|
Advanced Search Options
Income Tax - Case Laws
Showing 301 to 320 of 175842 Records
-
2025 (6) TMI 1765
Unexplained income u/s 69A - high-value fund transfers occurred during the third week of November 2016, which coincided with the demonetization period - onus to prove - HELD THAT:- As per settled legal principles, once the assessee provides such evidence, the onus shifts to the Revenue to disprove the claims. In this case, however, the AO failed to conduct any independent inquiry. No summons u/s 131 or notices u/s 133(6) were issued to the concerned parties, despite having full access to the supporting materials.
DR has not pointed to any infirmity in the submissions of the assessee or the observations made by CIT(Appeals) in the appellate order and keeping in view the settled principle that refund of money from earlier advances cannot be added under Section 68 of the Act, we find no infirmity in the order of CIT (A) so as to call for any interference. We observe that since the transactions were duly recorded in the books, properly explained with documentation, and lacked any rebuttal or investigation by the AO or the Ld. DR before us during the course of arguments, Ld. CIT(A) was justified in deleting the addition - Appeal of the Department is dismissed.
-
2025 (6) TMI 1764
LTCG - long term asset being immovable property sold by the Appellant - agricultural land OR capital asset chargeable to tax within the meaning of sec 2(14) - HELD THAT:- We find that it was the contention of assessee that the impugned land sold, was an agricultural land, duly supported by Revenue records wherein the same land was recognised as being cultivated agricultural land, secondly the assessee is continuously showing agricultural income in his returns prior to sale of the same land and the assessee also relied on various judgements of the decisions of Hon’ble Courts and Co-ordinate Bench of this Tribunal wherein it has been held that when in Revenue records the land is being recognised as agricultural land the gain if any arising on the sale of the above land cannot give rise to taxable capital gain in the hands of the assessee.
CIT(A)/NFAC at one hand directed the Assessing Officer to recalculate the long term capital gain by treating the receipt of Rs. 3 crore as received against the sale of the impugned land and at the same time confirmed the long term capital gain calculated by the AO in the hands of the assessee.
Accordingly, we find force in the arguments of assessee that CIT(A)/NFAC has erred in not deciding the issue raised by the assessee and therefore we deem it appropriate to remand the matter back to the file of CIT(A)/NFAC to decide the issue raised before us through ground no.1- that whether the long term asset being immovable property sold by the assessee was agricultural land and not a capital asset chargeable to tax within the meaning of section 2(14) of the IT Act, afresh. Ground no.1 raised by the assessee is partly allowed.
-
2025 (6) TMI 1763
Bogus LTCG - Long-Term Capital Gain in the nature of accommodation entries - disallowance of exemption claimed u/s 10(38) - amalgamation of companies resulting in allotment of shares to the assessee
HELD THAT:- As in this case the Assessee got shares of 'Twenty First Century India Ltd. after amalgamation of three companies duly approved by the Hon'ble Calcutta High Court on 24.12.2010. Before according approval for amalgamation, the Hon'ble Calcutta High Court had taken a No Objection Certificate from the Income Tax Department which means that the Department had made necessary verification before giving No Objection for amalgamation / merger of such companies into 'Twenty First Century India Ltd.'
Once, No Objection had been given by the Income Tax Department for the amalgamation and three companies for allotment of shares by 'Twenty First Century India Ltd., we fail to understand how the Income Tax Department has come out (on the basis of statement of Mr. Ashok Kumar Khemka) that 'Twenty First Century India Ltd., was just a paper company. The Income Tax Department either did not make proper verification before giving No Objection to the Hon'ble High Court for the amalgamation of these companies or merely on the basis of a statement or findings regarding 'Twenty First Century India Ltd. (the basis of statement of Shri Ashok Kumar Khemka) is wrong.
Both cannot be correct at the same time. In our considered view, once the Income Tax Department had given / filed ‘No Objection’ to the Hon'ble Calcutta High Court on which the Hon'ble High Court approved the amalgamation of companies into 'Twenty First Century India Ltd., it is no case for the Department to call the same company, a paper company just after a year.
Therefore, the findings given by the AO and CIT(A) are not based on sound basis and correct appreciation of the situation. Thus, we have no hesitation in rejecting the findings of both these authorities below. Accordingly, Assessee’s appeal on merit is allowed.
Addition made on the basis of sale of shares of 'Twenty First Century India Ltd.’ - Assessee has made addition on the basis of sale of shares of DLC Exports Ltd. - Assessee right from the beginning has been arguing that it never dealt in the purchase and sale of shares of DLC Exports Ltd. but the AO made the addition of the same without bringing any documentary evidence against the Assessee. CIT(A) has also confirmed it without bringing any relevant document for the same.
During proceedings before us Revenue could not produce any evidence regarding trading of shares of DLC exports Ltd. by the Assessee other than the assessment order and the appellate orders of the authorities below. Assessee clearly and categorically stated that the Assessee has never dealt in the shares of DLC Exports Ltd, so this addition has been made on the basis of information of some other person. We have considered it and we find that this addition has been made without bringing any documentary evidence against the Assessee on record by the authorities below. Therefore, along with the addition for 'Twenty First Century India Ltd’, the addition madefor shares dealing in DLC Exports Ltd by authorities below are deleted and the exemption as claimed u/s 10(38)
-
2025 (6) TMI 1762
Revision u/s 263 - Disallowance of loss claimed at NSEL - CIT(A) held that the assessee has entered into circular transactions which are clearly represent nongenuine trade and such losses cannot be allowed to be set off against business income - HELD THAT:- As in its own case [2022 (11) TMI 885 - ITAT AHMEDABAD] wherein similar loss was allowed as business loss/finance loss.
As rightly contended on behalf of the assessee-company, the exercise of re-characterization of transactions in the light of statement given by Shri Nilesh Patel should be restricted to only determination of correct taxable income. The relevant purchase and sales transactions were entered into by the assessee-company in order to avail the funds and, therefore, the loss incurred in the said transactions actually represented cost of such funds which was a business loss. The adverse inference drawn by the learned CIT(A) against the assessee on the basis of withdrawal of such loss partly was also not correct as the reasons for such withdrawal proposed by the assessee were duly explained and the fact that the assessee-company by entering into these transactions had availed finance for the purpose of business was duly established. Decided in favour of assessee.
Addition on account of paper/fictious purchase of castor seeds - CIT(A) deleted addition - HELD THAT:- The assessee has submitted purchase details along with stock register for goods received at Chandisar and Kadi location which in fact prove that assessee has received such goods at such premises. The castor seeds purchased during the year are either used for crushing for production of oil and oil cake or subsequent sales and such details are apparent from stock register as well as relevant schedules of Audited Annual accounts already on record of Assessing Officer as well as Special Auditor. The castor seeds purchases in its books of account with other purchases made from various parties in books of account and aggregate purchase value shown in purchase register tallies with amount shown in Profit & Loss account. The sales register along with stock register which clearly proves that part of above referred purchases were sold. When Assessing Officer has not doubted purchase quantity, sale quantity, books results, manufacturing process, there is no reason for treating entire purchase value as income of assessee. The assessee has in fact made payment against such purchases and the proofs have been submitted viz. copies of obligation report of NSEL for such purchase value and payments have in fact been made through HDFC Settlement Account. The assessee had submitted relevant bank details along with bank vouchers in support of its claim. Hence, we decline to interfere with the order of the Ld. CIT(A). Revenue on this ground is dismissed.
-
2025 (6) TMI 1761
Disallowance of loss - Speculative transaction or not - AO observed that Transactions that were settled without effecting delivery - Commodity transactions on NSEL platform - addition made as assessee was engaged in paper transactions - Additions on the basis of Special Auditor's report under section 142(2A) - HELD THAT:- AO concluded that the transactions on the National Spot Exchange Limited (NSEL) platform, where these trades purportedly occurred, were essentially financing transactions and settled without actual delivery, thus he held the loss as speculative. Before us, Ld. AR submitted that the assessee had already substantiated that the transactions have not been carried out at the NSEL Platform which has been accepted by the CIT(A) and hence they are not the speculative transactions of the assessee; the Ld. CIT(A), however, has made the addition only on the basis of the observation that no delivery challans had been submitted by the assessee to substantiate the delivery of such goods within a short time of 1 day.
The assessee has submitted copies of purchase of Cotton Washed Oil as well as the sale made to Tirupati Proteins Pvt Limited. Since the transactions have not been in question, the profit or loss arising out of the same would have the consequent effect. Hence, the addition made by the AO solely on the basis that that the transactions are with Tirupati Proteins Pvt Limited and hence the losses cannot be allowed is not an acceptable proposition. The appeal of the assessee on this ground is allowed.
Disallowance of loss from future and option (commodities) transactions - assessee submitted that these transactions were undertaken to hedge its existing stock and thus should be considered a business loss under the proviso to Section 43(5) of the Act, rather than a speculative loss, as held by the AO - HELD THAT:- When the main business of the assessee was to manufacture such goods, it is implied that the sales made by the assessee include the sales of the manufactured goods under contracts of supply on Actual Delivery Basis. The provisions of Section 43(5) are squarely applicable to the facts of the instant case, hence the same cannot be treated as speculative transaction. The appeal of the assessee on this ground is allowed.
Disallowance of the interest u/s 36(1)(iii) - Depreciation shall be allowed on the capitalization of interest. The appeal on this ground is hereby allowed for statistical purposes.
Addition on account of prior period income - The details pertaining to prior period income and prior period expense was duly provided by the appellant company in Form No. 3CD. (PB 68). This amount was considered in earlier year by the appellant by furnishing a revised computation of income and the appellant company has filed challan on 02.11.2012 which is reflected in Form 26AS (PB 66). The said tax is paid on the basis of revised computation in which prior period income taken into consideration is Rs. 1,19,45,801/-. There was an error in the amount as Rs. 1,19,45,801/- instead of Rs. 1,05,89,948/- which stands corrected. The Assessing Officer shall verify these facts from the record and allow. The appeal of the assessee on this ground is allowed.
Purchase of Cotton Wash Oil and Mustard Seed - allegations of the AO that Rs. 80.51 crores have not been paid against the purchase of goods - HELD THAT:- The purchase of Cotton Wash Oil were made from Rajkot and reflected in the stock register.The payments have been made through NSEL Settlement Account and such payments were through banking channel.Letter dated 24thJanuary, 2018 addressed by NSEL to Assessing Officer confirmed that purchases made by NKPL were on peer-to-peer basis and payment was made against such purchases by Rajkot Depot of the Company.These purchases were recorded in books of account of Kota Branch and payment was also made against such purchases.NSEL has confirmed the details of payment.
With regard to purchase of mustard seeds at Kota branch from NSEL NSEL has stated that as per Exchange Appellant has purchased mustard seeds in Mustard Kota Contract, which was launched during FY 2011-12. NSEL has further confirmed that assessee has purchased mustard seeds on electronic exchange trading platform and payment in respect of such purchases has been made by NKPL from NKPL-NSEL Settlement Account by settlement date mentioned in the contracts. Thus, from the reading of the remand report and the reply of NSEL, it is proved beyond doubt that the payments have been indeed made. Assessee appeal allowed.
Disallowance of additional depreciation - As per AO such assets were put to use in preceding AY for less than 180 days and therefore assessee is eligible for depreciation at only 50% rate in preceding year and balance 50% depreciation have to forego and not allowable in succeeding year following section 32(1)(iia) - HELD THAT:- As relying on Godrej Industries Ltd [2018 (12) TMI 64 - BOMBAY HIGH COURT] as held that intention of the legislation is absolutely clear, that the assessee shall be allowed certain additional benefit, which was restricted by the proviso to only half of the same being granted in one assessment year, if certain condition was not fulfilled. But, that, in our considered view, would not restrain the assessee from claiming the balance of the benefit in the subsequent assessment year. Additional depreciation allowed under Section 32(1)(iia) of the Act is a onetime benefit to encourage industrialization, and the provisions related to it have to be construed reasonably, liberally and purposively, to make the provision meaningful while granting the additional allowance - we find no reason to interfere with the order of the Ld. CIT(A) deleting the impugned disallowance. The appeal of the Revenue on this ground is hereby dismissed.
-
2025 (6) TMI 1760
Revision u/s 263 - Deduction u/s. 80P(2)(a)(i) - interest income from investments made with Pune District Central Cooperative Bank Ltd. (PDCC) - AO taking the basis of total Revenue to the interest on investment calculated the percentage at 6.7% and after applying the same on the deduction claimed by the assessee u/s. 80P disallowed amount and concluded the assessment
HELD THAT:- We find that AO had conducted a detailed enquiry on the issue of deduction claimed u/s. 80P by the assessee. Ld. PCIT has only referred to the claim u/s. 80P(2)(d) - AO has examined the issue exhaustively and took one of the permissible views by allowing the proportionate expenses.
PCIT has also raised question on the method of calculating the proportionate disallowance but this method followed by ld. AO is also one of the correct method for calculating such disallowance.
Even otherwise, practically, it is not possible to examine each and every indirect expenditure incurred by the assessee during the year to calculate the expenses actually incurred for earning the interest income from investments with Cooperative Banks. We also note that this Tribunal has consistently held that even the interest earned from Cooperative Banks is also eligible for deduction u/s. 80P(2)(d).
Thus, we find that AO has conducted detailed enquiry on all the issues referred by ld. PCIT in the show cause notice issued u/s. 263 and after proper application of mind has taken one of the view legally permissible and concluded the assessment. We therefore find that the assessment order dated for A.Y. 2021-22 is neither erroneous nor prejudicial to the interest of Revenue.
Impugned finding given by PCIT is set-aside and the order u/s. 263 is hereby quashed and the assessment order is restored to its original place. Grounds of appeal raised by the assessee are allowed.
-
2025 (6) TMI 1759
Denial of Exemption u/s 11 - accumulated funds were not utilized within the prescribed five-year period - utilization occurred in the sixth year - assessee has accumulated an amount during the financial year 2016-17 and has utilized the same in the 6th year of accumulation, the CPC taxed it in the 6th year i.e. financial year 2022-23 - as argued provisions of the Income Tax Act, 1961 as applicable to assessment year 2023-24 provides for taxation in the 5th year only and not in 6th year, therefore, taxing it in the 6th year ought to be deleted
HELD THAT:- Since the assessee in the instant case has utilized the accumulated surplus funds in the year immediately following the prescribed period of 5 years i.e. before 31.03.2023 and the amendment to the provisions of section 11(3) are held to be prospective in nature, therefore, the Ld. Addl / JCIT(A) in our opinion is not justified in upholding the intimation of the CPC making adjustment u/s 11(3) as deemed income of the assessee which was accumulated in the financial year 2016-17 and when the provisions at the relevant time prescribed the utilization of the amount within a period of 5 years or in the year immediately following the prescribed period of 5 years.
Even otherwise also we find merit in the argument of assessee that the 5 year period ends on 31.03.2022 and therefore the unutilized amount could have been brought to tax in assessment year 2022-23 and not in assessment year 2023-24. We set aside the order of the Ld. Addl / JCIT(A) on this issue and direct the AO/CPC to delete the adjustment. The grounds raised by the assessee are accordingly allowed.
-
2025 (6) TMI 1758
Unexplained money u/s 69A - Addition made concluding no man will keep such a huge cash - HELD THAT:- Assessee has given the details of the agricultural produce including the documents related to the ownership of the land (agricultural land). But all these details were totally ignored including that of sale receipts produced by the assessee during the proceedings.
The details of the same were partly admitted by the CIT(A) thus, there is discrepancy in the finding related to the documents produced by assessee. The finding of the CIT(A) that there is a bogus agricultural income appears to be not justifiable. Hence, the said addition does not sustain.
Addition on account of unexplained money u/s. 69A of the Act, the assessee has given the details of cash withdrawals on various dates and the deposit of the same on the subsequent occasions which can be seen from cash books as well as from the bank statements. Therefore all these details should have been taken into account by the Assessing Officer as well as by the CIT(A). Thus, the addition made by the Assessing Officer is not correct. Hence, the appeal of the assessee is allowed.
-
2025 (6) TMI 1757
Revision u/s 263 - eligibility of the assessee for claim of deduction under the provisions of section 80P(2)(a) or section 80P(2)(d) - As per CIT AO during the course of assessment proceedings, has not asked any specific question to the effect as to whether the interest income in question is business income or not - HELD THAT:- We find the AO during the course of assessment proceedings has examined the issue and has asked the queries to the assessee to which the assessee has responded.
Coordinate Bench of the Tribunal in the case of Talegaon Nagari Sahakari Patsanstha Limited [2024 (6) TMI 1476 - ITAT PUNE] has held that the interest income earned by a co-operative society on deposits made out of surplus funds with co-operative banks as well as scheduled banks qualify for deduction both under the provisions of section 80P(2)(a)(i) and 80P(2)(d). Since the AO in the instant case after considering the reply of the assessee has taken a plausible view, therefore, the same in our opinion cannot be considered as erroneous although it may be prejudicial to the interest of the Revenue.
It is the settled proposition of law that for assuming the jurisdiction u/s 263 of the Act, the twin conditions i.e. (i) the order of the AO is erroneous and (ii) the order is prejudicial to the interest of revenue must be fulfilled.
In the instant case the order passed by the AO may be prejudicial to the interest of revenue but it cannot be said to be erroneous since the AO has taken a plausible view on this issue after calling for various details from the assessee to which the assessee has replied. Therefore, in absence of fulfillment of the twin conditions, the Ld. PCIT in our opinion is not justified in assuming the jurisdiction u/s 263 of the Act. We, therefore, set aside the order passed by the Ld. PCIT. The grounds raised by the assessee are accordingly allowed.
-
2025 (6) TMI 1756
Cancellation of registration u/s 12AB(4) - PCIT (Central) retrospectively cancelling the assessee’s registration earlier granted u/s 12AA - HELD THAT:- We find that the said CBDT Notification has been deliberated in the decision in the case of Meenakshi Foundation [2025 (6) TMI 1615 - ITAT DELHI] wherein it was held that the power to cancel registration vest only with the CIT (Exemptions) and not PCIT (Central).
The expression "specified violation" and consequential withdrawal of registration was introduced in the Finance Act, 2022 only with effect from 1.4.2022 and could be made applicable only from Assessment Year 2023-24 and onwards and not retrospectively. This view is also clarified by the CBDT Circular No. 23/2022 dated 15.11.2022 vide para 9.3.3. of the Circular.
We hold that the PCIT(Central) was not having jurisdiction to pass the impugned order u/s 12AB(4) of the Act cancelling the registration of assessee society and also with retrospective effect. Accordingly, the impugned order of Learned PCIT(Central) is hereby quashed. The grounds raised by the assessee are allowed.
PCIT (Central) had passed an identical order and had withdrawn the registration with retrospective effect from Assessment Year 2011-12 onwards in the case of Lala Sher Singh Memorial Jeevan VIgyan Trust Society and from Assessment Year 2014-15 onwards in the case of Florence Nightingale Educational Society. Those orders are also quashed in view of aforesaid decision. Assessee's appeals are allowed.
-
2025 (6) TMI 1755
Disallowance u/s 40(a)(ia) - target discount, consistency discount and cash discount provided to spare parts dealers - CIT(A) after considering the submission of assessee confirm the action of AO by holding that discount scheme are directly passed through credit notes - HELD THAT:- It is clear that assessee has paid commission to its dealers under the cover of sales discount and it should be disallowed by apply provision section 40(a)(ia). We find that the assessee right from the beginning has claimed the relationship of assessee with its dealers were based on agreement that is of principal to principal (P2P) basis and not that of agent. The AO as well as CIT(A) has not given any adverse remark on the various clauses of the agreement of assessee with its dealers.
In our view, the fundamental principle and requirement for making TDS arise when the person is responsible for making some payment. However, in the cash in hand, the assessee in fact is not responsible for making payment to his various dealers, rather sold the spare parts on certain terms and conditions. Such terms and conditions are agreed to regulate the price. In fact, the dealers are making payment against the spare parts supplied to them by the assessee under the terms and conditions of dealership.
We find that Hon’ble Apex Court in CIT Vs Ahmadabad Stamp Vendors Association [2012 (9) TMI 298 - SC ORDER] while confirming the finding of Gujarat High Court held that discount given to Stamp Vendors for purchasing stamp in bulk quantity was in the nature of cash discount in transaction of sale, an therefore, section 194H has no application to that transaction. Assessee
The Gujarat High Court held in said case [2002 (6) TMI 32 - GUJARAT HIGH COURT] held the licensed vendor has to pay less the discounted at the rate provided in the Gujarat Stamp duty and Sales Rules. The liability of the Stamp Vendor to pay the price less the discount is not dependent upon or contingent to the sale of the stamp paper by the Licensed Vendor. The licensed vendor would not be entitled to get any compensation or refund of the price if the stamp papers were to be lost or destroyed. The Gujarat Stamps Supply and Sales Rules themselves contemplate that what the licensed vendor does, while taking delivery of the stamp papers from the Government offices, is purchasing the stamp papers.
We find that the assessee has furnished copy of agreement with its distributors and the details of payments of various discounts to dealers. No investigation of facts from such dealers about treatment of such discount is carried out, if they have shown such payment as commission income or their business income. No adverse remark on various terms and conditions of distributor agreement is made by assessing officer. The assessee is a well-known auto mobile manufacturer in India and claimed that they are consistently following similar practice from various decades and such discount payment/concession was started doubting by revenue authorities from last certain years only.
No survey action was carried out by TDS authorities. There is no evidence or material on record to suggest that discount allowed by assessee is against the commission payment or that the dealers were not doing their business independently or merely acting an agent of assessee. On careful perusal of the definition of 'commission or brokerage' as given in Explanation to section 194H, we find that to bring any payment within the Explanation, the payment received or receivable, directly or indirectly, is by a person acting on behalf of another person for services rendered (not being professional services), or for any services in the course of buying or selling of goods, and / or in relation to any transaction relating to any asset, valuable article or thing. So there must be an element of agency is to be there in case of all services or transactions contemplated by Explanation (i) to section 194H. Thus, we do not find any justification for treating the discount as a commission payment for attracting provision of section 40(a)(ia). Appeal of assessee allowed.
-
2025 (6) TMI 1754
Ex-parte order passed by the CIT(A) u/s 250 - No adjudicating the grounds raised by the assessee and without providing an opportunity of hearing - HELD THAT:- One more opportunity should be given to the assessee, to plead his case before the Assessing Officer.
It is settled law that principles of natural justice and fair play require that the affected party is granted sufficient opportunity of being heard to contest his case. Therefore, deem it fit and proper to set aside the order of the ld. CIT(A) and remit the matter back to the file of the AO to adjudicate the issue afresh on merits after giving reasonable opportunity of hearing to the assessee. The assessee is also directed to furnish all the evidence at the earliest possible of time before AO as and when call for.ppeal filed by the assessee is allowed for statistical purpose.
-
2025 (6) TMI 1753
Addition u/s 69A - Estimation of income - principle of res judicata - HELD THAT:- Since the AO in the assessee’s own case for assessment year 2014-15 has adopted the profit rate at 6.34% under identical circumstances, therefore, for this year also the same rate should have been adopted. It is the settled legal proposition that the principle of res judicata does not apply to income tax proceedings as every year is separate and distinct.
Merely because the AO has adopted the profit rate at 6.34% in the preceding year, the assessee cannot claim that the same rate of profit should be adopted for the huge cash deposits made in the bank account, the nature and source of which remained unexplained.
Considering the fact that the assessment proceedings had taken place during the Covid-19 period and the order of the CIT(A) / NFAC’s also ex-parte order due to non-appearance of the assessee, therefore we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate his case by filing the requisite details and decide the issue as per fact and law. The grounds raised by the assessee are accordingly allowed for statistical purposes.
-
2025 (6) TMI 1752
Deduction u/s 80P - addition in respect of interest received from Co-Operative Society/Co-Operative Bank - HELD THAT:- As the issue is squarely covered by the judgment of this Division Bench of this Tribunal in the case of Shri Avadh Nagarik Sahkari Mandli Ltd. [2024 (7) TMI 1650 - ITAT RAJKOT] held that any income by way of interest derived by a Co-operative society from its investment with any other Co-operative bank would be deductible u/s. 80P(2)(d) and there is no change in facts and law and the CIT-DR for the Revenue is unable to produce any material to controvert the aforesaid findings we allow grounds raised by assessee in these two appeals. Assessee appeal allowed.
-
2025 (6) TMI 1751
Rejecting the application for registration u/sec.80G - substantial charitable activities carried out by the trust - HELD THAT:- CIT(A) dismissed the application filed by the assessee in a casual manner by repeating or copying the contents from some other order which is evident from the findings in CIT(E)’s order where the CIT(E) observed that, no substantial charitable activities are being carried out by the assessee trust, which is in violation of provisions of sec.80G. The present application in Form 10AB for registration u/sec.80G is herewith rejected. We find that the learned CIT(E) has not disputed the fact that the assessee has not violated the provisions of sec.80G(v) of the Act.
Assessee trust has carried-out it’s activities in accordance with it’s objectives, which is evident from relevant evidences and photographs submitted before the authorities. CIT(E) ignored 12AB registration after satisfying with objects and activities. Therefore, CIT(E) ought to have grant registration to the assessee trust. We, therefore, direct the learned CIT(E) to grant registration u/sec.80G. Appeal of the assessee is allowed.
-
2025 (6) TMI 1750
Validity of the notice issued u/s 143(2) being in an invalid format - HELD THAT:- We find that undisputedly the notice issued u/s 143(2) of the Act dated 28.08.2016, specifies only computer aided scrutiny selection which neither mentioned it either to be a limited or a complete scrutiny nor compulsory manual scrutiny. Thus, the said notice has been issued in violation of the instruction issued by CBDT as noted above.
In our opinion, the revenue authorities have to follow the instruction issued by CBDT and violation thereto would certainly render the notice as invalid with the result all the consequential proceeding would also be invalid. The case of the assessee find support from the decision of Tapas Kumar Das [2025 (3) TMI 1481 - ITAT KOLKATA] wherein a similar issue has been decided in favour of the assessee.
Notice issued u/s 143(2) of the Act is invalid notice and accordingly, the assessment framed consequentially is also invalid. Assessee appeal allowed.
-
2025 (6) TMI 1749
Reopening of assessment - Unexplained cash credit u/s.68 - HELD THAT:- We find that on similar issue in the case of Nitin Hire Purchase Pvt. Ltd. [2024 (10) TMI 1668 - ITAT KOLKATA] has held that reopening was made on the basis of some material which was available before the AO at the time of proceedings u/s.147, is a change of opinion on the part of the AO.
Now, the department has challenged in the grounds of appeal the addition made in the assessment order passed u/s.147/143(3) - CIT(A) in the appellate proceedings has already allowed the appeal of the assessee by observing and holding that there is no material on record before the AO while issuing notice u/s.148 of the Act and is only a change of opinion on the part of the AO and accordingly the reopening was quashed on the ground of change of opinion. Revenue appeal dismissed.
-
2025 (6) TMI 1748
Conversion of capital asset into stock in trade - year of taxability of the amount in dispute - income arising from the exchange of land held as stock in trade for constructed commercial complex under a Joint Development Agreement (JDA) - HELD THAT:- As admitted position of fact that the assessee has got the Occupancy Certificate with respect to completion of building of the developed area on 21.7.2016. It is also an admitted position of fact that the coordinate bench of the ITAT in assessee’s own case cited [2024 (8) TMI 1577 - ITAT BANGALORE] has categorically observed that year of taxability is not assessment year 2017-18 and it is the year when the assessee has sold the whole or part of the building. Now the only issue which we require to adjudicate in departmental appeal is whether the ld. CIT(A) is correct in directing the AO to take the value at Rs. 3085.50 ps. Per sq ft.
We are of the view that ld. CIT(A) is not an expert for valuation purposes, therefore, this matter is to be referred to the valuation cell by the assessing officer to ascertain the correct valuation of the developed area and also the year of taxability of the amount in dispute.
AO will also examine in which year the assessee has sold the premises and has offered the income attributable to such sale. With these observations we restore this matter to the file of AO for examining afresh with a direction that the matter may be referred to the departmental valuation officer to decide in accordance with law.
-
2025 (6) TMI 1747
Rejection of books of account u/s 145(3) - gross profit of the assessee is low - HELD THAT:- It is important to mention here that the books of account of the assessee have been audited by the statutory auditors under the provision of Companies Act and also audited under the provision of Section 44AB of the Act. As we have already stated that in the present case books of account of the assessee has been rejected by the AO only on this ground that the gross profit of the assessee is low during the relevant period as compared to the other years.
We do not find anything in the order of AO to specify the defects in the books of account for the purpose of rejecting it. AO has not doubted the sales and purchases made from various parties. The submission of the assessee before the AO regarding the low gross profit in the relevant period are that most of the small and medium business specifically textile trade is almost in the sinking condition due to curtailment in demand increasing overhead expenses, staff reduction in the price realization. It is further important to mention here that no one can dictate a business man how he runs business.
Thus, rejection of books of account u/s 145(3) of the Act is illegal.
Addition as unexplained cash credit - CIT(A) has confirmed the order of AO only on this ground that there was nothing has been submitted - It is pertinent to mention here that assessee had explained that for survival of the business of the company, they have tried to explore source of income from other revenue and borrowings from lender companies were interest free since income earned in future from investment in properties was to be shared with them.
The submission of assessee is that since he has filed some documentary evidences before the AO that required to be proper verification by the AO. Keeping in view the above facts and submission made by the assessee this issue requires to be re-verification by the AO, as a result of which, the appeal of the assessee is remanded back to the file of AO for proper verification on the issue of addition and passed a reasoned order after going over the facts.
Appeal filed by the assessee partly allowed for statistical purposes.
-
2025 (6) TMI 1746
Validity of notice issued u/s 153C - jurisdiction over the other person (assessee) whose documents were found during search - undisclosed business income - satisfaction in the case of other person (assessee) was recorded on 03.09.2018, whereas, according to the remand report submitted by the AO in the first appellate proceedings, satisfaction in the case of the searched person was recorded on 06.09.2018
HELD THAT:- A perusal of the satisfaction recorded on 06.09.2018 inspires confidence in our mind to believe that it is consequence of the satisfaction recorded on 03.09.2018, but it does not assume the status of satisfaction recorded by the AO of the searched person, because, nowhere, it is recorded that the documents do not belong to the searched person and on the other hand, it says that the satisfaction of the AO of the searched person was already received and placed on record. This clearly shows that the satisfaction of the searched person is something foreign to this satisfaction recorded on 06.09.2018, it forms part of record, but, had never seen the light of the day.
On this factual finding, we conclude that there is no legal and valid satisfaction recorded by the AO of the searched persons, without which, the satisfaction recorded on 03.09.2018 has no jurisdictional foundation and therefore, the entire edifies of the Revenue gets collapsed.
We, therefore, accept the contention of the assessee and hold that for want of jurisdiction invested in the Assessing Officer in his capacity as Assessing Officer of the other person (assessee), the satisfaction dated 03.09.2018 is non-est in the eye of law and the consequent assumption is liable to be quashed. Accordingly, the assessment orders passed by the AO u/s 153C for the A.Y.2016-17 and 2017- 18 are quashed. We hold and order so.
Undisclosed business income - gross receipts as unaccounted sale, only on the basis of additions made towards on-money received over and above the SRO value of the flats for the A.Y.2016-17 and 2017-18 - HELD THAT:- There is no clarity as to whether the entire gross receipts is on-money or consideration received for sale of property, including sale consideration as per the registered sale deed. Since there is ambiguity in the findings of the AO and also the fact that there is evidence for incurring unaccounted expenditure against unaccounted receipt of on-money for sale of flats, in our considered view, a reasonable rate of profit needs to be estimated on purported on-money received by the assessee for sale of flats.
This principle is supported by the decision of Panna Corporation [2014 (11) TMI 797 - GUJARAT HIGH COURT] and Yugaandhar Housing Pvt. Ltd. [2022 (9) TMI 51 - ITAT VISAKHAPATNAM], where a similar view has been taken by the Tribunal and directed the AO to estimate profit on on-money received for sale of flats. Further, as pointed out by the Ld.DR, the assessee is co-developer of the lands and as per terms and conditions of MOU, the entire development expenditure has been incurred by the developer. If at all any expenditure for the assessee, then the assessee may incur regular overhead expenditure applicable to any kind of business. Therefore, we deem it appropriate to estimate 25% profit on total unaccounted receipt towards sale of flats. Thus, we direct the AO to estimate 25% profit on total gross receipts and delete the balance addition.
............
|
9911796707
