Cash capital contributed by identified partners cannot be treated as unexplained cash credits in the partnership firm's hands merely because the partners' sources of income are not established. The firm must establish the identity of the contributing partners, while any inquiry into the source of an unexplained contribution is assessable, if at all, in the individual partners' assessments. Accordingly, the cash-capital addition made in the firm's assessment was deleted.

Reassessment jurisdiction remains valid where reasons to believe are recorded and the prescribed statutory procedure is followed. Seized ledger entries maintained by a family member cannot support separate substantive additions in another person's hands when the recorded amounts have been owned and substantively assessed in the ledger keeper's hands. Protective additions in a company's assessment, being dependent on those substantive additions, likewise fail. The principle prevents duplicate substantive taxation of the same ledger amounts across different persons.

Requisition proceedings under Section 132A governed by the pre-existing Section 153A assessment regime had to be initiated and completed within the limitation prescribed by Section 153B. Expiry of that period could not be circumvented by invoking the reassessment procedure under Sections 148A and 148 introduced from 1 April 2021. The relevant Explanation to Section 148 applied only to searches or requisitions conducted on or after that date. A challenge to the statutory procedure was distinct from an objection to territorial jurisdiction under Section 124(3). Consequently, the reassessment notice and proceedings were invalid, and the penalty founded on the resulting reassessment could not survive.

Depreciation on goodwill arising from amalgamation is allowable under Section 32(1)(ii) where the goodwill represents excess consideration over the amalgamating entities' net asset value and is supported by the amalgamation scheme and valuation. Consistent prior-year allowance should continue absent distinguishing facts or evidence of an artificial goodwill arrangement. Reimbursement of employee stock option costs to a group entity is deductible under Section 37(1) when it constitutes business-related employee compensation and the liability accrues under the mercantile system. The claims remain allowable where identical claims were accepted in earlier years and no distinguishing facts are established.

Enhanced business income arising from a sustained addition qualifies for a corresponding enhanced deduction under section 80P where the deduction is linked to business profits. CBDT guidance recognises that disallowances increasing business profits require Chapter VI-A deductions to be recomputed on the enhanced income. The enhanced business profits therefore remain eligible for deduction under section 80P, increasing the allowable deduction to reflect the addition.

Interest on borrowings is deductible against dividend income only to the extent a direct factual nexus exists between the borrowing and the dividend-yielding investment; investments funded from sale proceeds or available interest-free funds do not support further interest deduction. Industrial-unit deduction remained available on the established position followed for prior years. Security deposits paid to obtain leased employee accommodation do not create taxable notional interest, because tax liability requires actual income rather than assumed returns. Interest on borrowings for new machinery and overheads incurred during trial runs are revenue expenditure. These principles support the assessee's positions on the identified issues.

Reassessment cannot be initiated on transactions already scrutinised in the original assessment merely by revisiting the same material. The original scrutiny examined purchases from high-risk billers, GST reconciliations, supplier confirmations, bank-payment evidence and books of account, rejected the books, and estimated net profit on total sales. As the alleged escaped income was subsumed within that assessment, reopening represented an impermissible change of opinion. The reassessment initiation was therefore invalid.

Reassessment following a scrutiny assessment was invalid where the deduction claim, partners' capital details and gold purchases from a sister concern had been fully disclosed and were available during the original assessment. The gold-pricing issue had already been examined, while the explanation regarding fineness and the alleged notional price difference was not addressed in rejecting objections. The interest-based allegation also lacked foundation because an amended partnership deed had rendered the interest clause inoperative, leaving no contractual obligation to pay interest or basis for profit adjustment. Audit objections materially influenced reopening despite prior acceptance of the pricing explanation.

Valid service of service-tax show-cause notices is essential before ex parte adjudication can proceed. Postal delivery was not established, and emails sent to an address sourced from income-tax records were not shown to be accessible to the assessee or registered on the GST portal. As service was unproven, the ex parte adjudication and delayed appeal could not stand. The show-cause notices and consequential appellate orders were quashed, with remand for fresh notices and adjudication after providing an opportunity of hearing.

Article 289(1) exempts a State's property and income from Union taxation, restricting the Income-tax Act's taxing reach. A State-controlled conservation society may qualify for this immunity where it functions as an instrumentality and administrative vehicle of the State: it is controlled by State functionaries, performs public conservation obligations linked to Article 48A, and holds ring-fenced statutory receipts and corpus solely for those purposes. Incidental interest applied exclusively to conservation purposes retains that public character. Statutory conservation receipts and related funds meeting these conditions cannot be subjected to income tax.

Rule 20 requires the Tribunal to fix hearings with sufficient time to serve notice, enabling parties to appear and be heard. Where prior hearings were adjourned because the Tribunal did not function and no notice of the subsequently fixed hearing was issued to the assessee, an ex parte merits decision without verifying service breaches that requirement and causes a failure of justice. The ex parte appellate order was therefore set aside, and the appeal was restored for fresh adjudication after notice to both parties.

Bright Line Test is not a legally sanctioned method for determining transfer-pricing adjustments concerning advertising, marketing and promotion expenditure. Binding decisions support rejection of an adjustment computed through that test. The advertising, marketing and promotion adjustment was therefore rejected in favour of the assessee.

Hotel-booking costs recovered from end customers do not qualify as pure-agent reimbursements under Rule 33 where the supplier lacks customer authorisation to procure third-party booking services, receives invoices in its own name, obtains title to those services, and uses them for its own reservation supply. Rule 33 also requires separate recovery of actual expenditure and prohibits inclusion of unauthorised intermediary charges. Consequently, the full consideration collected for hotel reservation services, including recovered booking-agent costs, forms part of the taxable value and is subject to CGST and SGST.

Plastic twine (sutli) made from polypropylene or polyethylene granules is treated as an article of plastics under Chapter 39, not as textile twine, cordage, rope or cable under Heading 5607. Extrusion, slitting, orientation, twisting and winding do not by themselves make the product a textile material. Heading 3923 does not apply because the twine is neither a container nor an article for conveyance or packing of goods. In the absence of a more specific applicable heading within Chapter 39, plastic twine falls under sub-heading 39269099 as an other article of plastics and attracts GST at 18%.

Availability of an effective statutory appeal before the Appellate Tribunal precluded writ intervention where the extended limitation period for that appeal remained open. The contention that the adjudication exceeded the scope of the show-cause notice was left for determination in the appellate process. The writ petition was not entertained, and the petitioners were left to pursue the statutory appellate remedy.

Writ jurisdiction was not used to examine the jurisdictional challenge or validity of the assessment order because the statutory appellate remedy remained available. The petitioner received liberty to file the statutory appeal within two weeks, subject to the required pre-deposit and an application seeking condonation of delay. No determination was made on the merits of the assessment or the jurisdictional contention.

Building-plan scrutiny fees, ground rent and security deposits require express statutory authority; absent a State Government notification enabling municipal commissioner powers and a reasonable nexus between fee and services, such charges cannot be levied by a development authority. Labour welfare cess remains payable but cannot be recovered upfront before construction; collection must follow the timing and manner prescribed under the applicable cess rules. CGST and SGST do not apply to building-plan sanction because the sanction involves neither a supply of goods nor provision of services. The validity of relevant levies remains subject to a pending writ appeal.

Input tax credits availed under the erstwhile Haryana VAT regime cannot be adjudicated through proceedings under Sections 73 and 74 of the Punjab, Haryana and Central GST enactments. Those GST recovery and adjudication provisions do not extend to credits arising under the repealed VAT framework. Revenue may nevertheless pursue any remedy preserved under the applicable legal framework, subject to law. The stated position treats GST proceedings under those provisions as unavailable for determining liability relating to such legacy VAT credits.

Withdrawal of a show-cause notice was permitted, with liberty to issue a fresh notice within two weeks. The jurisdictional objection, potential invocation of a different statutory sub-clause, and limitation issue were considered only prima facie; no final determination was made on the notice's validity, jurisdiction, or timeliness. The operative effect is that the impugned notice stands withdrawn without a conclusive ruling on those objections, while fresh proceedings may be initiated within the permitted period.

Service of a GST show-cause notice solely through the GST portal after cancellation of registration does not provide an effective opportunity of hearing, because the assessee has no obligation to continue monitoring that portal. Notice must be served through an alternative mode after cancellation to satisfy the principles of natural justice. Assessment proceedings initiated solely on portal-based service are therefore vitiated, and the assessment order was set aside for breach of natural justice.