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Income Tax - Case Laws
Showing 261 to 280 of 175842 Records
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2025 (6) TMI 1865
Denial of benefit u/s 12A - delay of 353 days in submitting the audit report in Form-10B prescribed under Rule 17B of the IT Rules - HELD THAT:- Taking cognizance of well-established principle that when technical consideration and cause of substantial justice are pitted against each other, it is the substantial justice which is to prevail, this Court holds that mere technicality should not have been ground for claim of exemption u/s 12A - CIT has failed to consider the application for condonation of delay in its right earnest under the provisions of Section 119(2)(b) of the Income Tax Act, 1961 read with power conferred by virtue of Circular No.10/2019, dated 22.05.2019.
Ergo, finding that there was “genuine hardship” faced by the petitioner during the relevant period and refusal to condone the delay invoking power u/s 119(2) of the IT Act being arbitrary exercise of discretion having regard to the fact-situation, Order dated 12.02.2025 passed by the CIT (Exemption), Hyderabad-opposite party No.2 are hereby set aside. The matter is remitted to the said authority concerned to consider audit report in Form 10B furnished under Rule 17B of the Income Tax Rules to claim exemption u/s 12A of the Income Tax Act and in consequence thereof, the Commissioner of Income Tax (Exemptions)-opposite party No.2 is directed to grant all consequential relief to the petitioner by taking into account the Audit Report in Form 10B pertaining to the Assessment Year 2017-18 submitted on 19.03.2021, as if the same is filed within period specified invoking Section 119(2)(b) of the Income Tax Act, 1961.
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2025 (6) TMI 1864
Validity of reopening of assessment - assumption of jurisdiction on the basis of approval from an authority which was not competent to grant approval u/s 151 - more than three years have lapsed - HELD THAT:-Approval is contrary to the provisions of section 151 of the Act as amended/substituted by the Finance Act, 2021 because, as per section 151 of the Act, if more than three years have lapsed from the end of the relevant assessment year, approval of Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General was required to be obtained. In the present assessment years, notices u/s 148 have been issued on 28.07.2022 after expiry of three years from the end of relevant assessment years. Accordingly, sanction/approval of Principal Chief Commissioner of Income-tax or Principal Director General or Chief Commissioner or Director General was required to be obtained. Reliance in this regard is placed on the decision of the Hon’ble Supreme Court in Union of India vs. Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] and various decisions. Thus, the approval is not sustainable under law. Assessee appeal allowed.
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2025 (6) TMI 1863
Penalty u/s 271(1)(c) - Debatable issues - whether assessee acted in good faith ? - TP adjustment made in respect of the manufacturing and trading segments - TPO’s decision to use PBIT/Sales as the Profit Level Indicator (PLI) instead of PBDIT/Sales as adopted by the Assessee, changes in the filters and comparables used for benchmarking, and adjustments made to the operating profit computation by excluding items such as liabilities written back, bad debts written off, and provisions for doubtful debts - penalty was levied only on the ground that the adjustments made by the TPO were upheld by the CIT(A) and partly confirmed by the ITAT
HELD THAT:- We note that the assessee had furnished relevant details in the return of income, the transfer pricing study report, and during the course of assessment and penalty proceedings, none of which were found to be inaccurate or false. The TNMM was accepted by the TPO as the most appropriate method, and the adjustments arose on account of differences in interpretation, such as the use of PBIT versus PBDIT as the PLI, and in the treatment of certain operating items-issues which in our view are debatable.
We note that several judicial precedents, including CIT vs. Reliance Petroproducts (P) Ltd. [2010 (3) TMI 80 - SUPREME COURT], Mastek Ltd vs. DCIT [2012 (11) TMI 17 - ITAT, AHMEDABAD], and PCIT vs. Global Vantedge (P) Ltd [2018 (3) TMI 2057 - DELHI HIGH COURT] have held that mere differences in opinion or debatable issues should not attract penalty.
In the instant case penalty was levied for furnishing inaccurate particulars of income, despite there being no specific finding by the Tax Authorities that the ALP was not computed in good faith or without due diligence. Moreover, Explanation 7 to section 271(1)(c), which specifically governs penalty in transfer pricing cases, was neither invoked during the initiation nor discussed while levying the penalty.
In the instant case, the assessee had used a prescribed method (TNMM) u/s 92C of the Act and disclosed the selection of filters, comparables, and operating margin computation in the transfer pricing study report. Neither the TPO nor CIT(A) ever held that the ALP was computed outside the statutory provisions, or that the study report lacked diligence or was not prepared in good faith. In view of these facts and the settled legal position, in our view the necessary conditions under Explanation 7 for imposing penalty are not satisfied. Accordingly, we hold that the penalty levied by the AO is unsustainable in law and is hereby deleted. Since, we have given our findings on merits of the case, the other technical grounds raised by the assessee on jurisdiction are not being separately adjudicated.
Appeal of the assessee is allowed.
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2025 (6) TMI 1862
Deferment of revenue - Difference between receipts as per Form 26AS and the Profit & Loss Account - uncertainty of ultimate revenue collection and has failure to demonstrate, with supporting evidences that the conditions mentioned in AS-9 are fulfilled - as per assessee deferment of revenue recognition was on account of a genuine dispute between the assessee and the parties concerned and this amount was received by the assessee in a later year
HELD THAT:- On going through the contents of the agreements furnished by the assessee for deferment of revenue, the year-wise income recognition table and the reconciliation statement of Form 26AS with audited Profit & Loss Account, we are of the considered view that assessee has not given a clear finding on what basis the amount was deferred by the assesee.
Assessee has also not submitted the precise breakup of bills raised by the assessee, the copies of bills for which revenue were deferred and has also not submitted the evidences to ascertain the reasons for deferring the revenue.
Accordingly, in view of the lack of submission of complete details by the assessee, in the interest of justice, the matter is hereby restored to the file of AO for de-novo consideration with a direction to the assessee to file all necessary details as called for by the AO during the course of assessment proceedings. Appeal of the assessee is allowed for statistical purposes.
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2025 (6) TMI 1861
Assessee-in-default u/s 201(1) for non-deduction of TDS - Non-deduction of TDS u/s. 194J - determine the nature of transaction - HELD THAT:- Other than the default reported in the Tax Audit Report, there is no material in the possession of the AO and on record as to how the said default has been determined. The tax audit report is also silent as to how the provisions of Section 194J have been held applicable and the basis of arriving at the said opinion by the tax auditor.
If we refer to the provisions of Section 194J of the Act, it provides that any person other than an individual or an HUF, who is responsible for paying to a resident any sum by way of fee for professional services or fee for technical services or royalty etc., shall at the time of credit of such sum to the account of the payee or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, shall deduct at appropriate rate as specified.
Therefore, it is critical to determine the nature of transaction as to whether the same will constitute as fee for technical services, professional services or in the nature of a royalty and thereafter, basis such determination, the TDS liability can be quantified.
However, we find that in the instant case, there is no such finding recorded by the AO apparently for the reason that the assessee has not complied to the show cause notice issued by the AO. Even there is nothing on record as to how the tax auditor has determined the TDS liability u/s. 194J of the Act. Even before the Ld.CIT(A), we find that even though the assessee has stated that it has availed charter hire services from Velocity Charter Private Limited, there is no supporting documentation in terms of any charter hire agreement or copy of the invoice which seems to be submitted for the first time before us.
Further, there are separate provisions in terms of 194C in terms of transportation services and there is no finding recorded by either of the authorities in this regard as to how the said provisions are not applicable.
In the instant case, we find that other than the tax audit report, there is nothing on record and no substantive explanation furnished by the assessee. Therefore, we deem it appropriate to remit the matter back to the file of the AO to determine the exact nature of a transaction, after providing reasonable opportunity to the assessee. Appeal filed by the assessee is allowed for statistical purposes.
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2025 (6) TMI 1860
Rectification order u/s. 154 - mistake apparent from record that assessee has deposited cash during the demonetisation period is not added - assessee did not respond to 4 notices issued by the CIT(A), hence it was held that assessee is not interested in prosecuting the appeal - HELD THAT:- CIT(A) is empowered to dispose of the appeal only on its merits. He is not empowered to dismiss the appeal of assessee for non-prosecution. Further, the notices sent by him are not at the email address stated by the assessee in Form 35, except on 1st occasion.
All subsequent notices have been issued to a different email id, which we do not know, wherefrom he got information about. Therefore, assessee did not receive at least 3 notices. In absence of receipt of notices, naturally assessee could not respond.
But despite that, the ld. CIT(A) should have decided the appeal on the merits and not for non-prosecution as one of the grounds of appeal raised before the CIT(A) was against rectification order in accordance with law in absence of any mistake apparent from the record. CIT(A) even did not adjudicate the same.
Therefore, in absence of any decision on merits of the case, when adequate information is available before him, the ld. CIT(A) is not correct in disposing of the appeal on the allegation of non-prosecution. Therefore the order of the ld. CIT(A) is not sustainable, hence quashed.
Appeal of the assessee is allowed by quashing the rectification order passed by the ld. AO and also quashing the order of the ld. CIT(A) though not based on the merits of the case wherein the appeal of the assessee is disposed of for non-prosecution which is in violation of the provisions of section 251 of the Act. Appeal of the assessee is allowed.
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2025 (6) TMI 1859
Disallowance of miscellaneous expenses and business expenses of the assessee - Disallowance on the ground that the assessee has not produced any cogent evidence in support of the expenses to prove the same were fully and exclusively incurred for the purpose of business of the assessee firm - Even during the first appellate proceedings, the assessee except filing written submissions not produced any documents to substantiate its claim
HELD THAT:- Considering the fact that the assessee has failed to substantiate its claim either before the lower authorities or before this Tribunal, finding no merits in the grounds of appeal, we dismiss the grounds of appeal of the assessee.
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2025 (6) TMI 1858
Disallowance of deduction u/s 35(2AB) - expenditure incurred on in-house Research and Development facility - non-availability of Form No.3CL issued by the DSIR - HELD THAT:- It is an admitted fact that Form No.3CL was issued by the DSIR on 16.12.2022 only after the assessee filed a Writ Petition before the Hon’ble Delhi High Court.
Since the above certificate was not available either during the course of assessment proceedings or during appellate proceedings and since it has a bearing on the matter, therefore, we deem it proper to restore the issue to the file of the AO with a direction to adjudicate the issue afresh. Appeal filed by the assessee is allowed for statistical purposes.
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2025 (6) TMI 1857
Addition u/s 69A - undisclosed income of the assessee - unexplained cash deposits in bank - HELD THAT:- Upon examination, we find that out of the total cash deposit the assessee had already offered Rs. 30,00,000/- to tax in the return of income. Further, the cash book clearly evidences that the assessee had adequate cash balance to support the bank deposits.
While the Ld. DR advanced arguments, no specific objection was raised against the factual submissions made by the assessee. We find merit in the contentions of the assessee. Accordingly, the addition sustained by the Ld. CIT(A) is hereby deleted.
It is further noted that the revenue has not preferred any appeal against the portion of the addition deleted by the CIT(A). Assessee appeal allowed.
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2025 (6) TMI 1856
Addition u/s 69 r.w.s. 115BBE and disallowance u/s 14A r.w. Rule 8D - CIT(A) failure to issue any statutory show-cause notice u/s 251(2) - HELD THAT:- We find that in the present case, while passing the impugned order, the ld. CIT(A) confirmed the addition u/s 69 r.w.s. 115BBE of the Act without fully examining the supporting documents and explanations offered by the assessee before him and similarly, while making the disallowance u/s 14A r.w. Rule 8D CIT(A) simply upheld the addition despite admitting the fact that the assessee has not earned any exempt income during the relevant assessment year, which is contrary to the settled proposition of law.
We additionally note that the enhancement of income as unexplained expenditure u/s 69C by the ld. CIT(A), is not justified as the CIT(A) failed to issue any statutory show-cause notice u/s 251(2) while making the adjustment, which is clearly a violation of principles of nature justice.
We also note that the assessee was deprived of proper opportunity to explain or rebut the proposed enhancement of income rendering the action unsustainable in the eyes of law.
In view of the above and in the interests of justice and fair play, we feel it necessary to remand the whole issue to the file of the AO. Therefore, we set aside the impugned order of the CIT(A) and restore the entire matter to the file of the AO with a direction to re-examine the case of the assessee on merits after affording reasonable opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes.
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2025 (6) TMI 1839
Validity of reopening of assessment - notice issued beyond the period of four years - review v/s reopening - reasons to believe - tangible material to initiate reassessment proceedings - HELD THAT:- A reassessment made within four years or beyond four years has to be based on tangible material de hors that is available on record that has come to the notice of the AO.
Recourse to proceedings for reassessment is available only if the Department comes into possession of materials, apart from that already available as part of its records or if primary particulars reveal discrepancies that are not explained or resolved by the accompanying documentation. This is subject, therefore, to the assessee having placed on record all materials necessary for the appreciation of issues arising for assessment including financials and annexures along with its return of income at the first instance.
As in Orient Craft Ltd. [2013 (1) TMI 177 - DELHI HIGH COURT] has held that reopening of assessment made u/s 143(1) of the Act is without jurisdiction, in the absence of any tangible material available with the Assessing Officer to form the requisite belief regarding escapement of income. The Court held that in the absence of any tangible material, there will be a review in the guise of reopening.
In the present case, the reasons disclose that the AO reached the belief that there was escapement of income, on going through the return of income filed by assessee after it was accepted u/s 143(1) without scrutiny and nothing more. Therefore, this is nothing but a review of the earlier proceedings. There is no whisper in the reasons recorded, of any tangible material which came to the possession of AO subsequent to the issue of the intimation. It reflects arbitrary exercise of the power conferred u/s 147 of the Act. Decided in favour of assessee.
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2025 (6) TMI 1838
Validity of reopening of assessment - period of limitation - effect of TOLA on the limitation period for issuing notices u/s 148 and 148A(b) for A.Y. 2015-16 - HELD THAT:- It is not in dispute that the respondent-Assessing Officer has issued the notice u/s 148A(b) of the Act after the period of six years were over on 31.03.2022.
As observed in case of Deepak Steel and Power Ltd [2025 (4) TMI 1367 - SC ORDER] and in view of the concession made by the Revenue before the Apex Court for the Assessment Year 2015-16, all the notices issued on or after 01.04.2021 will have to be dropped as they would not fall for completion during the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and therefore, nothing further is required to be adjudicated in the matters as the notice so far as the present petitions are concerned, though dated 31.03.2021, admittedly have been issued after 01.04.2021.
t is also not in dispute that the notices u/s 148A(b) have been issued pursuant to the decision in Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] dated 04.05.2022 admittedly after 31.03.2022. Therefore, on both counts, the notices issued under section 148 of the Act dated 27/28/29.07.2022 would be time barred.
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2025 (6) TMI 1837
Revision u/s 263 - exemption of Long Term Capital Gain [‘LTCG’] u/s 10(38) - PCIT has categorically observed that the AO has failed to conduct the investigation and inquiry on the basis of the report received from Directorate of Investigation, Kolkatta wherein it is disclosed that M/s. Suchak Trading Limited is a penny stock company - Tribunal held that it is a case of inadequate enquiry without even pointing out what further enquiry could have been conducted
HELD THAT:- Tribunal has rightly come to the conclusion that PCIT was justified in setting aside the assessment order directing the AO to conduct further inquiries or verification which ought to have been condoned for the purpose of computation of the income of the assessee as the assessment order is found to be erroneous as per the provision of Explanation 2(a) to section 263 to that extent and also prejudicial to the interest of the Revenue in absence of the inquiry which should have been made by the AO. Therefore, the contention raised on behalf of the appellant-assessee that there are two views are available is also not tenable.
Contention raised on behalf of the appellant assessee that there is breach of principles of natural justice as the documents which were relied upon by the PCIT for initiation of the revisional proceedings were not supplied is also without any basis as the PCIT has only relied upon the documents which are available on record at the time of assessment proceedings only and by invoking Explanation 2(a) to section 263 it was held that the assessment order is erroneous and prejudicial to the interest of the Revenue in absence of inquiry which ought to have been conducted by the AO.
Therefore, the case law relied upon by the learned advocate of the appellant is not applicable in the facts of the case as admittedly the assessing officer has not carried out inquiry which he should have made as appellant assessee has availed exemption of LTCG on transactions of sale of shares of penny stock company.
Therefore, in view of concurrent findings arrived at by the PCIT and the Tribunal and in the facts of the case when the AO has failed to conduct inquiry which should have been made by him, the PCIT was justified in invoking as per Explanation 2(a) to section 263 to hold that the assessment order would be erroneous and prejudicial to the interest of revenue.
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2025 (6) TMI 1836
Ex-parte order passed by CIT(A) - Addition made in rectification u/s 154 - non-appearance of the assessee before the lower authorities - HELD THAT:- In an affidavit the assessee has submitted that the company did not receive any notice u/s 147 or during the appellate proceedings and due to non-receipt of said notices the company was unable to respond the reassessment proceedings and appellate proceedings.
Keeping in view, the submission, order passed by the Ld. CIT(A) as well as considering the Affidavit, we are inclined to restore the appeal of the assessee to the file of Ld. CIT(A) for fresh adjudication after affording an opportunity to the assessee. In the result, both the appeals filed by the assessee are allowed for statistical purposes. The impugned order passed by the CIT(A) are set aside.
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2025 (6) TMI 1835
Denial of exemption u/s 10(23C)(via) - non-filing of Form 10BB by the Assessee-Trust - CIT(A) allowed claim as Form 10BB was filed within the time allowed by the CBDT Circular No.16/2024 dated 18.11.2024 - HELD THAT:- It is noticed that the revenue has not been able to point out any specific error in the order of the ld. JCIT(A)-9, Mumbai. The assessee is entitled to the benefit of Section 10(23C)(via) of the Act and the requisite Form 10BB has also been filed.
The provisional approval u/s 10(23C)(via) of the Act is also available with the assessee for the assessment years 2022-2023 & 2024-2025 vide an order dated 30.09.2021. This being so, as no error has been pointed out by the revenue in the order passed by the ld. JCIT(A)-9, Mumbai in the case of the assessee, the appeal filed by the revenue stands dismissed.
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2025 (6) TMI 1834
Reopening of assessment - Period of limitation - notice issued u/s. 148 of the Act before six years from the end of the assessment year 2015 -16 - old regime notices - mandation to take prior approval of the ld. PCIT as per provisions of section 151 - allegation of mechanical approval by competent authority and without proper service of notice u/s. 148 - undisclosed capital gain
HELD THAT:- In the old regime, section 149(ii) prescribes the time limit for issuing notice u/s. 148 as four years, but not more than six years from the end of the assessment year if the income chargeable to tax, which has escaped assessment amounted to or was likely to amount Rs. 1,00,000/- or more.
In the instant case, AO found that the income/sale consideration of Rs. 45,00,000/- under the head capital gain, which was not depicted in assessee’s ITR, was surely over one lakh rupees. Hence, notice dated 31.03.2021 issued u/s. 148 before six years from the end of the assessment year 2015-16, falls within the time limit prescribed u/s.149 of the Act of the old regime.
Perusal of the assessment order that prior approval of the jurisdictional Principal Commissioner of Income-tax was taken in accordance with section 151 of the Act of the old regime before initiating assessment proceedings u/s. 147/148 - AR has, though, mentioned that such approval was casual and in a mechanical manner, however, failed to elaborate the same. The assessee has not made any efforts to procure the said approval either through the process of this Tribunal or by any other mode available under law. Hence, it cannot be accepted that the approval/sanction was given in a casual or mechanical manner by the sanctioning authority.
Service of notice u/s. 148 dated 31.03.2021, it is an admitted fact that the Revenue issued notice through electronic platform on assessee’s email ID available with the department in consonance with section 282 r.w.s. 292BB of the Act.
All modes of service of notice are not required to be effected. The service through either of the given modes of service is sufficient. It also transpires that the assessee participated in the assessment proceedings, which were being proceeded in the faceless manner u/s. 144B and entire procedure of faceless assessment of income escaping assessment was adopted by the AO as provided u/s. 151A of the Act.
We accordingly, do not find any illegality or invalidity either in the notice u/s. 148 r.w.s. 142(1) or at any stage of the assessment proceedings. In view of the aforesaid discussion, the first point is accordingly determined against the assessee and in favour of the department.
Exemption u/s 54 - Whether an immovable property consisting predominantly four shops at the ground floor along with a single room at the first floor, can be treated as a “residential house” within the meaning of section 54, thereby qualifying for exemption of capital gains? - Admittedly, the assessee has claimed deduction u/s. 54 of the Act in respect of capital gains arising from the transfer of a long term capital asset on the ground that the assessee had invested in other residential properties within the stipulated period. One of such two properties purchased by the assessee comprises four shops at the ground floor and one room at the first floor.
A perusal of section 54 shows that this section provides exemption from capital gains tax if the capital gains arise from the transfer of a long-term capital asset being a residential house (buildings or lands appurtenant thereto), the income of which is chargeable under the head “income from house property”, and the assessee has, within the prescribed time, invested in the purchase or construction of another residential house. The term “residential house” is not specifically defined under the Act, but the legislative intent makes it clear that the nature and usage of the property are key determinants of the true character of the said property. The property should not be predominantly commercial in character. In the present case, the immovable property in question admittedly consists of four shops at ground floor and one room at first floor, which is also substantiated by the conveyance deed dated 04.02.2014 submitted by the assessee through his paper book. In common parlance, shops are not capable to be characterized as residential house.
Based on the composition and functional usage of the property, it is evident that the property purchased by the assessee was predominantly commercial in nature. The presence of a single room at the first floor of the commercial structure does not alter the dominant character of the property as the same is expected to be used for incidental and ancillary activities/for commercial purposes. The primary usage and income generation from the property appear to be from commercial activity and not from residential house, thereby disqualifying the eligibility of capital gains for exemption u/s. 54.
AR has utterly failed to adduce any corroborating evidence like electricity bills, municipal records etc. to justify the property in question to be a residential house. Hence, we do not find any infirmity in the findings of the revenue authorities that the investment in second new property does not qualify for exemption from capital gain tax.
The sale deed dated 29.08.2014, which is part of assessee’s paper book at page 8 to 24 shows that the assessee Hazi Alauddin and his wife Smt. Hajjan Shahnaz Begum are shown to be the joint sellers/owners of the property. Hence, the share of the assessee in the sale consideration of Rs. 45,00,000/- is half, whereas the Revenue has computed the capital gain after considering the entire sale consideration in the hands of the assessee.
Revenue seems to have ignored this fact that only 50% of the sale consideration can be taken into account for computation of capital gains in the hands of the assessee. For this limited point, the AO is directed to re-compute the capital gain on 50% share of the aforesaid sale consideration in the hands of assessee. The second point is accordingly determined partly in favour of the assessee.
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2025 (6) TMI 1833
Rejection of grant of registration u/s 12AB and u/s 80G - application was not filed under the correct provisions - assessee trust was supposed to file application for grant of approval u/s 80G under Clause (iii) of First Proviso to sub-Section (5) of Section 80G of the Act, whereas he incorrectly filed applicant in Clause (ii) of First Proviso to sub-Section (5) of Section 80G
HELD THAT:- In the case of Global Academy for Medical Education & Science Trust [2024 (6) TMI 864 - ITAT AHMEDABAD] where CIT(E) by ex-parte order rejected the assessee trust’s applications for grant of registration u/s 12AB and u/s 80G, in view of the principles of natural justice, said authority was directed to re-consider grant of registration u/s 12AB and u/s 80G by providing one more opportunity to the assessee to pass appropriate orders.
In the case of Bhagwan Mahaveer Jain Relief Trust [2025 (2) TMI 162 - ITAT RAIPUR] held that where CIT(E) rejected assessee trust’s application for registration under Section 80G on the technical ground that the application was not filed under the correct provisions, since there was no mention of any specific query or show-cause to the assessee about ineligibility to file an application under the provisions of Clause (iv)(b) of the First Proviso to Section 80G(5) of the Act in the impugned order, principles of natural justice had been violated by rejecting the application, without confronting the assessee about reasons for such rejection and thus, the matter was required to be remanded back.
In the case of Rotary Charity Trust [2025 (2) TMI 114 - ITAT MUMBAI] held that where assessee trust filed an application for final registration u/s 80G(5) of the Act and Commissioner (Exemption) rejected said application on ground that assessee was not fulfilling stipulated conditions prescribed for filing application for approval in Form 10AB, since assessee had inadvertently mentioned wrong section, issue was to be remitted back to file of Commissioner (Exemption), with a direction to grant final approval to assessee under Clause (iii) to First Proviso to Section 80G(5) of the Act, if assessee was otherwise found eligible.
Accordingly, the matter is restored to the file of CIT(E) for de-novo consideration.
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2025 (6) TMI 1832
Addition u/s 68 - cash deposits during demonetization period - assessee was not required to maintain any books of account having returned income on presumptive basis u/s. 44AD
HELD THAT:- Additions made by the AO and confirmed by the Ld. CIT(A) are in complete disregard of the facts on record before the AO and the pleadings made by the assessee to the CIT(A) that the assessee was not required to maintain any books of account having returned income on presumptive basis u/s. 44AD and, therefore, no question of making any addition of either cash found deposited in its bank account or disallowance of expenses incurred by it.
Even on the aspect of unsecured loans added to its income u/s. 68 of the Act, it has been pointed out that it was demonstrated to the authorities below that majority of the loan was taken in the preceding year.
Clearly the order passed by the Ld. CIT(A) is not sustainable since there is no application of mind to the facts on record and the pleadings made by the Ld. Counsel for the assessee before him. We, therefore, consider it fit to restore the issue back to the AO to frame assessment de novo after considering all the facts on record - Appeal filed by the assessee is allowed for statistical purposes.
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2025 (6) TMI 1831
Addition u/s 36(1)(iii) - interest free advances given by assessee to its sister concern - commercial expediency or not? - HELD THAT:- Perusal of the order of the CIT(A) reveals that the assessee company has advanced an interest free loan to its sister concern and it has debited its profit & loss account of interest as paid to the banks and financial institution on secured loan raised for construction etc.
CIT(A) called the remand report during the appeal proceedings and found that there is nothing on record to prove that the interest free advance to the sister concern was made for non-business purposes. From the order of the Ld. CIT(A) it is evident that the investee company has been regularly paying the advance tax and effective tax rate in the hands of investee is more than the assessee
CIT(A) has examined the issue in correct prospective and rightly deleted the additions towards disallowances u/s 36(1) (iii) made by the A.O. Appeal of the revenue is dismissed.
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2025 (6) TMI 1830
Unexplained cash credit - sums deposited by assessee in the bank account during demonetization period - AO conducted inquiries u/s.133(6) from the concerned banks and also sought explanation of the assessee with respect to the source of this amount - HELD THAT:- The arguments advanced by the assessee that the customers have deposited these amounts directly in the bank account of the assessee, is not supported with any documentary evidences. The assessee has also failed to provide any details vis-à-vis goods supplied to the so called customers who have deposited the amount in the bank account of the assessee.
Assessee has placed on record certain additional evidences before us under Rule 29 of the Income Tax Rules, 1962. We remit this matter back to the file of the AO for examining the case de novo, in accordance with law, needless to say that the AO will afford a reasonable opportunity of being heard to the assessee.
Appeal filed by the assessee is allowed for statistical purposes.
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9911796707
