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Income Tax - Case Laws
Showing 361 to 380 of 175845 Records
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2025 (6) TMI 1687
Addition u/s 69A - cash deposits on account of sale of vegetables and milk - HELD THAT:- No details of persons to whom milk and vegetables were supplied across India were furnished and neither any proof of transportation of milk and vegetables to various locations across India was furnished before us. We note that even for subsequent assessment years, though the assessee is claiming that it is engaged in the supply of milk and vegetables, there is no documentary evidence maintained by the assessee regarding supply of milk and vegetables to various locations across India. Further, we also note that the assessee has given no plausible explanation as to why the cash so deposited in his bank account was withdrawn by the assessee at such short intervals.
Thus, the assessee has not been able to give any satisfactory explanation regarding the source of cash deposits and credit entries in his bank account. Further, assessee submitted that it is a well-established law that in case the Department is unable to demonstrate that the cash withdrawn by the assessee from the same bank account was utilized elsewhere by the assessee, then it has to be presumed that the subsequent deposits in the same bank account were sourced out of the withdrawals earlier made by the assessee from the same bank account.
We find force in the aforesaid legal contention made of the assessee and are of the considered view that it is well settled law the entire cash deposits / credits cannot be held to be the undisclosed income of the assessee, without giving the assessee the credit for the withdrawals made by the assessee from the same bank account (unless the Department is able to demonstrate that the cash was utilized by the assessee for some other purpose and that the said withdrawals made by the assessee in cash were not available for re-deposit). Accordingly, the matter is set-aside to the file of the Assessing Officer for carrying out the necessary verification and to decide the issue in accordance with law, after due verification. Appeal of the assessee is allowed for statistical purposes.
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2025 (6) TMI 1686
Differential receipt/turnover - assessee has declared less turnover in comparison to the turnover reflected in Form 26QB as well as the audit report in Form 3CA - AO made addition of the entire differential amount to the total income of the assessee - CIT (A) has restricted the addition to the profit element in the differential receipt/turnover by adopting the profit @ 15% of the said receipts -
HELD THAT:- CIT (A) has not discussed the point as raised by the learned DR that the expenditure has already been booked by the assessee in the P&L Account, however, we find that in the P&L Account, the assessee has debited only the net amount of material consumed during the year by taking into account the opening balance on WIP + expenditure and subtracting the closing work-in-progress.
Once the assessee has taken into consideration, the opening and closing work-in-progress, then the entire differential amount cannot be treated as income of the assessee. It is an undisputed fact that, the assessee has declared the GP @ 16.22% for the year under consideration and, therefore, the addition of profit element in the differential amount ought to have been computed at the GP rate declared, i.e. 16.22%. Accordingly, we modify the impugned order of CIT (A) and direct the AO to compute the income on this account by taking the GP @ 16.22% as against 15% adopted by the learned CIT (A). Appeal of the Revenue is partly allowed.
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2025 (6) TMI 1685
Addition u/s 68 - unexplained deposits in bank account - As argued additional evidences furnished by the assessee are not dealt with and deliberate upon the authorities below
HELD THAT:- As assessee had furnished various documents for more than 300 pages before the Ld. CIT(A), which are at first glance found to be relevant to the business of the assessee, however, the appeal was dismissed without referring to such documents, stating that the assessee failed to make any attempt to link the deposits with the business receipts, whereas there was no material on record to show that the assessee was show caused to furnish explanations qua such claim by the CIT(A).
We, therefore, after having given a thoughtful deliberation to the entirety of the facts and circumstances of the present case, are of the considered view that in all fairness, following the principle of natural justice, the matter should be restore back to the file of CIT(A) for denovo adjudication, within a period of 03 months from the date of receipt of this order.
Needless to say, the assessee shall be afforded with reasonable opportunity of being heard in the set aside appellate proceedings - Appeal of the assessee is partly allowed for statistical purposes.
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2025 (6) TMI 1648
Validity of notice issued u/s 148 - period of limitation - dispatch and service of notices issued on or after 01.04.2021 - As decided by HC [2024 (7) TMI 1186 - TELANGANA HIGH COURT] for any notice of re-assessment on or after 01.04.2021 it would be the new amended law which would be governing the field, as the un-amended provisions were valid only till 31.03.2021 - impugned notices in all these batch of writ petitions are barred by limitation u/s 148 and 149 since the said notices have left the I.T.B.A. portal on or after 01.04.2021. WP allowed - HELD THAT:- No case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed.
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2025 (6) TMI 1647
Income deemed to accrue or arise in India - Royalty receipts - consideration received by the assessee from various customers on account of licensing of Customer Relationship Management CRM software - India-Singapore DTAA - assessee is a tax resident of Singapore income in question as derived from the subscription fee which the assessee receives from customers in India for providing CRM related services - As decided by HC [2024 (2) TMI 1396 - DELHI HIGH COURT] Explanation 4 in essence introduces a deeming fiction and includes transfer of all or any rights “for use” or “to use” a computer software including by way of a license irrespective of the medium through which such right is transferred. Significantly, the DTAA does not bring within its sweep a right for use or a right of use of a computer software.
ITAT correctly held that the consideration received by the assessee from various customers on account of licensing of Customer Relationship Management CRM software is not royalty income within the meaning of Article 12(3) of the IndiaSingapore Double Taxation Avoidance Agreements DTAA. Appeal decided in favour of assessee.
HELD THAT:- After having heard the learned counsel appearing for the petitioner, we find no error in the impugned judgment of the High Court. The Special Leave Petition is accordingly dismissed.
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2025 (6) TMI 1646
Penalty u/s. 271 (1) (c) - as per AO explanation of the Assessee in respect of the bonus amount not being found bona fide - whether the two ingredients of (i) concealment of particulars of income, or (ii) furnishing inaccurate particulars of income are made out for the purpose of attracting the provisions of Section 271(1)(c) ? - HELD THAT:- There is nothing on record to indicate that the Assessee made a wrongful claim of having actually paid any amount towards additional bonus to the employees in the relevant Accounting Year. On the contrary, the claim of the Assessee for deduction of amount towards additional bonus was premised on statement that it was a future liability crystalised in the relevant year.
Thus, the case does not involve making of any false statement by the Assessee. What is ultimately found to be incorrect is entitlement of the Assessee to claim deductions in respect of the amount which are yet to be actually paid in view of provisions of Section 43B of the I.T. Act. The claim for additional bonus is disallowed on the ground that the amount was actually paid in the subsequent Accounting Year. In our view, the case does not involve making of any false statement by the Assessee and therefore the ratio of Reliance Petroproducts Private Limited [2010 (3) TMI 80 - SUPREME COURT] would squarely apply to the present case.
As the case involves raising of a bona fide claim by the Assessee that the crystallised liability towards additional bonus could have been claimed as deduction during the relevant year. Whether such claim is tenable in law or not is an altogether different issue. However by no stretch of imagination it can be held that the claim was raised with mala fide intention of concealing the income.
What is however relevant to note is that the claim raised by the Assessee for claiming deduction in respect of the crystalised liability towards additional bonus was a plausible claim. Whether it could be sustained or not in the light of judgment of the Apex Court in Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT] is an altogether different issue. What is relevant to note is the position that the claim made by the Assessee can, by no stretch of imagination, be treated as mala fide act of concealment of income so as to attract the provisions of Section 271(1)(c) of the I.T. Act.
Therefore the ingredients of Section 271(1)(c) of the I.T. Act are not satisfied in the present case. The Tribunal has grossly erred in setting aside order passed by the CIT(A) by recording an unsustainable finding that the claim made by the Assessee was ‘baseless’.
Assessee only raised the claim that the crystalized liability towards additional bonus could be claimed towards deduction, which is later found to be inadmissible in law. Thus, the case does not involve making of any false statement in the return and therefore the finding of the Tribunal that there is inaccurate furnishing of particulars cannot be sustained.
Assessee cannot be penalised for having raised a plausible claim. The essential ingredients of Section 271(1)(c) of the I.T. Act are not met with in the present case. Assessee appeal allowed.
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2025 (6) TMI 1645
Short deduction of TDS - raising demand by invoking provisions of section 206AA - CIT (Appeals) held that the assessee is not liable to deduct the tax at a higher rate in view of the provisions of section 90(2) - HELD THAT:- As in case of Wipro Ltd. [2023 (1) TMI 173 - KARNATAKA HIGH COURT] has also followed the decision in case of Danisco India (P) Ltd [2018 (2) TMI 1289 - DELHI HIGH COURT] and held that that as per DTAA, maximum deduction shall not exceed 10% which the assessee has deducted and any other interpretation to permit the taxing authority to raise a demand beyond 10% would be incongruous.
Assessee has deducted the tax at source on payment made to non residents on account of royalty and/or fees for technical services at the rates prescribed in respective DTAAs between India and respective countries of non residents and such rate of tax being lower than rate of 20% as provided u/s 206AA CIT (Appeals) and the Tribunal have rightly arrived at concurrent findings to the effect that as per section 90(2) of the Act, the provisions of DTAA would override the provisions of the Domestic Act where the provisions of the DTAA are more beneficial to the assessee.
Tribunal therefore, has rightly affirmed the conclusion arrived at by CIT(Appeals) in deleting the tax demand relatable to difference between 20% and the actual tax rate on which tax was deducted by the respondent assessee in terms of the relevant DTAAS.
Questions of law are answered in favour of the assessee
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2025 (6) TMI 1644
Application u/s 119(2)(b) - condonation of delay in respect of filing of Form no. 67 under Rule 128 of the Rules - petitioner had received the salary income from Bangladesh on which tax was duly paid - only fault on the part of the petitioner was that Form no. 67 as required as per Rule 128 of the Rules was not submitted before the due date of filing of the return - as per DR no genuine hardship shown by the petitioner for not filing the Form no. 67 along with Return of Income as the petitioner has simply stated that he missed to file Form no. 67 before filing the Return of Income.
HELD THAT:- As held by this Court in various judgments while considering the late filing Form 10IC, Form 10B as required under various provisions of the Act for claiming deduction under Chapter-VI, that the filing of form for claiming benefit under the provisions of the Act is procedural, the case of Sitaldas K. Motwani [2009 (12) TMI 36 - BOMBAY HIGH COURT] as well as the case of Bombay Mercantile Co-op. Bank Ltd. [2010 (9) TMI 23 - BOMBAY HIGH COURT] were followed.
Assessee appeal allowed.
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2025 (6) TMI 1643
Revision u/s 263 - Validity of assessment and reassessment proceedings u/s 153A - no or inadequate enquiries - computation of total income claiming interest u/s 24B - HELD THAT:- Order impugned invoking Explanation 2 by the Ld. PCIT is found to have no manner of application having regard to all relevant documents being filed by the Ld. AO during reassessment proceedings under Section 153A by the assessee and on verification whereof the assessment was finalized allowing the claim of interest under Section 24B of the Act.
We note that apart from that, in fact this particular aspect of the matter of income from house as declared by the assessee has duly been taken care by the AO in A.Y. 2012-13 which is evident from the order passed by AO being the DCIT Circle 25(1), New Delhi dated 5.3.2015 u/s143(3) of the Act, a copy whereof has already been filed before us.
Needless to mention that it is the continuing cause of action and once the interest has been allowed by the AO initially in A.Y. 2012-13 the same cannot be disturbed subsequently without finding of any different fact which has already been narrated by us hereinbefore against the assessee.
Thus, taking into consideration the entire aspect of the matter we find that the order impugned is nothing but the non application of mind having regard to the order passed by the Ld. AO in the reassessment proceedings under Section 153A of the Act accepting the claim of interest income under Section 24B of the Act upon examination of the issue after verification of the details filed by the Assessee
AR submitted before us that under the present facts and circumstances of the matter it cannot be said that no inquiries what-so-ever have been conducted by the AO with respect to the claims under consideration as relied upon the judgment of Clix Finance India (P) Ltd. [2024 (3) TMI 157 - DELHI HIGH COURT] It was also mentioned by him that the plausible view having been taken by the AO in the assessment order the same cannot be held to be prejudicial to the interests of Revenue.
In support of his contention Ld. AR relied upon the decision of Sunbeam Auto Pvt. Ltd. [2009 (9) TMI 633 - DELHI HIGH COURT] which has been duly considered by us and found to be applicable in the case in hand having regard to the facts and circumstances of the case.
Thus, when the claims of the assessee have been duly examined during original assessment proceedings and also the reassessment proceedings under Section 153A of the Act itself, there could have been no error, neither the same is found to be prejudicial to the interest of Revenue as observed by the Ld. PCIT in the order impugned before us. The order passed under Section 263 of the Act is, therefore, found to have no legs to stand and thus quashed. Assessee’s appeal stands allowed accordingly.
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2025 (6) TMI 1642
Rate of surcharge on the family trust's income - Levying surcharge of 37% as against the applicable rate of 10% based upon the income of the assessee - HELD THAT:- While computing the tax liability, the assessee has paid surcharge at the rate of 10%. In the intimation u/s 143(1), the CPC while processing the return levied the surcharge at the maximum rate of 37%. The assessee challenged the said action of CPC before Ld. CIT(A) but failed to succeed.
Assessee has referred to the judgement of Araadhya Jain Trust [2025 (4) TMI 648 - ITAT MUMBAI] held that the surcharge is to be levied as per income tax slab as provided in Paragraph A, Part 1, First Schedule and as per first slab, if income exceeds Rs. 50 lakhs but do not exceed Rs. 1 crore including the income by way of dividend or income under the provisions of section 111A, section 112 and section 112A of the Act surcharge is leviable at the rate of 10%.
Though there are three more slabs but since the case of the assessee falls under the first slab, the assessee is required to pay surcharge at the rate of 10% and CIT(A) erred in confirming the action of the CPC of wrongly levying surcharge at the rate of 37%. Appeal of the assessee is allowed.
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2025 (6) TMI 1641
Reopening of assessment - mandation of prior approval of the specified authority according to section 151 of the new regime before passing an order u/s. 148A(d) or issuing a notice u/s. 148 - Addition u/s 56(2)(viia) - HELD THAT:- In the present case, since the notice u/s. 148 has been issued beyond the period of three years from the end of the relevant Assessment Year, case of the assessee falls within the provisions of section 151(ii) of the amended law whereby the specified authority for grant of approval is specified as Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. Contrary to this requirement, the approval obtained is by Principal Commissioner of Income Tax-17, Mumbai. Accordingly, since a proper sanction by the specified authority had not been obtained for issue of notice u/s. 148 under the applicable provisions of law, said notice is invalid and bad in law.
Thus, the sanction by specified authority has not been obtained by the Id. AO in accordance with the provisions contained in section 151 of the Act under the new regime, since notice u/s. 148 has been issued beyond three years from the end of the relevant Assessment Year in violation of sec 149(1) and 151 of the Act. Accordingly, the said notice issued is invalid liable to be quashed.
As relying on case of Ashish Agrawal [2022 (5) TMI 240 - SUPREME COURT] and Rajeev Bansal [2024 (10) TMI 264 - SUPREME COURT (LB)] the notice issued dated 31.07.2022 for Assessment Year 2017-18 under the new regime is invalid and thus quashed. Resultantly, the impugned reopening proceeding so initiated and the impugned re-assessment order passed thereafter are also quashed.
Addition u/s 56(2)(viia) - assessee had purchased an immovable property for which AO took note of difference in the actual consideration and stamp duty valuation - HELD THAT:- We note that as against the stated consideration of Rs. 3,65,00,000/-, the valuation of the property arrived at by ld. DVO is Rs. 3,95,19,000/-, resulting into difference of Rs. 30,19,000/- which come to about 8.27% of the stated purchase consideration. The difference between the stated consideration vis-à-vis the stamp duty valuation arrived at by ld. DVO is admittedly less than 10% in the present case, we find that provisions of section 56(2)(viia) will have no application in the matter. Accordingly, the addition so as made by the AO stands deleted considering the merits of the case. Thus, assessee succeeds both on the legal as well as merits of the case. Assessee appeal allowed.
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2025 (6) TMI 1640
Reopening of assessment u/s 147 - Competent Authority for granting sanction u/sec.151(ii) - reopening assessments beyond three years from the end of the relevant assessment year - scope of amended by the Taxation and Other Laws Amendment Act, 2021 (TOLA) - HELD THAT:- As following the decision of Raziulla Syed, Hyderabad [2025 (3) TMI 651 - ITAT HYDERABAD] we are of the considered view that the notice issued u/sec.148 by obtaining prior approval from the Commissioner of Income Tax [International Taxation]-2, Mumbai is not in accordance with sec.151(ii) as applicable from 01.04.2021 onwards.
Therefore, we quash the notice issued u/sec.148 and consequent Final Assessment Order passed by the AOu/sec.147 r.w.s.144C(13). Accordingly, the grounds raised by the assessee allowed.
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2025 (6) TMI 1639
Cancellation of registration granted to the assessee u/s 12AB - charitable activity u/s 2(15) - as per AO activities of the trust are not genuine - validity of order passed by the Ld. PCIT, Central Circle denying exemption - HELD THAT:- As order passed by the Ld. PCIT, Central Circle is without jurisdiction in to the context of territorial jurisdiction and subject matter as well as not in accordance with law, liable to be quashed. Accordingly, ground of appeal nos. 2 and 3 of appeal are allowed.
PCIT has repeatedly referred to “specified violations” which was introduced vide Finance Bill 2022 w.e.f. 01.04.2022 could not have been used for assessment years 2019-20, 2020-21 and 2021-22.
Reference to judgment in the case of Lakhmi Chand Charitable Society [2024 (8) TMI 1297 - ITAT DELHI] is important. Therefore, it is held that Ld. PCIT erred in applying “specified violation” clause in section 12AB along with explanation with reference to financial year 2020-21 onwards whereas aforesaid sub section (4) of the Act was introduced by Finance Act, 2022 was applicable for financial year 2022-23. Accordingly, ground of appeal nos. 4 and 5 are allowed.
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2025 (6) TMI 1638
Disallowance of exemption u/s 10(25)(ii) - as per AO assessee was not eligible for said exemption under specified sub-sections of section 10 of the Act duly mentioned in ITRs - assessee filed applications u/s 154 which was rejected on the reasoning that there was neither a prima facie mistake apparent from the record as there was no claim of exemption u/s 10(25)(ii) of the Act in ITRs nor the assessee was a registered Trust or Institution u/s 12A of the Act.
HELD THAT:- We are of the considered view that the assessee’s claim, which is undisputedly admissible, cannot be denied only on the reasoning that one of the columns of the ITR was wrongly filled up.
This case is squarely covered by the decision of Delhi Policy Group [2023 (10) TMI 1238 - ITAT DELHI] wherein the fact is that the said assessee, a charitable trust registered under section 12A since 30-12-1993, failed to claim exemption under section 11 of the Act by mentioning its registration under section 12A/12AA of the Act in its ITR. Tribunal allowed the appeal holding that since the assessee did not seek registration or any fresh claim of benefit of exemption under section 12A/12AA of the Act in its rectification application u/s 154 of the Act instead it made a mere request to rectify inadvertent mistake which had crept in ITR filed by it online, AO was not right in denying benefit of registration under section 12A of the Act. Appeals of the assessee are allowed.
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2025 (6) TMI 1637
Unexplained credit u/s 68 - AO relying on the statement of the Accounts Head and non-submission of any document before him, proceeded to make the addition with the observation that the credit entries in the case of sundry creditors are made with the narration under the head particulars show “cash” was written on these pages - HELD THAT:- We observed that the document found during the search belongs to various entities of the Rama Group and its associate companies. The last Panchnama was in the name of group companies, identified as RU-1 and it was observed that there is no mention of the assessee’s name anywhere in the Panchnama. Therefore, all these materials found during the search belong to the Rama Group entities.
Therefore, the addition should have been made in the hands of the relevant entities based on the material found and Panchnama on record. Therefore, no addition can be made on the basis of third party without examining and linked to various contents of the documents with the third party in this case assessee. Various courts have held that no addition can be made in the hands of the assessee treating the material found during the search, the relevant search was not initiated in the name of the assessee and such material cannot be applied to make addition in the hands of the assessee. After considering the detailed findings of the ld. CIT (A), in this regard, we are inclined to dismiss ground nos.1 to 4 raised by the Revenue.
Cash transactions in the seized material - CIT (A) has deleted the addition after considering the detailed remand report submitted by the AO - HELD THAT:- We observed that in remand report, the Assessing Officer has accepted the actual unreconciled amount of Rs. 42.79 lakhs. The same was accepted by both parties. The assessee also surrendered an amount of Rs. 52.50 lakhs to compensate the above. Therefore, there is no loss to the Revenue. Accordingly, we do not see any reason to disturb the findings of the ld. CIT(A). Accordingly, ground raised by the Revenue is dismissed.
Book balance in the seized material excluding the opening balance - We observed that there is a credit of Rs. 5,50,000/- and Rs. 3,00,000/- during the year and also there are debit balances of Rs. 2,13,000/-. We observed that there is opening balance of Rs. 4,01,000/-. The opening balance is not a transaction relevant for the current assessment year. Since total credit relevant for the current assessment year is Rs. 8,50,000/- excluding opening balance and there is a debit balance as well. The net credit transactions are Rs. 6,35,000/-. Since the relevant documents were found at the premises of the assessee, the maximum addition could be made is Rs. 6,35,000/- during the current assessment year. Therefore, we direct AO to restrict the addition to Rs. 6,35,000/-. Accordingly, ground no.6 of Revenue’s appeal as well as ground raised by the assessee are partly allowed.
Addition based on the material found during search - sales transactions carried on by Rama Central Store - As per the data found during the search, it clearly indicates that assessee was indulged in purchase as well as sales during that period and the AO has made addition only the sales without considering the purchases. As per the record submitted before the first appellate authority and the details submitted before us, it clearly shows that Rama Central Store was indulged in booking sales as well as purchase during that period. We observed that ld. CIT (A) has sustained only the profit earned by the Rama Central Store, in our considered view, may be reasonable approach to make addition in the hands of Rama Central Store. No reason to disturb the findings of the ld. CIT (A) in proposing the addition based on the profit earned in the hands of Rama Central Store or Rama Group. However, it is apparent on record that purchase and sales were made by Rama Central Store which belongs to Rama Group of companies and they are separate assessees and additions can be made in the respective companies in the relevant assessment proceedings. Assessee being a Director is separate from the company and the addition cannot be made in the hands of the assessee. There is no material brought on record to lift the corporate veil in this case.
Unreconciled turnover - We observed that AO has noticed that assessee has declared unreconciled turnover from the data seized from RU-1 Annexure A-39 to the extent of Rs. 11,65,77,710. We observed that AO has not brought on any record to show that assessee has received more than the amount found during the search as per Annexure A-39. That being so, in our considered view, the actual income alone can be brought on record for taxation and not on the basis of notional income or anything on presumption basis. Therefore, assessee has already accepted the actual receipt of cash as actual income and declared the same during search proceedings. Therefore, we do not see any reason to disturb finding of the ld. CIT (A). Accordingly, ground no.1 raised by the Revenue is dismissed.
Addition based on document find from group companies - We observed that AO has noticed that assessee has declared unreconciled turnover from the data seized from RU-1 Annexure A-39 to the extent of Rs. 11,65,77,710. We observed that AO has not brought on any record to show that assessee has received more than the amount found during the search as per Annexure A-39. That being so, in our considered view, the actual income alone can be brought on record for taxation and not on the basis of notional income or anything on presumption basis. Therefore, after considering the relevant document on record, the assessee has already accepted the actual receipt of cash as actual income and declared the same during search proceedings. Therefore, we do not see any reason to disturb finding of the ld. CIT (A). Accordingly, ground no.1 raised by the Revenue is dismissed.
1074.05 grms. of jewellery were found during the search from locker no.171 which was in the name of the assessee as well as Leena Agarwal - Assessee has stated that the abovesaid jewellery belongs to brother-in-law and sister-in-law, namely, Sachin Goel and Prachi Goel. In support, they have also filed affidavits claiming the same that these jewellery belongs to them.
Considering the fact that assessee has submitted at the time of recording statement during the course of search as well as subsequently that these jewellery belong to brother-inlaw and sister-in-law of the assessee. In this regard, they also filed specific affidavits. After considering the due submissions, we observed that assessee has submitted and claimed the jewellery belongs to his in-law family including mother-in-law and other family members.
After due consideration of the affidavits filed by Sachin Goel and Prachi Goel, we are of the view that no doubt the material found at the time of search presumed to belongs to the assessee as per section 132(4A) of the Act, but in case of rebuttal during the search on subsequent proceedings, the tax authorities are under obligation to put to test the material as well as the affidavits filed before them. In case if failure is on the part of the authorities below, it is presumed that the affidavits filed are true. Assessee ground allowed.
Addition of net profit @ 5% in wholesale trading business of cattle feed - CIT (A) has sustained the addition merely relying on the information submitted before him in the form of remand report and rejoinder to the remand report. He observed certain discrepancies on the information supplied by the assessee, however he could have asked the assessee to substantiate those observations before dismissing the appeal. In our considered view and for the sake of complete justice, we are inclined to remit this matter back to the file of ld. CIT (A) to decide the matter on merits as per law after giving proper opportunity of being heard to the assessee.
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2025 (6) TMI 1636
Addition u/s 69A r/w/s 115BBE - large cash deposits during demonetization period as compared to returned income - assessee stated that the source was earlier cash withdrawals by him from FYs 2014-15 to 2015-16 and also withdrawals during the year before the demonetization - HELD THAT:- Appellant himself submitted that he is a retired person and leads a very simple and frugal life. Hence, it is not understood as to why the appellant would keep on withdrawing cash so many occasions if he already had substantial cash-in-hand due to the earlier withdrawals. This is against normal human behaviour. The appellant had also not been able to file any evidence whatsoever before the AO or CIT(A) or the Tribunal that he needed cash to purchase a property at Vishakhapattam. No agreement of sale or evidence of any advance has been filed by the appellant to substantiate such claim.
CIT(A) has rightly observed that it is a makebelieve story and feeble attempt by the appellant to explain away the onus of proof regarding the source of cash deposits. Hence, explanation of the appellant that the amount of cash withdrawn from 27.06.2014 to 21.10.2016 amounting to Rs. 18,46,000/- was used for re-deposit cannot be accepted in toto. Assessee had withdrawn Rs. 6,00,000/- on 26.09.2016 and Rs. 3,00,000/- on 21.10.2016. These two withdrawals totalling to Rs. 9,00,000/- just prior to demonetization period is accepted as part of the explained source of deposits of Rs. 18,46,000/-. It is so held because the assessee had also withdrawn of Rs. 49,000/- each from his three bank accounts (Total: Rs. 1,47,000/-) on 01.07.2016. This amount of Rs,.1,47,000/- was sufficient to take care of his personal and household expenses till the demonetization period. Hence, AO is directed to delete Rs. 9,00,000/- from the total addition of Rs. 18,46,500/- The remaining addition of Rs. 9,46,500/- (Rs.18,46,500 – Rs. 9,00,000/-) is upheld. The ground is partly allowed.
Applicability of provisions of Sec. 69A to the impugned addition - As per the computation of income filed by the appellant sources of income were interest on SB account, pension received, interest on FD, NSC interest, other interests etc. Such income from other sources was Rs. 3,70,454/-. The appellant has not been able to establish the nexus of these disclosed sources with the cash deposited in the bank accounts. Hence, the impugned amount sustained by us in the preceding para takes the character of unexplained money within the meaning of Section 69A of the Act. The appellant was found to be the owner of such money and he has not been able to offer explanation about the nature and source of acquisition of the said money. As already discussed, the explanation offered by him was also not found satisfactory. Therefore, mischief of the provisions of Section 69A are clearly attracted in the present case. We do not find any infirmity in the order of lower authorities. Hence, this ground of assessee is dismissed.
Applicability of Section 115BBE - This is repetitive issue before the Tribunal in many cases. So far as taxing the addition at the enhanced rate of tax u/s 115BBE is concerned, we find that Divisions Bench as well as SMC Bench of this Tribunal in a series of case has held that enhanced rate prescribed u/s 115BBE is not applicable for AY 2017-18. Useful reference may be made to the cases of Samir Shantilal Mehta [2023 (5) TMI 1279 - ITAT SURAT] Arjunsinh Harisinh Thakor [2023 (6) TMI 770 - ITAT SURAT] and Jitendra Nemichand Gupta [2023 (6) TMI 1338 - ITAT SURAT] and Punjab Retail Pvt. Ltd [2021 (11) TMI 405 - ITAT INDORE] and Sandesh Kumar Jain [2022 (11) TMI 126 - ITAT JABALPUR] Accordingly, ground raised by the assessee is allowed.
Appeal of the assessee is partly allowed.
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2025 (6) TMI 1635
Validity of reopening of assessment - reasons to believe - A.R. submitted that the reopening u/s. 148 does not meet the requirement of law including the failure to provide proper reasons for reopening to provide a clear basis for such action - DR submitted that the reopening was rightly done as the assessee has not filed any return of income and there was huge transaction related to the immovable property owned by the assessee.
HELD THAT:- It is pertinent to note that the assessee has not filed the return of income. In fact after receiving the information relating to the sale of immovable property, the department after following all the procedure issued notice u/s. 148 of the Act. The assessee never filed return of income in response to notice u/s. 148 of the Act. As the reopening was properly done as per Income Tax Act and no discrepancy pointed out by the Ld. A.R., the proceedings u/s. 148 of the Act are valid and assessment order passed u/s. 147 is just and proper. Thus, ground no. 1 is dismissed.
LTCG - Transaction related to the immovable property owned by the assessee - Real owner of property - The assessee’s contention before the Assessing Officer that the assessee is not owner and the amount was not at all paid to the assessee has failed and the revenue has pointed out as to why the said contention of the assessee has failed.
AO has rightly made calculation of long term capital gain on the whole immoveable property and the same is justified. CIT(A) has also taken into cognizance of these aspects and has rightly confirmed the same. As regards the assessee’s contention that there was attachment on the property in question and company Motorol India Ltd. was in liquidation, the same has been taken care of by the Hon’ble Gujarat High Court by declaring assessee as owner of the said property which was at no point of time was denied by the assessee before the Hon’ble High Court despite showing the documents of 2005 only to the tax authorities and not to the Hon’ble High Court.
Therefore, the journal entry as well as payment entry made by the Neptune Realty Pvt. Ltd. in the case of (assessment proceedings) of Neptune Realty Ltd. appears to be co-relating with the decision of Hon’ble Gujarat High Court and hence sales amount of Rs. 97,00,000/- was paid to the assessee and the property sale price of Rs. 3,20,00,000/- to that extent has to be treated as long term capital gain and the calculation to that effect was rightly done by the Assessing Officer. Hence, the appeal of the assessee is dismissed.
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2025 (6) TMI 1634
Ex parte order passed by CIT(A) - Addition u/s 56(2)(x) - difference in stamp duty value and purchase value of the property shown by the assessee which was added back under the head “Income from other sources” to the total income - HELD THAT:- The assessee had bona fide relied on her Chartered Accountant, who neither properly participated in the appellate proceedings nor informed the assessee about the status thereof. Additionally, the assessee was undergoing emotional distress due to the loss of a close relative. The appellate order has been passed ex parte without affording the assessee a reasonable opportunity of being heard, thereby resulting in a denial of the principles of natural justice.
We find it appropriate, in the interest of justice, to remand the matter to the file of the CIT(A) for adjudication afresh. We make no comment on the merits of the case, so as not to prejudice the outcome of the de novo proceedings. It is, however, directed that the assessee be granted a reasonable opportunity of being heard, and be permitted to file any additional documents in support of her case, in accordance with law. Appeal of the assessee allowed for statistical purpose.
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2025 (6) TMI 1633
Reopening the assessment u/s 147 - addition on account of alleged 30% of total credits treated business income - HELD THAT:- AR has repeated the submission made during the appellate proceedings before CIT(A). He has not made any additional arguments as to why the findings of the CIT(A) is not correct. We do not find any infirmity in the reasoning of the CIT(A) in dismissing the ground. Hence, this ground No.1 is dismissed.
Estimation income at 30% of the unexplained cash deposits/credits entries in the HDFC Bank account of assessee - AO has added the entire deposit, which was restricted to 30% by the CIT(A). During the hearing, it was submitted by both counsel that a reasonable estimate may be made by the Tribunal. After considering the totality of the facts, we are of the considered view that 20% of the total cash deposits/credits in the impugned bank account would meet the ends of justice. Hence, the AO is directed to add Rs. 1,67,716/-(i.e., 20% Rs. 8,38,580/-). The ground is partly allowed.
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2025 (6) TMI 1632
Bogus purchases - onus cast upon the assessee could not be discharged either before the Ld. AO or before the Ld. CIT(A) - CIT(A) sustaining the disallowance to the extent of 12.5% of the non-genuine/suspicious/bogus purchases instead of 100% disallowance - HELD THAT:- The genuineness of transactions is a factual finding, which cannot be established without understanding the facts properly along with substantial corroborative evidence to support the same. Only after getting a clear depiction of the facts, the pertinence of judicial pronouncements would come into the play to justify their applicability under the given facts and circumstances, whereas in present case, on perusal of facts on records, the assessee was not able to substantiate the genuineness of transactions doubted by Ld. AO.
We are of the considered view that the assessee is liable to substantiate that there are genuine purchases to achieve the turnover / sales declared by it in its Return of Income for the relevant year. Whereas the assessee squarely failed in offering any plausible explanation about the bogus purchases, nor was it able to justify that there was no inflation in the purchase expenses on account of such sham transactions.
As all such facts of the present matter are not examined by the Ld. CIT(A) before deciding the issue, he only kept his entire focus and remain self-centered on the jurisprudence dehors relating the factual aspect of the alleged bogus transactions. Therefore, the matter needs thorough examinations and enquiries by the First Appellate Authority by himself or through Ld. AO, in accordance with the mandate of Section 250 of the Act.
Before parting with, we may herein observe that as the matter in present case pertains to bogus purchases/ sham transactions, the observations of this tribunal in the case of Subedar Pathak [2025 (6) TMI 810 - ITAT RAIPUR] restored appeal in the set aside appellate proceedings as it is the responsibility of the revenue authorities to investigate the matter in detailed manner as per law whether there is tax planning or tax evasion as per the transactions entered into by the assessee. If tax evasion is determined by the revenue in such circumstances, additions are to be sustained in the hands of the assessee.
The order of CIT(A) is set aside and the matter is restored back to his file for denovo adjudication, with adequate opportunity of being heard to the assessee to prove the genuineness of the disputed bogus purchases pointed out by the Ld. AO - Appeal of revenue is allowed for statistical purposes.
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