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Income Tax - Case Laws
Showing 341 to 360 of 175845 Records
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2025 (6) TMI 1707
Revision u/s 263 - PCIT observed that assessee firm is engaged in the business of manufacturing of Coffee and declaring its income at NIL, on the ground that the income of the assessee falls under the category of agricultural income - PCIT observed that the AO ought to have considered the claim of the assessee having regard to the provisions of Rule 7B of the Income Tax Rules, 1962 and observed that the AO has not enquired as to the process followed by the assessee for growing and selling coffee.- HELD THAT:- The provisions of explanation (2) of the section 263 of the Act provides that where the ld. PCIT is of the opinion that the order is passed without making enquiries or verification, which should have been made, then such order should be deemed to be erroneous and prejudicial to the interest of revenue.
Perusal of the relevant questions as mentioned in show cause notice, referred by us herein above would prove beyond doubt that the AO has accepted the claim of the assessee, without there been any documents filed from the side of assessee.
The role of the AO during the course of assessment proceedings is that of investigator as well as an adjudicator. If during the course of assessment proceedings, he accepts any claim of the assessee without enquiring into the facts then such an order is erroneous order. While acting as an adjudicator if he takes a view, overlooking the provisions of law then also his order is erroneous.
When we examined the facts of the present case then it would be abundantly clear that present is a case where the AO has accepted the claim of the assessee without conducting any enquiries and without referring to the provisions of rule 7B of the I.T.Rule, which rules are specifically applicable to the coffee growers.
So far as the contention of the assessee that in previous years also the provisions of rule 7B are not invoked, would not in any way made the order of the AO justiciable. Therefore, we are of the firm opinion that the ld. PCIT is justified in exercising jurisdiction u/s 263 of the Act. With these observations, the appeal of the assessee stands dismissed.
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2025 (6) TMI 1706
Addition of interest on HSBC Account on protective basis - assessee is having account with HSBC, Geneva, Switzerland - CIT(A) has confirmed the addition on substantive basis - HELD THAT:- From the perusal of the bank statement as reproduced, it is found that the said bank account contained the client no. and client name which are matching with the client profile code and client name referred. It is correct that nowhere in the statement, name of the assessee is mentioned however, the other particulars referred therein suggest that it is the same bank account which has been made basis for computing the notional interest by the AO.
A bare perusal of the said bank account, it is seen that on opening day of previous year i.e. on 01.04.2011, there was a credit balance of 8,599.72 USD as against which the AO in the table of the order has taken the balance at 4,07,651.17 USD.
AO ignored the fact that the bank has not credited any interest rather account maintenance fee was charged on two occasions, totaling to 1391.51 USD (941.29 USD+ 450.22 USD) and NIL balance was remained as on 16.11.2011. These facts clearly suggest that neither the assessee is having the balance as alleged by the AO nor has received any interest for which the AO could made additions rather account maintenance charges was levied by the bank. Under these circumstances, in our considered view, no addition on account of notional interest could be made in the hands of the assessee.
Co-ordinate Bench of ITAT in the case of Krishan Kumar Modi [2019 (7) TMI 596 - ITAT DELHI] where under identical circumstances, additions were made on notional interest @ 4% were deleted by the Co-ordinate Bench - we delete the addition made on account of notional interest on substantive basis in the hands of the appellant.
Addition towards cash found/seized during the course of search - HLD THAT:- The immediate source as explained by the assessee that bank withdrawals made within the period of one month totaling to INR 4,50,000/- from her bank account out of which a sum of INR 2,78,142/- was available with assessee as on the date of search. The withdrawals were made on 26.11.2011 of INR 2,50,000/- and on 08.07.2011 of INR 2,00,000/- and the date of search is 28.07.2011. Looking to this short span of time of around of 30 days from the withdrawals and the search, the claim of the assessee cannot be ignored solely for the reason that she was not able to state these facts during the course of search. It is not the case of the Revenue that the bank account from where the withdrawals were made was not of the assessee nor the said account was undisclosed bank account. Therefore, we find no reason to confirm such addition. Accordingly, we hereby direct the AO to delete the addition of INR 2,78,142/-. Ground No.4 raised by the assessee is accordingly, allowed.
Addition made towards the jewellery found during the course of search - The total jewellery found of 3619.170 grams during the course of search, following jewelry could be held as explained:-
(i) Declared under VDIS 1997 at 1088.910 grams;
(ii) Gift from other in law 375.200 grams;
(iii) Purchase of jewellery 1621.140 grams; and
(iv) As per CBDT instruction, 700 grams.
The total comes to 3785.25 grams as against which the total jewellery was 3619.170 grams therefore, no jewellery could be held as unexplained accordingly, we direct the AO to delete the addition of INR 1,01,52,902/- made on account of jewellery. Ground Nos. 5 & 6 raised by the assessee are accordingly, allowed.
Legality of the assessment order as the same was barred by limitation and without jurisdiction - In this case, it is seen that a reference was made by the AO to FT & TR in respect of foreign assets and foreign transactions and as per Explanation (9) to section 158B of the Act. There is an extension of one year is granted. In view of these facts, we do not find any infirmity in the action of the AO and order is not barred by limitation and accordingly, these grounds of appeal are dismissed.Before us, the assessee has taken one additional ground wherein the approval granted u/s 153B of the Act was challenged however, during the course of hearing, Ld. AR of the assessee has withdrawn this additional ground. Therefore, the same is hereby dismissed.
Levy the penalty u/s 271(1)(c)- additions so made by holding that the assessee has concealed the particulars of income - As we have already deleted the additions made on account of notional interest, cash and jewellery found during the course of search by considering the arguments of the assessee on merits. Therefore, there remained no income for which any particulars were concealed by the assessee and therefore, the penalty levied u/s 271(1)(c) of the Act has no legs to stand and accordingly, the same is hereby dismissed.
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2025 (6) TMI 1705
Reopening proceedings when proceedings u/s 154 was pending - HELD THAT:- Two notices were received by the assessee. One in regard to non-deduction of TDS on account of lease rent and the other was in regard to alleged non-accounting of short-term capital gain. The report submitted by the AO is patently silent on the fact if these notices when responded by the assessee were particularly dropped. The judgement which was relied in the case of S.M. Overseas (P) Ltd. [2022 (12) TMI 702 - SC ORDER] squarely applies wherein the Hon’ble Supreme Court has upheld the Tribunal’s conclusion that during the pendency of proceedings u/s 154 of the Act, it was not permissible on the part of the Revenue to initiate the proceedings u/s 147/148 of the Act.
As far as application of provisions of section 154(8) of the Act is concerned, the same is applicable where the application is moved by an assessee which is not the case. Thus, the assertions of the ld. DR by relying provisions of section 154(8) of the Act do not come to the rescue.
In any case, when the material on record establish that AO was aware of the disputed transaction of short term capital gain for which notice was issued by way of rectification proceedings, and the proceedings are deemed to have been dropped then subsequent assumption of jurisdiction u/s 147 of the Act will certainly lead to reopening on stale information and just a change of opinion.
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2025 (6) TMI 1704
Denial of approval u/s 80G(5)(iii) - charitable activity u/s 2(15) - as per CIT(A) appellant had not furnished sufficient details or proof of the activities of the trust/Institution within the meaning of section 2(15) - assessee submitted that the fee receipts are the revenue generated out of the regular activities carried on by the institution and they have not been issued any certificate u/s. 80G like any other donations and CIT(E) grossly erred in ignoring the Capital expenditure applied during the year as application as well as accumulation u/s. 11(1)(a) of the Act
HELD THAT:- The scope of enquiry by CIT(E) while dealing with the application for grant of approval u/s. 80G of the Act extends only to the satisfaction of the genuineness of the activities of such trust/institutions and the fulfillment of all the conditions laid down in clauses (i) to (v) of Section 80G(5) of the Act and not the actual computation of surplus. We are also of the opinion that the provisions of section 11 & 12 along with section 13 including application of fund by the charitable organization are to be examined during the course of assessment proceedings and not at the time of granting approval u/s 80G of the Act.
Private institutions like assessee trust are well funded by high fee receipts and management fee which undergoes an increase every year does not commensurately passed on in terms of tangible and intangible facilities, we are of the considered opinion that the ld. CIT(E) did not point out any specific circumstances under which the fees received had not been commensurately passed on in terms of tangible and intangible facilities. These are merely sweeping statement without any corroborative evidence. The ld. CIT(E) in her order did not even whisper about any activity of the trust to be non-genuine.
Fees receipts which are forming part of the total receipts, the ld. CIT(E) is of the view that these receipts do not fall within the purview of the donation u/s. 80G of the Act - The fee receipts are nothing but the revenue generated out of the regular activity carried on by the assessee trust and the assessee trust never granted 80G certificates on such fees receipts. We are of the considered opinion that mere fact of the assessee being an educational institution which received tuition & other fees along with hostel fees, the approval u/s 80G of the Act cannot be denied specially when it is established for the charitable purposes within the meaning of section 2(15) of the Act and the registration u/s 12A of the Act has already been granted after verifying the genuineness of the activities carried out by the Assessee trust. The issues, whether receipts in the form of tuition and other fees, hostel fees do not fall under the definition of donation are not at all relevant in the present case of the assessee trust.
For the purpose of granting approval u/s 80G of the Act, the only relevant section is sub-sections (5). The ld. Commissioner (Exemptions) after receiving the application for granting approval u/s 80G of the Act shall call for such document or information and make such enquiry as he/she thinks necessary in order to satisfy himself/herself about the genuineness of the activity of such institution or fund and the fulfillment of all the conditions laid down in clause.
Thus, we are of the opinion that at the time of granting of approval u/s 80G of the Act, the authority has to satisfy herself that the chartable institution is established in India for charitable purposes and the activities of the assessee trust are genuine and the assessee trust also fulfilled all the conditions as mentioned above. The ld. CIT(Exemptions) in our view has also not brought any material on record to show that the activities of the assessee trust are not genuine or the conditions as specified above are not fulfilled by the assessee trust.
Allow the appeal of the assessee trust and direct the ld. CIT(Exemptions) to grant approval u/s 80G of the Act to the assessee trust as applied in form 10AB on 08.08.2024.
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2025 (6) TMI 1703
Revision u/s 263 - Jurisdiction of the Pr. CIT u/s 263 to revise the AO's order for AY 2021-22 - HELD THAT:- After going through the facts on record, we are of the considered view that the ld. Pr. CIT has assumed jurisdiction on wrong appreciation of facts. The impugned property was purchased by the assessee on 03/08/2021 falling in FY 2021-22 relevant to AY 2022-23 whereas the impugned assessment year is AY 2021-22.
All the apprehensions raised by the ld. Pr. CIT in justifying that the assessment order dated 26/12/2022 is erroneous and prejudicial to the interest of the revenue may be relevant for AY 2022-23 and not for the year under consideration. Since the assumption of jurisdiction is based upon wrong appreciation of facts, we have no hesitation in setting aside the impugned order of the CIT and restore that of the AO.
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2025 (6) TMI 1702
Denying the approval u/s 80G(5)(iii) - charitable activity u/s 2(15) - as per CIT(E) assessee trust reported surplus every year which is not utilized towards charitable purposes and they had been accumulated in FDs and received interest income AND fee receipts which are forming part of the total receipts do not fall under the purview of donation u/s. 80G - HELD THAT:- For the purpose of granting approval u/s 80G of the Act, the only relevant section is sub-sections (5). Commissioner (Exemptions) after receiving the application for granting approval u/s 80G of the Act shall call for such document or information and make such enquiry as he/she thinks necessary in order to satisfy himself/herself about the genuineness of the activity of such institution or fund and the fulfillment of all the conditions laid down in clause (i) to (v).
At the time of granting of approval u/s 80G of the Act, the authority has to satisfy herself that the chartable institution is established in India for charitable purposes and the activities of the assessee trust are genuine and the assessee trust also fulfilled all the conditions as mentioned above. CIT(Exemptions) in our view has also not brought any material on record to show that the activities of the assessee trust are not genuine or the conditions as specified above are not fulfilled by the assessee trust.
We allow the appeal of the assessee trust and direct the ld. CIT(E) to grant approval u/s 80G of the Act to the assessee as applied in form 10AB on 10.08.2024. Appeal filed by the assessee is allowed.
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2025 (6) TMI 1701
Delay of 477 days in filing before ITAT - eligible reasons of delay - negligence of the accountant had resulted in ex-parte decision of the two lower authorities - HED THAT:- As the the assessee has been lackadaisical in its approach and it has tried to seek condonation of delay in a nonchalant manner. The gross negligence on the part of the assessee and the lack of bona fides does not make it a fit case for condonation of delay.
As held by the Hon’ble Apex Court [2015 (1) TMI 1053 - SUPREME COURT] the liberal approach has to encapsule the conception of reasonableness and it cannot be allowed a totally unfettered free play. We can’t condone the delay on the bedrock of the principle that adjudication of a lis on merits is seminal to justice dispensation system. The conduct, behaviour and attitude of the assessee relating to its inaction or negligence are relevant factors to be taken into consideration.
The gross negligence of the assessee in not filing its return of income and in not complying to the notices at any stage reflects poorly on the conduct, behaviour and attitude of the assessee. There are inconsistencies in the declarations as made by the assessee and the accountant regarding the delay in filing the present appeal. There was no careful concern in drafting the condonation application by the assessee considering the affidavit of the accountant.
The parameters laid down by the Supreme Court, when not to condone delay, get squarely attracted to the facts of the present case and we find no reason to condone the delay.
In the case of Mani Ram Seva Nyasi Sangh Ayodhya [2020 (6) TMI 109 - SC ORDER] as held that it was otherwise the duty of the assessee to watch the affairs of its firm and delay of few days or months can be considered, but delay of years is required to be examined minutely. As already discussed earlier, there was gross negligence on the part of the assessee and it didn’t exercise any care to enquire about the status of the second appeal and merely tried to shift the responsibility on his accountant. On the other hand, the accountant has only owned up the responsibility for the ex-parte order of the CIT(A) and has not acknowledged any delay on his part for filing the present appeal. Since the assessee has failed to properly explain the reason for delay in filing the present appeal, we don’t find any ground to condone the delay and consequently, the appeal of the assessee is dismissed as time barred.
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2025 (6) TMI 1700
Addition u/s 69A - Unexplained source of cash deposited in the bank accounts - only reason for making the addition given by the AO is that the assessee should not have accepted the SBNs after 08/11/2016 being not legal tenders - HELD THAT:- We are of the considered view that after assuming that it was not a legal tender for the assessee then the same was also not legal tender for the banks but the banks have accepted the deposit. Therefore, we do not find any merit in the accusation of the AO.
Though the decision of Raju Ravichandran [2023 (6) TMI 1448 - ITAT CHENNAI] is in favour of the revenue but the same author sitting in Division Bench in the case of Tamil Nadu State Marketing Corporation Ltd. [2024 (10) TMI 1614 - ITAT CHENNAI] has decided the impugned issue in favour of the assessee as held to bring any amount u/s. 69 or 69A of the Act, the nature and source of investment, needs to be examined. In case the assessee explains the nature and source of investment, then the question of making addition towards unexplained investment u/s. 69 of the Act does not arise. In this case, the source of deposits has not been disputed and has been created out of ordinary business sales which has been credited into books of accounts and profits has also been duly included in the return of income filed in relevant assessment year. Therefore, additions cannot be made u/s. 69 of the Act and taxed u/s. 115BBE of the Act towards cash deposits made to bank account of demonetized cash in SBNs. Appeal of the assessee is allowed.
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2025 (6) TMI 1699
Correct head of income - rental income - treating the income as House Property Income as business income by the assessee while filing the return of income - HELD THAT:- AR drew our attention to the decision of assessee’s own case for A.Y. 2011-12, [2017 (12) TMI 1894 - ITAT MUMBAI] wherein the Coordinate Bench had held primary issue that the assessee’s rental income was assessable as “Income from Business.” DR also conceded that the facts and circumstances for the year under consideration are identical to those of A.Y. 2011-12, which was decided in favour of the assessee. Accordingly, no infirmity in the order passed by the Ld. CIT(A) - Decided against revenue.
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2025 (6) TMI 1698
Assessment order is passed ex parte - exemption u/s 10(23C)(iiiab) - AO has added the entire cash deposits in the bank account, the interest income and also the payment to hotel and restaurant bills - No expenditure whatsoever has been allowed while the assessee claims to be a university which is substantially financed by the Government and the University Grants Commission and has claimed that its income is exempt u/s 10(23C)(iiiab) of the Act. Even if the exemption u/s 10(23C)(iiiab) of the Act was not allowed; however, the entire deposits which were claimed to be out of the fee received and grants from the Government could not have been added without considering the income on commercial basis and after allowing the expenditure.
HELD THAT:- Bench was of the view that in the interest of justice, another opportunity may be granted to the assessee. Therefore, the order of the Ld. CIT(A) as well as the order of the Ld. AO are hereby set aside as the reasons for the delay are found to be justified and the assessee had a sufficient cause for the delay and the submission made have not been considered and the issue is remitted to the file of the Ld. AO for framing the assessment de novo after considering the submissions which may be filed by the assessee in support of the claim and also in support of the claim that the exemption u/s 10(23C)(iiiab) of the Act is allowable. Hence, all the grounds of appeal are allowed for statistical purposes
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2025 (6) TMI 1697
Addition u/s 68 - cash deposited in Bank during demonetization period - unexplained sources - as argued assessee had discharged his onus of explaining the source of cash deposited in the bank account by furnishing his cash book, and the entire case of the Revenue only on presumptions and assumptions which were also explained satisfactorily by the assessee.
HELD THAT:- Assessee had furnished his entire books of account, including his cash book explaining the source of cash deposit in the bank account during the demonetization period. Details of cash flow/ cash book of the preceding year was also filed and these details clearly reflected a pattern of huge withdrawals made by the assessee every month and the same being deposited in the bank account of the assesse.
Assessee has given the reason for keeping huge cash in hand every month pointing out that it is in the business of quarrying mines and since, it works in remote areas in difficult conditions, it requires cash in hand to meet any medical or other emergency of which there is always a huge risk.
Revenue authorities have pointed no infirmity in the Books of accounts maintained by the assessee nor the reasons given by the assessee for keeping huge cash balance. There is no question therefore of doubting the source of cash deposited in bank.
Undisputedly the Revenue has only doubted the source of cash deposited during demonetization, despite the records revealing cash deposit to be a regular feature throughout the year by the assessee.
We agree with assessee, that without any cogent reason the Revenue cannot cherry pick transactions for doubting the same.
As for the fact that the assessee chose to deposit the cash in hand during the demonetization in tranches, the assessee, we have noted, had explained reason for the same also, as since its business requirement of cash in hand remaining and with the restrictions in place on cash withdrawals from bank during demonetization period, the assessee did not deposit all SBN notes available as on 08-11-16 in one go but in tranches. The assessee also pointed out that there was no bar under the demonetization law of meeting medical expenses with SBN's.
Assessee chose to keep SBN's in hand during demonetization period, depositing them only in tranches. Again, we agree with assessee, the Revenue has failed to point out any infirmity in the aforestated explanation of the assessee. In the absence of the same, the Revenue cannot hold the cash deposits as suspicious for the said reason.
Also, the discrepancy noted of the entire cash in hand available as on 08.11.2016 being deposited during demonetization period all being by way of SBNs which the Revenue authorities have found to be highly improbable, we do not find any merit in the same. We see no reason to doubt entire amount available with the assessee as on 08.11.2016 to be in specified bank notes. Moreover, the short fall of the cash deposited in bank during the demonetization to the balance available as on 08.11.2016 leading to the interference by the Revenue that the assessee had taken SBNs during the demonetization period against the provisions of law, we agree with the assessee, cannot lead to any doubt being expressed about the source of cash deposits in the bank account of the assessee.
The assessee may have been debarred by law from accepting SBNs but the fact that the assessee did accept SBNs and deposit it in the bank account, thus, flouting the demonetization law, is not highly improbable. As rightly pointed out by the Ld. Counsel for the assessee, the consequence of the same lay under the demonetisation law and not under the Income Tax Act.
Assessee, we hold, had duly discharged its onus of explaining the source of cash deposit in its bank account during demonetization period and the findings of the Revenue treating the same as non-genuine are merely on presumption and assumption. The addition made, therefore, we hold of cash deposited during the demonetization period u/s 68 of the Act is not sustainable in law and is directed to be deleted. Assessee appeal allowed.
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2025 (6) TMI 1696
Bogus purchases - Denial of principles of natural justice - Assessee argued that addition confirmed without dealing with the assessee's contention that the addition was made in gross violation of the principle of the natural justice without affording adequate opportunity of hearing to the assessee and without considering the material that was placed on record before the AO.
HELD THAT:- It is clear that the addition on account of non-genuine purchases has been made without giving a fair opportunity of hearing to the assessee and against the principles of natural justice. Assessment unit has found both the purchases and sales to be not genuine, which in fact means that they have found business conducted by the assessee to be bogus.
But addition has been made only on account of purchases found to be not genuine which is not inconsonance with the findings of the assessment unit from the investigation conducted by it showing the entire business conducted by the assessee to be bogus.
Assessment has been done in an ad hoc manner without any application of min or without adhering to the principles of natural justice. We, therefore, set aside the assessment order directing the AO to redo the assessment afresh after giving the assessee due opportunity of hearing confronting it with all materials in his possession and adhering with the principles of natural justice. The Ld.AO is thereafter directed to pass order in accordance with law.
Appeal filed by the assessee is allowed for statistical purposes.
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2025 (6) TMI 1695
Settlement of case of quantum assessment under VSVS, 2024 - HELD THAT:- As per the provisions of section 91(2) of the DTVSV Scheme, 2024, any appeal pending before the ITAT or CIT(A) in respect of disputed interest or disputed penalty or disputed fee or tax arrears shall be deemed to have been withdrawn upon the issuance of certificate u/s 92(1) of the DTVSV Scheme, 2024.
On going through the letter along with the enclosures filed we find that the Form No.2 i.e. Certificate under sub- section (1) of section 92 of the Finance (2) Act, 2024, is issued by the Principal Commissioner of Income Tax on 20.01.2025. Further, intimation of payment under sub-section (2) of section 92 of the Finance (No.2) Act, 2024 is filed by the assessee on 4.2.2025 vide acknowledgement No.858981110040225 and accordingly the Form No.4 i.e. Order for full & final settlement of tax arrears under sub- section (2) of section 92 r.w.s. 93 of the Finance (2) Act, 2024 is awaited from the. This Being so, we, accordingly, as per the request letter dated 5.3.2025, dismiss this appeal of the assessee for the assessment year 2016-17 as withdrawn.
In the result, appeal filed by the assessee is dismissed as withdrawn.
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2025 (6) TMI 1694
Revision u/s 263 - As per CIT AO failed to verify the fact that there is difference between the Stamp Duty Value and agreement value of the flats sold - applicability of Section 43CA - HELD THAT:- On perusal of the order impugned, we find that the PCIT has not invoked the provisions contained in Explanation 2 to Section 263. The order passed under Section 263 of the Act, wherein reliance was placed on Explanation 2 to Section 263 of the Act, was set aside by the Tribunal vide Order, dated 13/10/2022 passed [2022 (10) TMI 1285 - ITAT MUMBAI] . Therefore, the reliance on the provisions contained in Explanation 2 to Section 263 of the Act is misplaced.
We note that the AO had failed to carry out any inquiry in respect of the balance two transactions even though it was apparent that the difference in sale consideration and the stamp-duty value was beyond the tolerance band.
To this extent we do not find any infirmity in the order passed by the Learned PCIT in invoking provisions contained in Section 263 of the Act as clearly the applicability of Section 43CA of the Act was required to be examined and the failure on the part of the Assessing Officer has resulted in passing of assessment order which was erroneous as aforesaid. We have already returned a finding that the actual sale agreements were neither requisitioned nor produced during the assessment proceedings.
We also reject the contention of the Learned Authorised Representative of the Assessee that the applicability of Section 43CA of the Act is to be examined by aggregating all the transaction. The language of Section 43CA of the Act does not provide for such an approach or interpretation.
No addition under Section 43CA of the Act was warranted in respect of 5 out of 7 transactions. Accordingly, the order passed by the AO without making addition in respect of the aforesaid 5 transactions cannot be regarded as erroneous. Thus, the Order passed by the PCIT directing for fresh examination of the aforesaid five transactions cannot be sustained. As regards balance 2 transactions we uphold the order passed by the Learned PCIT holding that the Assessment Order was erroneous in so far as pre-judicial to the interest of revenue. The Assessee would be at liberty to raise all contentions in relation to the aforesaid 2 sale transaction on merits before the Assessing Officer. Present appeal preferred by the Assessee is partly allowed.
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2025 (6) TMI 1693
Best judgment assessment order passed u/s 144 - deceased assessee didn’t file return of income (RoI) for AY 2017-18 - addition u/s. 69A being the SBNs deposited during demonetization period and further taking note that the assessee had also deposited cash [other than SBNs in his HDFC Bank A/c], the AO estimated business income @ 8% i.e - HELD THAT:- We note that the assessee claims to be suffering from severe diabetic which resulted in stroke and later was admitted in Hospital/ICU, during the time when the AO passed the assessment order; and during the appellate proceedings, the assessee is noted to have expired on 18.05.2021. The main grievance of the assessee is that since he was in the ICU of the Hospital the assessment order was passed, denying him proper opportunity before the AO when the assessment order was passed.
Therefore, relying on the decision of TIN Box Co.[2001 (2) TMI 13 - SUPREME COURT] we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO with a direction to pass de novo assessment after hearing the assessee. The Ld.AR has undertaken to present/file all the relevant documents to substantiate the source of SBNs deposited during demonetization period and also evidences to show that the assessee’s business income was less than 8%. The AO to pass the assessment order after giving proper opportunity to the assessee in accordance to law.
Penalty levied u/s. 271B - non-filing of Audit Report] & Penalty u/s. 271AAC(1) - Since the quantum assessment has been restored back to the file of the AO, he may decide the same after de novo assessment has been passed as directed supra after hearing the assessee. Therefore, we set aside the impugned appellate order passed by the Ld.CIT(A) and the AO may initiate penalty proceedings as per law after assessment order has been framed.
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2025 (6) TMI 1692
Validity of order passed u/s 143(1) - AO / CPC jurisdiction to make the adjustment - taking the capital gain shown in the profit and loss account, which was also considered by the assessee in the computation of income under the head capital gain after claiming the benefit of indexation - HELD THAT:- We find that the assessee has shown income from capital gain as profit and loss account which was apparently before claiming the indexation benefit. We further note that the assessee while filing the return income assessee has duly taken the said amount of capital gain into account and computed the capital gain accordingly, after taking benefit of indexed cost.
AO/ CPC ignored all these facts and picked up these figures without indexation which has resulted in excess amount of income assessed which in our opinion is wrong and against the facts on record. Even the CIT (A) overlooked the correct facts and figures presented by the assessee.
Thus we find merit in the contention of the assessee that the said adjustment made by the AO/ CPC was not a prima facie adjustment to be made u/s 143(1) of the Act as the issue involved/ required a lot of debate/ discussion and facts to be clarified and therefore, cannot be said to be a prima facie adjustment.
In our opinion, if the AO/ CPC had any issue with regard to said capital gain the proper course would have been made to fix the scrutiny and to examine the amount of capital gain accordingly. We are inclined to quash the intimation passed u/s 143(1) as invalid on the ground that the AO / CPC has no such jurisdiction to make the adjustment. The appeal of the assessee is allowed.
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2025 (6) TMI 1691
Unexplained cash credit u/s 68 - cash deposits made during the demonetization period - HELD THAT:- Admittedly all the cash deposits were made during the financial year 2016-17 relevant to assessment year 2017-18, but the ld. AO as well as CIT(A) wrongly added the cash deposits during assessment year 2015-16.
Therefore, addition made by the AO is not acceptable for the assessment year 2015-16. AO wrongly made the addition and added to the total income of the assessee for the assessment year 2015-16. Therefore, the addition made by the AO is hereby deleted. The grounds raised by the assessee are allowed.
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2025 (6) TMI 1690
Settlement of case under VSVS, 2024 - assessee had filed Form 1 under the Vivad se Vishwas Scheme, 2024 and subsequently, Form 2 was awaited by him - HELD THAT:- As per S. No. 10 of the Guidance Note 1/2024 on provisions of the Direct Tax Vivad se Vishwas Scheme, 2024 dated 15th October, 2024, it is mentioned that as per section 91(2) of the Scheme, after filing of declaration, appeals before ITAT/CIT(A)/ JCIT(A) are deemed to be withdrawn from the date of issue of certificate by the Designated Authority.
As per section 91(3) of the Scheme, the taxpayer is required to withdraw appeals and furnish proof thereof along with intimation of payment u/s 92(2) of the Scheme. Since the assessee has requested for withdrawal of the appeal, he is permitted to withdraw the same and the appeal is dismissed as withdrawn. However, if the subsequent facts warrant that the appeal should be heard on merits, the assessee shall be at liberty to file a Miscellaneous Application for restoration of the appeal.
Appeal filed by the assessee is dismissed as withdrawn.
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2025 (6) TMI 1689
Addition u/s 68 - share capital/share premium treated as unexplained cash credit - as per AO assessee has issued share capital/share premium at high premium and there was no compliance to the summons issued - CIT(A) has deleted the addition by giving a very detailed finding and by passing a speaking order to the effect that the six (6) subscribers companies’ directors as well as one individual subscriber appeared before the AO and their statements were recorded on oath.
HELD THAT:- CIT(A) as noted on the observation of the Assessing Officer that there was no justification for issuance of share at a high premium by observing that assessee company was going to invest in concern which was a joint venture with assessee company with 51% and 49% partnership respectively.
CIT(A) noted that Delsey SA is a French Company, founded in the year 1946 and is engaged in the business of luggage and travel accessories with around 6000 active sales outlets across the globe and having a turnover of about 130 Million Euro as of 2010 and it holds second place in the global luggage market behind Samsonite.
Therefore CIT(A) correctly noted that the assessee has all the reasons to issue share at a high premium. CIT(A) noted that in the course of scrutiny proceeding for AY 2016-17, AO enquired into the details of issue of share to the same allottees and considered the allotment of shares as genuine and bona fide in the order passed u/s. 143(3).
CIT(A) noted that in the subsequent year i.e. AY 2014-15 [2024 (6) TMI 1144 - ITAT KOLKATA] the coordinate bench deleted the addition made by AO from the same subscribers. Order of Ld. CIT(A) upheld by dismissing the appeal of the revenue.
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2025 (6) TMI 1688
Penalty u/s.271(1)(c) - non specification of clear charge - mandation of recording satisfaction - AO specified that the assessee had concealed the particular of income or furnished inaccurate particulars of income and in the assessment order also there was no satisfaction recorded by the AO - HELD THAT:- Notice issued by the AO is without specifying the charge on which the penalty was proposed to be levied, particularly, when there is no satisfaction in the assessment order on which charge the penalty proceedings were initiated.
In that scenario, the penalty notice issued u/s.271(1)(c) r.w.s.274 of the Act itself is bad in law, so also the consequential proceedings including the penalty order. Accordingly, we set aside the order of the CIT(A) for both the years under consideration and direct the AO to delete the penalty levied in both the appeals. Appeals of the assessee are allowed.
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