actual payments or their recorded source from business operations. A difference between the expenditure claimed and vendor confirmations, without an unexplained source of payment, did not attract Section 69C.

Conclusion: The expenditure was not unexplained, and the addition under Section 69C was deleted in favour of the assessee.

Final Conclusion: Share valuation based on projected cash flows must be assessed as of the valuation date and cannot be displaced solely through hindsight comparison with later results; further, a vendor-confirmation mismatch does not establish unexplained expenditure where the recorded payments and their source are undisputed.

Issues: Whether chewing gum is classifiable as "sweets and sweetmeats" under Entry 74A of Schedule II to the Gujarat Value Added Tax Act, 2003, or as an unclassified good under residuary Entry 87 of that Schedule.

Analysis: Entry 74A covers "sweets and sweetmeats", whereas Entry 87 is the residuary entry. Applying the common parlance test and binding precedent, chewing gum or bubble gum is not an eatable sweetmeat: it is chewed as a mouth freshener and discarded, and contains gum base and other ingredients in addition to sugar. Food-standard specifications, tariff classification, and departmental commodity coding did not displace this test; prior treatment of toffee or chocolate as sweetmeats did not establish that chewing gum falls within Entry 74A.

Conclusion: Chewing gum is not classifiable as "sweets and sweetmeats" under Entry 74A and is taxable as an unclassified good under residuary Entry 87 of Schedule II.

Issues: Whether provisional attachment orders under Section 83 of the Central Goods and Services Tax Act, 2017 survive beyond one year and whether the Revenue's challenge concerning such attachments remained adjudicable.

Analysis: Section 83(2) provides that a provisional attachment ceases to have effect after one year. The statutory scheme contains no enabling authority for renewal, re-issuance, or revival of an attachment after its statutory expiry. The attachments in question had therefore lapsed, and no interim protection had been granted against the directions issued in respect of them.

Conclusion: The provisional attachments had ceased to operate by statutory lapse, and the Revenue's challenge concerning them had become infructuous.

Issues: Whether leasing digital cinema equipment comprising a projector, server, UPS and VSAT for a single rental constitutes a composite supply or a mixed supply, and the applicable GST rate.

Analysis: The equipment was supplied together for a single lease rental but was not naturally bundled in the ordinary course of business. The indicators of natural bundling, including customary industry practice, consumer expectation, ancillary character and integral dependence of the components, were not satisfied. Since the individual equipment could constitute independent supplies and the bundle was supplied for a single price without being a composite supply, it was classified as a mixed supply. Under Section 8(b), a mixed supply is taxable at the rate applicable to the constituent supply attracting the highest rate. The projector attracted the highest applicable rate among the equipment.

Conclusion: The leasing of the digital cinema equipment is a mixed supply and is taxable at the rate applicable to the projector: 28% GST up to 21.09.2025 and 18% GST thereafter. The GST rate applied by the applicant was correct.

Issues: Whether furnishing a bank guarantee could be insisted upon as a condition for provisional release of imported goods when the final differential duty had not been determined.

Analysis: Provisional release must prevent unnecessary detention of goods during investigation or adjudication while sufficiently protecting Revenue interests. Since the final duty liability remained subject to adjudication, payment of duty on the declared value and execution of a personal bond for any differential duty ultimately determined constituted reasonable and proportionate security. An additional bank guarantee was not justified.

Conclusion: The bank-guarantee condition for provisional release was set aside in favour of the assessee; release was directed upon payment of applicable declared duty and execution of a personal bond for the differential duty, if ultimately determined.

Issues: Whether cancellation of GST registration for non-filing of returns could be sustained where the registered person did not respond to the show-cause notice or attend the hearing due to illness and no further hearing date was fixed.

Analysis: The registration was cancelled after only one notice. The explanation for the non-response and absence was supported by the asserted medical condition. In these circumstances, an adequate opportunity required fixation of another hearing date before passing an adverse order. The claimed filing of return after cancellation was also required to be verified in the fresh proceedings.

Conclusion: The cancellation order was set aside in favour of the assessee, with a direction to afford an opportunity to respond to the show-cause notice and pass a fresh order after hearing.

Issues: Whether assessments under Section 153A of the Income-tax Act, 1961, completed on 11 April 2022 following a search whose last authorisation was executed on 15 January 2021, were barred by statutory limitation under Section 153B(1) of the Income-tax Act, 1961, and whether the Supreme Court's COVID-19 extension of limitation applied to such original assessment proceedings.

Analysis: The third proviso to Section 153B(1) prescribed a twelve-month period from the end of the financial year in which the last search authorisation was executed. Since the authorisation was executed in financial year 2020-21, the statutory deadline expired on 31 March 2022. The COVID-19 extension of limitation was confined to judicial and quasi-judicial proceedings in the nature of appeals, suits and petitions, and did not extend the statutory deadline for original assessment proceedings.

Conclusion: The assessments completed on 11 April 2022 were time-barred and invalid; the issue was decided in favour of the assessee for all the assessment years concerned.

Issues: Whether cash loan amounts received from finance companies and passed on to borrowers by a vehicle-finance facilitator, without being claimed as expenditure, attract disallowance under section 40A(3) of the Income-tax Act, 1961.

Analysis: Section 40A(3) applies only where the assessee incurs expenditure and makes payment otherwise than through prescribed modes. The loan funds were received for onward disbursement to identified borrowers, while only commission or brokerage was recognised as income. The supporting finance records, payment advices, agreements and confirmations established that the assessee acted as a facilitator and did not incur or claim the disbursed loan amounts as business expenditure. Mere routing of funds through the assessee's bank account did not convert the onward payment into its expenditure.

Conclusion: In favour of the assessee, the onward disbursement of loan funds was not expenditure incurred by it; section 40A(3) was inapplicable and the disallowance was deleted.

Issues: Whether the assessee's advertisement, marketing and promotion expenditure constituted an international transaction requiring an arm's-length-price adjustment.

Analysis: Transfer-pricing adjustment under Chapter X requires the Revenue to first establish an international transaction between associated enterprises. Following earlier decisions in the assessee's own case, AMP expenditure paid to third parties could not, without evidence of an agreement, arrangement, or understanding with the associated enterprise, be treated as an international transaction. The bright line test could not substitute proof of such transaction.

Conclusion: AMP expenditure was not an international transaction in the assessee's case; consequently, no arm's-length-price adjustment was permissible.

Issues: Whether the petitioner should be permitted to avail the statutory appellate remedy despite expiry of the ordinary limitation period.

Outcome: The petitioner was permitted to file the statutory appeal within two weeks, to be entertained on merits without objection as to limitation.

Issues: (i) Whether the impugned circulars validly assigned proper-officer functions to Central Tax officers for action under the Central Goods and Services Tax Act, 2017; (ii) Whether the writ challenge to the demand order should be entertained despite an effective statutory appeal.

Issue (i): Whether the impugned circulars validly assigned proper-officer functions to Central Tax officers for action under the Central Goods and Services Tax Act, 2017.

Analysis: The officers concerned had already been appointed as Central Tax officers under the statutory framework. The distinction from cases concerning assignment of customs functions to persons who were not customs officers was material. Section 2(91) permits assignment of proper-officer functions to Central Tax officers, and the circulars specified the officers' functions and monetary limits under Section 74.

Conclusion: The impugned circulars validly assigned proper-officer functions to the already appointed Central Tax officers; the challenge fails against the assessee.

Issue (ii): Whether the writ challenge to the demand order should be entertained despite an effective statutory appeal.

Analysis: The demand order recorded consideration of the defence material and an opportunity of personal hearing. The remaining objections required reappreciation of factual disputes and documents, which falls within the appellate authority's jurisdiction. The alternative statutory remedy was effective, and no recognised exception warranted writ intervention.

Conclusion: The writ challenge to the demand order is not entertained; statutory appeal is the appropriate recourse.

Final Conclusion: The jurisdictional challenge to the circular-based assignment of proper-officer functions is rejected, while the liability-related controversies are to be resolved through the statutory appellate process.

Issues: Whether an SEZ unit is entitled to claim refund of unutilized input tax credit under the GST refund framework.

Analysis: Section 54 of the Central Goods and Services Tax Act, 2017, read with Rule 89(1) of the Central Goods and Services Tax Rules, 2017, permits a refund application by any eligible entity and does not confine such claims to suppliers making supplies to SEZ units. The supplier-specific reference in the second proviso to Rule 89 and Rule 89(2)(f) identifies one category of claimant but does not exclude an SEZ unit. A restriction absent from the statutory text cannot be introduced through interpretation.

Conclusion: An SEZ unit is eligible to claim refund of unutilized input tax credit.

Issues: Whether pre-transfer income-tax demands, adjustment of refunds against such demands, and fresh or reassessment proceedings could survive after approval of the resolution plan.

Analysis: Section 31(1) of the Insolvency and Bankruptcy Code, 2016 makes an approved resolution plan binding upon governmental authorities, and claims not forming part of the plan stand frozen and extinguished. The overriding effect under Section 238 of the Insolvency and Bankruptcy Code, 2016 prevails over the refund-adjustment power under Section 245(1) of the Income-tax Act, 1961. Statutory income-tax dues not included in the approved plan cannot be pursued as pre-transfer liabilities, and such dues do not obtain priority over secured creditors.

Conclusion: The pre-transfer tax notices, consequential orders, refund adjustments, and proposed fresh or reassessment proceedings were legally unsustainable and were quashed. Refunds adjusted against pre-transfer demands were directed to be repaid with applicable interest, and no proceedings for that period may be initiated.

Issues: Whether GST could be recovered for a period preceding its commencement on 08.07.2017.

Analysis: GST became operative on 08.07.2017. The respondents accepted that it was chargeable only from that date; consequently, a demand for the prior period lacked basis.

Conclusion: GST cannot be charged from the petitioner for any period before 08.07.2017.

Issues: Whether the writ challenge to the GST demand order should be entertained despite an available statutory appeal, on the grounds of alleged breach of natural justice and delayed recourse to the appellate remedy.

Analysis: The record disclosed service of the show-cause notice, filing of replies by the petitioner, and grant of an opportunity of personal hearing before the demand order. The writ petition was instituted nearly one year and six months after the impugned order. The contention that the hearing was scheduled before expiry of the reply period was considered appropriate for examination in the statutory appeal.

Conclusion: Extraordinary writ jurisdiction was not warranted where an effective statutory appellate remedy was available; any application for condonation of delay may be considered by the Appellate Authority in accordance with law.

Issues: (i) Whether the substituted refund formula in Rule 89(5) applies to refund applications filed after 05.07.2022 where the accumulated ITC relates to earlier periods; and (ii) whether a supplementary refund claim for a period for which an earlier NIL claim was filed may be rejected merely because no separate mechanism exists or the GST portal restricts refiling.

Issue (i): Whether the substituted refund formula in Rule 89(5) applies to refund applications filed after 05.07.2022 where the accumulated ITC relates to earlier periods.

Analysis: Notification No. 14/2022-Central Tax substituted the refund formula to permit consideration of input-service ITC. The applicable date for the substituted formula is the date of filing of the refund application, rather than the period in which the ITC accumulated. The substituted provision was treated as curative and clarificatory, and the contrary understanding in Circular No. 181/13/2022-GST could not restrict the statutory refund entitlement.

Conclusion: The amended Rule 89(5) formula applies to the refund applications filed after 05.07.2022 notwithstanding that the ITC accumulated during earlier periods; this issue is decided in favour of the assessee.

Issue (ii): Whether a supplementary refund claim for a period for which an earlier NIL claim was filed may be rejected merely because no separate mechanism exists or the GST portal restricts refiling.

Analysis: Section 54 confers a substantive refund benefit, while the method of filing is procedural. Neither the show-cause notices nor the adjudication orders identified a statutory prohibition against a supplementary claim. A portal limitation or absence of a distinct supplementary-claim category cannot defeat a claim satisfying the substantive refund conditions, which must be assessed on merits.

Conclusion: A supplementary refund claim cannot be rejected solely because an earlier claim for the same period was filed or because of procedural or technological restrictions; this issue is decided in favour of the assessee.

Final Conclusion: The substituted formula and the availability of a supplementary claim preserve the entitlement to differential inverted-duty refunds where the statutory conditions and limitation requirements are met.

Ratio Decidendi: A substituted curative refund formula applies to a claim filed after its notification even where the ITC arose earlier, and absence of a filing mechanism or portal functionality cannot defeat a substantively valid refund claim.