Classification of site formation and earth moving activities vis a vis mining services - composite mining contract cannot be vivisected for levy of service tax - site formation services not taxable prior to 1 6 2007 - Board's Circular dated 27.5.07 - reliance on precedents including Daelim line of decisions - penalty under Section 78 - application of Section 73(3) read with Board's Circular for conclusion of proceedingsClassification of site formation and earth moving activities vis a vis mining services - composite mining contract cannot be vivisected for levy of service tax - Board's Circular dated 27.5.07 - site formation services not taxable prior to 1 6 2007 - Demand raised as Site Formation & Clearance, Excavation & Earth Moving & Demolition Services for the period 16.06.2005 to 31.05.2007 was not sustainable and was correctly dropped. - HELD THAT: - The Adjudicating Authority examined the Board's Circular dated 27.5.2007 and held that the Circular treats site formation services as inclusive but does not convert activities integral to mining into a separate taxable category prior to 1 6 2007. Applying settled precedents (including the Daelim line), the authority concluded that where the contract/agreement is for mining, the services forming part of that comprehensive mining contract cannot be vivisected to treat site formation or overburden removal as separately taxable prior to 31.5.2007. The agreements before the authority were executed for mining and contained no separate consideration for overburden removal or site formation; payments were tied to removal of coal, and valuation of a part of the service did not alter the character of the overarching service contract. On these grounds the demand was rightly dropped. [Paras 14]Demand of Rs.11,64,74,435/ treated as Site Formation etc. for 16.06.2005 to 31.05.2007 was correctly dropped.Classification of income under mercantile system and reconciliation with billing - reliance on statutory auditor's certificate for reconciliation of balance sheet figure - Demand based on difference between balance sheet figures and billed amounts for 2008 09 was unsustainable and was correctly dropped. - HELD THAT: - The Adjudicating Authority accepted the statutory auditor's certificate which reconciled the excess in the balance sheet figure over billed mining clients. The auditor certified that, under the mercantile system, expenditures and provisions for coal stock at mine site (not invoiceable to joint venture companies) are required to be reflected in the Profit & Loss Account as income from mining services, thereby explaining the discrepancy relied upon in the show cause notice. Having given cognizance to this reconciliation, the authority found no basis for the proposed demand under the SCN for 2008 09. [Paras 18]Demand of Rs.2,09,43,980/ for 2008 09 (difference between Balance Sheet & Service Tax Return figures) was correctly dropped.Penalty under Section 78 - application of Section 73(3) read with Board's Circular for conclusion of proceedings - Proposed penalty under Section 78 in respect of the amount paid with interest before issuance of the show cause notice was not justified and was correctly dropped. - HELD THAT: - Following the ratio of prior Tribunal and Court decisions and Board's Circular No.137/167/2006/CX 4 dated 03/10/2007, and applying Section 73(3) of the Act, the Adjudicating Authority concluded that the demand in question had been covered by those provisions and clarifications. In consequence, and in view of the fact that the amount was paid with interest before issuance of the show cause notice, the authority found no justification to impose penalties under Section 78 and ordered closure of proceedings in respect of that amount. [Paras 17]Penalty under Section 78 in respect of the amount paid with interest was correctly dropped and proceedings concluded under Section 73(3) read with the Board's Circular.Final Conclusion: The Tribunal found no error in the Adjudicating Authority's detailed findings and dismissed the Revenue's appeal, upholding the dropping of the demands and the proposed penalty for the periods and amounts determined by the authority.

Classification of transactions as sale/purchase or loan for taxability - assessment based on incriminating material seized during search and survey - use of third party seized documents in simultaneous searches to assess counterparties - assessment and appellate treatment of notional or unaccounted interest additions - application of precedential principle in Kabul Chawla regarding non use of third party seized material - treatment of disputed expenditure/disallowance connected to exempt incomeClassification of transactions as sale/purchase or loan for taxability - assessment based on incriminating material seized during search and survey - assessment and appellate treatment of notional or unaccounted interest additions - Validity of additions made by the Assessing Officer treating certain property transactions with Vatika group as loans (and taxing unaccounted interest) for AYs 2006-07 to 2011-12 - HELD THAT: - The Tribunal considered whether the agreements and surrounding material established that the transactions were loans (with interest) rather than bona fide agreements to sell plots. The CIT(A) had performed a contractual construction of the primary agreements (MOU and subsequent extension/agreements), examined the absence of express interest receipts in the books, the parties' accounting treatment, PDCs and guarantees, conduct of the parties and the seized material, and concluded that the transactions were sale/purchase transactions (with option/assured buy back clauses) and that the AO's addition for notional/unaccounted interest was not supported by the evidentiary material. A Coordinate Bench decision in SEH Realtors (ITA Nos. 2686-2692/Del/2017 & Others dated 20.04.2023) reached the same conclusion and was relied upon. Applying that reasoning and on the facts before it (including absence of evidence of payment of interest and the allotment/sale process), the Tribunal held that the AO's conclusion was erroneous and that the additions for unaccounted interest could not be sustained and were rightly deleted by the CIT(A). [Paras 4, 6]Revenue's appeals for AYs 2006-07 to 2011-12 dismissing the additions on account of alleged unaccounted interest are dismissed; CIT(A)'s deletion is affirmed.Treatment of disputed expenditure/disallowance connected to exempt income - application of precedential principle in Kabul Chawla regarding non use of third party seized material - Validity of disallowance under the rules applicable to expenditure relating to exempt income (section 14A context) in AY 2011-12 - HELD THAT: - The CIT(A) found no incriminating material unearthed during the search that supported the AO's disallowance and applied the ratio of the jurisdictional High Court in Kabul Chawla, a view subsequently approved by the Supreme Court in PCIT v. Abhisar Buildwell Pvt. Ltd. The Tribunal, on the material before it, found no basis to dislodge the factual finding that the disallowance was not founded on incriminating material discovered during the search and, therefore, upheld the CIT(A)'s deletion of the 14A addition. [Paras 5]Ground relating to disallowance under section 14A for AY 2011-12 is dismissed; CIT(A)'s deletion is affirmed.Use of third party seized documents in simultaneous searches to assess counterparties - assessment based on incriminating material seized during search and survey - Whether the assessee's cross objections require adjudication and whether third party or contemporaneously seized material was appropriately used in the assessments - HELD THAT: - The assessee did not press the cross objections at hearing and the Tribunal observed them to be academic in view of the dismissal of the Revenue's appeals. As to the broader contention on use of third party documents, the Tribunal noted the parties' common position and applied the reasoning of the Coordinate Bench and CIT(A) on evidentiary sufficiency; no separate adjudication of outstanding cross objections was required. Consequently the cross objections were dismissed as not pressed/academic. [Paras 7]Assessee's cross objections are dismissed as not pressed and/or academic.Final Conclusion: The Tribunal, applying contractual construction, review of seized material and the Coordinate Bench precedent, upheld the CIT(A)'s deletions and dismissed the Revenue appeals for AYs 2006-07 to 2011-12 on the issue of alleged unaccounted interest; the deletion of the section 14A disallowance for AY 2011-12 is affirmed; the assessee's cross objections are dismissed as not pressed or academic.

Exemption for captively consumed goods - Notification No. 67/95-CE - inputs and capital goods captively consumed within the factory - Notification No. 65/95-CE - goods manufactured in factory workshop used for maintenance - Machinery installed in the factory - Integral and inseparable part of manufacture - railway tracks, wagons and locomotives - Captive consumption - Precedent: Jayaswal Neco - railway tracks part of manufactureNotification No. 65/95-CE - goods manufactured in factory workshop used for maintenance - Notification No. 67/95-CE - inputs and capital goods captively consumed within the factory - Machinery installed in the factory - Integral and inseparable part of manufacture - railway tracks, wagons and locomotives - Exemption for captively consumed goods - Whether acetylene gas manufactured and captively consumed within the factory for repair and maintenance of railway track, railway wagons, locomotives and in various shops/departments is eligible for exemption under Notification No. 65/95-CE or Notification No. 67/95-CE - HELD THAT: - The adjudicating authority denied exemption under Notification No. 65/95-CE on two grounds: that the acetylene gas was not manufactured in the workshop and that the devices serviced were not "machinery installed in the factory" used for manufacture of final goods. The Tribunal rejected these conclusions and held that, even if the benefit under Notification No. 65/95-CE was disputed, the acetylene gas consumed for repair and maintenance of railway tracks, wagons, locomotives and in the identified shops/departments falls within the scope of Notification No. 67/95-CE. The Tribunal reasoned that the railway tracks, wagons and locomotives operating within the plant are integral and inseparable from the manufacturing process because they are essential for feeding inputs, transferring intermediate products and dispatching finished goods; interruption of such rail operations would impede production and could damage plant and machinery. Applying the ratio in Jayaswal Neco - that internal railway tracks and associated transport form part of the manufacturing process - the Tribunal concluded that the acetylene gas manufactured and used within the factory for these repair and maintenance activities qualifies as goods used "in or in relation to manufacture of final products" and is therefore exempt as captively consumed inputs/capital goods under Notification No. 67/95-CE. Consequently the confirmed demand premised on denial of exemption under Notifications 65/95 or 67/95 was unsustainable. [Paras 9, 10, 11]The appellant is eligible for exemption under Notification No. 67/95-CE for acetylene gas used in repair and maintenance of railway tracks, wagons, locomotives and in the specified shops/departments; the demand confirmed in the impugned order is set aside.Final Conclusion: The impugned Order-in-Original denying exemption and confirming duty in respect of captively consumed acetylene gas (for the identified railway and departmental repair/maintenance uses) is set aside; the appeal is allowed and the demand is held unsustainable.

Directory nature of statutory time-limits under SVLDRS - extension of time for compliance under SVLDRS due to COVID pandemic - court-ordered acceptance of payment under SVLDRS and issuance of Form SVLDRS-4Directory nature of statutory time-limits under SVLDRS - extension of time for compliance under SVLDRS due to COVID pandemic - court-ordered acceptance of payment under SVLDRS and issuance of Form SVLDRS-4 - Validity of the respondent's rejection of the petitioner's representation dated 24.08.2021 and entitlement to acceptance of payment under SVLDRS and issuance of Form SVLDRS-4. - HELD THAT: - The Court applied its earlier decision holding that the time-limits for availing and for payment under the SVLDRS scheme are directory in nature and were extended by the Central Government and authorities in view of the COVID pandemic. Having regard to the petitioner's availing of the SVLDRS by filing Form SVLDRS-1, issuance of Forms SVLDRS-2 and SVLDRS-3, the payment made pursuant to an interim order of this Court and the prevailing pandemic-related extensions, the Court found that interference was warranted. The impugned order rejecting the representation was set aside and the respondent was directed to accept the payment made in terms of Form SVLDRS-3 and to issue the Certificate of Settlement in Form SVLDRS-4 within the time stipulated by the Court. [Paras 6, 7, 8]Impugned order dated 24.08.2021 set aside; respondent directed to accept payment under Form SVLDRS-3 and issue Form SVLDRS-4 within four weeks from receipt of the order.Final Conclusion: Writ petition allowed; impugned order dated 24.08.2021 quashed and respondent directed to accept the payment under SVLDRS and issue Certificate of Settlement in Form SVLDRS-4 within four weeks; no costs.

Revisionary jurisdiction under Section 263 of the Income tax Act - erroneous and prejudicial to the interests of revenue - absence of factual basis for exercise of revisional power - requirement of show cause notice before raising a new ground in revision - apportionment of expenses between exempt and taxable income - need for clear and categorical finding to invoke revisionAbsence of factual basis for exercise of revisional power - apportionment of expenses between exempt and taxable income - erroneous and prejudicial to the interests of revenue - Whether the Principal Commissioner of Income tax validly invoked revisionary jurisdiction under Section 263 by holding that the assessment order was erroneous and prejudicial to revenue on the ground that the assessee had claimed excessive deduction under Section 80P due to incorrect apportionment of expenses. - HELD THAT: - The Tribunal found that the PCIT's conclusion that the assessee was entitled to only Rs. 36.73 crore (and thus had an excess claim) rested on a figure of relatable expenses of Rs. 51.04 crore which does not emerge from the records. The assessee's books, tax audit report and computation filed in assessment supported the claim of deduction of approximately Rs. 41.31 crore and the AO had examined relevant documents during assessment. The Revenue was unable to point to records justifying the PCIT's expense figure and the PCIT's order does not disclose the source of that number. Because the foundational factual premise for the PCIT's finding of error was incorrect and unverifiable from records, the requirement that the assessment be both erroneous and prejudicial to revenue was not satisfied, and assumption of jurisdiction on that basis failed. [Paras 10, 11, 13, 14, 15]The PCIT's exercise of revisionary jurisdiction based on alleged excess claim due to incorrect apportionment of expenses is unsustainable as it rests on incorrect and unverifiable facts.Requirement of show cause notice before raising a new ground in revision - revisionary jurisdiction under Section 263 of the Income tax Act - Whether the PCIT could sustain revision by holding that interest earned on bank deposits was ineligible for deduction under Section 80P without issuing a show cause notice to the assessee on that specific legal contention. - HELD THAT: - The Tribunal held that even if the fact of interest from bank deposits was available on record (or pointed out by the assessee), the PCIT was obliged to confront the assessee with the legal contention that such interest was ineligible for deduction and afford an opportunity to be heard on that distinct ground. No separate show cause notice was issued by the PCIT on this legal disallowance, and the Revenue's contention that no notice was required because the assessee had itself mentioned the fact was rejected. In the absence of notice and opportunity on this fresh legal ground, the PCIT's finding of error on that basis is not sustainable. [Paras 16, 17, 18]The PCIT's finding of error for allowing deduction on interest from bank deposits is unsustainable for want of a show cause notice and opportunity to the assessee on that specific ground.Need for clear and categorical finding to invoke revision - revisionary jurisdiction under Section 263 of the Income tax Act - Whether the PCIT's revisional order is vitiated by inconsistent and uncertain findings regarding the nature of the error in the assessment order. - HELD THAT: - The Tribunal observed that the PCIT oscillated between (a) a finding of excess deduction due to incorrect apportionment of expenses, (b) a finding that deduction was wrongly allowed on income ineligible in law (interest on bank deposits), and then reverted to the excess claim conclusion. This lack of a single, clear basis for invoking revision undermines the exercise of revisional power, which requires a categorical finding that the assessment is erroneous and prejudicial to revenue. The uncertainty in the PCIT's reasoning renders the revisional order legally unsustainable. [Paras 19, 20, 21]The revisional order is invalid because the PCIT failed to articulate a clear and categorical finding of error, presenting inconsistent bases for revision.Final Conclusion: The Tribunal allowed the assessee's appeal, set aside the order passed under Section 263, 2012 13 assessment remains undisturbed, and the PCIT's revisionary order was held unsustainable for being based on incorrect/unverifiable facts, for failing to issue a show cause notice on a new legal ground, and for lacking a clear and categorical finding of error.

Limited return as appropriation of profits - dividend character of limited return - non-deductibility of dividend-like payments - deductibility of business promotion expenses under section 37 - remand for decision pending High Court outcomeLimited return as appropriation of profits - dividend character of limited return - non-deductibility of dividend-like payments - Limited return on share capital paid by the Producer Company is not an allowable deduction but an appropriation of profits. - HELD THAT: - The Tribunal examined the statutory scheme for Producer Companies and the definition of "limited return" in the Companies Act, 1956. Section 581E authorises payment of a limited return on share capital and section 581A(c) defines "limited return" as the maximum dividend specified by the articles. On a plain reading, the limited return is a form of dividend payable to members as authorised by the articles; it is not a charge against profit and cannot be treated as an expense in the profit and loss account. Consequently the assessing officer's disallowance of the claimed finance-cost treatment was justified and the additions were upheld. [Paras 8]Addition disallowing the limited return (claimed as expenditure) is sustained; Grounds 1 and 2 of the Revenue's appeal are allowed.Remand for decision pending High Court outcome - Tax treatment of withheld price/additional price payments to milk suppliers is to be decided by the AO in light of the outcome of the High Court proceedings. - HELD THAT: - The Tribunal noted that similar issues in the assessee's own earlier year were decided by a Coordinate Bench in favour of the assessee but that Revenue has preferred an appeal to the High Court of Andhra Pradesh against that decision. To avoid multiplicity of litigation the Tribunal declined final adjudication on this ground and directed the assessing officer to decide the issue in accordance with the eventual decision of the High Court. The matter is therefore disposed for statistical purposes pending that outcome. [Paras 10]Ground relating to withheld/additional price is disposed for statistical purposes and remitted to the AO for decision after the High Court's determination.Deductibility of business promotion expenses under section 37 - Expenditure on gifts distributed at the Annual General Meeting to members/suppliers is allowable as business promotion expenditure under section 37. - HELD THAT: - The Tribunal found that the gifts were distributed to milk producers who were both suppliers and members of the Producer Company and that such payments were made to retain suppliers in the face of competition. Applying the principles governing business expediency, the Tribunal held these payments to be in the nature of business promotion and therefore deductible under section 37 of the Income-tax Act. There was no infirmity in the CIT(A)'s deletion of the disallowance. [Paras 12]Addition disallowing general body gifts is deleted; Ground No.4 of the Revenue's appeal is dismissed.Final Conclusion: The Revenue appeals are partly allowed: disallowance of limited return on share capital sustained; disallowance relating to withheld/additional price remitted for decision in light of the High Court outcome; disallowance of AGM gifts deleted. Cross objections by the assessee are dismissed as infructuous.

Income from House Property - Deduction under section 24(a) of the Income-tax Act - Characterisation of rental receipts as income from other sources versus income from house property - Owner for tax purposes - entitlement to receive income as test of ownership for fiscal assessment - Effect of unregistered agreement to sell and builder's transfer/recognition for fiscal purposes - Classification of expenditures as business expenses of a money lending business - Effect of dormant business and absence of continuing receipts on allowance of business expenditure - Independence of assessment yearsIncome from House Property - Deduction under section 24(a) of the Income-tax Act - Effect of unregistered agreement to sell and builder's transfer/recognition for fiscal purposes - Owner for tax purposes - entitlement to receive income as test of ownership for fiscal assessment - Whether the rent received by the assessee in A.Y. 2015-16 is assessable as income from house property and whether deduction under section 24(a) is allowable. - HELD THAT: - The Tribunal found on the facts that the assessee entered into an Agreement to Sell dated 01.04.2014, paid the consideration within the stipulated period, took possession and relied on the builder's letter/transfer deed recognizing the assessee's rights effective 13.04.2014. For fiscal purposes the Court applied the principle that, under the Income tax law, 'owner' is the person entitled to receive income from the property; therefore documents such as agreement to sell or other unregistered instruments may be effective between assessee and Revenue to determine the character of receipts. The Tribunal distinguished Suraj Lamps (concerning civil conveyance and registration) and followed precedents that, where the assessee is in exclusive possession and entitled to the income, receipts are to be treated as income from house property and the standard deduction under section 24(a) is allowable. On this basis the Tribunal allowed the claim and reversed the AO/CAA on this point. [Paras 9, 10, 11, 12]Rent is assessable as income from house property for A.Y. 2015-16 and deduction under section 24(a) is allowable.Classification of expenditures as business expenses of a money lending business - Effect of dormant business and absence of continuing receipts on allowance of business expenditure - Independence of assessment years - Whether the expenditures of Rs. 43,62,446 claimed as business expenses of a money lending business are allowable in A.Y. 2015-16. - HELD THAT: - The Tribunal examined the financial entries, earlier orders and the material on record and agreed with the CIT(A) that the assessee had only two historical advances reflected in the balance sheet-transactions relating to advances for property-without contemporaneous interest receipts in the year under consideration. The Tribunal noted that although earlier years recognised money lending activity when interest income was shown, each assessment year is independent and facts for A.Y. 2015-16 did not demonstrate a continuing money lending business or current income from it. The averments in the complaint and earlier assessments indicated repayment disputes and advances tied to property transactions rather than regular lending activity. Given absence of regularity or income in the year and that the standard deduction for house property was allowed, the Tribunal upheld the disallowance of the claimed business expenses. [Paras 13, 14]Disallowance of the claimed business expenditures is sustained; the claim is rejected for A.Y. 2015-16.Final Conclusion: Appeal partly allowed: the Tribunal allowed the claim treating rental receipts as income from house property and permitted deduction under section 24(a), but upheld the disallowance of the expenditures claimed as business expenses of money lending for A.Y. 2015 16.

Deduction under section 80IA(4) - Developer versus works contractor distinction - Explanation to section 80IA(13) excluding works contracts - Principle of consistency / benefit in own case - Enhancement of Chapter VI-A deduction consequent to disallowance/addition - Survey addition for unverifiable expenses and its effect on eligible business income - CBDT Circular recognising disallowance enhancing business profits for purpose of Chapter VI-ADeduction under section 80IA(4) - Developer versus works contractor distinction - Explanation to section 80IA(13) excluding works contracts - Principle of consistency / benefit in own case - Admissibility of deduction claimed by the assessee under section 80IA(4) for projects claimed as developer activity - HELD THAT: - The Tribunal upheld the CIT(A)'s conclusion that the assessee acted as a developer and not merely as a works contractor for the projects in question and therefore was eligible for deduction under section 80IA(4). The Tribunal analysed the legislative history and purpose of section 80IA(4), the effect of the Explanation to section 80IA(13), and relevant judicial guidance, and applied commercial and purposive construction to avoid defeating the object of the provision. It identified functional indicia of a developer (undertaking design, financing, technical and managerial responsibility, exposure to liquidated damages, provision of plant and materials, guarantees and defect liability) and found, on examination of tender terms and sample contracts, that those indicia were satisfied. The Tribunal also relied on prior appellate orders in the assessee's own case where identical projects had been held to be development activities and noted absence of any higher court reversal or distinguishing facts for the year under consideration; accordingly it applied the principle of consistency/precedent in the assessee's favour and dismissed the Revenue's ground on this point. [Paras 9]Revenue's challenge to the allowance of deduction under section 80IA(4) was dismissed; the assessee was held to be a developer entitled to the deduction.Enhancement of Chapter VI-A deduction consequent to disallowance/addition - Survey addition for unverifiable expenses and its effect on eligible business income - CBDT Circular recognising disallowance enhancing business profits for purpose of Chapter VI-A - Whether the deduction under section 80IA(4) may be correspondingly increased on account of income added during survey for unverifiable expenses - HELD THAT: - The Tribunal affirmed the CIT(A)'s view that the addition of income on account of unverifiable expenses disclosed during survey increases the assessable business profits and, where such profits pertain to undertakings eligible under section 80IA(4), the deduction under Chapter VI-A is correspondingly increased only to the extent of income attributable to eligible projects. The Tribunal noted the assessee's admission to offer additional income, the settled position (and CBDT Circular) that disallowances which enhance business profits will enhance Chapter VI-A deductions, and that the assessee had both eligible and non-eligible projects; the enhanced deduction was therefore limited to the eligible projects. On this basis the Tribunal found no reason to interfere with the CIT(A)'s direction to proportionately increase the 80IA(4) claim and dismissed the Revenue's appeal on this point. [Paras 10, 15]Addition made on account of unverifiable expenses was held to increase eligible business profits and the corresponding deduction under section 80IA(4) was allowable proportionately for eligible projects; Revenue's ground was dismissed.Final Conclusion: The Revenue's appeal is dismissed: the Tribunal affirmed the CIT(A)'s allowance of deduction under section 80IA(4) on the ground that the assessee acted as a developer (and not a mere works contractor) and upheld the proportional enhancement of the 80IA(4) deduction consequent to the survey addition for unverifiable expenses.

Deduction under section 80P(2)(d) in respect of interest/dividend from investments with other co-operative societies and co-operative banks - eligibility for deduction under section 80P(2)(a)(i) for primary agricultural credit societies - distinction between co-operative society and co-operative bank for the purpose of section 80P - remand for verification by the Assessing Officer - allowability of provisions as business expenditureDeduction under section 80P(2)(d) in respect of interest/dividend from investments with other co-operative societies and co-operative banks - distinction between co-operative society and co-operative bank for the purpose of section 80P - Whether interest/dividend income earned by the assessee from deposits with co-operative banks is eligible for deduction under section 80P(2)(d). - HELD THAT: - The Tribunal examined the nature of the recipient institutions and the principle that only where the payee is a co operative society deriving income from investments with other co operative societies would section 80P(2)(d) apply. Following and applying the Supreme Court analysis as reproduced and the coordinate Bench decisions, the Tribunal directed verification by the AO of the character and licensing status of the recipient banks. If the interest is found to be from co operative banks that do not fall within the definition of a co operative bank requiring a licence under the Banking Regulation Act, 1949 (and thus are not 'banking companies' within that definition), the interest is to be allowed as deduction under section 80P(2)(d). If, however, the AO finds the institutions to be co operative banks falling within the statutory definition (and licensed under section 22), the interest would be treated as income from other sources subject to the taxpayer's statutory entitlements (including section 57), and no deduction under section 80P(2)(d) would be available. The assessee was given opportunity to produce documents and the AO was directed to verify and decide after hearing the assessee. [Paras 11]Directed remand to the AO to verify the nature/licensing status of the recipient banks and allow deduction under section 80P(2)(d) on the interest of Rs. 24,11,084 if found to satisfy the statutory requirement; otherwise apply the jurisdictional High Court decision.Remand for verification by the Assessing Officer - deduction under section 80P(2)(d) in respect of interest/dividend from investments with other co-operative societies and co-operative banks - Whether the small amount of interest/dividend of Rs. 36,446 received from a cooperative society qualifies for deduction under section 80P(2)(d). - HELD THAT: - The Tribunal observed that the interest/dividend of Rs. 36,446 from a cooperative society was not examined by the AO during assessment and had been placed before the CIT(A). Given the absence of verification at the assessment stage, the Tribunal remitted this limited issue to the AO for determination and directed the assessee to produce evidence to substantiate that the income satisfies the requirements of section 80P(2)(d). [Paras 11]Remitted to the AO for verification; if found to satisfy section 80P(2)(d), the deduction is to be allowed.Allowability of provisions as business expenditure - remand for verification by the Assessing Officer - Whether the provisions (reserve for NPA, staff leave encashment, reversal of interest subsidy receivable) disallowed by the AO are part of the business profit of the current year and thus allowable. - HELD THAT: - The Tribunal noted that the CIT(A) had allowed part deduction under section 80P(2)(a)(i) but the assessee had not established before the Tribunal that the provisions disallowed by the AO were in fact appropriations out of business profit of the year. The assessee relied on Circular/Notification No.37/2016 before lower authorities, but the Tribunal found the question of whether the provisions form part of business profit required factual verification. Consequently, the Tribunal remitted the issue to the AO to verify whether the provisions were part of the business profit of the relevant year and, if so, to apply the Circular as appropriate. [Paras 12]Remitted to the AO for verification; if found to be part of business profit of the year, the assessee to be given benefit as per the Circular cited.Final Conclusion: The Tribunal allowed the appeal for statistical purposes and directed specific remands to the Assessing Officer to verify (i) the character and licensing status of the recipient banks in respect of interest of Rs. 24,11,084 and to decide eligibility under section 80P(2)(d); (ii) the origin and eligibility of interest/dividend of Rs. 36,446 for section 80P(2)(d); and (iii) whether the disputed provisions formed part of the business profit of the year and are allowable, giving the assessee reasonable opportunity to produce supporting documents.

Allocation of common/head office expenses for deduction under sections 80IB/80IC - Characterisation of brand building/advertisement expenditure as revenue or capital - Remand for factual verification of sales tax incentive (character as capital receipt) - Section 145A adjustments to inventories - requirement to adjust opening stock, purchases, sales and closing stock - Remand for factual verification of retention money (accrual under percentage completion contracts) - Computation of disallowance under section 14A read with Rule 8D - recomputation in mixed fund cases - Admission and disposition of additional grounds - dismissal as infructuous where not pressedAllocation of common/head office expenses for deduction under sections 80IB/80IC - Whether head office corporate, advertisement, travelling and depreciation expenses could be further allocated by the Assessing Officer to the eligible units for computing deduction under sections 80IB and 80IC, beyond the allocation adopted by the assessee. - HELD THAT: - The Tribunal followed the coordinate bench decisions in the assessee's earlier years and accepted the assessee's methodology of allocating 50% of corporate (including advertisement) and related head office expenses to the eligible units as certified by the assessee's accountant. In the absence of any change in circumstances or cogent material to justify a different allocation, the Assessing Officer was directed not to make further allocations. The Tribunal therefore allowed the assessee's ground on allocation and dismissed the corresponding grounds of the Revenue challenging the reduced allocation, treating the matter as covered by precedent and the consistency of approach in earlier years. [Paras 16, 40, 41, 44, 46]Accepted the assessee's allocation method (50% allocation) for head office expenses and dismissed the Revenue's challenges on the same basis.Characterisation of brand building/advertisement expenditure as revenue or capital - Whether the expenditure on brand building/advertisement is capital in nature or revenue expenditure. - HELD THAT: - The Tribunal applied the established test distinguishing expenditure on an ongoing business from expenditure to create a new capital asset. Relying on the jurisdictional High Court authority, the Tribunal held that the advertisement/brand building expenditure related to maintaining and promoting an existing business and did not create a separate capital asset; therefore it is revenue in nature. The CIT(A)'s enhancement treating the expenditure as capital was reversed. [Paras 17, 18, 19, 20]Held the brand building/advertisement expenditure to be revenue in nature and allowed the assessee's ground.Remand for factual verification of sales tax incentive (character as capital receipt) - Character of sales tax incentive received by the Dadra unit - whether it is a capital receipt. - HELD THAT: - The Tribunal observed that the additional ground raised by the assessee touching the nature of the sales tax incentive requires factual verification. Consequently, rather than deciding the matter on the papers, the Tribunal remanded the issue to the Assessing Officer for verification of facts and decision on merits based on the assessee's submissions. [Paras 22, 23, 24]Remanded to the Assessing Officer for factual verification and decision on merits.Section 145A adjustments to inventories - requirement to adjust opening stock, purchases, sales and closing stock - Whether the assessee's offered addition under section 145A for difference in CENVAT on opening and closing stock alone was erroneous. - HELD THAT: - The Tribunal noted the assessee's contention that adjustments under section 145A must be made across opening stock, purchases, sales and closing stock, and that an isolated adjustment of opening and closing stock was incorrect. As the matter involved factual verification, the Tribunal remanded the issue to the Assessing Officer for enquiry and fresh decision. [Paras 26, 27]Remanded to the Assessing Officer for factual verification and fresh adjudication.Remand for factual verification of retention money (accrual under percentage completion contracts) - Whether retention money included in turnover under percentage completion contract accounting had accrued to the assessee during the year or was contingent until contractual obligations were fulfilled. - HELD THAT: - Relying on the Bombay High Court authority, the Tribunal accepted the legal principle that retention money becomes receivable only upon fulfillment of contractual obligations and may not accrue as income in the year of retention. The Tribunal directed the Assessing Officer to verify facts and determine when the retention money accrued in the factual matrix of the assessee's contracts. [Paras 30, 31]Remanded to the Assessing Officer for verification of facts and decision on accrual.Computation of disallowance under section 14A read with Rule 8D - recomputation in mixed fund cases - Whether the disallowance under section 14A (read with Rule 8D) required recomputation having regard to investments and mixed fund position disclosed by the assessee. - HELD THAT: - The Tribunal found that the assessee had offered certain exempt income and interest income to tax and that the matter of apportionment in cases of mixed funds is governed by the jurisdictional High Court's decision in Godrej Boyce. The Tribunal upheld the CIT(A)'s direction that the Assessing Officer recompute the disallowance under section 14A in accordance with that principle and dismissed the Revenue's challenge to the CIT(A)'s direction. [Paras 33, 35, 36]Upheld the CIT(A)'s direction to recompute disallowance under section 14A in accordance with applicable High Court precedent; Revenue's ground dismissed.Admission and disposition of additional grounds - dismissal as infructuous where not pressed - Disposition of additional grounds which were not pressed by the assessee (leave encashment and education cess). - HELD THAT: - The Tribunal recorded that certain additional grounds were not pressed by the assessee before it. On that basis the Tribunal dismissed those grounds as infructuous rather than deciding them on merit. [Paras 25, 28]Additional grounds not pressed were dismissed as infructuous.Final Conclusion: The Tribunal partly allowed the assessee's appeal by upholding the assessee's allocations of head office expenses (including advertisement and travelling) and treating brand building expenditure as revenue; it remanded the sales tax incentive, section 145A inventory adjustment and retention money issues to the Assessing Officer for factual verification; it upheld recomputation of disallowance under section 14A in accordance with jurisdictional precedent; and it dismissed as infructuous additional grounds not pressed.

Applicability of Section 115JB to statutory corporations/Government undertakings - prospective operation of the amendment to Section 115JB effected by Finance Act, 2012 w.e.f. 01.04.2013 - computation of book profit based on statements prepared under regulatory Acts versus Schedule/Part provisions of the Companies ActApplicability of Section 115JB to statutory corporations/Government undertakings - prospective operation of the amendment to Section 115JB effected by Finance Act, 2012 w.e.f. 01.04.2013 - Applicability of Section 115JB to the assessee for AY 2012-13 - HELD THAT: - The Tribunal applied the ratio of the Hon'ble Jurisdictional High Court which held that the amendment to Section 115JB introduced by Finance Act, 2012 (effective 01.04.2013) is substantive and prospective. Prior to that amendment, companies required to prepare accounts under their regulatory Acts (such as statutory electricity corporations) were not brought within the machinery of Section 115JB(2) and consequently the charging fiction of Section 115JB(1) was not attracted. Following that reasoning, the Tribunal held that Section 115JB does not apply to the assessee for AY 2012-13 and the Revenue's appeal for that year fails. [Paras 15, 16]Revenue's appeal for AY 2012-13 dismissed; Section 115JB held not applicable for that year.Applicability of Section 115JB to statutory corporations/Government undertakings - prospective operation of the amendment to Section 115JB effected by Finance Act, 2012 w.e.f. 01.04.2013 - computation of book profit based on statements prepared under regulatory Acts versus Schedule/Part provisions of the Companies Act - Applicability of Section 115JB to the assessee for AY 2016-17, AY 2017-18 and AY 2018-19 - HELD THAT: - Applying the High Court's conclusion that the 2012 amendment brought within the scope of Section 115JB those companies whose statements are governed by their regulatory Acts by expressly providing for such statements for computation of book profit, the Tribunal held that post-amendment (i.e. with effect from 01.04.2013) the assessee falls within the ambit of Section 115JB. Consequently, the Tribunal set aside the CIT(A)'s findings for AY 2016-17, AY 2017-18 and AY 2018-19 and decided the issue in favour of the Revenue. [Paras 16]Revenue's appeals for AY 2016-17, AY 2017-18 and AY 2018-19 allowed; Section 115JB held applicable for those years.Final Conclusion: Following the Jurisdictional High Court's ratio on the 2012 amendment to Section 115JB, the Tribunal dismissed the Revenue's appeal for AY 2012-13 and allowed the Revenue's appeals for AY 2016-17, AY 2017-18 and AY 2018-19.

Acceptability of laboratory test report - drawal and preservation of samples as per BIS 1405-2010 - reliability of delayed testing of samples - determination of iron content on Wet Metric Ton (WMT) basis - classification for export duty based on Fe content - right to opportunity / supply of contested test reportAcceptability of laboratory test report - drawal and preservation of samples as per BIS 1405-2010 - reliability of delayed testing of samples - right to opportunity / supply of contested test report - The CRCL (Customs) laboratory test report relied upon by the department is not acceptable for finalising the assessment. - HELD THAT: - The Tribunal found that the CRCL report was supplied to the appellant only in the second round of litigation and was not provided earlier, thereby denying the appellant an opportunity to contest or seek retesting. The Tribunal recorded that the CRCL samples and their storage did not appear to adhere to BIS procedures (BIS 1405-2010 and related Board circular), including that samples were kept in plastic bags rather than air tight containers and that testing was carried out after an inordinate delay causing doubt as to moisture evaporation and resultant Fe determination. The Tribunal referred to binding precedents which discredit test reports based on samples drawn or tested contrary to prescribed standards or after significant delay, and held that the CRCL report was cryptic, lacked necessary protocols, and therefore could not form the basis for assessment or classification for export duty. [Paras 8, 9, 10]The CRCL test report is rejected as unreliable and not acceptable for assessment purposes.Determination of iron content on Wet Metric Ton (WMT) basis - classification for export duty based on Fe content - The Fe content for classification and levy of export duty must be determined on Wet Metric Ton (WMT) basis and the load port/discharge port test reports adhering to BIS standards are to be accepted for assessment. - HELD THAT: - Applying the law laid down by the Supreme Court in Union of India v. Gangadhar Narsinghdas Agarwal and subsequent High Court and Tribunal authorities, the Tribunal held that the percentage of iron must be related to the weight of the goods at the relevant time of export (WMT), inclusive of impurities and moisture, and that where reputable load port and discharge port laboratories have tested samples in accordance with BIS standards and their results are in near harmony, those reports are decisive. In the present case the contractual (load port) and discharge port CIQ reports, tested as per BIS, recorded Fe below 58% on dry basis and moisture levels which, when converted by the universally accepted formula to WMT basis, support classification under the nil duty entry relied upon by the appellant. Consequently, the CRCL dry basis determination could not be used to reclassify the exports and impose export duty. [Paras 12, 13, 14, 19]Assessments must be finalised on WMT basis accepting the load port/discharge port BIS compliant reports; the department's dry basis CRCL determination cannot be used to attract export duty.Final Conclusion: The Tribunal set aside the impugned order of the Commissioner (Appeals), rejected the Customs Laboratory (CRCL) report as unreliable, accepted the load port/discharge port BIS compliant test reports and the legal position that Fe content must be determined on Wet Metric Ton basis, and allowed the appeal with consequential relief.

Validity of communication issued without Document Identification Number (DIN) - Binding effect of CBDT Circular No.19/2019 - Failure to quote DIN renders communication invalid and deemed never issued - Exceptional circumstances and prior written approval for manual communications - Requirement of regularisation within fifteen working days for manually issued communications - Subsequent generation/communication of DIN cannot cure non-compliance in the original order - Quashing of assessment order for non-compliance with CBDT Circular No.19/2019Validity of communication issued without Document Identification Number (DIN) - Binding effect of CBDT Circular No.19/2019 - Failure to quote DIN renders communication invalid and deemed never issued - Subsequent generation/communication of DIN cannot cure non-compliance in the original order - Exceptional circumstances and prior written approval for manual communications - Requirement of regularisation within fifteen working days for manually issued communications - Whether the assessment order dated 24.12.2021 for AY 2015-16, which does not quote a DIN in its body and contains no recorded reasons or prior written approval for manual issuance, is valid in law. - HELD THAT: - The Tribunal found as a fact that the impugned assessment order does not contain a computer-generated DIN in its body and there is no material on record recording reasons or prior written approval by the Chief Commissioner/Director General as contemplated by paragraph 3 of CBDT Circular No.19/2019. Paragraph 2 of the Circular mandates that communications on or after 1.10.2019 must quote a computer-generated DIN in the body; paragraph 3 prescribes narrowly defined exceptions subject to prior written approval and recording of reasons; paragraph 5 prescribes regularisation steps within fifteen working days where applicable; and paragraph 4 provides that any communication not in conformity with paragraphs 2 and 3 shall be treated as invalid and deemed never to have been issued. The Tribunal held that the subsequent generation or communication of a DIN by a separate intimation dated 03.02.2022 cannot cure the deficiency in the original order which failed to quote the DIN and did not comply with the exceptional-approval and recording requirements. Reliance was placed on the decision of the Delhi High Court in CIT (International Taxation) v. Brandix Mauritius Holdings Ltd. and on coordinate decisions, and the Tribunal treated the CBDT Circular as binding on the revenue. Applying the Circular's plain terms to the present facts, the assessment order was held to be non-est in law and therefore liable to be quashed. [Paras 9, 11, 12, 13, 16]Impugned assessment order dated 24.12.2021 is invalid for non-compliance with CBDT Circular No.19/2019 and is quashed; consequence that the CIT(A)'s order stands set aside and the appeal is allowed without adjudication on merits.Final Conclusion: The Tribunal allowed the additional legal ground based on non-compliance with CBDT Circular No.19/2019, held the assessment order for AY 2015-16 to be invalid and of no legal effect for failure to quote DIN and to follow the Circular's exception/regularisation regime, quashed the assessment order dated 24.12.2021 and set aside the CIT(A)'s order; the appeal was allowed and the matter was not decided on merits.

Disallowance under Section 14A - applicability of Rule 8D - 5% standard disallowance rule under Section 14A (pre-Rule 8D years) - deductibility of settlement of claims - transfer pricing adjustment for issuance of Letter of Comfort - treatment of Letter of Comfort vis-A -vis corporate guarantees - international transaction under Section 92B - incidental benefit doctrine (OECD guidance)Deductibility of settlement of claims - precedential application of co-ordinate bench decisions - Deletion of disallowance of expenditure incurred on settlement of claims. - HELD THAT: - The Tribunal applied binding/co-ordinate bench precedent in the assessee's own case for earlier assessment years where identical disallowances in respect of claims settled were deleted. The Tribunal noted that the co-ordinate bench had considered similar facts and, respectfully following those orders, deleted the disallowance made by the Assessing Officer for A.Y. 2007-08. The Revenue's reliance on lower authorities was considered but, in view of the consistent earlier decisions, the disallowance was held not maintainable.Disallowance in respect of settlement of claims deleted; assessee's ground allowed.Disallowance under Section 14A - applicability of Rule 8D - 5% standard disallowance rule under Section 14A (pre-Rule 8D years) - Quantum of disallowance under Section 14A where Rule 8D is not applicable. - HELD THAT: - The Tribunal held that Rule 8D was not part of the statute for A.Y. 2007-08 and therefore its computational methodology could not be applied. Relying on the Tribunal's approach in the assessee's earlier year (A.Y. 2005-06), the Tribunal adopted a pragmatic standard and restricted the disallowance under Section 14A to 5% of the exempt dividend income. Although the assessee advanced alternative computations (excluding foreign investments and non-dividend yielding investments), those computations were founded on Rule 8D formulae; since Rule 8D was inapplicable, the Tribunal declined to re-work disallowance under that rule and granted relief by applying the 5% benchmark.Disallowance under Section 14A reduced by applying 5% of exempt income; assessee granted part relief.Transfer pricing adjustment for issuance of Letter of Comfort - treatment of Letter of Comfort vis-A -vis corporate guarantees - international transaction under Section 92B - incidental benefit doctrine (OECD guidance) - Whether issuance of Letters of Comfort (LoC) to bankers of associated enterprises constitutes an international transaction attracting transfer pricing adjustment, or is equivalent to an intra-group guarantee requiring commission/adjustment. - HELD THAT: - The Tribunal upheld the CIT(A)'s conclusion that the LoC is a unilateral comfort letter not accepted by the banker, not enforceable as a guarantee, and therefore does not create binding recourse akin to a corporate guarantee. The LoC was characterized as supplying only comfort or an incidental benefit arising from group affiliation, which per OECD guidance does not automatically amount to a remunerable intra group service. Given that the issue had been decided in the assessee's favour in an earlier assessment year, the Tribunal followed that precedent and deleted the TPO/AO's transfer pricing adjustment computed on the LoCs.Transfer pricing addition relating to Letters of Comfort deleted; Revenue's grounds dismissed.Final Conclusion: Following co-ordinate-bench precedents, the Tribunal deleted the disallowance for settlement of claims, restricted the Section 14A disallowance for A.Y. 2007-08 to 5% of exempt dividend income (Rule 8D inapplicable), and dismissed the revenue's transfer pricing adjustment in respect of Letters of Comfort; the assessee's appeal was partly allowed and the revenue's appeal dismissed.

Document Identification Number (DIN) requirement under CBDT Circular No. 19/2019 - Manual issuance of communication subject to prior written approval and recorded reasons under Para 3 of the Circular - Communication not in conformity with Para 2 and Para 3 to be treated as invalid and deemed never to have been issued - Subsequent generation of DIN cannot cure non compliance with Para 3 requirementsDocument Identification Number (DIN) requirement under CBDT Circular No. 19/2019 - Manual issuance of communication subject to prior written approval and recorded reasons under Para 3 of the Circular - Communication not in conformity with Para 2 and Para 3 to be treated as invalid and deemed never to have been issued - Subsequent generation of DIN cannot cure non compliance with Para 3 requirements - Whether the assessment order dated 31.12.2019 is valid where it was issued manually without quoting a DIN and did not contain the statement/format required by Para 3 of CBDT Circular No.19/2019 - HELD THAT: - The Tribunal held that the CBDT Circular mandates generation/allotment/quoting of a computer generated DIN in the body of communications and, where communications are issued manually for exceptional reasons, requires recording of reasons in the file and prior written approval of the Chief Commissioner/Director General together with a prescribed statement in the communication. The Assessing Officer's order of 31.12.2019 did not quote or state any DIN and did not include the Para 3 statement evidencing recorded reasons and prior written approval. Reliance on a subsequent generation of the DIN after issuance does not satisfy the specific Para 3 requirement that the manual communication must state the fact of issuance without a DIN and the particulars of the approval; accordingly paragraph 4 of the Circular treats communications not in conformity with Para 2 and Para 3 as invalid and deemed never to have been issued. The Tribunal found the CIT(A)'s reliance on post hoc generation of DIN and vague reference to approval of CCIT(C) inadequate to cure the non compliance and concluded that the assessment order must be set aside for being invalid under the Circular. As the preliminary legal issue was decided in favour of the assessee, the remaining grounds were rendered academic. [Paras 9, 11, 12, 13]Assessment order dated 31.12.2019 is invalid for non compliance with CBDT Circular No.19/2019 and is deemed never to have been issued; appeal of the assessee allowed and Revenue's cross appeal dismissed as infructuous.Final Conclusion: The Tribunal set aside the assessment order dated 31.12.2019 for assessment year 2017-18 as not conforming to CBDT Circular No.19/2019 (absence of DIN and required Para 3 statement), allowed the assessee's appeal and dismissed the Revenue's cross appeal as infructuous.

Omnibus show cause notice and non application of mind - requirement to specify offence in the penalty notice - penalty under section 270A of the Income Tax Act - distinction between underreporting and misreporting of income - vitiation of penalty proceedings for failure to delete inapplicable portions - mandatory precision in show cause noticesOmnibus show cause notice and non application of mind - requirement to specify offence in the penalty notice - penalty under section 270A of the Income Tax Act - distinction between underreporting and misreporting of income - Validity of penalty proceedings under section 270A where the penalty show cause notice contained unstruck printed portions and did not specify whether the assessee was alleged to have underreported or misreported income. - HELD THAT: - The Tribunal found that the assessee, a charitable trust, had accepted a disallowance in the quantum proceedings but challenged the penalty notice on the ground that the Assessing Officer did not strike off inapplicable portions of the printed notice and did not specify the particular offence under section 270A (whether underreporting, misreporting, or both). Relying on the Full Bench decision of the Bombay High Court in Mohd. Farhan A. Shaikh which disapproved the routine issuance of omnibus printed show cause notices without deleting inapplicable parts and endorsed Dilip N. Shroff as treating such practice as indicative of non application of mind, the Tribunal observed that different rates of penalty are prescribed for underreporting and for misreporting under section 270A. Because of that statutory distinction it was incumbent on the Assessing Officer to identify the offence alleged so as to apply the correct penal provision. The absence of any specific allegation in the notice, coupled with failure to delete irrelevant portions, vitiated the penalty proceedings. The Tribunal therefore deleted the penalty levied under section 270A. As the relief was granted on this procedural/technical ground, other grounds were left open for consideration. [Paras 3, 4]Penalty under section 270A set aside because the show cause notice contained unstruck inapplicable printed portions and did not specify whether underreporting or misreporting was alleged.Final Conclusion: The appeal is allowed: the penalty levied under section 270A is deleted on the ground that the show cause notice failed to strike off inapplicable portions and did not specify the offence (underreporting or misreporting), thereby vitiating the penalty proceedings.

Re-opening of assessment under Section 147 - Notice under Section 148 - Sanction under Section 151 - Mechanical approval / non-application of mind - Proviso to Section 147 - failure to truly and fully disclose material factsRe-opening of assessment under Section 147 - Sanction under Section 151 - Mechanical approval / non-application of mind - Proviso to Section 147 - failure to truly and fully disclose material facts - Reopening of assessment and consequent reassessment quashed as the sanction under Section 151 was accorded mechanically without application of mind, and the condition in the proviso to Section 147 was not made out. - HELD THAT: - The Addl. CIT's approval dated 30.03.2015 consisted only of a signature on the proforma and did not record any satisfaction or reasons indicating application of mind. The Tribunal held that such ritualistic or mechanical sanction vitiates the jurisdictional requirement for issuance of notice under Section 148 and renders the reopening invalid. The Tribunal applied settled principles that the approving authority must form an independent satisfaction after perusing the AO's proposal, and that mere appending of 'approved' or signing a proforma is insufficient. The decision relied on coordinate and High Court authorities which establish that reasons recorded must disclose a live link between material and the belief of escapement, and that approvals given without applying mind are void. Independently, the Tribunal observed that where assessment was framed under Section 143(3) and relevant material had been placed on record, the proviso to Section 147 (requiring failure to truly and fully disclose material facts) was not satisfied; therefore reopening beyond four years could not be sustained. For these reasons the reopening under Section 147/148 and the consequent assessment were quashed. [Paras 5, 6, 8]The reopening proceedings under Section 147/148 and the consequent assessment are quashed; the assessee's appeal is allowed.Final Conclusion: The Tribunal allowed the appeal, quashed the reopening sanctioned on 30.03.2015 and the resultant reassessment, holding the sanction under Section 151 to be mechanical and that the proviso to Section 147 was not satisfied.

Taxation of commission income as opposed to treating bank deposits as trading receipts - facility provider / accommodation entries - onus of proof where cash is found deposited in assessee's bank accounts - presumption of ownership from possession (principle of Section 110 of the Evidence Act) - reopening under Section 147 and consideration of reasons recorded - remand for verification and coordinated examination between Investigation Wing and Assessing OfficerTaxation of commission income as opposed to treating bank deposits as trading receipts - facility provider / accommodation entries - whether deposits in the assessee's bank accounts were to be taxed as her trading receipts (gross profit on turnover) or only to the extent of commission income earned as a facility provider - HELD THAT: - The Tribunal examined survey statements, remand reports and material on record and concluded that the assessment had been opened to tax commission income from transactions facilitated by the assessee. The Assessing Officer's later change of stance to treat the deposits as the assessee's own trading receipts (and apply GP rate) was held to be unjustified in view of: (a) the assessee's admitted position in survey/statements that the bank accounts were used to facilitate cash receipts for marble traders and she received commission; (b) absence of any infrastructure, registrations, books or other corroboration that the assessee carried on marble trading; and (c) earlier consistent treatment in related matters where commission income alone was taxed. On these facts the Tribunal upheld the CIT(A)'s approach of treating the assessee as a facility provider and not as a marble trader, and modified the addition to assess only net commission income at Rs.225 per Rs.1,00,000 of deposits. The Bench declined to sustain the AO's gross profit additions which swung the basis of assessment without supporting evidence. [Paras 6, 14]Deposits were not to be treated as the assessee's trading receipts; only net commission income of Rs.225 per Rs.1,00,000 of deposits is to be brought to tax.Onus of proof where cash is found deposited in assessee's bank accounts - presumption of ownership from possession (principle of Section 110 of the Evidence Act) - whether the assessee discharged the onus to show that the cash deposited in her accounts belonged to third-party marble traders and not to her - HELD THAT: - The Tribunal analysed the law that when cash/deposits are in an assessee's possession (here, bank accounts in her name), the onus to show the money belongs to others lies on the assessee. The assessee had, during survey, stated that she furnished party-wise details to the Investigation Wing; the Revenue did not produce controverting evidence showing those details were not provided or that beneficiaries were not pursued. The Tribunal observed absence of any further evidence from the Revenue and accepted that the assessee had provided the available information to the Investigation Wing and that the Revenue had not controverted the same before the bench. In that factual backdrop the Tribunal held the assessee had sufficiently explained the source of deposits for purposes of the present proceedings and the Revenue failed to discharge its burden to prove otherwise. [Paras 2, 13]The assessee's explanation that the deposits belonged to marble traders (and details were furnished to the Investigation Wing) was accepted in the absence of contrary evidence; the onus did not lead to sustaining AO's finding that deposits were assessee's own trading receipts.Reopening under Section 147 and consideration of reasons recorded - change of basis of assessment at the fag end of proceedings - whether the Assessing Officer was justified in changing the basis of assessment from taxing commission to estimating gross profit from deposits after reopening under the reasons recorded - HELD THAT: - The Tribunal applied the principle that reassessment must be guided by the reasons recorded; while other concealed income noticed in reassessment can be taken cognizance of, the finding must be supported by clinching evidence. Here the reassessment was initiated to assess commission income; the AO's subsequent switch to treat the assessee as a marble trader and apply GP on turnover lacked supporting evidence in remand reports (which admitted absence of infrastructure, registrations and books). The Tribunal held that the swing in position was not supported by the facts and records and could not be sustained. [Paras 6, 14]The AO's change of basis from commission to gross profit on turnover was unjustified and could not be sustained.Allowability of expenses against commission income - whether the CIT(A)'s allowance of 25% as expenses against the assessed commission income was sustainable - HELD THAT: - While the CIT(A) allowed 25% of commission as expenses (arriving at net commission of Rs.225 per Rs.1,00,000), the Tribunal examined the record and found no documentary proof or particulars of such expenses before it. The assessee did not produce supporting evidence quantifying expenses attributable to the commission income in the appellate proceedings. Accordingly, the Tribunal accepted the view that the allowance of 25% had no demonstrable basis on the record before it and therefore could not be sustained. [Paras 6, 14]Allowance of 25% expenses out of commission was not sustained for lack of evidence; the claim for such expenses is disallowed.Final Conclusion: The appeals by Revenue were partly allowed. On the material before it the Tribunal held that the deposits in the assessee's bank accounts were from third-party marble traders and the assessee was a facility provider; the Assessing Officer's gross-profit additions treating the deposits as the assessee's trading receipts were reversed and only net commission income (Rs.225 per Rs.1,00,000) was directed to be assessed. The CIT(A)'s allowance of 25% expenses against commission was not sustained for lack of evidence.

Disallowance of depreciation on land development expenditure on leasehold land - depreciation on "right to use" leasehold land treated as intangible asset - finality of earlier assessment finding / estoppel by conduct in subsequent years - disallowance under section 14A read with rule 8D - computation of book profit under clause (f) to Explanation 1 to section 115JB - deduction under section 80IAB for income from SEZ activities (including scrap and hedging gains) - characterisation of foreign currency derivative (swap) gains/losses as business (non speculative) hedging transactions - corporate/bank guarantee as an "international transaction" and benchmarking to determine ALP - bench marking of interest on intra group loans - appropriate LIBOR plus margin approachDisallowance of depreciation on land development expenditure on leasehold land - finality of earlier assessment finding / estoppel by conduct in subsequent years - Validity of disallowance of depreciation claimed on land development expenditure for leasehold land - HELD THAT: - The Tribunal upheld the view that where an identical claim had been finally adjudicated against the assessee in an earlier assessment year and the assessee did not challenge that conclusion, the assessee cannot reopen the same issue in subsequent years. Applying that principle to the present facts, the tribunal found the earlier CIT(A)'s confirmation of disallowance reached finality and therefore the claim for depreciation on land development expenditure could not be entertained for the year under consideration. [Paras 7]Assessee's ground dismissed; disallowance of depreciation on land development expenditure sustained for the year.Depreciation on "right to use" leasehold land treated as intangible asset - Allowability of depreciation on recognition of 'right to use' leasehold land as an intangible asset - HELD THAT: - The Tribunal followed a prior coordinate bench decision in the assessee's own case for an earlier assessment year, which had accepted the accounting recognition of the right to use leasehold land as an intangible asset and allowed depreciation. No material was placed to show that that earlier tribunal order has been set aside or that facts differ. Respectfully following that decision, the Tribunal held that depreciation on the right to use leasehold land is allowable and directed deletion of the disallowance. [Paras 12]Assessee's ground allowed; disallowance deleted and AO directed to give relief.Disallowance under section 14A read with rule 8D - computation of book profit under clause (f) to Explanation 1 to section 115JB - Correct quantum and method of disallowance in respect of expenditure relatable to exempt income and treatment for book profit under section 115JB - HELD THAT: - On facts the Tribunal found that the assessee had sufficient interest free own funds exceeding investments yielding exempt income; therefore, interest disallowance under rule 8D(2)(ii) was not warranted. For administrative expenses under rule 8D(2)(iii), the Tribunal applied the Special Bench ratio that only investments which yielded exempt income during the year are to be considered and computed that disallowance accordingly (resulting no further disallowance as assessee's own suo moto amount exceeded computed liability). Separately, the Tribunal held that disallowances arrived at under section 14A r.w.r. 8D are not to be mechanically imported into the book profit computation under clause (f) to Explanation 1 to section 115JB; clause (f) is to be applied independently. In the facts, the Tribunal directed addition to book profit of the amount admitted by the assessee as incurred in connection with exempt income. [Paras 17]Disallowance under section 14A reduced to the extent determined (assessee relieved on interest; administrative disallowance limited); addition under section 115JB partly allowed (addition limited to amount admitted by assessee).Deduction under section 80IAB for income from SEZ activities (including scrap and hedging gains) - characterisation of foreign currency derivative (swap) gains/losses as business (non speculative) hedging transactions - Whether scrap receipts and foreign currency derivative gains/losses are eligible for deduction under section 80IAB and whether derivative losses are business (non speculative) - HELD THAT: - The Tribunal followed its own earlier decisions in the group's prior years and relevant judicial pronouncements holding that (i) scrap receipts arising in the course of eligible SEZ activities can be treated as business income eligible for section 80IAB; and (ii) foreign currency swap/derivative gains and mark to market losses entered into for hedging commercial exposure are to be treated as business income/loss (non speculative) where the transactions are hedging the enterprise's underlying exposures. Applying those precedents and on the facts that the derivative transactions were hedging and not speculative, the Tribunal directed deletion of the AO's disallowances. [Paras 24, 27, 29]Deductions under section 80IAB allowed in respect of scrap and qualifying derivative gains; derivative losses treated as business losses (disallowances deleted).Bench marking of interest on intra group loans - appropriate LIBOR plus margin approach - Appropriate arm's length benchmark for notional interest on interest free intra group foreign currency loan - HELD THAT: - Considering tribunal precedents and the commercial differences between bank loans and intra group advances, the Tribunal rejected the TPO's adoption of bank upfront fees and risk adjustments as applicable to a parent to subsidiary interest free advance. Having regard to judicial and tribunal practice on comparable contexts, the Tribunal concluded that a LIBOR plus margin (taken at LIBOR + 2% on the facts and precedents cited) is a reasonable ALP and that the assessee's notional interest offered at a similar LIBOR plus rate represented ALP; accordingly the upward transfer pricing adjustment was deleted. [Paras 54]Assessee's appeal allowed; AO/TPO interest benchmarking adjustment deleted and ALP accepted at LIBOR+2% (suo moto offered rate treated as ALP).Corporate/bank guarantee as an "international transaction" and benchmarking to determine ALP - Whether corporate guarantees furnished to an associated enterprise constitute an international transaction and the proper approach to determine ALP of guarantee commission - HELD THAT: - The Tribunal acknowledged that the Finance Act, 2012 (retrospective explanation to section 92B) brings corporate guarantees within the definition of international transactions. It found that bank guarantee commission rates are not automatically comparable to corporate guarantee considerations; benchmarking must reflect facts such as creditworthiness, benefit to the guaranteed party and interest saving. On the facts, the assessee's internal comparables showed no benefit to the AE (AE paid higher borrowing cost despite guarantee) and the assessee had not incurred cost; applying an interest saving approach the Tribunal found no basis for the TPO's upward adjustment based on bank margins and therefore upheld the CIT(A)'s deletion of the TP adjustment. [Paras 41]Revenue's ground dismissed; corporate guarantee held to be within international transactions but AO/TPO's benchmarking (using bank rates) rejected and upward adjustment deleted on facts.Disallowance under section 14A read with rule 8D - Remand for limited recomputation of administrative expense disallowance under rule 8D(2)(iii) - HELD THAT: - For later assessment years the Tribunal applied the principle that administrative disallowance under rule 8D(2)(iii) should be computed considering only investments which yielded exempt income during the year and limited the disallowance not to exceed exempt income. Where computation for subsequent years differed, the Tribunal set aside the matter to the AO for limited recomputation on that basis to avoid multiplicity of proceedings. [Paras 45]Issue remanded to AO for limited purpose to recompute administrative expense disallowance consistent with Tribunal's directions (only investments yielding exempt income to be considered; capped by exempt income).Final Conclusion: The Tribunal's consolidated outcome: appeals are mixed - on factual and precedent grounds depreciation on certain land development claims was disallowed where prior years' findings were final, but depreciation on 'right to use' leasehold land was allowed following the Tribunal's earlier decision; disallowances under section 14A/rule 8D were significantly restricted (interest disallowance negated; administrative disallowance limited to investments yielding exempt income and capped by exempt income) with limited remand for recomputation; section 80IAB reliefs for scrap and hedging gains were allowed and derivative losses treated as business losses where hedging was established; corporate guarantee TP adjustments based on bank rates were rejected on the facts and no upward adjustment sustained; and for intra group interest benchmarking the Tribunal accepted a LIBOR plus approach (LIBOR+2% adopted on the facts) and deleted the TPO's higher adjustment. Overall disposition of the arrayed appeals is recorded as partly allowed/dismissed in the combined result announced.

Revision under section 263 - erroneous order prejudicial to the interests of the revenue - lack of inquiry versus inadequate inquiry - application of mind by the Assessing Officer - deduction under Chapter VI-A (section 80GGC)Revision under section 263 - erroneous order prejudicial to the interests of the revenue - lack of inquiry versus inadequate inquiry - application of mind by the Assessing Officer - deduction under Chapter VI-A (section 80GGC) - Whether the Principal Commissioner of Income-tax was justified in treating the assessment framed under section 143(3) as erroneous insofar as prejudicial to the interests of the revenue for not making adequate enquiries into the claim of donation to a political party and in setting aside the assessment under section 263. - HELD THAT: - The Tribunal held that the Assessing Officer had made enquiries and considered written submissions and supporting documents (donation receipt, donation ledger, bank statement and election commission recognition) before completing the assessment under section 143(3). The distinction between lack of inquiry and inadequate inquiry was applied: mere dissatisfaction of the Commissioner with the extent of inquiries does not render an order erroneous under section 263. Authority to revisit an assessment under section 263 exists only where the AO has failed to apply the law, omitted inquiries altogether, taken a view unsustainable in law, or the order demonstrates non-application of mind. The PCIT's reliance on subsequent search proceedings at the political party (dated after the assessment) could not supply a ground to characterise the AO's earlier order as erroneous because those findings were not available to the AO when the assessment was completed. Precedents were cited supporting that a revisional order is impermissible where the AO has carried out enquiries and taken a plausible view. Applying these principles to the material on record, the Tribunal found no omission by the AO amounting to an erroneous order prejudicial to revenue. [Paras 8]The revisional order passed by the Principal Commissioner under section 263 is unsustainable because the assessment under section 143(3) was rendered after enquiries and application of mind; therefore the assessment is not erroneous insofar as prejudicial to the interests of the revenue.Final Conclusion: The assessee's appeal is allowed; the revisional order under section 263 is quashed and the assessment framed under section 143(3) for AY 2018-2019 is upheld.