Issues: (i) Whether exclusion of a functionally dissimilar comparable was justified; (ii) whether remand for examination of working-capital adjustment upon furnishing supporting details was justified; (iii) whether remand for reconsideration of the foreign-exchange revenue filter was justified; and (iv) whether transfer-pricing adjustment was rightly restricted to the relevant international transactions.

Issue (i): Whether exclusion of a functionally dissimilar comparable was justified.

Analysis: Under Rule 10B of the Income-tax Rules, comparability depends on the functions performed, products manufactured and material circumstances. The comparable's manufacture of non-pesticide products and its materially different functional profile supported its exclusion. In an appeal under Section 260-A of the Income-tax Act, 1961, factual comparability findings cannot be re-appreciated absent perversity, lack of evidence or inconsistency with the statutory scheme.

Conclusion: Exclusion of the functionally dissimilar comparable was upheld, in favour of the assessee.

Issue (ii): Whether remand for examination of working-capital adjustment upon furnishing supporting details was justified.

Analysis: No unconditional or quantified working-capital adjustment had been granted. The matter was left for determination by the Assessing Officer/Transfer Pricing Officer after the assessee supplies the necessary material, so that any adjustment is based on relevant evidence and can be computed with reasonable accuracy.

Conclusion: The remand for examination of working-capital adjustment was upheld, in favour of the assessee.

Issue (iii): Whether remand for reconsideration of the foreign-exchange revenue filter was justified.

Analysis: The adoption of a 40 per cent foreign-exchange revenue filter lacked a proper basis. The direction required a consistent and lawful reconsideration of the appropriate filter, while preserving both sides' opportunity to establish the applicable range on the available material.

Conclusion: The remand for reconsideration of the foreign-exchange revenue filter was upheld, in favour of the assessee.

Issue (iv): Whether transfer-pricing adjustment was rightly restricted to the relevant international transactions.

Analysis: Transfer-pricing provisions govern determination of the arm's-length price of international transactions with associated enterprises. Restricting the adjustment to transactions concerning import of raw materials applied that principle, and no perversity or patently unsustainable interpretation was established.

Conclusion: Restriction of the transfer-pricing adjustment to the relevant international transactions was upheld, in favour of the assessee.

Final Conclusion: The factual transfer-pricing determinations and the directed reconsideration processes remain governed by the Tribunal's order.

Ratio Decidendi: Under Section 260-A of the Income-tax Act, 1961, factual transfer-pricing determinations, including comparability and remand directions for evidence-based computation, do not give rise to a substantial question of law unless shown to be perverse or contrary to the statutory scheme.

Issues: Whether reopening and reassessment founded on alleged unexplained bank credits could stand without consideration of the detailed explanation and supporting material concerning the source and purpose of those credits.

Analysis: The reopening order and reassessment proceeded on the premise that no explanation had been offered for the identified remittances. The explanations that the principal receipt arose from sale of jewellery and that the other transfers were made by overseas relatives for construction expenses required consideration before determining whether the amounts constituted undisclosed income. A detailed response supported by documents must be permitted, with all questions remaining open for determination.

Conclusion: The reopening order, notice, reassessment, and consequential actions could not be sustained without fresh consideration of the petitioner's detailed response; the issue is decided in favour of the assessee.

Issues: Whether an addition as unexplained money under Section 69A could be made where the show-cause notice proposed different variations and gave no notice of that addition.

Analysis: The assessment was founded on an addition under Section 69A, although the show-cause notice had proposed variations under different provisions. The revenue accepted that no prior notice was issued for the Section 69A addition, depriving the assessee of an opportunity to explain the amount.

Conclusion: An addition under Section 69A made without prior notice and opportunity is unsustainable, in favour of the assessee.

Issues: (i) Whether the addition under Section 69B for alleged cash repayment of rebate on construction bills was sustainable; (ii) Whether the addition for alleged unaccounted cash sales of molasses based on entries in a third party's excel sheet was sustainable; (iii) Whether disallowance computed under Section 14A read with Rule 8D could be added while computing book profit under Section 115JB; (iv) Whether components of the cogeneration plant were eligible for depreciation at the higher rate applicable to the cogeneration system.

Issue (i): Whether the addition under Section 69B for alleged cash repayment of rebate on construction bills was sustainable.

Analysis: The seized diaries and loose sheets recovered from a third party were vague and did not acknowledge, identify, or establish cash payments by the assessee. The third party's employees, including its CFO, denied receipt of cash from the assessee and affirmed that the 7.5% rebate was part of pre-contract commercial negotiation. The Revenue produced no independent or cogent material to corroborate its extrapolation that the rebate had been repaid in cash. An assessee cannot be required to prove the negative; the burden remained on the Revenue to establish undisclosed payments.

Conclusion: The addition under Section 69B for alleged cash repayment of rebate is deleted, in favour of the assessee.

Issue (ii): Whether the addition for alleged unaccounted cash sales of molasses based on entries in a third party's excel sheet was sustainable.

Analysis: The presumption concerning seized material under Section 132(4A) operates against the searched person and cannot, without corroboration, be used against a third party merely because its name appears in a document. The two excel-sheet entries neither disclosed their nature as cash receipts or payments nor established that they represented actual unaccounted transactions. They were unsigned, unattested, and unsupported by independent evidence. The statement relied upon by the Revenue had been retracted, and the assessee was denied requested cross-examination; reliance upon that statement consequently violated principles of natural justice.

Conclusion: The addition for alleged unaccounted cash sales of molasses is deleted, in favour of the assessee.

Issue (iii): Whether disallowance computed under Section 14A read with Rule 8D could be added while computing book profit under Section 115JB.

Analysis: Section 115JB provides a distinct code for computation of book profit. The disallowance mechanism under Section 14A read with Rule 8D, applicable to normal computation of income, cannot be imported for adjustment of book profit under Section 115JB.

Conclusion: No adjustment under Section 14A read with Rule 8D is permissible in computing book profit under Section 115JB, in favour of the assessee.

Issue (iv): Whether components of the cogeneration plant were eligible for depreciation at the higher rate applicable to the cogeneration system.

Analysis: The components in question formed integral parts of the cogeneration power system and could not perform an independent function outside that system. The issue stood covered by the decisions in the assessee's own earlier assessment years, recognising such integral components as eligible for the higher depreciation rate.

Conclusion: The disallowance of depreciation on components of the cogeneration plant is deleted, in favour of the assessee.

Final Conclusion: The additions founded on uncorroborated third-party material and the impermissible book-profit adjustment are excluded, and the depreciation claim on integral cogeneration components is to be given effect.

Ratio Decidendi: Unsigned, vague, or non-speaking material seized from a third party cannot support an addition against an assessee without reliable corroborative evidence, particularly where the foundational statement is retracted and cross-examination is denied.

Issues: Whether dismissal of the statutory GST appeal as time-barred should be set aside and the appeal directed to be decided on merits.

Analysis: The appeal had been dismissed on the basis that the delay exceeded the Appellate Authority's statutory power of condonation. The petitioner sought adjudication on merits, and the respondents agreed to comply with a direction for such adjudication. Complete relevant documents were also directed to be supplied before further proceedings.

Conclusion: The appellate order dismissing the appeal on limitation was set aside, and the matter was remanded for a speaking and reasoned decision on merits after hearing the petitioner.

Issues: Whether the period spent in prosecuting an application for rectification must be excluded in computing the limitation for filing an appeal under the GST enactments.

Analysis: The statutory appeal had been dismissed as filed beyond the maximum period contemplated under Section 107. The rectification application under Section 161 was pursued after the adjudication order, and it was undisputed that, on excluding the period consumed in those proceedings, the appeal was within time. The applicable limitation computation required exclusion of that period.

Conclusion: The appeal was within limitation after excluding the time spent on the rectification application, and its dismissal as time-barred was unsustainable.

Issues: (i) Whether notional annual letting value of completed but unsold flats held as stock-in-trade was taxable under the head income from house property for Assessment Year 2015-16; (ii) Whether the transfer-pricing adjustment reducing brokerage paid to the marketing entity from 2.87% to 2% was sustainable.

Issue (i): Whether notional annual letting value of completed but unsold flats held as stock-in-trade was taxable under the head income from house property for Assessment Year 2015-16.

Analysis: Sections 22 and 23 operate in respect of income chargeable under the head income from house property. Flats constructed for sale and reflected as closing stock by a real-estate developer retain the character of stock-in-trade. Section 23(5), specifically addressing property held as stock-in-trade, was inserted with effect from Assessment Year 2018-19 and operates prospectively. For the pre-amendment year, no specific charging provision authorised assessment of notional annual letting value of such unsold stock-in-trade. Consistent decisions in the assessee's own case required the same treatment.

Conclusion: Notional annual letting value of the unsold flats was not taxable under the head income from house property for Assessment Year 2015-16. The issue is decided in favour of the assessee.

Issue (ii): Whether the transfer-pricing adjustment reducing brokerage paid to the marketing entity from 2.87% to 2% was sustainable.

Analysis: Under section 92C read with Rule 10B, an arm's length price must rest on a recognised benchmarking method, reasonably comparable uncontrolled transactions or other reliable material, with due regard to functions performed, assets employed and risks assumed. The marketing entity performed comprehensive advertisement, sales promotion, broker coordination, customer documentation, collection, financing assistance and specialised NRI services. The 2% rate was adopted merely as a general market estimate without comparable transactions, independent market material or functional comparability analysis.

Conclusion: The estimated 2% brokerage rate lacked a reliable benchmarking basis, and the transfer-pricing adjustment was unsustainable. The issue is decided in favour of the assessee.

Final Conclusion: For the relevant assessment year, the unsold inventory could not attract notional house-property income, and the actual brokerage payment could not be substituted by an unsupported estimated arm's length rate.

Issues: Whether the difference between the stamp duty value and the purchase consideration of an immovable property was taxable in the assessee's hands under section 56(2)(vii)(b) where the Departmental Valuation Officer valued the same jointly acquired property at the declared consideration.

Analysis: The statutory framework applicable to section 56(2)(vii)(b) permitted a valuation reference where the assessee disputed the stamp duty value on grounds contemplated by section 50C(2). The valuation mechanism could not be denied merely because section 50C ordinarily concerns a transferor. The Departmental Valuation Officer had valued the entire jointly purchased property at the declared consideration, and the co-owner's corresponding addition had been deleted on that basis. The same property, acquired under the same instrument and on the same date, could not be assigned inconsistent values for the respective co-owners.

Conclusion: No amount was taxable under section 56(2)(vii)(b) in respect of the assessee's share, as the Departmental Valuation Officer's value equalled the declared purchase consideration.

Issues: (i) Whether reassessment and enhanced turnover based on the discrepancy between the books of account and monthly returns, notwithstanding disclosure in Form VAT-240, were sustainable; (ii) Whether the consequential levy of penalty and interest was sustainable.

Issue (i): Whether reassessment and enhanced turnover based on the discrepancy between the books of account and monthly returns, notwithstanding disclosure in Form VAT-240, were sustainable.

Analysis: Reassessment under the Karnataka Value Added Tax Act, 2003 proceeded on discrepancies in purchase turnover for three tax periods. The disclosure in Form VAT-240 and the explanation of inadvertent omission were taken into account but were found insufficient to satisfactorily explain the omissions in the monthly returns. The estimation of turnover was supported by material, and no perversity, absence of material, or error of law was established. Under revisional jurisdiction, factual findings cannot be reopened merely because another view of the evidence is possible.

Conclusion: The reassessment and estimation of enhanced turnover were sustainable, against the assessee.

Issue (ii): Whether the consequential levy of penalty and interest was sustainable.

Analysis: No independent error of law was demonstrated in the levy of penalty and interest consequent upon the sustained reassessment.

Conclusion: The levy of penalty and interest was sustainable, against the assessee.

Final Conclusion: No substantial question of law arose, and the concurrent factual findings supporting the reassessment and consequential fiscal liabilities remained legally sustainable.

Ratio Decidendi: Revisional jurisdiction does not permit reappreciation of concurrent factual findings on turnover discrepancy and estimation unless perversity, absence of supporting material, or an error of law is established.

Issues: Whether penalty for non-compliance with transit requirements could be levied under Section 53(12) of the Karnataka Value Added Tax Act, 2003 where the goods were transported inter-State, temporary unloading was explained, and no intention to evade Karnataka tax was established.

Analysis: Penalty under Section 53 is attracted only where the person fails to furnish sufficient cause for the alleged contravention; the explanation must be assessed on the facts of each case. The transport documents established that the imported goods originated in Gujarat and were destined for Pondicherry, constituting inter-State movement. The temporary unloading for transshipment was satisfactorily explained, and there was no material establishing an intention to evade tax in Karnataka. Section 53 does not apply to an inter-State transportation of goods on these facts.

Conclusion: Penalty under Section 53(12) was not leviable; the issue is decided in favour of the assessee.

Issues: Whether an order fastening a company's tax liability upon its director under Section 179, without considering the director's reply and supporting documents, is sustainable.

Analysis: The impugned order was passed without considering the reply and documents furnished in response to the show-cause notice. This undisputed omission breached the principles of natural justice.

Conclusion: The order under Section 179 was unsustainable for violation of principles of natural justice and was quashed; the matter was directed to be decided afresh in accordance with law.

Issues: (i) Whether a further disallowance of expenditure relating to exempt income could be made without recording satisfaction regarding the assessee's suo motu disallowance; (ii) Whether the addition for excess share premium could be sustained by rejecting a contemporaneous discounted cash flow valuation on comparison with subsequent actual financial results.

Issue (i): Whether a further disallowance of expenditure relating to exempt income could be made without recording satisfaction regarding the assessee's suo motu disallowance.

Analysis: Section 14A of the Income-tax Act, 1961 read with Rule 8D of the Income-tax Rules, 1962 permits determination of disallowable expenditure under the prescribed method only after examination of the accounts and recorded dissatisfaction with the correctness of the assessee's computation. The assessment order did not identify any defect in, or record dissatisfaction with, the suo motu disallowance. Mere computation of a different amount does not fulfil this statutory precondition.

Conclusion: The further disallowance was impermissible and was deleted, in favour of the assessee.

Issue (ii): Whether the addition for excess share premium could be sustained by rejecting a contemporaneous discounted cash flow valuation on comparison with subsequent actual financial results.

Analysis: For valuation under Section 56(2)(viib) of the Income-tax Act, 1961 and Rule 11UA of the Income-tax Rules, 1962, a discounted cash flow valuation is to be assessed with reference to information and estimates available on the valuation date. Valuation is not an exact science, and subsequent variation between projections and actual results, without a demonstrated material error in the inputs or valuation methodology, cannot justify rejection of the valuation or substitution of the net asset value method. The historical growth and subsequent performance also did not establish that the projections were arbitrary or aggressive.

Conclusion: Rejection of the discounted cash flow valuation and substitution of the net asset value method were unjustified; the addition for excess share premium was deleted, in favour of the assessee.

Final Conclusion: The assessee's suo motu disallowance was accepted, and the share valuation based on the contemporaneous discounted cash flow method was restored for determining the tax consequences of the share issue.

Issues: Whether MEIS duty credit scrips received under the Foreign Trade Policy, 2015 are taxable as revenue receipts under Section 2(24)(xviii) of the Income-tax Act, 1961 from assessment year 2016-17.

Analysis: The purpose test distinguishes assistance intended to enable profitable conduct of business, which is revenue in character, from assistance tied to setting up or expansion of capital assets, which is capital in character. MEIS rewards offset export-related infrastructural inefficiencies and recurring costs, are computed with reference to export turnover, are available to qualifying exporters generally, and are freely transferable or usable without any mandatory capital application. They are therefore operational assistance for carrying on export business rather than capital assistance.

Analysis: Section 2(24)(xviii) employs inclusive and expansive language covering governmental assistance in specified forms and assistance by whatever name called, subject only to stated exclusions. The phrase cannot be confined through ejusdem generis or noscitur a sociis where the legislative intent to cover assistance irrespective of nomenclature is clear. MEIS rewards fall within the descriptions of grant, cash incentive or residuary governmental assistance, and neither exclusion applies because the rewards are not adjusted against the actual cost of a depreciable asset and are not corpus grants to trusts or institutions.

Conclusion: MEIS rewards received under the Foreign Trade Policy, 2015 are taxable as revenue receipts under Section 2(24)(xviii) of the Income-tax Act, 1961 from assessment year 2016-17.

Issues: Whether TDS credit can be denied to a trust where the corresponding interest income was offered to tax by it, but the TDS stood deducted in the trustee's PAN and no declaration under Rule 37BA(2) was furnished.

Analysis: Section 199 of the Income-tax Act, 1961 read with Rule 37BA(2) of the Income Tax Rules, 1962 requires TDS credit to be granted to the person in whose hands the relevant income is assessable. The declaration contemplated by the proviso to Rule 37BA(2) is procedural and cannot defeat the substantive entitlement of the beneficial owner where the income has been returned to tax by that owner and there is no dispute concerning the deduction of tax. The trust established that its funds were invested through its trustee, the interest income was assessed in its hands, and the TDS had been deducted on that income in the trustee's PAN.

Conclusion: The assessee trust is entitled to credit of TDS of Rs. 2,47,910 notwithstanding the absence of the declaration under Rule 37BA(2).

Issues: (i) Whether infrastructure grants received from the parent cricket body qualified as corpus donations under Section 11(1)(d); (ii) Whether accumulation under Section 11(2) could be denied because the prescribed form was filed belatedly; (iii) Whether the addition for alleged double claim of application of income was valid without prior notice; (iv) Whether the assessee was entitled to automatic statutory accumulation of 15% under Section 11(1)(a); (v) Whether the first proviso to Section 2(15) and Section 13(8) applied on the basis that the activities constituted trade, commerce or business; (vi) Whether depreciation was disallowable under Section 11(6); (vii) Whether the addition under Section 13 and enhancement of gross receipts were sustainable.

Issue (i): Whether infrastructure grants received from the parent cricket body qualified as corpus donations under Section 11(1)(d).

Analysis: Section 11(1)(d) excludes voluntary contributions made with a specific direction that they form part of the corpus. The resolutions earmarked the grants for infrastructure subsidy, the amounts were credited to a separate corpus or infrastructure fund, and they were deployed for construction of a cricket stadium. A specific direction need not take the form of a separate written declaration for every payment where the donor's intention is clearly manifested through its resolutions and the treatment and utilisation of the funds are consistent with that direction.

Conclusion: The infrastructure grants were corpus donations eligible for exemption under Section 11(1)(d); denial of the exemption and the corresponding additions were deleted, in favour of the assessee.

Issue (ii): Whether accumulation under Section 11(2) could be denied because the prescribed form was filed belatedly.

Analysis: The prescribed form and condonation application were furnished before completion of assessment. CBDT Circular No. 30/2019 dated 17.12.2019 extended condonation benefit for the relevant assessment year, although it was issued after the assessment had concluded. Its beneficial purpose required that accumulation not be denied on this technical ground.

Conclusion: Accumulation under Section 11(2) was allowable in accordance with law despite the delayed filing, in favour of the assessee.

Issue (iii): Whether the addition for alleged double claim of application of income was valid without prior notice.

Analysis: The addition was made without incorporating the issue in the show-cause notice or affording an opportunity to explain the entries in the return. Such action contravened the mandatory requirement of prior notice and the principle of natural justice.

Conclusion: The addition for alleged double application of income was deleted, in favour of the assessee.

Issue (iv): Whether the assessee was entitled to automatic statutory accumulation of 15% under Section 11(1)(a).

Analysis: Section 11(1)(a) permits accumulation or setting apart of 15% of income derived from property held for charitable purposes without the conditions applicable to accumulation under Section 11(2). The computation had incorrectly shown this statutory accumulation as nil after excluding the corpus receipt.

Conclusion: The assessee was entitled to 15% statutory accumulation under Section 11(1)(a), subject to verification of the computation, in favour of the assessee.

Issue (v): Whether the first proviso to Section 2(15) and Section 13(8) applied on the basis that the activities constituted trade, commerce or business.

Analysis: No revenue-sharing arrangement, commercial match activity, or comparable commercial operation was established. The factual basis that had supported application of the proviso in a distinguishable case was absent; the activities remained directed towards promotion of cricket.

Conclusion: The first proviso to Section 2(15) and Section 13(8) were not attracted, in favour of the assessee.

Issue (vi): Whether depreciation was disallowable under Section 11(6).

Analysis: The return showed nil application towards acquisition of capital assets, and no material established that the cost of the depreciable assets had previously been claimed as application of income. The claim was also consistent with the treatment accepted in earlier years.

Conclusion: Disallowance of depreciation under Section 11(6) was unsustainable, in favour of the assessee.

Issue (vii): Whether the addition under Section 13 and enhancement of gross receipts were sustainable.

Analysis: The addition under Section 13 did not identify the violated provision, any specified person, or a prohibited benefit and, in any event, stood absorbed by the statutory accumulation. The gross-receipt enhancement was unsupported by any discrepancy in the books, audited financial statements, or return.

Conclusion: The Section 13 addition did not increase taxable income and the enhancement of gross receipts was deleted, in favour of the assessee.

Final Conclusion: The infrastructure subsidies are excluded as corpus receipts, and the permitted accumulations and applications must be given effect in recomputing income; the resulting taxable income is nil.

Ratio Decidendi: A donor's specific direction for corpus treatment under Section 11(1)(d) may be established by resolutions and the earmarking, accounting and utilisation of funds, without a separate written direction for each contribution.

Issues: (i) Whether the interim stay of recovery proceedings precluded the prior blocking of the electronic credit ledger; (ii) Whether negative blocking of the electronic credit ledger is impermissible as a recovery measure under Section 79 of the Central Goods and Services Tax Act, 2017.

Issue (i): Whether the interim stay of recovery proceedings precluded the prior blocking of the electronic credit ledger.

Analysis: The interim order required recovery proceedings to be kept in abeyance. Its effect was confined to preventing debit of amounts lying in the electronic credit ledger towards recovery; it did not affect the earlier blocking order.

Conclusion: The interim stay did not invalidate or preclude the blocking of the electronic credit ledger, against the assessee.

Issue (ii): Whether negative blocking of the electronic credit ledger is impermissible as a recovery measure under Section 79 of the Central Goods and Services Tax Act, 2017.

Analysis: Section 79(1) permits recovery of amounts payable through multiple modes, including deduction from money under the proper officer's control, recovery from goods, garnishee proceedings, distraint and sale of property, and recovery through the Collector or Magistrate. Unlike Rule 86A, which operates provisionally before determination of liability, Section 79 provides wider post-determination recovery powers. Negative blocking of the electronic credit ledger falls within those recovery powers.

Conclusion: Negative blocking of the electronic credit ledger is permissible under Section 79, against the assessee.

Final Conclusion: The revenue authorities' blocking action remains valid notwithstanding the interim protection against recovery debits.

Ratio Decidendi: Post-determination recovery powers under Section 79 extend to negative blocking of an electronic credit ledger, while an interim restraint on recovery does not by itself invalidate an existing blocking order.

Issues: Whether termination of the Corporate Insolvency Resolution Process, which granted the relief sought, could be challenged before the Supreme Court.

Analysis: The termination of the proceedings had itself resulted in the grant of relief in relation to the Corporate Insolvency Resolution Process. That termination therefore did not furnish a basis to question the NCLAT order.

Conclusion: The NCLAT order terminating the Corporate Insolvency Resolution Process was not open to challenge on the stated ground.

Issues: Whether steel rods, TMT bars, plates, sheets, pipes, beams and structural steel used within the factory for construction, fabrication and erection activities are eligible for input credit as inputs or capital goods.

Analysis: The governing Supreme Court ratio concerning eligibility of materials used for construction, fabrication and erection was applicable to the disputed items. As the original adjudication preceded that ruling, the eligibility of each item required reconsideration in accordance with that ratio.

Conclusion: The disputed credit claims require fresh item-wise determination under the applicable legal test.

Issues: Whether exemption under Section 11 could be denied to a registered charitable trust solely because Form 10BB was filed belatedly after Form 10B had initially been uploaded for the assessment year.

Analysis: The assessee was registered under Section 12AB and had claimed exemption under Section 11. The Tribunal followed the jurisdictional High Court decision that a charitable trust otherwise meeting the conditions for exemption should not be denied the benefit merely on account of a bona fide delay in uploading the prescribed audit report, particularly where the statutory framework permits a just, balanced and equitable approach to such procedural lapse.

Conclusion: The delayed filing of Form 10BB could not by itself justify denial of exemption under Section 11; the exemption was directed to be granted after verification of the belatedly filed Form 10BB.

Issues: (i) Whether turnover could be enhanced and books of account rejected without quantified suppression or supporting adverse material; (ii) Whether input tax credit could be reversed where the supplying dealers were registered on the transaction dates but their registrations were subsequently cancelled.

Issue (i): Whether turnover could be enhanced and books of account rejected without quantified suppression or supporting adverse material.

Analysis: The penalty proceedings arising from seizure had been dropped and no material showed reversal of that determination. The survey disclosed no business activity or godown, but no suppression was detected. Although seven invoices could not be verified, the remaining challans and bills had been verified. The record did not disclose any quantified suppression or specific material supporting enhancement of turnover. Under the UP VAT Act, enhancement must correspond to the suppression actually established.

Conclusion: Enhancement of turnover and the consequential rejection of books on the stated material were unsustainable, in favour of the assessee.

Issue (ii): Whether input tax credit could be reversed where the supplying dealers were registered on the transaction dates but their registrations were subsequently cancelled.

Analysis: The suppliers held valid registrations on the transaction dates. The purchases were through banking channels and contemporaneous documents evidenced physical movement of goods to the assessee. Subsequent cancellation of suppliers' registrations, without cogent material discrediting the transactions at the relevant time, could not justify reversal of input tax credit.

Conclusion: Input tax credit could not be denied merely because the suppliers' registrations were cancelled after the transactions, in favour of the assessee.

Final Conclusion: The impugned tax determination, including the turnover enhancement and reversal of input tax credit, lacked legal sustainability.

Ratio Decidendi: A purchaser's input tax credit cannot be denied solely on the basis of a supplier's subsequent cancellation of registration where the supplier was validly registered and the transaction is supported by banking and movement-of-goods evidence; turnover enhancement requires established and quantified suppression.