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Income Tax - Case Laws
Showing 201 to 220 of 173256 Records
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2025 (4) TMI 1361
Validity of the impugned section 143(3) assessment - initiate section 153C proceedings OR reopening u/s 148/147 - instant case involves the PCIT, Kanpur’s requisition which amounts to initiation of search attracting either section 153A proceeding in case of the searched person or under section 153C, involving any third person - Unexplained money/cash - assessee’s could not explain the source thereof during the course of hearing of assessment framed as upheld in the lower appellate discussion.
HELD THAT:- We are of the considered view that the Revenue’s arguments carry no merit once it is a case of a “requisition” and the learned Assessing Authority has framed its assessment under the regular provisions i.e. under section 143(3) of the Act than either taking recourse of section 148/147, as the case may be. We thus see no reason to sustain the impugned assessment framed on 31st March, 2022, which is hereby quashed in very terms. Assessee’s appeal is allowed.
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2025 (4) TMI 1360
Addition u/s 56(2)(viib) - rejecting the valuation report submitted by the assessee - Valuation of unquoted equity shares where in terms of rule 11UA(1)(c)(b) of the Income Tax Rules, 1962 whether the book value of the immovable property is to be taken or the circle rate of immovable property is to be considered for the purpose of valuation - HELD THAT:- In the instant case, the assessee has valued its shares in terms of Net Asset Value method as prescribed u/Rule 11UA(1)(c)(b) of the Act.
AO has taken the book value of the assets for the purpose of valuation of the shares however, the fair market value of the shares has to be computed by taking the market value of the assets of the company as on the date of issue of shares.
As the AO was not agreed with the market value claimed by the assessee, therefore, the matter must be referred to the DVO for the purpose of determining the value of the assets of the assessee as on the date of issue of shares.
Accordingly, the matter of determining the fair market value of shares as per method provided under clause (ii) of explanation (a) of section 56(2)(viib) is set aside to the file of AO for fresh adjudication after obtaining the report of the DVO with regard to the fair market value of immovable property as on the date of issue of shares. Ground of appeal taken by the assessee is allowed for statistical purposes.
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2025 (4) TMI 1359
Taxing consultancy income of the Appellant, who is not having permanent establishment in India - treaty benefits as claimed under provisions of Article 7 of the India-UAE treaty - HELD THAT:- The assessee has filed Tax Residency Certificate (TRC) valid from January 2018 to December 2018. It is not in dispute that the assessee earned marking commission during the year.
Since the assessee do not have any PE, the Article 7 is not applicable. The assessee is eligible for benefits under Article 22. The AO is hereby directed to recompute the tax liability.
The assessee is eligible for benefits under Article 22of DTAA. AO is hereby directed to recompute the tax liability.
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2025 (4) TMI 1358
Addition u/s 69 - deposit of cash in the bank during demonetization period - HELD THAT:- When assessee proves that she had on relevant date a large sum of money sufficient to cover the deposit of cash in the bank during demonetization period, this Tribunal/Hon’ble Courts, in the absence of something which showed that the explanation was inherently improbable has accepted the explanation that the assessee had such amount in SBNS which was deposited in the bank account.
Assessee was held to have prima facie discharged the initial burden upon him/her which was upon him in such cases. Moreover, once the AO has accepted the genuineness of the source as source from the withdrawals AO can’t be expected to reject part of the explanation [i.e. Rs. 12.10 lakhs as source from the very same source viz., withdrawal of Rs. 40 lakhs] without cogent reason or adducing any material to show that the withdrawn amount of Rs. 40 lakhs had been spent by assessee or invested in immovable/movable assets of which is not the case of the AO.
Therefore, the action of the AO rejecting in part, the explanation given by the assessee can’t be accepted. Explanation which was held to be reasonable [by the AO] as to a part, must be good for the whole, because there is no material on which it could be held that the balance constituted income from some undisclosed source to distinguish case about the part rejected from the part accepted.
We are of the view that the assessee has prima facie discharged her burden about the source which has not been rebutted by the Ao/Ld.CIT(A) which is merely based on no evidence rather it is based on conjectures, surmises and suspicion; and furthermore is vitiated by failure of lower authorities in not taking into consideration relevant materials bearing on the fact in issue. Thus, the assessee’s appeal is allowed and the addition made u/s.69 is directed to be deleted.
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2025 (4) TMI 1357
Applicability of section 56(2)(viib) - issue of shares at premium to parent company - AO observed that assessee declared losses and its future prospects are not promising however, it has charged huge premium on the shares issued - HELD THAT:- As assessee M/s EPEL is wholly owned subsidiary of M/s ESL. Since EPEL is a 100% subsidiary of ESL (a listed company), EPEL is also a company in which public are substantially interested within the meaning of Section 2(18)(b)(B)(c) of the Act. Accordingly, the provisions of Section 56(2)(viib) of the Act which are applicable to the unquoted equity shares of a company in which public is not substantially interested are not applicable to the case of EPEL where the shares are issued at premium.
By respectfully following the decision of case of Appollo Sugar Clinic [2019 (6) TMI 340 - ITAT HYDERABAD] we find no infirmity in the order of ld. CIT(A) in holding that the assessee is 100% subsidiary of M/s ESL and, therefore, is a company in which public is substantially interested and thus the provisions of section 56(2)(viib) of the Act are not applicable. Accordingly, we uphold the order of ld. CIT(A) deleting the additions made by AO. Appeal of the revenue is dismissed.
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2025 (4) TMI 1356
Levy of surcharge @37% instead of 10% applicable to the assessee as per the Relevance Finance Act - HELD THAT:- Admittedly, this issue now stands covered by the decision of the Hon’ble Special Bench in the case of Aaradhya Jain Trust vs. Income Tax Officer [2025 (4) TMI 648 - ITAT MUMBAI] wherein held that in the case of private discretionary trusts taxed at the maximum marginal rate, the computation of surcharge must be based on the slab-wise surcharge structure prescribed in the Finance Act under Paragraph A of Part I of the First Schedule, and not at a flat highest rate.
Thus, we hold that the assessee has rightly computed the surcharge @10% for A.Y.2021-22 and @25% for the A.Y.2022-23. Accordingly, the grounds raised by the assessee are allowed. Accordingly, the reference was answered in favour of the assessee.
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2025 (4) TMI 1355
Levying surcharge on the tax in the hands of the assessee as a result of maximum marginal rate despite the income was much below limit of Rs. 50,00,000/- prescribed under the relevant Finance Act - HELD THAT:- Hon’ble Special Bench in the case of Araadhya Jain Trust [2025 (4) TMI 648 - ITAT MUMBAI] clarified that in case of “Private Discretionary Trust” whose income is chargeable to tax at marginal rate, surcharge has to be computed on the income tax having reference to the slab rates prescribed in the Finance Act under the “surcharge of Income Tax”, accordingly, we hold that even if rate tax is applicable at maximum marginal rate however, if the slab rates are below Rs. 50,00,000/- for levy of surcharge, no surcharge can be levied. Here in this case, it is not in dispute that slab rate of income of the assessee trust is much below of Rs. 50,00,000/- and therefore, surcharge cannot be levied. Appeals of the assessee are allowed.
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2025 (4) TMI 1354
Penalty levied u/s 271(1)(c) - additional income declared before the Settlement Commission, including income from salary from foreign entities, buffer income, and income from house property - order of the Ld. CIT(A) in cancelling the penalty on account of limitation
Addition on account of rental income - HELD THAT:- We find the major portion of the same is relating to the notional income from house property which was lying vacant. In our opinion, although the addition can be made on account of notional income from the house property which is lying vacant, however penalty u/s 271(1)(c) of the Act is not warranted. The income tax law is so complex and complicated that it is possible that some omission or error may occur on account of interpretation of the statute in a bonafide manner. Since there is no evidence that the assessee has received any rental income from the house property which was vacant and the addition has been made on account of such notional rent, therefore, penalty on the amount in our opinion, is not justified. We therefore hold that no penalty is leviable on the addition on account of notional house rent.
Income from house property - It is the submission of the assessee that due to some arithmetical error, there was shortfall in disclosing that rental income but rental income from the above two properties was disclosed. We find some force in the above argument of the Ld. Counsel for the assessee that the same was only an arithmetical inaccuracy and not a deliberate attempt to evade tax for which penalty should not be levied. We accordingly hold that no penalty is leviable on account of this difference in rental income.
Buffer income - We do not accept this proposition of the Assessing Officer. This amount, in our opinion, is an income voluntarily disclosed by the assessee to overcome omission, if any. However, no such omission or error was found by the AO. Since assessee has not paid tax on the amount disclosed before the Settlement Commission, the immunity was withdrawn and the penalty was levied. This being the case, we are of the considered opinion that the penalty on this amount of Rs. 50 lakhs disclosed by the assessee as buffer income does not call for levy of penalty u/s 271(1)(c) of the Act.
Salary which was not added by the assessee in its return of income being a non-resident, we find the Settlement Commission vide order passed u/s 245D(2C) has held that the assessee is a non-resident - We find that two different combinations of the Settlement Commission which consists of very very senior officers of the department are not in agreement with each other regarding the status of the assessee. Under these circumstances, alleging the assessee that the assessee has concealed the particulars of his income with respect to salary income by treating himself as non-resident, in our opinion, is not justified.
Although the Settlement Commission in the said order has held the assessee to be a resident Indian, however, there is a finding of fact by the Settlement Commission that the assessee has not concealed any material facts from the Settlement Commission. This shows the bonafideness of the assessee in disclosing the material facts before the Settlement Commission. It is no doubt an admitted fact that the immunity was withdrawn on account of non-payment of due taxes by the assessee on the basis of the addition made by the Settlement Commission treating the assessee as resident. However, we find the assessee subsequently challenged the order of the Settlement Commission treating the assessee as resident and the Hon’ble High Court has admitted the substantial question of law.
We find in an identical issue had come up before in the case of CIT vs. Nayan Builders and Developers [2010 (9) TMI 1004 - BOMBAY HIGH COURT] has to be deleted. We find in that case the Tribunal deleted the penalty on the ground that when the substantial question of law is admitted by the Hon’ble High Court, penalty is not leviable.
We also find merit in the argument of assessee that treating the issue of residential status as a part and parcel of issue of concealment of income is not justified. In our opinion, scope of concealment of income ought to be construed / interpreted from the specific clear words which do not include issue of residential status. We, therefore, hold that the penalty levied by the Assessing Officer is not sustainable on account of substantial question of law being admitted on the issue of salary income and the residential status of the assessee.
Period of limitation - We are of the considered opinion that the penalty proceedings initiated by the Assessing Officer are barred by limitation.
We find the Settlement Commission vide order dated 27.08.2015 passed u/s 245D(4) had granted immunity to the assessee which was withdrawn by the Settlement Commission on 03.05.2017 vide order passed u/s 245(H)(1A). Therefore, the assessee was granted immunity from penalty and prosecution for a period of 20 months and 7 days i.e. between the period from 27.08.2015 till 03.05.2017. This, in our opinion, has to be added to the two time periods specified in section 275(1)(c). If the first limitation i.e. the expiry of the financial year in which the action for imposition of penalty has been initiated are completed is considered, then in view of the order passed u/s 245D(4) dated 27.08.2015, the limitation period after considering the period of 20 months and 7 days is 07.12.2017. However, the concealment penalty has been levied on 26.09.2018. Therefore, such penalty order is beyond the first date of limitation.
Similarly, if the period of 6 months from the end of the month in which the action for imposition of penalty has been initiated is considered, then such date to be inferred is 29.02.2016 i.e. 6 months from 31.08.2015 i.e. the end date of the month in which 245D(4) order was passed. After adding the immunity period of 20 months and 7 days to 29.02.2016, the second limitation period happens to be 07.11.2017. However, the concealment penalty order has been passed on 26.09.2018. Therefore, the penalty order has been passed beyond the second date of limitation.
If the date of withdrawal of immunity passed by the Settlement Commission u/s 245H(1A) on 03.05.2017 is considered as the date of initiation of penalty proceedings, then also the first limitation date ends on 31.03.2018 whereas the penalty has been levied on 26.09.2018 and therefore, such penalty order happens to be beyond the date of first date of limitation. So far as the second limitation date is concerned, if we consider the end of 6 months from the end of the month in which the penalty proceedings are initiated, then the second limitation period ends on 30.11.2017 i.e. 6 months from 31.05.2017 (since the order u/s 245H(1A) was passed on 03.05.2017). Since the penalty order has been passed on 26.09.2018, therefore, the said penalty order happens to be beyond the second date of limitation. Since the penalty order has been passed beyond the stipulated period, therefore, in view of the above discussion and in view of the detailed reasoning given by the Ld. CIT(A) on this issue, we hold that such penalty levied by the Assessing Officer being barred by limitation, is not sustainable. We, therefore, uphold the order of the Ld. CIT(A) quashing the penalty being barred by limitation and the grounds raised by the Revenue are accordingly dismissed.
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2025 (4) TMI 1353
Disallowance of deduction u/s. 54 - property purchases jointly - assessee has purchased the old property along with her husband where she has failed to establish that the sale consideration was paid by her and not her husband - HELD THAT:- We do not find any embargo for the assessee to claim deduction under this provision either as a co-owner, or on sale of one or two residential properties or on purchase of a residential property as a co-owner. Any express bar for the assessee to claim the said deduction on a property which has been jointly purchased by the assessee.
AO's contention that the old property was purchased jointly by the assessee’s husband and the assessee is to be taken into view only to find out if the assessee’s husband has also claimed deduction u/s. 54 pertaining to the sale of this property and purchase of the new residential house. If as per the contention, the old property belongs to the assessee and the sale consideration received out of the transfer was invested by the assessee in the new property, the assessee is entitled to claim deduction u/s. 54 to the extent of her investment in the new residential property.
AO has also not brought on record any fact to show that the assessee has sold more than one property and merely because the assessee’s husband has transferred his other property, which detail is not before us, it cannot be said that the assessee has transferred two properties.
Even otherwise, assuming that the old property which was sold belonged to the assessee’s husband then the assessee’s husband was entitled to claim the entire benefit u/s. 54, though the property was purchased jointly. In the present case in hand, it is not the case of the revenue that both the assessee and her husband has claimed benefit u/s. 54 twice for the entire sale consideration but it is a case where they have claimed proportionately to the extent of investment made by either of them in the purchase of the new property. Pertinently, courts have taken a liberal view with regard to the claim of Section 54 and Section 54F which are beneficial provisions that are to be interpreted liberally in favour of the assessee and deduction should not be merely denied on hyper-technical ground.
Benefit u/s. 54 cannot be denied merely because the property was purchased jointly in the name of the assessee and her husband, where in case of property held jointly the capital gain shall be calculated for each owner in accordance with the funding and allocation of shares of the house properties for claiming tax benefits. We find justification in allowing ground no. A with the direction that the ld. AO shall verify that there has been no double deduction claimed by the assessee and her husband on the capital gain arising out of the sale of property claimed by the assessee and to allow deduction u/s. 54 to the extent of the investment made by the assessee on the purchase of the new property. Ground no. A(1) is hereby allowed.
Addition u/s. 23 - deemed rental income of the office premises which the assessee alleged to be owned by the assessee and her husband jointly at 90.90% and 9.10% share respectively and the same was used as office premises for business purpose by the assessee - HELD THAT:- The assessee has failed to furnish documentary evidences to demonstrate the fact that the said property was used by the assessee and her husband for their business purposes. We are also conscious of the fact that there are various judicial precedents which has held that the ALV of a property has to be determined based upon the municipal rentable value which in the present case has not been considered by the ld. AO. We therefore deem it fit to remand this issued to the ld. AO to the limited extent of determining the ALV of the said property as per the municipal rentable value to the extent of the holding of the assessee in the said property.
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2025 (4) TMI 1352
TDS u/s 194H - commission payments to franchisees/LFS - AR submitted that Section 194H has no applicability in the present facts, as the assessee is not a person responsible for making any payment to the franchisees or LFS
HELD THAT:- The agreement entered into between the assessee and the franchisees/LFS establishes a principal-to-principal relationship. The franchisees/LFS are not agents of the assessee. Relevant terms of the agreement are annexed as Annexure ‘A’ to the Synopsis of Arguments. The transaction between the assessee and the franchisees/LFS is a sale on a principal-to-principal basis.
Section 194I treating the discounts offered to LFS as rent for occupation of a demarcated space within the LFS premises - On Applicability of Section 194-I the assessee contended that the discount allowed to LFS cannot be considered as rent. The allegation of the AO that the assessee acquires possession or control over a specified demarcated area within the premises of the LFS stores, and that its employees use the space exclusively for its business purposes, is factually incorrect and unsustainable. As per the agreement between the assessee and the LFS entities, the assessee merely sells goods to the LFS, who in turn display and sell the goods to end customers.
For the purpose of facilitating sales, the assessee may, at times, depute its employees to be present on the store floor to assist customers. However, the employees do not possess or control the premises. LFS retains full possession and operational control. The fact that a brand-dedicated area is used for display of goods does not lead to the inference that the assessee has possession or control over that space. The employees of the assessee are neither entitled to exclusive use of such space nor do they have independent access or rights thereto. No fixed or identifiable area is earmarked in the agreement, and the LFS has complete discretion regarding whether to display the goods or not. Therefore, the invocation of Section 194-I of the Act is without merit.
Assessee raised invoices in the name of the LFS/franchisees, and the LFS/franchisees in turn raised invoices to the end customers. The brand name was merely used to sustain the market position. The transactions are clearly on a principal-to-principal basis, and the discounted pricing mechanism adopted by the assessee cannot be considered as payment of commission. No evidence has been placed by the revenue to establish that the assessee has paid any commission to the LFS/franchisees. Further, the transactions have been accepted by both the Assessing Officer and the GST Authorities as sales on a principal-to-principal basis. The only objections raised pertain to alleged applicability of TDS under Sections 194H and 194-I, which, in our considered view and as elaborated hereinabove, are not sustainable.
No infirmity in the impugned order passed by the Ld. CIT(A). We therefore see no reason to interfere with the same. In the result, the appeal filed by the revenue is dismissed.
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2025 (4) TMI 1351
Validity of Reopening of assessment u/s 147 as beyond the limitation period specified u/s 149(1) - Scope of new regime - HELD THAT:- From the plain reading of the provisions of Section 149 of the Act, it is evident that no notice under section 148 of the Act shall be issued after the expiry of 3 years from the end of the relevant assessment year, unless the case falls under clause (b) to section 149(1) of the Act.
Having considered the provisions of the Act, pre as well as post the amendment by the Finance Act, 2021, and the TOLA, in the light of the decision of Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] and Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] we are of the considered view that the notice issued under section 148 of the Act on 28/07/2022 is barred by limitation period specified under section 149 of the Act. Accordingly, we are of the considered view that notice issued under section 148 of the Act on 28/07/2022 is void ab initio and bad in law. Therefore, the same is quashed. Consequently, the entire re-assessment proceedings and assessment order passed under section 147 r.w. section 144B of the Act are also quashed. Appeal by the assessee are allowed.
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2025 (4) TMI 1350
Cancelling the application u/s 12AB(1)(b)(ii)(B) for permanent registration and also cancelling the provisional approval u/s 12A(1)(ac)(vi) - application for recognition u/s. 80G was rejected on the ground that the assessee was not granted registration u/s 12AB and therefore, recognition u/s 80G was also rejected - only reason in rejection of the registration of the applicant-assessee trust was that the assessee was not registered under RPT Act and therefore, the application for registration u/s 12AB of the Act was rejected
HELD THAT:- Bench noted that since the assessee has already applied for registration under RPT Act and thereby the reasons advance for rejecting the registration of the applicant-assessee trust are curable in nature. Bench feels that the issue of registration u/s 12AB of the be decided a fresh, based on the registration under RPT Act to be produced by the assessee.
Therefore, we restore the matter of the registration u/s 12AB of the Act to the file of the ld. CIT(E) be decided afresh.
Bench also noted that recognition u/s 80G of the Act was denied because the applicant-assessee trust was not registered u/s 12AB of the Act. Since we have restored the matter of registration u/s 12AB to the file of the ld. CIT(E) and therefore, we also deem it a fit case to restore the matter of recognition u/s 80G of the Act to the file of the ld. CIT(E). Both the matters are restored back to the file of the ld. CIT(E).
We may make it clear that our decision to restore the matter back to the file of the ld. CIT(E) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the CIT(E) independently in accordance with law.
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2025 (4) TMI 1349
Exemption u/s 11 - scope of provisions of section 2(15) - as per revenue since the income of the trust was applied for religious purposes, the surplus so earned by the assessee would not be eligible for exemption u/s 11 - whether activities of the assessee are not 'religious' whereas the assessee has applied the money for religious purpose? - activity of sale of devotional articles was utilized for carrying out the objects or not? - assessee stated that the main charitable activities of the trust were feeding the poor, providing education and medical relief - CIT(A) allowed exemption
HELD THAT:- The assessee is a public charitable trust and it is registered trust u/s 12AA of the act. It is also holding valid approval u/s 80G(5). The perusal of Income and Expenditure (Page No.30 of the paper-book) would show that majority of its income constitute general donations and interest income. Apparently, there is no change in the activities of the trust since its inception and the assessee-trust continue to engage in similar kind of activities.
The Hon’ble Supreme Court in the case of ACIT vs. Ahmedabad Urban Development Authority[2022 (10) TMI 948 - SUPREME COURT] held that such activities if carried out for nominal cost, would not be ipso fact become business.
In the present case, the observation of Ld. AO that the assessee sold the books at a high mark-up is fallacious one since AO has not considered the administrative expenditure incurred on carrying out sale of books and articles. The major income of the assessee, as observed earlier, constitutes general donations and interest income. Therefore, the adjudication of CIT(A) could not be faulted with. Revenue Appeal dismissed.
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2025 (4) TMI 1348
LTCG - addition without referring to the valuation to DVO - HELD THAT:- AO made reference to DVO for estimate of Fair Market Value of asset as on 01.04.1981. Admittedly report of DVO was not received by AO before completion of assessment. AO on his wisdom adopted the value of land/asset as on 01.04.1981 @ Rs. 5/- per meter (wrongly mentioned at Rs. 5.00/- per square feet). AO after adopting the value of asset as on 01.04.1981 Rs. 5.00/- per re-computed the capital gains and made addition of capital gains at Rs. 87,86,472/-.
Admittedly the appeal of assessee was dismissed ex parte order by Ld.CIT(A).
Additional ground of appeal by making fair request that by admitting additional claim of section 54B, the matter may be restored back to the file of AO for further verification of claim u/s 54B and further to consider the report of DVO and report of Government Registered Valuer.
We find in case of Mitesh Impex [2014 (4) TMI 484 - GUJARAT HIGH COURT] held that Appellate Authorities have discretion to permit additional claim which was available when return was filed. Legal position that AO is not empowered to accept additional claim in absence of revised return though such discretion is vested with the Appellate Authority.
Therefore, keeping in view of the fact that assessee has sold ancestral agricultural land and have claimed to have purchase another agricultural land and claiming exemption u/s 54B. Therefore, additional claim of assessee is admitted subject to verification of fact by AO.
Considering the fact that report of DVO was not available at the time passing assessment order and CIT(A) has confirmed the action of AO. Therefore, matter is restored back to the file of AO to consider the report of DVO and the report of Government Registered Valuer and to pass fresh order in accordance with law. The assessee is at liberty to file objection, if any, against the report of DVO, if so desire. Needless to direct AO before passing the order afresh, the AO shall give reasonable opportunity of being heard to assessee and to file requisite as required and explanation and evidence as and when called for.
As we have already admitted additional claim raised by assessee u/s 54B therefore, AO is also directed to consider the claim of assessee and after verification of fact pass order in accordance with law. Appeal of the assessee is allowed.
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2025 (4) TMI 1347
Carry forward of business loss - whether the return of income was filed within the due date as prescribed u/s. 139(1), or it was filed beyond the due date prescribed u/s. 139(1) of the Act? - HELD THAT:- By clause (a)(ii) of Explanation 2 to Section 139(1), that when a person (other than a company) whose accounts are required to be audited under this Act i.e. Income-tax Act, 1961 or under any other law for the time being in force, the due date is 30th September of the assessment year. The word used is ‘required’ to be audited under the 1961 Act or under any other law for the time being in force, the due date for filing of return of income is 30th September of the assessment year.
Thus, once the Partner of such LLP which otherwise is not required to get its accounts audited vide first proviso to Rule 24(8), would be required to get its accounts audited vide second proviso to Rule 24(8) as the partners have decided to get its accounts audited even if it was not required to get its accounts audited vide first proviso, then in such case the same shall be audited in accordance with LLP Rules, 2009.
Section 34(4) of The LLP Act, 2008 is also become relevant as it stipulates that the accounts of LLP shall be audited in accordance with such Rules as may be prescribed. Thus, once the partners of LLP invokes second proviso to Rule 24(8) then the accounts of such LLP shall be required to be audited in accordance with LLP Rules, 2009, and then the same shall satisfy the condition as is stipulated in Explanation-2 to Section 139(1) and the due date u/s 139(1) for filing return of income in the instant case shall be 30.09.2019.
The assessee having filed the return of income on 17.09.2019, has filed the return of income within due date as prescribed u/s. 139(1), and keeping in view the provisions of section 139(3), the assessee is eligible to carry forward loss. Thus, the appeal of the assessee stands allowed.
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2025 (4) TMI 1304
Taxability of income in India or not - Royalty receipts taxable in India u/s 9(1)(vi) and Article 12 of the DTAA - Infrastructure Data Centre (IDC) Services & Consumer CRM Development Charges - HELD THAT:- As relying in assessee's own case for AY 2019-20 [2022 (12) TMI 1563 - ITAT MUMBAI] IDC and CRM Development Charges are not taxable in India and accordingly direct the AO to delete the addition made in this regard. Grounds 2 & 3 raised by the assessee are allowed.
Other Services Charges taxed as Royalty - We notice that the impugned issue is recurring in nature and that the Co-ordinate Bench while considering the same for AY 2019-20 [2022 (12) TMI 1563 - ITAT MUMBAI] as held this issue is recurring in nature and has been decided in favour of the assessee by the decision of the coordinate bench of the Tribunal for the preceding assessment years. The learned DR could not show us any reason to deviate from the aforesaid decision and no change in facts and law was alleged in the relevant assessment year. Thus, respectfully following the order passed by the coordinate bench of the Tribunal in assessee’s own case cited we uphold the plea of the assessee and direct the AO to delete the addition on account of other service charges (referral fees).
Management Service Fee taxed as Royalty - We notice that an identical has been considered by the Co-ordinate Bench in assessee's own case for AY 2010-11 to AY 2013-14 has considered similar issue and held the same in favour of the assessee. For the year under consideration the revenue did not bring any new material on record and therefore direct the AO to delete the addition made in this regard.
Member Login Fees - An identical issue has been considered by the Co-ordinate Bench in assessee's own case for AY 2019-20 [2022 (12) TMI 1563 - ITAT MUMBAI] uphold the plea of the assessee and direct the AO to delete the addition on account of member login fees.
Assessee appeal allowed.
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2025 (4) TMI 1302
Reopening of assessment u/s 147 - case re-opened after a period of four years - reasons to believe - HELD THAT:- On a perusal of the reasons recorded which are reproduced above, there is no allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Even on a perusal of the reasons recorded, the said pre-condition cannot be discerned with even in the absence of such allegation.
Reasons are based on verification of the profit and loss account and the other relevant records. If that be so, we fail to understand how the pre-condition specified in first proviso to Section 147 is satisfied. Therefore, on this short ground itself, the re-opening notice u/s 148 is required to be quashed and set aside.
Eligibility of interest u/s 80P was a subject matter of investigation in the course of the regular assessment proceedings and same is evident of the original assessment order, wherein the issue of deduction u/s 80P is discussed.
Disallowance u/s 40(a)(ia) a query was raised by the Respondents in the course of the assessment proceedings vide notice dated 18.07.2016 and same was replied by the assessee vide letter dated 09.11.2016, wherein all the details with respect to the TDS were furnished. The details are also filed along with this Petition from page 125 to 135. Therefore, on both these grounds i. e. deduction under Section 80P and disallowance for non-deduction of TDS, the issue was examined during the course of the assessment proceedings and therefore, any attempt to re-open the case would amount to re-opening on the basis of change of opinion and review of the earlier order passed u/s 143 (3) of the Act. This is not permissible under the Act which confers the power to re-open the case under Section 147 of the Act. Decided in favour of assessee.
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2025 (4) TMI 1301
Assessment order passed in violation of the principles of natural justice - not granting the Petitioner an opportunity of personal hearing - Violation of the provisions of Section 143 (3) r/w. 144B - HELD THAT:- As this was indeed a clear case of violation of principles of natural justice, we set aside the impugned assessment Order and remand the matter to the assessing officer with a direction to carry out the assessment afresh after giving an opportunity of hearing to the Petitioner and also providing a draft assessment Order. This exercise must be completed within three months from the date of uploading of this order.
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2025 (4) TMI 1300
Validity of re-assessment Order - Petitioner submits that this is a case of gross and apparent violation of principles of natural justice - HELD THAT:- We are satisfied that this Petition can be entertained despite the Petitioner having invoked the alternate statutory remedy of Appeal. This is because the undisputed facts indicate a clear violation of the principles of natural justice and fair play.
Petitioner was issued a Show Cause Notice and granted time to file a response by 23.59 hours of 30.03.2022. Such response was filed by the Petitioner at 17.59 hours on 30.03.2022. Even before the time limit indicated in the Show Cause Notice would expire, the second Respondent made the impugned re-assessment Order dated 30.03.2022 at 17.22 hours. Thus, the Petitioner’s response filed within the time line indicated was not even considered. Such non-consideration vitiates the impugned Order and constitutes violation of the principles of natural justice.
We set aside the impugned re-assessment Order and remit the matter back to the assessing officer for considering the Petitioner’s response for granting the Petitioner a personal hearing and making a fresh re-assessment Order on its own merits and in accordance with law. This entire exercise must be completed within three months of the uploading of this order.
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2025 (4) TMI 1299
Reopening of assessment - Bogus long term capital gains - information received from the Insight Portal regarding price manipulation in scrip of Tilak Venture Ltd. to provide accommodation entry of bogus long-term capital gains to its beneficiaries, proceedings u/s 147 of the Act were initiated in the case of the assessee - HELD THAT:- As in the present case, the proceedings u/s 147 of the Act were initiated based on the information received from the Insight Portal. Since the impugned additions were made pursuant to proceedings initiated u/s 147 of the Act, therefore, they can be either based on the information received by the AO or the information as obtained by the AO pursuant to an independent enquiry.
Once the AO has failed to prove in the present case that the assessee was involved in the alleged bogus transaction of accommodation entry on the basis of either of the aforesaid information, nor is there any vague reference against the assessee, the Revenue cannot now plead that the CIT(A) while adjudicating the assessee’s appeal failed to conduct the inquiry. Further, apart from raising the aforesaid plea, the Revenue has not specifically pointed out which inquiry the CIT(A) failed to conduct. Therefore, we do not find any merits in the aforesaid submissions of the learned DR.
Thus, no infirmity in the impugned order passed by the CIT(A). Accordingly, the deletion of the additions made u/s 68 and section 69C of the Act is upheld, and the grounds raised by the Revenue are dismissed.
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