The Tribunal observed serious procedural lapses, including reliance on an unsigned third-party ledger and denial of cross-examination. To balance equities, only an estimated profit portion was brought to tax.
Despite deficiencies in documentation, agricultural activity and landholding were undisputed. The Tribunal granted partial relief while sustaining a modest addition. The decision highlights a balanced approach where activity is proven but evidence is imperfect.
The Tribunal held that when sales are accepted as genuine, corresponding purchases cannot be disallowed in entirety. Documentary evidence and bank payments outweighed mere doubts about supplier compliance.
The Tribunal followed binding High Court precedents to hold that reassessment must strictly adhere to the faceless mechanism. Deviation from the mandated procedure invalidated the notice and the entire reassessment.
The issue was whether a post-search assessment could be completed under section 143(3) using third-party material. The Tribunal ruled that the special reassessment route under sections 148 and 148B was mandatory.
The Tribunal held that incorrect selection of a clause while filing Form 10AB is a technical and curable defect under the new registration regime. Applications for registration and approval were restored for fresh adjudication on merits.
The Tribunal held that reassessment beyond three years is invalid where the alleged escaped income is below ₹50 lakh. A notice issued for a ₹5 lakh donation was declared void ab initio.
The Tribunal held that reopening based solely on Insight Portal inputs without independent application of mind is invalid. Since the reassessment itself failed, the addition of share LTCG as unexplained income under section 68 could not survive.
The Tribunal held that estimating business income at 10% of turnover without citing comparable cases or industry benchmarks is unsustainable. Arbitrary profit estimation must be supported by material evidence.
Taxing a debenture waiver as revenue income was challenged. The Tribunal rejected the approach, holding the waiver arose from capital financing and not trading operations. The ruling confirms that capital restructuring gains are not taxable by default.
