ITAT Delhi Judgments — October 2026

The Tribunal held that the impugned loans received by the assessee from entities controlled by entry operators could not be proved sufficiently to escape the rigours of Section 68 of the Act. The Tribunal observed that the loan-giving entities had meager turnover, negligible fixed assets, few employees, and showed huge premium which did not justify their intrinsic worth. They also engaged in cross-holdings to boost capital for circular rotation of funds. The assessee failed to offer a plausible rebuttal or produce directors of the loan-givers to prove their NBFC activities, especially when some loans were squared up around the assessment period, and the loan-givers could not be located. The Tribunal emphasized the need to lift the veil of secrecy in cases of money laundering through accommodation entries. Consequently, the Tribunal upheld the AO's action in treating the impugned loans under Section 68 and reversed the CIT(A)'s relief. Regarding the disallowance of interest and the ad-hoc commission, the Tribunal, relying on the case of Shyam Realities, held that if the underlying loan transactions are considered non-genuine, the interest paid thereon is disallowable. The Tribunal also upheld the estimated commission payment. Therefore, the grounds raised by the assessee were rejected, and those raised by the revenue were allowed.

The Tribunal held that the impugned loans received by the assessee from entities controlled by entry operators could not be proved sufficiently to escape the rigours of Section 68 of the Act. The Tribunal observed that the loan-giving entities had meager turnover, negligible fixed assets, few employees, and showed huge premium which did not justify their intrinsic worth. They also engaged in cross-holdings to boost capital for circular rotation of funds. The assessee failed to offer a plausible rebuttal or produce directors of the loan-givers to prove their NBFC activities, especially when some loans were squared up around the assessment period, and the loan-givers could not be located. The Tribunal emphasized the need to lift the veil of secrecy in cases of money laundering through accommodation entries. Consequently, the Tribunal upheld the AO's action in treating the impugned loans under Section 68 and reversed the CIT(A)'s relief. Regarding the disallowance of interest and the ad-hoc commission, the Tribunal, relying on the case of Shyam Realities, held that if the underlying loan transactions are considered non-genuine, the interest paid thereon is disallowable. The Tribunal also upheld the estimated commission payment. Therefore, the grounds raised by the assessee were rejected, and those raised by the revenue were allowed.

The Tribunal held that technical aspects must yield to the cause of substantial justice, citing the Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC). Consequently, the delay of 379 days and 72 days in filing the assessee's appeals before the CIT(A)/NFAC was condoned. The assessee's appeals were restored to the CIT(A)/NFAC for fresh adjudication. The Tribunal stipulated that this fresh adjudication should occur within three effective opportunities, with the rider that the taxpayer would plead and prove his case at his own risk and responsibility. The appeals were allowed for statistical purposes.

The Tribunal observed that while the AO's disallowance of 25% of the entire purchases was not proper, in cases of bogus purchases, only a certain percentage should be sustained as income, considering the actual benefit earned. The assessee had declared a Gross Profit (GP) rate of 5.22%. The Tribunal, relying on various ITAT Benches that have sustained a GP rate of 10% in cases of bogus purchases, held that the differential rate of 4.78% (10% - 5.22%) should be added as income. The Tribunal directed accordingly. The issue regarding the exact total purchases from the suppliers was not explicitly decided, but the overall addition was modified based on the GP rate.

The Tribunal allowed grounds 5 to 10 in favor of the assessee. It noted that the assessee had discharged the initial onus regarding the identity, source, and creditworthiness of the lender by providing documents like loan confirmation, ITR, bank statements, and PAN details. The lender, M/s Nandini Tradex Pvt. Ltd., also complied with the notice under Section 133(6). The loan was received through banking channels and recorded in the books of both parties. The AO did not point out any specific infirmity in the documentary evidence. Crucially, identical notices for AYs 2021-22 and 2022-23 were accepted by the AO without addition. Therefore, the Tribunal held that Section 68 was not applicable, and the addition made by the AO and confirmed by the CIT(A) was liable to be deleted. The Tribunal found that since the case was decided on merits in favor of the assessee, other grounds became academic and were left open. The appeal was partly allowed.

The Tribunal held that the impugned order was passed in violation of the principle of natural justice. The assessee had raised ground No. 10 specifically regarding this violation, and both parties had made submissions on the matter. The Tribunal noted that the assessee was previously registered under Section 12AB, making an effective opportunity of hearing crucial. In the larger interest of justice, the Tribunal set aside the impugned order and restored the matter to the file of the CIT(Exemptions). The CIT(Exemptions) was directed to decide the application afresh after providing the assessee with an effective opportunity to present its case and submit all necessary materials to fulfill the conditions and requirements of law for registration under Section 12AB. The appeal was allowed for statistical purposes.

The Tribunal held that the appeal before the CIT(A) was not adjudicated on merits. While the CIT(A) had afforded several opportunities, the assessee failed to avail them and did not file submissions. However, the Tribunal noted that there was nothing on record to show that the notices sent to the assessee were duly served or received. Section 250(2)(a) mandates the right to be heard, which is a mandatory statutory requirement for natural justice. Therefore, the impugned order passed ex-parte without affording an effective opportunity of hearing is not sustainable. The Tribunal set aside the order and restored the matter to the file of the CIT(A) for fresh adjudication after affording an effective opportunity of hearing and considering the assessee's submissions. The assessee was directed to furnish necessary submissions within 60 days. The findings for ITA No. 4469/Del/2026 were to apply mutatis mutandis to ITA No. 4470/Del/2026. The ratio decidendi is that an appellate authority must ensure effective opportunity of hearing and compliance with principles of natural justice before passing an ex-parte order, and cannot dismiss an appeal for non-prosecution without adjudicating on merits.

The Tribunal held that the filing of Form 67 is a directory, not a mandatory, requirement. It reasoned that a violation of a procedural norm does not adversely affect the substantive rights or claims of the assessee. The Tribunal noted that the assessee was claiming a legitimate right to FTC for foreign taxes paid. Citing numerous decisions of coordinate benches, including Isha Mago vs. Asstt. Director of Income Tax, Rameshwar Prasad Shrivastava vs. ITO, Vikash Daga vs. ACIT, and Sanjeev Agarwal vs. DCIT, the Tribunal emphasized that the provisions of the DTAA override the provisions of the Act and Rules to the extent they are beneficial to the taxpayer. Therefore, a mere procedural lapse in filing Form 67 belatedly should not lead to the disallowance of the FTC. The Assessing Officer was directed to allow the assessee's claim for foreign tax credit.

The Tribunal held that the appeal before the CIT(A) was not adjudicated on merits. While the CIT(A) had afforded several opportunities, the assessee failed to avail them and did not file submissions. However, the Tribunal noted that there was nothing on record to show that the notices sent to the assessee were duly served or received. Section 250(2)(a) mandates the right to be heard, which is a mandatory statutory requirement for natural justice. Therefore, the impugned order passed ex-parte without affording an effective opportunity of hearing is not sustainable. The Tribunal set aside the order and restored the matter to the file of the CIT(A) for fresh adjudication after affording an effective opportunity of hearing and considering the assessee's submissions. The assessee was directed to furnish necessary submissions within 60 days. The findings for ITA No. 4469/Del/2026 were to apply mutatis mutandis to ITA No. 4470/Del/2026. The ratio decidendi is that an appellate authority must ensure effective opportunity of hearing and compliance with principles of natural justice before passing an ex-parte order, and cannot dismiss an appeal for non-prosecution without adjudicating on merits.

The Tribunal dismissed the assessee's appeal. It found that the PCIT had correctly identified that the AO had not conducted adequate inquiries and verification regarding the nature and taxability of the Rs. 1,80,00,000/- transaction. The Tribunal distinguished the case of Jyoti Ahuja, noting that the assessee here was engaged in business and not merely a 'pass-through' beneficiary. The Tribunal relied on Supreme Court and Delhi High Court judgments, including Orient Crafts Limited vs. CIT, Amitabh Bachhan, Malabar Industries Co., M.R. Apparels (P) Ltd., and PCIT vs. Delhi Gurgaon Super Connectivity Limited. These judgments affirmed that the PCIT's revisional jurisdiction under Section 263 is valid when the AO's order is erroneous due to lack of inquiry or verification, making it prejudicial to the interest of revenue. The Tribunal also noted that Section 263 does not mandate a prior show-cause notice detailing specific grounds, provided the assessee is given a reasonable opportunity to be heard, as per the principles of natural justice. The assessee's reliance on Chintamani Commodities was deemed unhelpful as it did not consider the cited precedents, particularly Amitabh Bachhan. The appeal was dismissed.

The Tribunal held that the notice issued under Section 148 of the Act is bad in law and consequently invalid. The reasoning was based on the admitted fact that more than three years had elapsed from the end of the relevant assessment year, necessitating sanction from the Principal Chief Commissioner or equivalent authority as per Section 151(ii) of the Act. The approval obtained from the JCIT, Delhi, for issuing the notice under Section 148 on 28.07.2022 was not in accordance with law. The Tribunal respectfully followed the Supreme Court decision in Rajeev Bansal (supra), which clarifies the specified authorities for granting sanction under Section 151 based on the time elapsed from the end of the assessment year and the amount of income escaping assessment. The ratio decidendi is that a notice under Section 148 issued without obtaining prior approval from the competent authority as prescribed by Section 151 is invalid. Consequently, the assessment order passed pursuant to the invalid notice was also quashed. The appeal of the assessee was allowed.

The Tribunal held that the waiver of the principal portion of the loan amount is not taxable under Section 56(2)(x) of the Income-tax Act, 1961. The Tribunal reasoned that the Supreme Court's decision in Mahindra & Mahindra Ltd., which dealt with the taxability of waived amounts under Section 28(iv) and Section 41(1), cannot be extended to Section 56(2)(x). The Court noted that the Supreme Court had not had occasion to apply Section 56(2) in that case. Furthermore, the Tribunal observed that Section 28(iv) was amended from April 1, 2024, to include cash receipts, but no corresponding amendment was made to Section 56(2)(x). This indicated that the legislature never intended to bring loan waivers under Section 56(2)(x). Therefore, the transaction of loan waiver on capital account could not be brought to tax under Section 56(2)(x). The Tribunal allowed Ground No. 3 raised by the assessee.

The Tribunal held in favour of the assessee. It was decided that Rule 128(9) of the Income-tax Rules, 1962, does not provide for the disallowance of FTC in case of delay in filing Form No. 67. The Tribunal found that filing of Form No. 67 is a directory, not a mandatory, requirement. Furthermore, it was held that the Double Taxation Avoidance Agreement (DTAA) overrides the provisions of the Income-tax Act, and the Rules cannot be contrary to the Act. The Tribunal agreed with the assessee that the DTAA provisions grant a vested right to claim FTC, which cannot be disallowed for mere delay in complying with a procedural provision. The Tribunal also ruled that the issue was not debatable and could be decided under Section 154 proceedings, as the rejection by revenue authorities was on merits, not on the ground of debatability. Consequently, the AO was directed to grant the FTC of Rs. 9,21,788/- and recompute the tax liability. Other grounds raised by the assessee were left undecided as the effective issue was decided in their favour.

The Tribunal, considering the rival submissions and material on record, was of the considered view that in the interest of justice, the matter required a denovo assessment. Therefore, the Tribunal remitted the issues back to the file of the Assessing Officer with directions to decide the same afresh after giving adequate opportunity of being heard to the assessee. The assessee was directed through its counsel to fully cooperate with the Assessing Officer during the proceedings. The Tribunal held and directed accordingly. The appeal filed by the assessee was allowed for statistical purposes.

The Tribunal considered the rival submissions and perused the material on record. In the interest of justice, the Tribunal was of the considered view that the assessee should be provided an opportunity of being heard before the Ld. CIT(E). Accordingly, the Tribunal condoned the delay in filing the relevant documents/details before the Ld. CIT(E). Both matters were restored to the file of the Ld. CIT(E) to decide afresh as per law, after giving adequate opportunity of being heard to the assessee. The assessee was directed through its counsel to fully cooperate with the Ld. CIT(E) during the proceedings. The Tribunal held and directed accordingly. The appeals were allowed for statistical purposes.

The Tribunal allowed the assessee's appeal. It noted that the issue was squarely covered by the decision of a co-ordinate bench in M/s South West Pinnacle Exploration Ltd. Vs. ACIT (ITA No. 3834/Del/2025, dated 21.01.2026). The Tribunal observed that in the present case, the assessee had repaid the loan amount of Rs. 1,50,00,000/- during the same assessment year, evidenced by bank statements. Specifically, Rs. 1,00,00,000/- was repaid on 26.02.2016, and the remaining Rs. 50,00,000/- on 08.03.2016. Interest of Rs. 11,08,200/- was paid on 17.03.2016. These facts, supported by documentary evidence, demonstrated that the case was covered by the cited precedent. The Tribunal held that the loan taken through banking channels and repaid with interest indicates genuine transactions. Therefore, the additions of Rs. 1,50,00,000/- under Section 68, and the consequential interest and commission additions under Section 69C, were deleted. The ratio decidendi is that if a loan is received and repaid through banking channels with interest, and the creditor has been found genuine in a prior adjudication, the addition under Section 68 is unjustified.

The Tribunal set aside both the assessment order passed by the AO and the appellate order passed by the CIT(A). The Tribunal reasoned that in the interest of justice, it was appropriate to provide the assessee with another opportunity to be heard. All issues in the appeal were restored back to the file of the AO with a direction to pass a fresh assessment order denovo in accordance with law. The assessee was directed to participate in the assessment proceedings and furnish all relevant details. Ground of appeal No. 1 was allowed for statistical purposes. The principle here is that procedural fairness and an opportunity to be heard are paramount, even in cases of initial non-compliance, if the interest of justice so demands.

The Tribunal held that the penalty under section 270A was not justified and directed its deletion. The Tribunal found that the TPO made an adjustment of Rs. 1,29,13,656/- under the Transfer Pricing provisions by computing a higher Arm's Length Price (ALP). It was undisputed that the assessee had maintained the prescribed Transfer Pricing documentation under section 92D, declared the international transaction in Form 3CEB, and disclosed all material facts as required by the Income-tax Act. In this factual context, the Tribunal considered the difference in ALP determination to be a matter of legal interpretation, not a result of under-reporting of income, misrepresentation, or suppression of facts. The Tribunal explicitly referred to section 270A(6)(d), which excludes income on account of differences in ALP determination from under-reported income, provided the assessee has complied with the prescribed documentation and disclosure requirements. Consequently, the penalty charged under section 270A(9)(a) read with section 270A(2)(g) was deemed not justified and was deleted. The appeal of the assessee was allowed.

The Tribunal decided the issues as follows: 1. Regarding the disallowance of deduction under Section 43B for excise duty on vehicles, R&D cess, excise duty on inputs, and CVD paid on goods in transit, the Tribunal dismissed grounds related to PLA balance on excise duty and R&D cess, and excise duty on inputs balance in RG23A Part-II, as these were covered against the assessee by the Supreme Court's decision in its own case for AY 1999-2000 and 2000-01. However, grounds related to customs duty paid to be adjusted against excise duty payable on finished goods, customs duty on goods in transit/under inspection, customs duty included in closing stock, customs duty paid under protest, and excise duty paid under protest were allowed in favour of the assessee, following Supreme Court decisions in Samtel Color Ltd. and the assessee's own case for earlier years. 2. The AO's action in not allowing the claim for withdrawal of add back under Section 43B was allowed in favour of the assessee, based on earlier Tribunal orders and High Court decisions. 3. Regarding the disallowance under Section 14A read with Rule 8D(2), the Tribunal found that the AO had not recorded objective satisfaction with cogent reasons to reject the assessee's suo motu disallowance, which is a mandate under Section 14A(2) read with Rule 8D(1). The Tribunal did not proceed to decide the merits of the disallowance under Section 14A as the judgment extract is incomplete on this point. 4. The transfer pricing adjustment made by the TPO on royalty payments was deleted. The Tribunal found that the TPO arbitrarily determined sales on which royalty should not have been paid without applying any prescribed method or providing data on comparable uncontrolled transactions. The Tribunal also noted that the transaction of royalty payment had been accepted in the assessee's own case up to AY 2013-14, thus applying the principle of consistency. Operative directions: Certain grounds were allowed, others dismissed, and the appeal was partly allowed for statistical purposes. The issue under Section 14A was not fully decided in the provided extract.

The Tribunal allowed both appeals filed by the assessee. The primary issue addressed was the validity of the assumption of jurisdiction under Section 153C. The Tribunal noted that the search was conducted on October 18, 2019, but the AO recorded the satisfaction note on January 23, 2024. Upon reviewing the satisfaction note, the Tribunal found that it did not explicitly state that the seized documents had "a bearing on the determination of the total income of the assessee," which is a mandatory statutory requirement under Section 153C. The Tribunal relied on the Delhi High Court's decision in *Saksham Commodities Ltd. v. ITO*, which held that the absence of such a specific recording vitiates the assumption of jurisdiction. Consequently, the Tribunal held that the notice under Section 153C and the subsequent assessment order were invalid and unsustainable in law. The Tribunal quashed the assessment orders under Section 153C for both assessment years. Grounds 2 to 6 of the assessee's appeal were allowed in terms of this finding. The Tribunal did not explicitly address other grounds raised by the assessee, such as those related to digital evidence, the repeal of Section 153C, manual signing of the order, delay in satisfaction, lack of cross-examination, or the applicability of Sections 69A and 69C, as the primary ground regarding the invalid assumption of jurisdiction was decisive.

The Tribunal allowed both appeals filed by the assessee. The primary issue addressed was the validity of the assumption of jurisdiction under Section 153C. The Tribunal noted that the search was conducted on October 18, 2019, but the AO recorded the satisfaction note on January 23, 2024. Upon reviewing the satisfaction note, the Tribunal found that it did not explicitly state that the seized documents had "a bearing on the determination of the total income of the assessee," which is a mandatory statutory requirement under Section 153C. The Tribunal relied on the Delhi High Court's decision in *Saksham Commodities Ltd. v. ITO*, which held that the absence of such a specific recording vitiates the assumption of jurisdiction. Consequently, the Tribunal held that the notice under Section 153C and the subsequent assessment order were invalid and unsustainable in law. The Tribunal quashed the assessment orders under Section 153C for both assessment years. Grounds 2 to 6 of the assessee's appeal were allowed in terms of this finding. The Tribunal did not explicitly address other grounds raised by the assessee, such as those related to digital evidence, the repeal of Section 153C, manual signing of the order, delay in satisfaction, lack of cross-examination, or the applicability of Sections 69A and 69C, as the primary ground regarding the invalid assumption of jurisdiction was decisive.

The Tribunal decided the issues as follows: 1. Regarding the disallowance of deduction under Section 43B for excise duty on vehicles, R&D cess, excise duty on inputs, and CVD paid on goods in transit, the Tribunal dismissed grounds related to PLA balance on excise duty and R&D cess, and excise duty on inputs balance in RG23A Part-II, as these were covered against the assessee by the Supreme Court's decision in its own case for AY 1999-2000 and 2000-01. However, grounds related to customs duty paid to be adjusted against excise duty payable on finished goods, customs duty on goods in transit/under inspection, customs duty included in closing stock, customs duty paid under protest, and excise duty paid under protest were allowed in favour of the assessee, following Supreme Court decisions in Samtel Color Ltd. and the assessee's own case for earlier years. 2. The AO's action in not allowing the claim for withdrawal of add back under Section 43B was allowed in favour of the assessee, based on earlier Tribunal orders and High Court decisions. 3. Regarding the disallowance under Section 14A read with Rule 8D(2), the Tribunal found that the AO had not recorded objective satisfaction with cogent reasons to reject the assessee's suo motu disallowance, which is a mandate under Section 14A(2) read with Rule 8D(1). The Tribunal did not proceed to decide the merits of the disallowance under Section 14A as the judgment extract is incomplete on this point. 4. The transfer pricing adjustment made by the TPO on royalty payments was deleted. The Tribunal found that the TPO arbitrarily determined sales on which royalty should not have been paid without applying any prescribed method or providing data on comparable uncontrolled transactions. The Tribunal also noted that the transaction of royalty payment had been accepted in the assessee's own case up to AY 2013-14, thus applying the principle of consistency. Operative directions: Certain grounds were allowed, others dismissed, and the appeal was partly allowed for statistical purposes. The issue under Section 14A was not fully decided in the provided extract.

The Tribunal condoned the delay of 182 days in filing the appeals, citing the Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji & Others. Regarding the substantive issue, the Tribunal acknowledged that the CIT(A) had proceeded ex-parte. The Tribunal reasoned that given the ex-parte nature of the lower appellate proceedings, a possibility of communication gaps between the taxpayer and their counsel, particularly in the context of the newly introduced faceless hearing system, could not be entirely ruled out. In the larger interest of justice, the Tribunal deemed it appropriate to restore the appeals back to the CIT(A)/NFAC for fresh adjudication. The assessee was granted three effective opportunities to present its case, with the understanding that it would plead and prove its case at its own risk and responsibility. The appeals were allowed for statistical purposes.

The Tribunal decided the issues as follows: 1. Regarding the disallowance of deduction under Section 43B for excise duty on vehicles, R&D cess, excise duty on inputs, and CVD paid on goods in transit, the Tribunal dismissed grounds related to PLA balance on excise duty and R&D cess, and excise duty on inputs balance in RG23A Part-II, as these were covered against the assessee by the Supreme Court's decision in its own case for AY 1999-2000 and 2000-01. However, grounds related to customs duty paid to be adjusted against excise duty payable on finished goods, customs duty on goods in transit/under inspection, customs duty included in closing stock, customs duty paid under protest, and excise duty paid under protest were allowed in favour of the assessee, following Supreme Court decisions in Samtel Color Ltd. and the assessee's own case for earlier years. 2. The AO's action in not allowing the claim for withdrawal of add back under Section 43B was allowed in favour of the assessee, based on earlier Tribunal orders and High Court decisions. 3. Regarding the disallowance under Section 14A read with Rule 8D(2), the Tribunal found that the AO had not recorded objective satisfaction with cogent reasons to reject the assessee's suo motu disallowance, which is a mandate under Section 14A(2) read with Rule 8D(1). The Tribunal did not proceed to decide the merits of the disallowance under Section 14A as the judgment extract is incomplete on this point. 4. The transfer pricing adjustment made by the TPO on royalty payments was deleted. The Tribunal found that the TPO arbitrarily determined sales on which royalty should not have been paid without applying any prescribed method or providing data on comparable uncontrolled transactions. The Tribunal also noted that the transaction of royalty payment had been accepted in the assessee's own case up to AY 2013-14, thus applying the principle of consistency. Operative directions: Certain grounds were allowed, others dismissed, and the appeal was partly allowed for statistical purposes. The issue under Section 14A was not fully decided in the provided extract.

The Tribunal decided the issues as follows: 1. Regarding the disallowance of deduction under Section 43B for excise duty on vehicles, R&D cess, excise duty on inputs, and CVD paid on goods in transit, the Tribunal dismissed grounds related to PLA balance on excise duty and R&D cess, and excise duty on inputs balance in RG23A Part-II, as these were covered against the assessee by the Supreme Court's decision in its own case for AY 1999-2000 and 2000-01. However, grounds related to customs duty paid to be adjusted against excise duty payable on finished goods, customs duty on goods in transit/under inspection, customs duty included in closing stock, customs duty paid under protest, and excise duty paid under protest were allowed in favour of the assessee, following Supreme Court decisions in Samtel Color Ltd. and the assessee's own case for earlier years. 2. The AO's action in not allowing the claim for withdrawal of add back under Section 43B was allowed in favour of the assessee, based on earlier Tribunal orders and High Court decisions. 3. Regarding the disallowance under Section 14A read with Rule 8D(2), the Tribunal found that the AO had not recorded objective satisfaction with cogent reasons to reject the assessee's suo motu disallowance, which is a mandate under Section 14A(2) read with Rule 8D(1). The Tribunal did not proceed to decide the merits of the disallowance under Section 14A as the judgment extract is incomplete on this point. 4. The transfer pricing adjustment made by the TPO on royalty payments was deleted. The Tribunal found that the TPO arbitrarily determined sales on which royalty should not have been paid without applying any prescribed method or providing data on comparable uncontrolled transactions. The Tribunal also noted that the transaction of royalty payment had been accepted in the assessee's own case up to AY 2013-14, thus applying the principle of consistency. Operative directions: Certain grounds were allowed, others dismissed, and the appeal was partly allowed for statistical purposes. The issue under Section 14A was not fully decided in the provided extract.

The Tribunal condoned the delay of 182 days in filing the appeals, citing the Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji & Others. Regarding the substantive issue, the Tribunal acknowledged that the CIT(A) had proceeded ex-parte. The Tribunal reasoned that given the ex-parte nature of the lower appellate proceedings, a possibility of communication gaps between the taxpayer and their counsel, particularly in the context of the newly introduced faceless hearing system, could not be entirely ruled out. In the larger interest of justice, the Tribunal deemed it appropriate to restore the appeals back to the CIT(A)/NFAC for fresh adjudication. The assessee was granted three effective opportunities to present its case, with the understanding that it would plead and prove its case at its own risk and responsibility. The appeals were allowed for statistical purposes.

The Tribunal decided as follows: Regarding the assessee's grounds 1 to 1.3 concerning the assessment order's legality and special audit, the assessee did not press these grounds, and they were rejected. On the issue of Late Payment Surcharge (LPSC) (Assessee's Ground 2), the Tribunal upheld the CIT(A)'s finding that LPSC represented 'real income' that had accrued and was taxable, rejecting the assessee's arguments on revenue neutrality and the theory of real income. Concerning barter transactions (Assessee's Ground 3), the Tribunal upheld the CIT(A)'s confirmation of the addition, finding that the transactions were not cash neutral and represented income. The method of computing sales at the average retail rate was also upheld. On regulatory assets (Assessee's Ground 4), the Tribunal held that the amount was taxable as the assessee had acquired a legal right to receive it based on the DERC's true-up order and had credited it to the P&L account, rejecting the 'real income' argument. Regarding unbilled revenue (Assessee's Ground 5), the Tribunal upheld the CIT(A)'s confirmation of the addition, finding the assessee's method of accounting was not sufficiently substantiated and the addition was not revenue neutral. On short capitalization of personnel cost (Assessee's Ground 6), the Tribunal upheld the CIT(A)'s confirmation of the addition, finding the assessee's method was not as per DERC directives. Concerning disallowance under Section 40(a)(ia) for non-deduction of TDS (Assessee's Ground 7), the Tribunal upheld the CIT(A)'s deletion of the addition, finding that the trading margin paid to RETL and BYPL was not subject to TDS under Section 194J. On Section 80IA deduction (Assessee's Ground 8), the Tribunal upheld the CIT(A)'s denial of the deduction, agreeing that it could not be claimed on miscellaneous incomes and that the assessee failed to claim it in the return as required by Section 80A(5). Regarding the Revenue's grounds, the Tribunal allowed the Revenue's appeal on the issue of subsidy, holding that the excess subsidy received was not assessable as income as it was adjustable against future billings and the assessee acted as an agent. The Revenue's ground on prior period expenditure was rejected as revenue neutral. The Revenue's grounds on capital expenditure, premium on investments, and legal expenses were rejected, upholding the CIT(A)'s deletions. The Revenue's ground on Section 80IA deduction was accepted, aligning with the decision on the assessee's ground 8. The Tribunal concluded that both appeals were partly allowed.

The Tribunal noted that the assessee company was struck off from the Register of Companies. However, the AO had filed an appeal before the NCLT to restore the company, which was pending at the time of assessment order. The Tribunal found that the AO had initiated proceedings under Section 153C based on material found during a search of the Kuldeep Bishnoi Group. The assessee argued that the assessment was invalid due to the company being struck off, and that the additions were based on "dumb documents" and the statement of a deceased person without corroboration or opportunity for cross-examination. The Tribunal acknowledged the grounds raised by the assessee concerning the validity of the assessment on a non-existent entity and the reliance on uncorroborated evidence. The Tribunal also considered the additional grounds regarding the advance received for a future sale and the penalty proceedings. The Tribunal did not make a finding on the merits of the additions or the validity of the assessment itself, as the core issue of the company's existence and the validity of proceedings against it was central. The Tribunal's decision would hinge on the outcome of the NCLT proceedings or a definitive ruling on whether assessment can proceed against a struck-off company. The judgment does not record a final decision on the merits of the additions or penalties, focusing on the procedural and existence-related issues.

The Tribunal held that the Ld. CIT(E)'s conclusion that the application for registration has been rightly rejected requires no interference. The primary onus on the assessee to demonstrate that its activities are genuine and intended for diversified community benefit was not discharged. The Tribunal found that for FY 2022-23, out of 739 donors, only 188 provided PAN/Aadhaar. For FY 2023-24, out of 418 donors, PAN was provided for 90. For FY 2024-25, out of 495 donors, PAN/Aadhaar was provided for 174. The Tribunal noted that for FY 2024-25, donations were shown from various distinct places in Kerala, with few from other parts of the country. Similar patterns were observed for FY 2023-24 and FY 2022-23. The Tribunal considered it questionable if donations received primarily in cash by a Delhi-based society from numerous persons, where PAN and other identity details were not available, were actual contributions of value or merely camouflaged. This lack of transparency rendered the donations anonymous and potentially indicative of clandestine activities. The Tribunal also found that while the assessee provided evidence of some activities like disaster relief and distribution programs, these reports did not specifically indicate the beneficiaries, and most activities appeared to be awareness or organizational in nature. The expenditure was not correlated to beneficiaries in a manner that would indicate funds from anonymous donations were used for charitable activities benefiting all segments of society. The Tribunal rejected the plea of consistency as it is not applicable when renewal of registration is sought and the prescribed authority is evaluating financials of the immediately past three years, questioning the genuineness of the source of funds. The Tribunal acknowledged that while the Ld. CIT(E) referred to presumptive tax liability under Section 115BBE and specified violations under Explanation 2 to Section 12AB(4), which might ordinarily be beyond the scope of renewal inquiry, the evidence regarding the infusion of funds from questionable sources made it significant. The Tribunal concluded that the grounds raised by the assessee lacked substance and dismissed the appeal.

The Tribunal upheld the rejection of the renewal application. Regarding the donations, the Tribunal found that for FY 2022-23, out of 1315 donors, PANs were provided for only 62, and around 73 donations were through banking modes. For FY 2023-24, out of 1839 donors, PANs were provided for 93, and 161 donations were via banking. For FY 2024-25, out of 1459 donors, no PANs were provided, and all donations were in cash. The addresses for FY 2024-25 were primarily in Kerala, and for other years, they were scattered across the country, with many distinct places in Kerala. The Tribunal noted that donations were primarily received in cash by a Delhi-based society, without justification for how cash was collected and handled. This led the Tribunal to question if the donations were genuine contributions or camouflaged, rendering them anonymous and potentially from clandestine activities. The Tribunal also considered information about the management and control of the assessee being in the hands of persons associated with 'tainted organizations' as a vital lead to examine the genuineness of activities in the larger interest of society and the State. While acknowledging that Section 115BBC and the 'specified violation' under Section 12AB(4) might ordinarily be beyond the scope of renewal inquiry, the Tribunal held that when evidence strongly suggests funds are not from genuine individuals but possibly 'tainted money,' these provisions expand the scope of inquiry. The Tribunal found that while there was evidence of some activities conducted as per the bye-laws, the primary endeavor was promoting interest-free credit cooperative societies for a particular religious community. The expenditure was not correlated to charitable activity in a manner that would indicate funds from anonymous donations benefited all segments of society. The onus on the assessee to prove genuine activities for diversified community benefit was not discharged. Therefore, the Ld. CIT(E)'s conclusion was upheld, and the application was rightly rejected. The appeal was dismissed.

The Tribunal decided that Rs. 5 lacs, introduced as an unsecured loan from Sh. Satish Chand Yadav on 30.08.2014, was sufficiently explained and found no merit in sustaining this component as unexplained. Therefore, this Rs. 5 lacs was deleted from the returns. Regarding the remaining Rs. 5 lacs, which the assessee claimed originated from Ms. Satish Chand Yadav through banking channels as repayment of earlier cash advances for property transactions, the Tribunal noted that the assessee failed to plead and prove this claim from scrutiny till date. The Tribunal also considered the possibility of the assessee's past savings, given his socio-economic status. Consequently, the Tribunal deemed it just and proper to make a lump sum addition of Rs. 2.5 lacs in the assessee's hands, instead of the entire Rs. 5 lacs. The assessee was held entitled to relief of Rs. 7.50 lacs in total (Rs. 5 lacs deleted + Rs. 2.5 lacs addition). Necessary computation was to follow. No other ground or argument was pressed.

The Tribunal decided as follows: Regarding the assessee's grounds 1 to 1.3 concerning the assessment order's legality and special audit, the assessee did not press these grounds, and they were rejected. On the issue of Late Payment Surcharge (LPSC) (Assessee's Ground 2), the Tribunal upheld the CIT(A)'s finding that LPSC represented 'real income' that had accrued and was taxable, rejecting the assessee's arguments on revenue neutrality and the theory of real income. Concerning barter transactions (Assessee's Ground 3), the Tribunal upheld the CIT(A)'s confirmation of the addition, finding that the transactions were not cash neutral and represented income. The method of computing sales at the average retail rate was also upheld. On regulatory assets (Assessee's Ground 4), the Tribunal held that the amount was taxable as the assessee had acquired a legal right to receive it based on the DERC's true-up order and had credited it to the P&L account, rejecting the 'real income' argument. Regarding unbilled revenue (Assessee's Ground 5), the Tribunal upheld the CIT(A)'s confirmation of the addition, finding the assessee's method of accounting was not sufficiently substantiated and the addition was not revenue neutral. On short capitalization of personnel cost (Assessee's Ground 6), the Tribunal upheld the CIT(A)'s confirmation of the addition, finding the assessee's method was not as per DERC directives. Concerning disallowance under Section 40(a)(ia) for non-deduction of TDS (Assessee's Ground 7), the Tribunal upheld the CIT(A)'s deletion of the addition, finding that the trading margin paid to RETL and BYPL was not subject to TDS under Section 194J. On Section 80IA deduction (Assessee's Ground 8), the Tribunal upheld the CIT(A)'s denial of the deduction, agreeing that it could not be claimed on miscellaneous incomes and that the assessee failed to claim it in the return as required by Section 80A(5). Regarding the Revenue's grounds, the Tribunal allowed the Revenue's appeal on the issue of subsidy, holding that the excess subsidy received was not assessable as income as it was adjustable against future billings and the assessee acted as an agent. The Revenue's ground on prior period expenditure was rejected as revenue neutral. The Revenue's grounds on capital expenditure, premium on investments, and legal expenses were rejected, upholding the CIT(A)'s deletions. The Revenue's ground on Section 80IA deduction was accepted, aligning with the decision on the assessee's ground 8. The Tribunal concluded that both appeals were partly allowed.

The Tribunal found that the assessee had raised grounds concerning the lack of an opportunity for a hearing before the NFAC. Upon reviewing the impugned order, the Tribunal noted the NFAC's observation that no response was received from the assessee to the notices served. The NFAC also relied on website information regarding the firm's registration status. However, the judgment excerpt does not contain the Tribunal's final decision on whether an adequate opportunity for hearing was provided or not. It also does not detail the reasoning or the ratio decidendi for any finding on this specific issue. The operative directions are also not recorded in the provided text.

The Tribunal noted that the assessee did not appear, but the Revenue's representative presented arguments. The Tribunal observed that the authorities below had not considered the evidence regarding the sources of funds advanced as a loan, specifically mentioning proceeds from Fixed Deposit Receipts, HDFC Life Insurance, and FDRs with HDFC. While the AO did not consider this evidence, the CIT(A) could have obtained a remand report from the AO on these evidences before passing the order, but this was not done. Therefore, in the interest of natural justice and for proper adjudication, the Tribunal decided to remand the matter back to the file of the Ld. CIT(A). The Ld. CIT(A) is directed to provide the assessee with an adequate opportunity to file relevant documents and, if necessary, obtain a remand report from the AO before passing the appellate order. The assessee is also directed to file all necessary documents and details before the Ld. CIT(A) promptly. The issue of the Rs. 2,00,000 addition for household expenditure and the related grounds were not explicitly decided but are implicitly part of the remand as they are linked to the overall financial transactions.

The Tribunal held that the assessment order deserves to be quashed on jurisdictional grounds. The Tribunal reasoned that if a search is conducted or a satisfaction is recorded after April 1, 2021, then a notice is to be issued under Section 148 of the Act after obtaining approval from the competent authority, and the assessment is to be completed under Section 147 of the Act. Since, in this case, the notices and assessment were completed under Section 153C of the Act, despite the satisfaction being recorded after April 1, 2021, the assessment proceedings were held to be invalid. Consequently, the assessee's appeal on this jurisdictional ground was allowed. The Tribunal, having decided the jurisdictional issue in favor of the assessee, stated that it was not inclined to decide on the other grounds of appeal on merit.

The Tribunal decided the issues as follows: 1. Regarding the disallowance of deduction under Section 43B for excise duty on vehicles, R&D cess, excise duty on inputs, and CVD paid on goods in transit, the Tribunal dismissed grounds related to PLA balance on excise duty and R&D cess, and excise duty on inputs balance in RG23A Part-II, as these were covered against the assessee by the Supreme Court's decision in its own case for AY 1999-2000 and 2000-01. However, grounds related to customs duty paid to be adjusted against excise duty payable on finished goods, customs duty on goods in transit/under inspection, customs duty included in closing stock, customs duty paid under protest, and excise duty paid under protest were allowed in favour of the assessee, following Supreme Court decisions in Samtel Color Ltd. and the assessee's own case for earlier years. 2. The AO's action in not allowing the claim for withdrawal of add back under Section 43B was allowed in favour of the assessee, based on earlier Tribunal orders and High Court decisions. 3. Regarding the disallowance under Section 14A read with Rule 8D(2), the Tribunal found that the AO had not recorded objective satisfaction with cogent reasons to reject the assessee's suo motu disallowance, which is a mandate under Section 14A(2) read with Rule 8D(1). The Tribunal did not proceed to decide the merits of the disallowance under Section 14A as the judgment extract is incomplete on this point. 4. The transfer pricing adjustment made by the TPO on royalty payments was deleted. The Tribunal found that the TPO arbitrarily determined sales on which royalty should not have been paid without applying any prescribed method or providing data on comparable uncontrolled transactions. The Tribunal also noted that the transaction of royalty payment had been accepted in the assessee's own case up to AY 2013-14, thus applying the principle of consistency. Operative directions: Certain grounds were allowed, others dismissed, and the appeal was partly allowed for statistical purposes. The issue under Section 14A was not fully decided in the provided extract.

The Tribunal held that since the CIT(A)/NFAC had proceeded ex-parte against the assessee, there was a possibility of communication gaps between the taxpayer and the counsel, especially with the introduction of the faceless hearing system. In the larger interest of justice, the Tribunal decided to restore the assessee's appeal back to the CIT(A)/NFAC for fresh adjudication. The assessee was granted three effective opportunities to plead and prove its case at its own risk and responsibility. The appeal was allowed for statistical purposes. No specific amount in dispute was recorded. The Tribunal did not decide on the merits of the additions or disallowances.

The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, dated 29.07.2022, was barred by limitation, having been issued beyond the period specified under Section 149 of the Act. The Tribunal relied on the ratio laid down by the Hon'ble Supreme Court in the case of Union of India & Ors. vs. Rajeev Bansal (2024) 469 ITR 46 (SC) and a co-ordinate bench decision in Mukesh Vs. ITO. The Tribunal noted that the notice was issued 50 days beyond the last permissible date of 10.06.2022, as per the calculations presented by the assessee and supported by the Supreme Court's directions. Consequently, the reassessment proceedings initiated based on this time-barred notice were quashed as void ab initio. The Tribunal did not decide on the merits of the addition made under Section 69A.

The Tribunal condoned the delay of 4 days in filing the appeal, citing the Supreme Court's decision in Collector, Land & Acquisition vs. Mst. Katiji & Others. The Tribunal noted that the CIT(A)/NFAC had proceeded ex-parte against the assessee. Considering the possibility of communication gaps between the taxpayer and counsel due to the newly introduced faceless hearings system, the Tribunal, in the larger interest of justice, decided to restore the appeal back to the CIT(A)/NFAC for fresh adjudication. The assessee was directed to plead and prove its case at its own risk and responsibility within three effective opportunities. The appeal was allowed for statistical purposes.

The Tribunal held that the impugned reopening notice under Section 148, dated 26.07.2022, was indeed time-barred. The Judicial Member, after perusing the case file and hearing both parties, found merit in the assessee's contention. The Tribunal relied on the factual matrix presented by the assessee, including the detailed timeline of events and the relevant legal provisions and judicial pronouncements, particularly the Supreme Court's directions concerning the issuance of reopening notices. The reasoning was that the Assessing Officer had failed to comply with the stipulated time limits for initiating reassessment proceedings. Consequently, the Tribunal quashed the reopening proceedings. All other issues on merits were rendered academic as a result of this decision. The appeal was allowed on this preliminary ground.

The Tribunal held that a bald statement recorded during a survey, if contested later, cannot be the sole basis for an addition. While the CIT(A) acknowledged this to some extent, neither the AO nor the CIT(A) presented substantial discrepancies between the books found during the survey and the income declared. Therefore, the Tribunal directed the deletion of the remaining addition of Rs. 30,00,000/- (out of the Rs. 50,00,000/- added by the AO). Regarding other additions (Rs. 1,00,000/-, Rs. 28,529/-, and Rs. 1,50,000/-), the Tribunal noted they were not adjudicated by the CIT(A) despite being raised in the grounds of appeal, possibly due to confusion in the ground drafting. Consequently, these remaining issues were remanded back to the CIT(A) for adjudication on merits. The principle established is that surrenders made under stress require corroborative evidence for additions, and appellate authorities must adjudicate all grounds raised.

For AY 2018-19 (ITA 6506), the Tribunal held that while the transactions might involve non-filers and unserved summons, and documents were not uploaded, the assessee's claim of banking channel transactions persuades a middle path. The Tribunal confirmed 3% of the allegedly dubious purchases and directed relief on the remaining amount. The addition on account of estimated commission was directed to be deleted as it was based on surmises and conjectures. The Tribunal found that the addition under Section 69C for AY 2019-20 was made solely on the basis of third-party information and the statement of the alleged entry operator without independent enquiry, verification, or evidence of goods movement or payment. The assessee demonstrated no such purchases in its books or GSTR-2A. The Tribunal noted that the AO did not reject the assessee's books of account or declare sales. Therefore, the addition of Rs. 32,73,010/- under Section 69C was deleted. The addition of Rs. 81,825/- for commission was also deleted as it was based on assumption and estimation without supporting evidence. The ratio for deleting the additions is that the foundational requirement for invoking Section 69C is the actual incurrence of expenditure, which was not established by the Revenue with cogent evidence, and additions based solely on third-party statements without independent verification are unsustainable. The Tribunal directed the deletion of Rs. 32,73,010/- and Rs. 81,825/- for AY 2019-20.

For AY 2018-19 (ITA 6506), the Tribunal held that while the transactions might involve non-filers and unserved summons, and documents were not uploaded, the assessee's claim of banking channel transactions persuades a middle path. The Tribunal confirmed 3% of the allegedly dubious purchases and directed relief on the remaining amount. The addition on account of estimated commission was directed to be deleted as it was based on surmises and conjectures. The Tribunal found that the addition under Section 69C for AY 2019-20 was made solely on the basis of third-party information and the statement of the alleged entry operator without independent enquiry, verification, or evidence of goods movement or payment. The assessee demonstrated no such purchases in its books or GSTR-2A. The Tribunal noted that the AO did not reject the assessee's books of account or declare sales. Therefore, the addition of Rs. 32,73,010/- under Section 69C was deleted. The addition of Rs. 81,825/- for commission was also deleted as it was based on assumption and estimation without supporting evidence. The ratio for deleting the additions is that the foundational requirement for invoking Section 69C is the actual incurrence of expenditure, which was not established by the Revenue with cogent evidence, and additions based solely on third-party statements without independent verification are unsustainable. The Tribunal directed the deletion of Rs. 32,73,010/- and Rs. 81,825/- for AY 2019-20.

The Tribunal held that the Ld. CIT(A)'s order is set aside and the additions made by the AO are reversed and cancelled. The Tribunal noted that for AY 2017-18, an assessee is not obligated to prove the 'source of the source' for unsecured loans under Section 68. It was also an admitted fact that the loans were repaid well before the notice of reassessment was issued. The Tribunal found that the repayment of loans, along with interest, and the fact that the lenders were engaged in giving loans and earned interest income, demonstrated the assessee's good faith in transacting with these companies. The Tribunal agreed with the Ld. CIT(A) that the assessee had discharged the onus under Section 68 by establishing the identity, creditworthiness, and genuineness of the transaction, supported by documentary evidence and repayment through banking channels. The AO failed to bring on record cogent material to suggest the transaction was a mere accommodation entry. The Tribunal found no substance in the Revenue's grounds of appeal, rendering the assessee's grounds under Rule 27 academic. The appeal of the department was dismissed.

The Tribunal decided the issues as follows: 1. Regarding the disallowance of deduction under Section 43B for excise duty on vehicles, R&D cess, excise duty on inputs, and CVD paid on goods in transit, the Tribunal dismissed grounds related to PLA balance on excise duty and R&D cess, and excise duty on inputs balance in RG23A Part-II, as these were covered against the assessee by the Supreme Court's decision in its own case for AY 1999-2000 and 2000-01. However, grounds related to customs duty paid to be adjusted against excise duty payable on finished goods, customs duty on goods in transit/under inspection, customs duty included in closing stock, customs duty paid under protest, and excise duty paid under protest were allowed in favour of the assessee, following Supreme Court decisions in Samtel Color Ltd. and the assessee's own case for earlier years. 2. The AO's action in not allowing the claim for withdrawal of add back under Section 43B was allowed in favour of the assessee, based on earlier Tribunal orders and High Court decisions. 3. Regarding the disallowance under Section 14A read with Rule 8D(2), the Tribunal found that the AO had not recorded objective satisfaction with cogent reasons to reject the assessee's suo motu disallowance, which is a mandate under Section 14A(2) read with Rule 8D(1). The Tribunal did not proceed to decide the merits of the disallowance under Section 14A as the judgment extract is incomplete on this point. 4. The transfer pricing adjustment made by the TPO on royalty payments was deleted. The Tribunal found that the TPO arbitrarily determined sales on which royalty should not have been paid without applying any prescribed method or providing data on comparable uncontrolled transactions. The Tribunal also noted that the transaction of royalty payment had been accepted in the assessee's own case up to AY 2013-14, thus applying the principle of consistency. Operative directions: Certain grounds were allowed, others dismissed, and the appeal was partly allowed for statistical purposes. The issue under Section 14A was not fully decided in the provided extract.

The Tribunal held that the reassessment proceedings initiated under Section 147 of the Act were vitiated. It was observed that the AO initiated proceedings under Section 148A(b) based on information that the shares of M/s. Goldline International Finvest Ltd. were held as penny stock. However, the AO himself noted in the Section 148A(b) notice that the transactions were duly recorded in the books of accounts and funds were transferred via cheque. The SEBI order relied upon by the AO was dated 29.06.2015, which was available much prior to the initiation of Section 153C proceedings. Therefore, the Tribunal concluded that the material found during the search was not new or incriminating material justifying the issuance of a notice under Section 148. Following the principles laid down in PCIT vs. Abhisar Buildwell Pvt. Ltd. and by coordinate benches, the Tribunal quashed the notice under Section 148 and the consequent reassessment order. Grounds of appeal related to the validity of reassessment proceedings were allowed. Remaining grounds were not adjudicated as the legal grounds were decided in favour of the assessee.

The Tribunal noted that the assessee's grounds 4 to 7, relating to adjustments made under section 143(1) (CSR expenses, equalization levy, TDS, employer's contribution to PF/ESI), were not pressed and were accordingly dismissed as not pressed. Regarding ground 2, concerning the disallowance under section 14A, the Tribunal observed that the assessee had made significant investments in shares and capital in a partnership firm and a subsidiary company. The AO did not controvert the fact that these investments were made from the assessee's own funds. Crucially, the AO had not established that the assessee earned any exempt income during the year from these investments. Following the Delhi High Court decisions in PCIT v. Delhi International Airport [2022] and PCIT v. Era Infrastructure (India) Ltd. [2022], which held that no disallowance under Section 14A can be made if no exempt income has been earned, the Tribunal deleted the disallowance of Rs. 20,62,763/- made under section 14A. Ground 2 was allowed.

The Tribunal held that the issue of the applicability of the rate of royalty or fees for technical services to the AE stands concluded in favour of the assessee by a coordinate bench decision in the assessee's own case for AY 2014-15. Following the precedent set in Ranbaxy Laboratories Ltd. and the assessee's own case, the Tribunal directed that the royalty payment be capped at 1.9% of net sales, as per the UAPA dated November 29, 2022, substituting the 'NIL' determined by the TPO and the 2% offered by the assessee. Thus, grounds 3 and its sub-points were partly allowed. Regarding the TP adjustment on account of manufacturing activity, the Tribunal considered the legal position and the case of Texport Overseas (P) Ltd. The Tribunal found that the decision in Kolhapur Canesugar Works Ltd. was still relevant. Following Texport Overseas and various coordinate benches, the Tribunal held that no upward adjustment was possible and directed the deletion of the adjustment made by the AO/TPO. Thus, ground 4 was allowed. The Tribunal noted that grounds 1 and 2 were general in nature and were not specifically adjudicated.

The Tribunal considered the findings of the authorities below and the arguments presented. It found that the additional evidences filed by the assessee under Rule 46A before the Ld. CIT(A) were essentially required to prove the assessee's points. Consequently, the Tribunal accepted the additional evidences and remanded the case back to the file of the Ld. CIT(A). The Ld. CIT(A) was directed to adjudicate the case after giving the assessee due opportunity as required under law. The assessee was also directed to file all documents and details before the Ld. CIT(A) as it deemed fit to prove its case in time. The Tribunal noted that the appeal was allowed for statistical purposes.

The Tribunal decided the issues as follows: 1. Regarding the disallowance of deduction under Section 43B for excise duty on vehicles, R&D cess, excise duty on inputs, and CVD paid on goods in transit, the Tribunal dismissed grounds related to PLA balance on excise duty and R&D cess, and excise duty on inputs balance in RG23A Part-II, as these were covered against the assessee by the Supreme Court's decision in its own case for AY 1999-2000 and 2000-01. However, grounds related to customs duty paid to be adjusted against excise duty payable on finished goods, customs duty on goods in transit/under inspection, customs duty included in closing stock, customs duty paid under protest, and excise duty paid under protest were allowed in favour of the assessee, following Supreme Court decisions in Samtel Color Ltd. and the assessee's own case for earlier years. 2. The AO's action in not allowing the claim for withdrawal of add back under Section 43B was allowed in favour of the assessee, based on earlier Tribunal orders and High Court decisions. 3. Regarding the disallowance under Section 14A read with Rule 8D(2), the Tribunal found that the AO had not recorded objective satisfaction with cogent reasons to reject the assessee's suo motu disallowance, which is a mandate under Section 14A(2) read with Rule 8D(1). The Tribunal did not proceed to decide the merits of the disallowance under Section 14A as the judgment extract is incomplete on this point. 4. The transfer pricing adjustment made by the TPO on royalty payments was deleted. The Tribunal found that the TPO arbitrarily determined sales on which royalty should not have been paid without applying any prescribed method or providing data on comparable uncontrolled transactions. The Tribunal also noted that the transaction of royalty payment had been accepted in the assessee's own case up to AY 2013-14, thus applying the principle of consistency. Operative directions: Certain grounds were allowed, others dismissed, and the appeal was partly allowed for statistical purposes. The issue under Section 14A was not fully decided in the provided extract.