Issues: Whether revisionary jurisdiction under section 263 of the Income-tax Act, 1961 was validly exercised in respect of unsecured loans accepted in the assessment.

Analysis: Revision under section 263 requires the assessment order to be both erroneous and prejudicial to the interests of the Revenue. The assessment record showed that the Assessing Officer had sought and obtained lender-wise particulars, confirmations, bank statements, income-tax returns, balance sheets and explanations regarding the unsecured loans. The lenders had also furnished documents in response to notices. The absence of elaborate discussion of this material in the assessment order did not establish lack of inquiry. A view formed after inquiry cannot be revised merely because a deeper inquiry or a different conclusion is preferred; inadequate inquiry, as distinct from lack of inquiry, does not justify revision. Repayment of most loans in subsequent years, accepted by the Department, also supported the genuineness of the transactions.

Conclusion: The statutory conditions for revision were not satisfied; the order under section 263 of the Income-tax Act, 1961 was quashed.

Issues: Whether cash deposits during demonetisation, recorded as cash sales, were liable to be treated as unexplained money under Section 69A of the Income-tax Act, 1961.

Analysis: Section 69A applies where the assessee does not satisfactorily explain the nature and source of money. The cash deposits were traced to recorded cash sales through books, day-to-day stock records, cash book, sales ledger and accepted VAT returns. The books and explanations for sales, cash balances and deposits were neither rejected nor found infirm. In those circumstances, the evidentiary burden stood discharged; suspicion arising from unusual sales patterns, deposits in specified bank notes, or a preponderance of probabilities assessment could not displace the documented explanation.

Conclusion: The cash deposits were satisfactorily explained and were not assessable as unexplained money under Section 69A; the addition was deleted.

Issues: Whether the internal TNMM and segmental financials furnished for benchmarking transactions with associated enterprises could be rejected in favour of external comparables.

Analysis: Reliable internal comparables are to be preferred over external comparables where transactions with associated enterprises and independent parties involve the same products, functions, assets and risks. Separate audit of segmental accounts is not a mandatory condition; segmental data may be accepted where it is reasonably prepared, reconciles with audited books, and is supported by a consistent allocation methodology. Sales were allocated on invoice-level actuals, common expenses were allocated through reasonable keys, and expenses exclusively relating to non-associated-enterprise sales were allocated to that segment. No specific defect, inconsistency, arbitrary allocation, or actual profit shifting was established. The associated-enterprise segment earned a higher margin than the non-associated-enterprise segment, supporting the arm's length nature of the international transactions.

Conclusion: The internal TNMM and segmental results were reliable and had to be accepted; the international transactions were at arm's length and the transfer-pricing adjustment was directed to be deleted.

Issues: (i) Whether exemption under section 11 was available for the assessment year in the absence of valid registration under section 12A/12AB; (ii) Whether, upon denial of section 11 exemption, the entire gross receipts of the trust could be taxed without allowing expenditure incurred for its activities.

Issue (i): Whether exemption under section 11 was available for the assessment year in the absence of valid registration under section 12A/12AB.

Analysis: Registration under section 12A/12AB is a statutory condition for claiming exemption under section 11. The provisional registration was effective only from a later assessment year, and no valid registration existed for the relevant year.

Conclusion: Exemption under section 11 was rightly denied for the relevant assessment year, against the assessee.

Issue (ii): Whether, upon denial of section 11 exemption, the entire gross receipts of the trust could be taxed without allowing expenditure incurred for its activities.

Analysis: Denial of charitable exemption does not alter the fundamental basis of assessment from income to gross receipts. Taxable income must be computed under ordinary commercial accounting principles by examining expenditure incurred wholly and exclusively for earning the receipts. The assessment did not verify the expenditure shown in the income and expenditure account before taxing the entire receipts.

Conclusion: Gross receipts could not be assessed as taxable income without allowing verified legitimate expenditure; the income must be recomputed on a net basis, in favour of the assessee.

Final Conclusion: The denial of charitable exemption remains intact, but the taxable income is required to be determined after verification of expenditure and confined to the resulting net income, if any.

Ratio Decidendi: Where a trust is denied exemption for want of statutory registration, its taxable income must nevertheless be computed on net-income principles after allowing legitimate expenditure, and not by taxing its gross receipts.

Issues: Whether the assessment framed by the Income-tax Officer was without jurisdiction for want of pecuniary jurisdiction under CBDT Instruction No. 1/2011, and whether the notice issued under section 143(2) of the Income-tax Act, 1961 and the consequent assessment under section 143(3) read with section 147 of the Act were liable to be quashed.

Analysis: The assessee had declared returned loss exceeding the monetary limit prescribed for ITOs under CBDT Instruction No. 1/2011, which placed jurisdiction with the ACIT/DCIT. The assessment, however, was completed by the ITO, and no transfer order under section 127 was shown. The defect went to the root of the assumption of jurisdiction, and the notice under section 143(2) issued by the ITO was held to be invalid and not curable. Once the jurisdictional ground succeeded, the merits of the addition ceased to survive.

Conclusion: The assessment was quashed for want of jurisdiction, and the assessee's challenge to the initiation and completion of proceedings was accepted.

Issues: (i) Whether the assessments for assessment years 2013-14 and 2014-15 were barred by limitation and void for want of valid jurisdiction under section 153C read with section 153A. (ii) Whether the assessment for assessment year 2019-20 framed under section 143(3) was invalid when the year fell within the statutory block to be dealt with under section 153C read with section 153A. (iii) Whether the profit estimation for assessment years 2015-16 to 2018-19 required adoption of a fair gross profit rate based on the average of the assessee's disclosed results.

Issue (i): Whether the assessments for assessment years 2013-14 and 2014-15 were barred by limitation and void for want of valid jurisdiction under section 153C read with section 153A.

Analysis: The assessments for these two years were examined in the context of the first proviso to section 153C and the amended post-01.04.2017 regime. The relevant date for computing the block was treated as the date of recording of satisfaction and handover of seized material, not the date of search on the searched person. On that basis, assessment year 2021-22 was taken as the year relatable to the triggering event, and the six preceding years comprised assessment years 2015-16 to 2020-21. Since assessment years 2013-14 and 2014-15 fell outside that block, and the additions for those years did not satisfy the statutory threshold for extending the reach to the relevant assessment years beyond six years, the jurisdictional preconditions were not met.

Conclusion: The assessments for assessment years 2013-14 and 2014-15 were held to be invalid and unsustainable.

Issue (ii): Whether the assessment for assessment year 2019-20 framed under section 143(3) was invalid when the year fell within the statutory block to be dealt with under section 153C read with section 153A.

Analysis: Assessment year 2019-20 was found to fall within the six-year block attracted by section 153C read with section 153A. Once the special search assessment machinery became applicable, the regular assessment route under section 143(3) was not open for that year. The reasoning was supported by the settled principle that when a year forms part of the special search block, assessment must be framed under the special code and not under the normal assessment provision.

Conclusion: The assessment for assessment year 2019-20 was held to be without jurisdiction and was quashed.

Issue (iii): Whether the profit estimation for assessment years 2015-16 to 2018-19 required adoption of a fair gross profit rate based on the average of the assessee's disclosed results.

Analysis: For these years, the dispute was confined to the quantum of estimated profit. The assessee's disclosed gross profit rates across the years were aggregated and averaged, and the fair rate was worked out at about 0.18%. The court accepted this average as the appropriate basis for estimation, with the higher of the declared rate or the adopted rate to be applied on factual verification.

Conclusion: The estimated profit was directed to be recomputed at 0.18% or the assessee's declared gross profit rate, whichever was higher.

Final Conclusion: The appeals relating to assessment years 2013-14, 2014-15 and 2019-20 were allowed, while the appeals for assessment years 2015-16 to 2018-19 were allowed only to the extent of modification in the estimated profit rate.

Ratio Decidendi: For a non-searched person, the block under section 153C is computed from the date of receipt of seized material or satisfaction, and where a year falls within the special search block, assessment must be made under the special search code rather than section 143(3).

Issues: Whether the reassessment notice and consequential reassessment were valid when prior approval for issue of notice beyond three years was granted by the Principal Commissioner instead of the authority prescribed under section 151 of the Income-tax Act, 1961.

Analysis: The notice under section 148 was issued beyond three years from the end of the relevant assessment year, attracting the higher sanction contemplated by section 151. The record showed that approval was granted by the Principal Commissioner of Income Tax, whereas the statute required approval by the specified higher authority. The defect was treated as one going to the root of jurisdiction and not as a curable irregularity. On that basis, the reassessment notice was held to be bad in law and the consequential reassessment could not survive. The merits of the additions were therefore not examined.

Conclusion: The reassessment was invalid for want of competent approval under section 151, and the assessee succeeded on the jurisdictional challenge.

1. ISSUES PRESENTED AND CONSIDERED

(i) Whether, for computing the holding period of a redeveloped residential flat sold on 31.12.2013, the date of acquisition should be taken as the date of allotment/crystallization of rights under the redevelopment arrangement, or the date of completion/physical possession/last instalment payment.

(ii) Consequentially, whether the gains on sale of the redeveloped flat were required to be assessed as long-term capital gains or short-term capital gains, and whether the addition assessed as short-term capital gains was sustainable.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i) - Commencement of holding period in a redevelopment/allotment situation

Legal framework (as discussed by the Court): The Court treated the governing legal principle as settled by the jurisdictional High Court decision applied by it, namely that in allotment-based acquisition, the date of allotment is regarded as the date of acquisition for capital gains computation, and that subsequent instalment payments and taking delivery of possession are follow-up actions that do not defer acquisition.

Interpretation and reasoning: The Court found that the assessee's entitlement to the redeveloped flat was not an isolated fresh purchase, but flowed from pre-existing ownership and the redevelopment arrangement. It held that rights in the redeveloped flat crystallized with the allotment letter and the redevelopment-related agreement, and that the lower authorities' focus on (a) completion of the building in May 2012, (b) doubts about earlier possession, and (c) the last instalment paid on 01.04.2013 for additional area, could not override the governing principle that allotment/crystallization of rights determines acquisition. The Court specifically rejected the argument that paying instalments for additional area postpones the date of acquisition.

Conclusion: The Court concluded that reckoning the holding period from May 2012 (completion) or from 01.04.2013 (last instalment) was legally unsustainable, and that the acquisition/holding period had to be computed from the allotment/crystallization of rights under the redevelopment arrangement.

Issue (ii) - Characterisation of gains as long-term or short-term and sustainability of addition

Interpretation and reasoning: Applying the above determination of the acquisition date, the Court held that the asset was held for more than thirty-six months before its sale on 31.12.2013. Therefore, it qualified as a long-term capital asset. The Court held that the treatment of the gains as short-term capital gains by the tax authorities was incorrect because it depended on an erroneous start date for the holding period.

Conclusion: The Court held that the gains from sale of the residential flat were long-term capital gains and not short-term capital gains, and therefore deleted the addition that had been made and sustained under the head "Short Term Capital Gain".

1. ISSUES PRESENTED AND CONSIDERED

1) Whether rejection of the assessee's books of account under section 145(3) was justified on the basis of alleged non-availability/incompleteness of debtor details and doubts raised from enquiries about certain major buyers and a supplier, despite existence of actual production and electricity consumption.

2) Upon rejection of books, whether estimation of income by applying a net profit rate of 1% of turnover was supported by cogent material and proper comparable analysis, or whether income should instead be estimated with reference to the assessee's own past performance.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Justification for rejection of books of account under section 145(3)

Legal framework (as discussed): The assessment was made by rejecting books under section 145(3), leading to estimation of profits.

Interpretation and reasoning: The Court noted that the Assessing Officer rejected the books "merely" because the assessee did not provide full details of certain parties (such as vendor names, addresses and PAN details) and based on doubts arising from enquiries concerning some buyers/supplier. At the same time, material on record showed that the assessee had an operational milk processing plant, incurred substantial expenditure and depreciation, and the Addl. CIT's observations (sought by the Assessing Officer) indicated that it would be inappropriate to treat the entire purchases/sales as mere financial flows, since actual production and electricity consumption corroborated business activity.

Conclusions: While the assessment proceeded on rejection of books and estimation, the Court's determinative reasoning emphasized that the business involved actual production corroborated by electricity consumption and that the rejection was not to be treated as a basis for treating the entire activity as non-genuine. The Court therefore addressed the consequence primarily through a corrected estimation approach rather than sustaining the 1% estimate.

Issue 2: Validity of estimating net profit at 1% versus estimation based on past performance

Legal framework (as discussed): Following rejection of books, income was to be determined by estimation (best judgment-type approach) on a reasonable basis.

Interpretation and reasoning: The Court found that the Assessing Officer adopted 1% net profit by stating that other similar market players generally earned 0.8% to 1.25%, but without bringing any cogent material on record or making a proper comparable analysis of similarly placed concerns. The Court held that such ad hoc estimation at 1% without corroborative comparison reflected assumption and conjecture. It then relied on the assessee's own consistent past results over three years, where net profit remained around 0.37%, 0.40% and 0.41% (average about 0.4%). Considering this history and "for the sake of complete justice," the Court determined that a slightly higher rate than the historical average would be fair.

Conclusions: The Court set aside the 1% net profit estimation and directed the Assessing Officer to estimate income by applying a net profit rate of 0.50% of total sales for the relevant year, treating this as a fair estimate based on the assessee's past performance rather than unsupported industry-range assertions.

Issues: Whether the earlier consolidated Tribunal order required recall where the assessee did not receive an opportunity to address its case under the India-UK treaty, including the existence of a permanent establishment for the relevant year.

Analysis: Although the receipt had been characterised as business profits rather than fees for technical services, its taxability depended on the facts concerning a permanent establishment in India for the relevant year. The earlier consolidated hearing principally concerned group entities governed by a different treaty, and the assessee had not addressed the facts specifically applicable to it. A further opportunity was therefore warranted on all relevant issues, including the existence or absence of a permanent establishment.

Conclusion: The assessee was entitled to recall of the earlier order so that its case could be heard afresh on the relevant treaty and permanent-establishment issues.

Issues: (i) Whether the delay of 282 days in filing the appeal deserved to be condoned on the basis of sufficient cause. (ii) Whether interest income earned by a co-operative society from deposits with co-operative banks was eligible for deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961.

Issue (i): Whether the delay of 282 days in filing the appeal deserved to be condoned on the basis of sufficient cause.

Analysis: The explanation offered was that the earlier counsel had advised the assessee not to challenge the order, and the appeal was filed promptly after obtaining correct legal advice. The Tribunal applied the settled principles that condonation depends on the sufficiency and bona fides of the explanation, that length of delay is not , and that merits of the underlying dispute are irrelevant at the condonation stage.

Conclusion: The delay was condoned and the appeal was admitted in favour of the assessee.

Issue (ii): Whether interest income earned by a co-operative society from deposits with co-operative banks was eligible for deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961.

Analysis: The Tribunal compared the competing Karnataka High Court decisions and held that the facts were closer to the line of authority treating such interest as attributable to the business of providing credit facilities to members. It also noted the beneficial character of section 80P and followed the view that interest earned from temporary deployment of surplus funds connected with the society's business activity can qualify for deduction.

Conclusion: The deduction under section 80P(2)(a)(i) was allowed and the disallowance was set aside in favour of the assessee.

Final Conclusion: The appeal succeeded on both the delay question and the substantive deduction issue, resulting in relief to the assessee.

Ratio Decidendi: Condonation of delay turns on a bona fide and sufficient explanation rather than the length of delay or the merits of the case, and interest income attributable to the business activity of a co-operative society may qualify for deduction under section 80P(2)(a)(i).

Issues: (i) whether the assessment framed under section 143(3) after a search under section 132 was sustainable, or whether the case had to proceed under section 148 with prior approval under section 148B; (ii) whether the gross profit rate adopted by the first appellate authority required interference and what rate should be applied.

Issue (i): Whether the assessment framed under section 143(3) after a search under section 132 was sustainable, or whether the case had to proceed under section 148 with prior approval under section 148B.

Analysis: Search action had been initiated and the assessment year in question fell within the preceding years covered by Explanation 2 to section 148. The statutory scheme was treated as requiring the special search-linked route, rather than continuation of a regular scrutiny assessment under section 143(3). The reasoning proceeded on the basis that section 143 governs regular assessment, whereas section 148 operates as the special provision for cases where search material indicates escapement of income. The principle of generalia specialibus non derogant was applied to hold that the special procedure overrides the general one.

Conclusion: The assessment under section 143(3) was held unsustainable and was quashed; the issue was decided in favour of the assessee.

Issue (ii): Whether the gross profit rate adopted by the first appellate authority required interference and what rate should be applied.

Analysis: The first appellate authority had adopted a mean profit rate by averaging the assessee's past gross profit with comparable industry results. That approach was rejected because estimation had to be grounded in the relevant segmental and contemporaneous trade results, and not on an unbridled averaging exercise. The Revenue's plea for a higher rate was not accepted, and the segmental trend rate was preferred.

Conclusion: The gross profit rate was directed to be estimated at 6.96%, and the Revenue's higher estimate was rejected; the issue was decided in favour of the assessee.

Final Conclusion: The common order granted substantive relief to the assessee by quashing the regular assessment and by reducing the gross profit estimation, while the Revenue's cross appeal did not succeed.

Ratio Decidendi: Where a search has triggered the special statutory mechanism for reassessment, a pending regular assessment under section 143(3) cannot be continued or completed contrary to the search-linked procedure; estimation of profits must also be based on relevant contemporaneous sectoral data rather than arbitrary averaging.

Issues: (i) Whether consideration for offshore supply of drawings, designs, plant and equipment was taxable in India as business income or fees for technical services. (ii) Whether receipts from supervisory services for erection and commissioning were taxable in India and, in the case of longer-duration supervision, how the profit of the permanent establishment was to be computed.

Issue (i): Whether consideration for offshore supply of drawings, designs, plant and equipment was taxable in India as business income or fees for technical services.

Analysis: The agreements and surrounding facts showed that the drawings and designs were tied to the supply of equipment and were not a standalone consultancy or technical service arrangement. The earlier coordinate bench decisions in the assessee's own case were followed, and the same composite factual pattern was treated as offshore supply completed outside India. On that basis, the receipts from the supply of drawings, designs and equipment could not be brought to tax in India as fees for technical services or as taxable business receipts merely because the contracts were separately drafted.

Conclusion: The issue was decided in favour of the assessee. The receipts from offshore supply of drawings, designs and equipment were held to be not taxable in India on the basis applied by the Tribunal.

Issue (ii): Whether receipts from supervisory services for erection and commissioning were taxable in India and, in the case of longer-duration supervision, how the profit of the permanent establishment was to be computed.

Analysis: For the short-duration supervisory receipts, the Tribunal followed the earlier coordinate bench view that such services fell within the treaty definition of fees for technical services, and the existence of a permanent establishment did not alter that character. For the longer-duration supervisory activity in the later year, the Tribunal held that a permanent establishment existed and that the income had to be computed on a net basis under Article 7 of the treaty. It further held that the Assessing Officer had given no reasons for rejecting the audited book results, and where the books showed a loss from that activity, no income could be brought to tax on that head. Interest under sections 234B and 234C was treated as consequential, and the penalty ground was premature or not pressed, and therefore did not alter the substantive outcome.

Conclusion: The short-duration supervisory receipts were held taxable, while the longer-duration supervisory income had to be computed on the basis of audited results and no income was assessable where the activity showed a loss. The assessee succeeded only partly on this issue.

Final Conclusion: The Tribunal sustained taxability of the short supervisory receipts, but granted relief on the offshore supply of drawings, designs and equipment and on the longer-duration supervisory segment where the audited results showed no taxable income, resulting in partial relief overall.

Ratio Decidendi: Where drawings and designs are contractually and commercially inextricable from offshore supply of plant and equipment, the composite receipt is not taxable in India as fees for technical services; supervisory receipts are taxable according to their treaty character, and income of a permanent establishment must be computed on a net basis on the basis of accepted books unless validly rejected.

ISSUES PRESENTED AND CONSIDERED

1) Whether a short delay in filing the appeal was liable to be condoned on the facts shown.

2) Whether the statutory prior approval under section 153D was granted in a mechanical/summary manner without independent application of mind, thereby vitiating the approval and rendering the consequent assessment legally invalid (non-est) and liable to be quashed.

ISSUE-WISE DETAILED ANALYSIS

Issue 1: Condonation of delay in filing appeal

Interpretation and reasoning: The Court examined the length of delay (3 days), the explanation supported by a condonation petition and affidavit, and the absence of objection from the opposing side. The Court considered whether the delay was inordinate and whether there was deliberate or malafide conduct.

Conclusions: Since the delay was not inordinate and no deliberate or malafide conduct was found, the delay of 3 days was condoned and the appeal was taken up for decision on merits.

Issue 2: Validity of approval under section 153D-whether mechanical/without independent application of mind; effect on assessment

Legal framework (as deliberated in the decision): The Court treated approval under section 153D as a mandatory statutory safeguard requiring the competent authority to apply an independent mind before permitting passing of assessment orders. The Court accepted that while elaborate reasons are not required, the approval must contain some indication of independent examination and satisfaction, particularly where multiple assessees and multiple assessment years are covered.

Interpretation and reasoning: The Court scrutinized the approval letter and noted: (i) the proposal seeking approval was made one day prior to the approval, and approval was granted immediately the next day; (ii) the approval covered multiple assessees and several assessment years; (iii) the approving authority stated that it was "presumed" the assessing authority had provided opportunity of hearing, verified seized materials, and proposed additions wherever required, followed by a direction to "act accordingly". The Court held that such language showed reliance on the assessing authority's presumed actions and satisfaction, rather than the approving authority's own independent evaluation. The Court considered that, at minimum, the approval should reflect independent application of mind by stating some brief reasoning or indication of perusal/examination of records for the relevant years, which was absent here. The Court also relied on its earlier decision on materially similar approval language by the same approving authority, treating the present approval as "absolutely similar" in substance, with the only distinction being that the approval was granted the next day instead of the same day-insufficient to cure the defect.

Conclusions: The Court conclusively held that the approval under section 153D was granted in a mechanical and summary manner based on borrowed satisfaction from the assessing authority and without independent application of mind. Consequently, the approval was treated as void, and the assessment order lost legal validity and was quashed. As the appeal succeeded on this legal ground, all remaining grounds on merits were held to be academic and were not adjudicated.

Issues: Whether the consideration of Rs. 1,00,00,000 received for granting non-exclusive broadcasting rights in cinematographic films, without transfer of copyright, is taxable as royalty under section 9(1)(vi) of the Income-tax Act, 1961 and Article 12(3) of the India-Mauritius DTAA.

Analysis: The agreement granted only a non-exclusive licence to broadcast 100 Hindi feature films for a limited period and did not confer any right to use, exploit, modify, or otherwise transfer copyright in the films. The statutory definition of royalty in Explanation 2 to section 9(1)(vi) specifically carved out consideration for the sale, distribution, or exhibition of cinematographic films, and the treaty definition in Article 12(3) applied only where payment was made for the use of, or right to use, copyright. On the facts, the payment was for broadcasting rights alone and not for any copyright interest.

Conclusion: The receipt was not royalty and could not be brought to tax on that basis; the addition of Rs. 1,00,00,000 was deleted.

Ratio Decidendi: Consideration for non-exclusive broadcasting or licensing of cinematographic films, unaccompanied by transfer of copyright, does not constitute royalty under section 9(1)(vi) of the Income-tax Act, 1961 or Article 12(3) of the applicable DTAA.

Issues: Whether reassessment notices under Section 148 issued by a Jurisdictional Assessing Officer in cases assigned to Central Charges, otherwise required to be issued through the faceless mechanism, were valid; and whether the objection was barred by Section 124(3).

Analysis: Section 124(3) concerns objections to the territorial jurisdiction of an Assessing Officer and does not preclude a challenge to the inherent statutory lack of authority to issue a reassessment notice. Jurisdiction cannot be conferred by acquiescence, waiver, or failure to object within the prescribed period. Under Sections 144B and 151A and the e-Assessment of Income Escaping Assessment Scheme, 2022, issuance of a notice under Section 148 is required through automated allocation in a faceless manner. The exclusion relating to assessment orders in Central Charges does not exempt the issuance of reassessment notices from that mandatory mechanism. The binding jurisdictional High Court position requires even Central Charge reassessment notices issued after the relevant amendments to be issued facelessly.

Conclusion: The notices issued under Section 148 by the Jurisdictional Assessing Officer outside the faceless mechanism were invalid for inherent lack of jurisdiction; consequently, the reassessment orders founded on them were void and quashed. The issue was decided in favour of the assessee.

Issues: Whether, for applying section 56(2)(x)(b), stamp duty value of immovable property must be determined as on the allotment date where part consideration was paid through banking channels before execution and registration of the sale agreement.

Analysis: The allotment letter fixed the consideration and the assessee had made part payments through banking channels under its terms before execution of the sale agreement. The provisos to section 56(2)(x) permit adoption of stamp duty value on the agreement date where the agreement and registration dates differ, provided consideration or part thereof was paid through prescribed banking modes on or before that date. An allotment letter in these circumstances constitutes an agreement to sell, and the subsequent registered agreement does not displace the original allotment date.

Conclusion: The stamp duty value is to be taken as on the allotment date, 11.12.2010, rather than the registration date; the addition under section 56(2)(x)(b) is unsustainable and is to be deleted, in favour of the assessee.

Ratio Decidendi: Where an allotment letter fixes consideration and part consideration is paid through banking channels before execution of the registered agreement, it is an agreement to sell for applying the provisos to section 56(2)(x), requiring stamp duty valuation as on the allotment date.

Issues: (i) Whether reassessment proceedings for Assessment Year 2015-16 initiated through a notice under Section 148 of the Income-tax Act, 1961 issued after 1 April 2021 were barred by limitation and without jurisdiction. (ii) Whether notices under Section 148 of the Income-tax Act, 1961 issued for Assessment Years 2016-17 and 2017-18 beyond the surviving limitation period were invalid.

Issue (i): Whether reassessment proceedings for Assessment Year 2015-16 initiated through a notice under Section 148 of the Income-tax Act, 1961 issued after 1 April 2021 were barred by limitation and without jurisdiction.

Analysis: Applying the limitation framework under Sections 147, 148 and 149 of the Income-tax Act, 1961, read with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and the legal principles governing the transition from the old reassessment regime to the regime under Section 148A, a notice for Assessment Year 2015-16 issued on 7 June 2021 was outside the permissible period. The deeming framework could not revive or validate a notice that was time-barred at inception. The subsequent proceedings under Sections 148A(b), 148A(d), 148 and 147 were founded on that invalid notice.

Conclusion: The notice under Section 148 and all consequential reassessment proceedings for Assessment Year 2015-16 were time-barred and without jurisdiction.

Issue (ii): Whether notices under Section 148 of the Income-tax Act, 1961 issued for Assessment Years 2016-17 and 2017-18 beyond the surviving limitation period were invalid.

Analysis: Under the framework governing deemed notices under Section 148A(b) and the surviving period preserved by the Income-tax Act, 1961 read with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the Assessing Officer was required to complete the remaining proceedings within the balance period available as on 30 June 2021. The surviving period was 68 days for each assessment year. The last permissible dates for issuance of notices under Section 148 were 22 August 2022 and 24 August 2022, whereas the notices were issued on 27 August 2022. The notices were therefore beyond the surviving limitation period.

Conclusion: The notices under Section 148 and the consequential reassessment proceedings for Assessment Years 2016-17 and 2017-18 were invalid and time-barred.

Final Conclusion: The reassessment proceedings and consequential assessment orders for all three assessment years could not be sustained, while the remaining grounds became infructuous.

Ratio Decidendi: A reassessment notice issued beyond the limitation period surviving under the Income-tax Act, 1961 read with the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 is invalid and without jurisdiction, and all consequential proceedings founded on it cannot survive.

Issues: Whether the addition under section 69 on account of alleged cash or on-money payments for purchase of shops, made on the basis of search material and third-party statements without supplying the relied-upon material or affording cross-examination, was sustainable.

Analysis: The addition rested on excel sheets and statements recorded during the search on the group concern. The assessee consistently denied making the alleged cash payments. The relied-upon material was not shown to have been independently corroborated by direct evidence linking the assessee to the alleged on-money payments. The order also proceeded without furnishing the statements and documents used against the assessee and without allowing cross-examination of the persons whose statements formed the basis of the addition. In such circumstances, the material did not rise to the level of clinching evidence required to sustain an addition for unexplained investment, and the denial of an effective opportunity to rebut the evidence offended the principles of natural justice.

Conclusion: The addition under section 69 was not sustainable and was deleted. The appeals were allowed.

Issues: Whether the notice issued under section 153C of the Income-tax Act, 1961 and the consequential assessment were valid when the notice was issued after a substantial gap from completion of the searched person's assessment.

Analysis: The Tribunal held that recording of satisfaction by the Assessing Officer of the searched person and by the jurisdictional Assessing Officer was a prerequisite for invoking section 153C. It accepted the settled position that such satisfaction must be recorded at the stage of initiation of proceedings against the searched person, during those proceedings, or immediately after completion of the searched person's assessment. On the facts, there was a gap of about 20 months between completion of the searched person's assessment and issuance of notice under section 153C. The Tribunal held that this delay was not contemporaneous with the assessment proceedings and that the notice was therefore invalid. Once the jurisdictional foundation failed, the assessment framed pursuant to that notice could not survive. The additions on merits were treated as academic and infructuous.

Conclusion: The notice under section 153C was held to be invalid and the assessment order was quashed, resulting in relief to the assessee.