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Income Tax - Case Laws
Showing 401 to 420 of 175845 Records
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2025 (6) TMI 1611
Entitlement to relief u/s 89(1) read with Rule 21A(1)(a) - lumpsum ex-gratia payment received from the employer - assessee was employed as labourer in maintenance department of Textiles Industry drawing a salary of approximately Rs. 18,000/- per month and was not under the taxable bracket and subsequently, the company incurred heavy losses and was shut down and assessee received an ex-gratia amount as per the agreement with the company
HELD THAT:- Relief claimed u/ 89(1) was allowed in the case of Rajesh Shantaram Chavan [2022 (4) TMI 1179 - ITAT MUMBAI].
On perusal of the order of the co-ordinate bench, we find that the facts of the case are identical to the case of the assessee and the co-ordinate bench has allowed the relief claimed u/s 89(1) of the Act, after consideration of the facts and circumstances of lump sum payment made to these employees. Thus, assessee is entitled to relief u/s 89(1) of the Act in respect of lumpsum payment received for the employer. Assessee appeal allowed.
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2025 (6) TMI 1557
Rejection of Applications for settlement filed before the Interim Board for Settlement - grievance of the assessees was essentially on account of the amendments that were brought about to the I.T. Act through the Finance Act, 2021 - cut-off date prescribed in the CBDT order for satisfying the eligibility conditions for preferring applications for settlement under the I.T. Act.
Whether the assessees who received their notices under Sections 153A/153C after 31.03.2021, but before 30.09.2021, can maintain their applications for settlement of cases before the Interim Board for Settlement ? - HELD THAT:- It was wholly unnecessary for the learned Single Judge to have undertaken the interpretative exercise that he did, to hold that so long as the search proceedings u/s 132 of the I.T. Act were initiated against the assessees prior to 31.03.2021, their applications for settlement, if filed before the Interim Board for Settlement on or before 30.09.2021, would be maintainable. In the light of the clear and unambiguous provisions of the Statute that defined what a pending case was, in the case of assessees who were served with notices under Sections 153A/153C and in the absence of any challenge to the validity of those provisions, there was no need to read in an artificial definition that would take in even search proceedings u/s 132 within the ambit of the term ‘case’ in such situations.
Legality of the conditions imposed by the CBDT while extending the last date for filing applications for settlement to 30.09.2021. It is significant, in this context, that in Sar Senapati Santaji Ghorpade Sugar Factory Ltd. [2024 (4) TMI 204 - BOMBAY HIGH COURT] held as follows in a writ petition that was filed challenging the provisions of the said CBDT order, to the extent it laid down an additional condition that the assessee should satisfy the eligibility requirements as on 31.01.2021, as ultra vires its power u/s 119(2)(b).
We find ourselves in complete agreement with the said view taken by the Bombay High Court.
When Section 245C does not prescribe any prior cut-off date for an assessee to satisfy the requirements for filing an application before the Interim Board for Settlement, and the only statutory requirement is that the assessee should have a pending ‘case’ at the time of filing the application for settlement, then so long as the assessee had a ‘live and un-adjudicated’ notice under Sections 153A/153C as on the date of filing the application, the application had to be considered on merits by the Board. The CBDT order issued under Section 119(2)(b), purportedly to relax the rigours of a statutory provision, could not have merely extended the time limit for filing an application while, simultaneously, denying the benefit of such extension to a class of assessees. The said clause in the CBDT order has to be seen as invalid, and bad in law, as declared by the Bombay High Court in the decision referred above.
Order - We set aside the impugned judgment of the learned Single Judge to the extent it holds that search proceedings under Section 132 would also fall within the ambit of 'case' in relation to the respondent assessees for the purposes of Chapter XIX-A of the I.T. Act. The writ appeals preferred by the Revenue are allowed to that limited extent.
We find that the provisions of the CBDT order dated 28.09.2021, to the extent it lays down an additional condition that the assessees should satisfy the eligibility requirements as on 31.01.2021 (to be read as '31.03.2021'), is ultra vires the power conferred on the CBDT under Section 119(2)(b) of the I.T. Act.
We, accordingly, direct that the applications for settlement filed by respondent assessees before the Interim Board for Settlement on or before 30.09.2021, taking note of notices under Sections 153A/153C of the I.T. Act issued to them between 31.03.2021 and 30.09.2021, be considered on merits by the Board.
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2025 (6) TMI 1556
Reopening of assessment u/s 147 - as argued materials and transactions not disclosed in the show-cause notices issued u/s 148A - HELD THAT:- As petitioner had received the notice issued by the Department and had chosen not to contest the case before the Competent Authority by responding to the show-cause notices and now the final assessment order having also passed, we are of the considered opinion that it is not a fit case for the High Court to invoke the writ jurisdiction under Article 226 of the Constitution of India testing the veracity of the order passed by respondent No. 3. These very grounds which the petitioner has raised can also be raised by him before the Appellate Authority and which the Appellate Authority shall consider strictly in accordance with law.
The Bench also stands persuaded with the previous order passed in respect of another assessment year which was challenged by the very same petitioner [2025 (4) TMI 1653 - TELANGANA HIGH COURT] which we had dismissed permitting the petitioner to avail statutory remedy available to him under the Act.
For all the aforesaid reasons, we are not inclined to entertain the present writ petition.
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2025 (6) TMI 1555
Validity of the notice issued u/s 148 for reopening the assessment - compliance with the procedural safeguards u/s 148A - alleged credible information received in high risk transactions module - escaped assessment - meaningful and effective opportunity of hearing - violation of the principles of natural justice - HELD THAT:- Since appropriate safeguards have been provided for in section 148A of the said Act and since an opportunity to respond is provided, in my view, such opportunity should be a meaningful opportunity and not mere rejection of the response filed by the assessee, as not being accepted in the light of the information available by them. If the assessing officer was to reject the contention of the petitioner, appropriate reasons as to why the same was found to be unacceptable ought to have been quoted. The assessing officer has chosen not to discredit the audited accounts of the petitioner while considering the response.
In this context, it may be noted that the Hon'ble Division Bench of this Court, in the judgments delivered in the case of Somnath Dealtrade Pvt. Ltd.[2022 (8) TMI 39 - CALCUTTA HIGH COURT] and in the case of Mustafa Huseni Chunwala (supra) has clearly concluded that there should be a meaningful and effective opportunity of hearing and not an empty formality. The assessing officer ought not to have dismissed the response filed by the petitioner by holding out the same not to be acceptable without the same being substantiated by reasons.
Thus, the order impugned and the notice under Section 148 cannot be sustained, the same are accordingly set aside and the matter is remanded back to the assessing officer for a fresh decision on merits.
The writ petition stands dispose of.
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2025 (6) TMI 1554
Validity of issuance of the notices u/s 153A/153C being dates prior to 31.03.2021 - HELD THAT:- The issue agitated in these appeals stands covered against the Revenue by the judgment dated 08.11.2024 of a Division Bench of this Court in W.A. No. 515 of 2024. Revenue does not choose to pursue the above writ appeals.
Writ Appeals are accordingly dismissed as not pressed.
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2025 (6) TMI 1553
Monetary limit to maintain appeal in High court - whether Appeals where the department has accepted the Revenue audit objection, are not liable to be withdrawn based on the tax effect involved? - HELD THAT:- As perused the circulars of 20 August 2018 and 15 March 2024. Upon reading the two circulars, we find merit in Mr Chaudhary’s contention. The exception in paragraph No. 10 (c) in the communication of 20 August 2018, read with Circular No. 03 of 2018 dated 11 July 2018 is not reflected in Circular No. 05 of 2014 dated 15 March 2024. Besides, circular No. 05 of 2024 raises the tax effect ceiling to Rs. 2 Crores.
Admittedly, the tax effect involved in this Appeal is only Rs. 12,11,053/-. Therefore, even though this Appeal may have been properly instituted, now, given Circular No. 05 of 2024, it will have to be disposed of on account of the tax effect.
Our order dated 02 April 2025, insofar as this Appeal is recalled because it does contain errors apparent on the face of the record, but after such recall and restoration, the Appeal is disposed of for the above reasons, relying on Circular No. 05 of 2024 dated 15 March 2024. The questions of how are, however, kept open.
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2025 (6) TMI 1552
Reopening of assessment u/s 147 - Order u/s 148A(d) to reopen the assessment in name of late assessee/person - HELD THAT:- The impugned order passed u/s 148A(d) and the notice for reopening of A.Y. 2016-17 was issued in name of a dead person, could not be controverted by learned Senior Standing Counsel Mr. Karan Sanghani.
No order and notice could have been issued in name of a dead person and therefore, the same are without jurisdiction. Both the notice and the impugned order are hereby quashed and set aside. Decided in favour of assessee.
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2025 (6) TMI 1551
Denial of exemption u/s 11 - non-furnishing of details during assessment proceedings - HELD THAT:- DR was unable to controvert the factual findings of the Ld. CIT(A) that the assessee in the past and in the future had never been denied exemption u/s 11 of the Act in scrutiny assessment undertaken by the Department. It is also a fact on record that in the impugned year, the basis for denying exemption u/s 11 of the Act by the AO was merely on account of non-furnishing of any details by the assessee during assessment proceedings.
We find no infirmity in the order of the CIT(A) holding that there is no case at all for denying the assessee the benefit of exemption u/s 11 of the Act in the present case. Ground of appeal No. 1 is, therefore, dismissed.
Admission of additional evidences by the CIT(A) under Rule 46A of the Act - order of the CIT(A) reveals that the assessee had contended before him that he was unaware of the assessment proceedings - HELD THAT:- In the light of these facts CIT(A) has noted that the assessee had sufficient cause for not appearing before the AO and accordingly he admitted the additional evidences filed by the assessee before him. DR was unable to controvert any of the facts, as noted above, leading to exceptional circumstances on account of which the assessee was unable to participate in the assessment proceedings. We hold that there is no case made out by the DR before us that the additional evidences having been admitted by the Ld. CIT(A) in contravention to the Rules prescribed under Rule 46A of the IT Rules, 1962. The ground of appeal No.2 raised by the Revenue is, therefore, dismissed.
Admission of final balance-sheet and Income & Expenditure Account submitted by the assessee as the true and correct statements of affairs of the assessee by the CIT(A) - DR before us was unable to controvert the fact noted by the CIT(A) that the AO had reported in his remand report that the final balance-sheet reflected the correct bank balances therein - HELD THAT:- We find no infirmity in the order of the Ld. CIT(A) holding the final balance-sheet to be the true and correct statement of affairs of the assessee trust. Ground of appeal No. 3 raised by the Revenue is, therefore, dismissed.
Addition made of loans by AO finding them to be not genuine - HELD THAT:- CIT(A), however, deleted the addition noting the fact that these loans represented outstanding balances of banks which were confirmed by the bank statements also. CIT(A) noted this fact to have been confirmed by the AO in his remand report also. Before us, DR was unable to controvert the factual finding of the CIT(A) that the loans represented outstanding balances of the banks which was confirmed by their bank statement also. In the light of the same, we find no infirmity in the order of the Ld. CIT(A) deleting the addition made of loans. Ground of appeal No. 4 raised by the Revenue is, therefore, dismissed.
Penalty u/s 271(1)(c) - Since the order of the CIT(A) deleting all the additions made by the AO has been confirmed by us, there is no case for levy of any penalty on the assessee u/s 271(1)(c) of the Act and the order of the Ld. CIT(A) as a consequence deleting penalty levied on the assessee is confirmed by us. The appeal of the Revenue is accordingly dismissed.
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2025 (6) TMI 1550
Undisclosed sales and undisclosed investment - sole basis for the addition made by the AO was the information shared by Central Excise Department consequent to search conducted upon on M/s Trikoot Iron and Steel Pvt. Ltd. Muzaffarnagar - as argued AO without making any independent enquiry with either Trikoot or from Excise Department or any other person, made additions in the hands of the Assessee
HELD THAT:- AO issued a show cause notice on the sole basis of the notice issued by the Central Excise Department to the Assessee pursuant to the search conducted by the central Excise Department on the premises of M/s Trikoot Iron and Steel Ltd. AO made the addition pursuant to the said search and based on the material found during the search conducted by the Excise Department on M/s Trikoot Iron and Steel Ltd.
The Hon’ble CESTAT in Excise Appeal [2024 (10) TMI 672 - CESTAT NEW DELHI] quashed the additions made in the hands of M/s Trikoot Iron and Steel Ltd. by allowing the Appeal. Hon’ble CESTAT has also allowed Assessee’s Appeal wherein deleted the demand of duty and imposition of penalty.
AO erred in making the additions in the hands of the Assessee and we find no reason to sustain the addition made by the AO which deserves to be deleted. In the result, the appeal of the Assessee is allowed and the impugned assessment order and the order of the CIT(A) are hereby set aside. Assessee appeal allowed.
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2025 (6) TMI 1549
Ex-parte order passed by the CIT(Appeals)/NFAC - cash and the gold-like metal seized during the search operation can be treated as the unexplained income - Assessee submitted that the assessee is a hawala trader and is earning commission from such transactions and therefore, the money which was stated to be of the assessee was actually to be handed over to some other person and that he would have just got some commission in lieu of such services.
HELD THAT:- After hearing the submissions, it was queried by the Bench whether any Enforcement Directorate (ED) proceedings or action of PMLA Act has been conducted in the case of the assessee to which, the Ld. Counsel submitted in negative.
Therefore, these facts are not regular facts which are coming in every day to day in any business or profession. Rather these are facts relating to interception and confiscation by the authorities where money, jewellery are being confiscated, detected and the person is held accordingly if there is any violation of relevant statutes.
Therefore, it is now the onus on the part of the department to conduct necessary enquiry and verification to see whether any tax evasion is committed by the assessee or any colorable device adopted by the assessee to defraud the revenue, in such case, the entire addition have to be sustained in the hands of the assessee since fraud vitiates everything including natural justice. Appeal of the assessee is allowed for statistical purposes.
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2025 (6) TMI 1548
Denial of exemption u/s 10(2A) - share of profit received from partnership firm - CIT(A) has denied the exemption stating that a LLP cannot become a partner in partnership firm - HELD THAT:- Assessee a LLP has been allowed to become a partner in a partnership firm by the Registrar of firm who has registered the partnership firm. It is not in dispute that M/s. Kothari Autolines is a partnership firm and has duly offered its income to tax and after duly paying the tax, it has distributed the profits among its partners.
The assessee which is a LLP is appearing as partner in the registered Partnership Deed of M/s. Kothari Autolines and as per the Partnership Deed, the assessee has received its share.
No reason why the assessee should be denied the benefit of exemption u/s 10(2A) when the income has already suffered tax in the hands of the partnership firm M/s. Kothari Autolines and only the share of profits after paying due tax has been distributed to its partners. Therefore, set-aside the findings of CIT(A) and allow the claim of exemption u/s 10(2A). Effective grounds of appeal raised by the assessee are allowed.
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2025 (6) TMI 1547
Addition u/s 56(2)(vii) - gifts were received by the assessee after the occasion of the marriage, based on dates of clearing of cheques and amount getting credited to the bank account of the assessee - Claim of the assessee is that AO has taken a microscopic view of the meaning “on the occasion of marriage” without going into the intent of the proviso to section 56(2)(vii), since the cheques were realised at a later date which were given by the respective donors and were received by the assessee on the occasion of his marriage
HELD THAT:- The expression “on the occasion of marriage” used in proviso to section 56(2)(vii) cannot be given restricted meaning. When the gift is associated with the event of marriage, the immediate reason or cause for the gift is the marriage of the recipient, it would be covered by the said expression and the relationship between the gift and the marriage is the relevant factor and not the time of making the gift.
Proviso to section 56(2)(vii) contains certain events and conditions on which the provisions contained in clause (vii) to section 56(2) shall not apply in respect of any sum of money or any property received by the individual. Clause(b) of the said proviso mentions that it shall not apply to any sum of money or any property received “on the occasion of marriage of an individual”.
The observations made by the authorities below are more of surmises and conjectures in nature rather than bringing any cogent material on record to disprove the documents and the explanations furnished by the assessee.
Taking into account all the documentary evidences and explanations, we find that the gifts received by the assessee on the occasion of his marriage, though the amount were credited at a later date, which is 10 days after the date of marriage in the case of gift received from Shri Anil Kumar Goel and 15 days in the case of gift received from Shri Siddharth Jatia, i.e., on 02.01.2013 since the cheque was issued from the Singapore branch of the bank of the donor, are covered by the proviso to section 56(2)(vii) as the same are received by the assessee on the occasion of his marriage.
Microscopic view taken by AO of the expression “on the occasion of marriage” to receive a gift on the day of marriage as well as to get the account credited on the same date is devoid of real-life situations. Accordingly, addition so made is deleted. Grounds raised by the assessee are allowed.
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2025 (6) TMI 1546
Restriction of deduction claimed u/s 54F - long-term capital gain earned from the transfer of tenancy/possessory rights was invested for the purchase of a residential flat - HELD THAT:- In order to support its contention that the assessee’s liability to pay the balance amount to Mr. Jaferali Jalal Momin was discharged within the time prescribed under section 54F assessee placed on record a letter whereby M/s. Delta Venture agreed to pay a sum of ₹ 26 lakh to Mr. Jaferali Jalal Momin for the flat purchased by the assessee. From the perusal of the said letter dated we find that the seller of the residential flat, i.e., Mr. Jaferali Jalal Momin has also countersigned the said letter and also agreed that no amount is outstanding from the assessee towards the sale of said flat.
The seller agreed vide letter that no amount is outstanding from the assessee towards the sale of said flat. During the hearing, DR, vehemently relying upon the assessment order, submitted that the entire transaction of agreeing to pay ₹ 26 lakh by M/s. Delta Venture to Mr. Jaferali Jalal Momin was a mere journal entry. As pertinent to note that the entire amount of ₹ 50,59,270/-, which was declared as long-term capital gain by the assessee, was also majorly a journal entry as per the admission of facts by the AO in the foregoing paragraphs.
Therefore, in the absence of any material which could dispute the fact that the assessee purchased a flat from Mr. Jaferali Jalal Momin on 06.03.2012, i.e., within a period of one year, from surrender of tenancy/possessory rights to M/s. Delta Venture, we do not find any merit in restricting the deduction claimed u/s 54F of the Act to ₹ 25 lakh only.
Accordingly, duly supported by the documentary evidence, we are of the considered view that the assessee is entitled to claim deduction even in respect of the balance long-term capital gain u/s 54F of the Act. Appeal by the assessee is allowed.
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2025 (6) TMI 1545
Addition u/s 69 r/w section 115BBE - unexplained investment in capital introduced by the assessee in the partnership firm - Immediate source of the capital introduced as loan received from his father
HELD THAT:- Assessee has satisfactorily explained the immediate source of the capital introduced as loan received from his father through regular banking channels, supported by complete fund trail. The father’s source has also been substantiated through sale of shares conducted on the recognized stock exchange through a registered broker.
Revenue has not brought any independent material to discredit the assessee’s explanation or establish that the funds represented undisclosed income of the assessee. In absence of any evidence of collusion, pre-arrangement, or accommodation, the explanation furnished by the assessee cannot be rejected merely on suspicion.
Whether or not the capital gains were correctly offered to tax in father’s hands is not a subject matter before us. The limited issue under section 69 being satisfactorily explained, the addition made by the AO is liable to be deleted.
We hold that both the essential conditions prescribed under section 69 of the Act stand unfulfilled. The assessee has duly recorded the investment in his books of account and has satisfactorily explained the nature and source of such investment through cogent documentary evidences.
AO has failed to bring on record any credible material to rebut or disprove the explanation furnished by the assessee. Mere suspicion, howsoever strong, cannot substitute legally admissible evidence. We thus find no infirmity in the well-reasoned order passed by the learned CIT(A) deleting the addition made by the Assessing Officer.
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2025 (6) TMI 1544
Eligible assessee defined u/s 144C(15)(b) - validity of assessment proceedings as the draft assessment order passed u/s. 144C of the Act was not served on the assessee in accordance with the provisions of section 282 of the Act r.w.r. 127 - contention of the assessee is that the email id on which draft assessment order is communicated is not that of the assessee - HELD THAT:- It is an undisputed fact that after conclusion of draft assessment order, the assessee filed objection before the DRP within the time prescribed under the provisions of the Act. The assessee participated in draft assessment proceedings and thereafter in DRP proceedings.
No prejudice was caused to the assessee, in availing the remedy against the draft assessment order. The Hon’ble Supreme Court of India in the case of CIT vs. Laxman Das Khandelwal [2019 (8) TMI 660 - SUPREME COURT] while dealing with an issue relating to service of notice u/s. 143(2) of the Act and the provisions of section 292BB of the Act which comes to rescue of the Department, where the assessee disputes service of notice held that if the assessee has participated in the proceedings it shall be deemed that any notice which is required to be served upon was duly served and the assessee would be precluded from taking any objections that the notice was (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner.
Once the draft assessment order comes to the knowledge of the assessee and the assessee has taken further steps to seek remedy against the said order within the period of limitation, any infirmity in service of notice or order would not impede the validity of proceedings arising from improper service of notice/order in any manner if the assessee has participated in further proceedings. We find no merit in ground no. 2 of appeal, hence, the same is dismissed.
Disallowance of CESS paid u/s. 40(a)(ii) - AO disallowed assessee claim of payment of Cess by merely observing that the expenses claimed in nature of Cess are not allowable as per section 40A(ii) of the Act, without identifying the exact nature of such ‘Cess’ - contention of the assessee is that ‘CESS’ claimed in P&L account under the head ‘Other Expenses’ is in respect of the condition set out in PSC entered into between Govt. of India and Geopetrol Inc. (the assessee) and other parties on 16.06.1955 - HELD THAT:- When the assessee filed objections before the DRP, the DRP misread the expression, ‘Cess’ and wrongly decided the issue considering it to be an ‘Education Cess’. Therefore, findings of the AO and the DRP on this issue are cryptic and contrary to the facts on record. A perusal of the P&L account placed on record reveal that the assessee has claimed ‘Cess’ under the head ‘Other Expenses’. The details of other expenses are given in Note No. 19 forming part of the Financial Statement for the year ended 31st March 2018. A perusal of Note No.19 further shows that similar expenditure was incurred in the Financial Year ended on 31st March, 2017.
Counsel made a statement that in the past assessee’s claim of Cess was allowed by the Department. We deem it appropriate to restore this issue back to the AO for the limited purpose to examine whether the payment of Cess was allowed to the assessee in the past. In case the same was allowed to the assessee in preceding assessment years, the rule of consistency demands that the same should be allowed to the assessee in the impugned assessment year, as well.
Addition treating Other Business and Community Development expenditure as a Corporate Social Responsibility (CSR) expenses - contention of the assessee is that since the assessee is engaged in the business of extraction of crude oil, it disturbs the land and marine ecosystem - HELD THAT:- We find that similar expenditure was incurred by the assessee in the preceding assessment year as well. The PSC was executed way back in the year 1995, ostensibly with no change in the terms and conditions of the contract the assessee must have been claiming such expenditure in the past. No material is available on record which would throw any light to show as to how these expenditure were dealt in the past.
Counsel has contended that in the past expenditure was allowed by the Revenue. If such expenditures were allowed to the assessee in the preceding assessment years, we see no reason to disturb consistent stand taken by Revenue from the preceding assessment years. Hence, we deem it appropriate to restore the issue to AO for limited purpose to examine the treatment given to the expenditure in the preceding assessment year and decide the issue accordingly. The ground no. 5 of appeal is thus allowed for statistical purpose.
Seismic, Geological and Reservoir Studies - treating it as capital expenditure as against Revenue expenditure - HELD THAT:- No effort was made by the AO or the DRP to examine the issue and understand the nature of expenditure. The ld. Counsel for the assessee has explained that the expenditure was in respect of Arbitral Award dated 30.07.2012 in favour of Geophysical Institute of Israel. Aggrieved by the Arbitral Award the operator has challenged the Award by filing an objection before the Hon’ble High Court and the matter is still sub judice. The ld. Counsel has further pointed that as per the accounting policy of the company Production and Exploration cost are to be transferred to the profit and loss account in the year in which Seismic, Geological and Reservoir Studies expenses are incurred for production of crude oil. These are routine expenses and were allowable u/s. 42 of the Act. The ld. Counsel submitted that similar expenditure was allowed in the past. We deem it appropriate to restore the issue back to AO to examine if similar expenditure was allowed to the assessee in preceding assessment year, we see no reason to take a different view in the impugned assessment year. Hence, the ground no. 6 of appeal is allowed for statistical purpose.
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2025 (6) TMI 1543
Royalty income u/s 9(1)(vi) r.w.s DTAA - license fee receipt with respect to live content for granting broadcasting rights of various events - AO held that the receipts from the Live Contracts as well as from the bundled contracts are liable to tax under Section 9(1)(vi) of the Act being the consideration received by the assessee for the use of, or the right to use, any copyright, trademark or other like property or right - HELD THAT:- The view of the Assessing Officer relying upon the order of Viacom 18 Media (P) Ltd. [2014 (4) TMI 737 - ITAT MUMBAI] that in view of the amendment by way of insertion of Explanation-6 to Section 9(1)(vi) of the Act defining ‘process’ to include transmission by satellite and by virtue of Article-3(2) of the DTAA would also be read in the definition of Royalty in Article-12(3) of the DTAA and therefore the license fees received for telecast of live matches would also constitute royalty is not acceptable because no such amendment as referred by the Assessing Officer has been brought in the DTAA expanding the scope of ‘process’ as relied by the Assessing Officer.
Therefore, we are of the considered view that finding of the AO and confirmed by Dispute Resolution Panel that entire license fees was taxable as royalty including the receipts received on account of live coverage to be royalty is not justified, subject to apportionment of license fees towards live coverage and recorded coverage in bundled rights as discussed later in this order. Hence, ground no.4 and 4.1 of the appeal are allowed accordingly.
DRP rejecting the rationale of the assessee for bifurcation of receipt into live content and non-live content of bundled rights and contracts - assessee had offered 5% as royalty income by considering 5% of the total receipt towards recorded coverage and the balance amount 95% towards live coverage - HELD THAT:- Attributing 25% of the license fees towards recorded feed will not be justified in the facts of the present case. However, the issue is regarding the correctness of the claim of the assessee with respect to apportionment of the receipts toward ‘live coverage’ and ‘recorded coverage’ in bundled rights, wherein, the assessee has taken a plea that 5% is only towards recorded coverage and the balance towards ‘live coverage’. But as noted by the AO that the other rights are available alongwith recorded coverage but ultimately all these mainly relates to recorded coverage only. However, since the assessee has taken the plea of 5% towards ‘live coverage’ by way of TV broadcast only in ‘broadcast rights’ but considering the fact that the broadcast of recorded event is also available on other medium and other rights as mentioned in the said two agreements and salient features of the same as highlighted we consider it appropriate to allocate 10% of the receipts towards recorded, events and 90% towards ‘live coverage’ as offered as against 5% towards recorded event and 95% towards ‘live coverage’ as offered by the assessee. Ground no.6 of the appeal is partly allowed.
AO taxing the receipts from non-resident payers @40% sur-charge instead of 15% (prescribed under treaty) - AO has taxed the royalty income received both from resident payers and non-resident payers @15% as per Article-12 of the DTAA being more beneficial. AO is directed to verify the above claim of the assessee once again and apply the correct rate of taxation as per law.
Validity of reopening of assessment - period of limitation - Scope of TOLA - HELD THAT:- In this case, notice u/s 148 of the Act was issued on June, 28, 2021 and the time limit for issuing of notice u/s 148 of the Act for AY 2015-16 under the old provisions was March, 31, 2022, which is admittedly barred by limitation under the new provisions of section 149(1) of the Act when the notice u/s 148 of the Act was issued on June 28, 2021, and is not covered under TOLA. On similar facts as referred above, the Mumbai Bench of the Tribunal in the case of Pushpak Realities Pvt. Ltd. [2024 (11) TMI 763 - ITAT MUMBAI] had quashed the notice u/s 148 of the Act for AY 2015-16. Thus we quash the assessment order passed u/s 147 r.w.s. 144(13) of the Act. Assessee appeal allowed.
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2025 (6) TMI 1542
Unexplained cash deposits u/s 69A - Assessee was minor - misuse of PAN - financial capacity to make such deposits - assessee submitted that the assessee was of a very immature age at the time of alleged deposits in the bank account with M/s. Renuka Mata Bank and the assessee also did not have any other bank account and also did not have the financial capacity to deposit such a huge amount in his bank account - HELD THAT:- There was an evident lack of enquiry made by the Tax Authorities, while concluding the assessment. When the notice of hearing was issued by the AO, the assessee had promptly submitted that he was a minor (though during the course of hearing before us assessee submitted that the assessee had completed 18 years of age) and that the assessee did not have any means whatsoever to deposit such a huge amount of money in M/s. Renuka Mata Multi State Urban Cooperative Credit Society Ltd. The assessee had specifically submitted that the aforesaid bank account had not been the opened by the assessee and had also furnished a copy of the police complaint to support his argument that this account had been opened by misusing his PAN details etc.
However, despite these specific averment by the assessee, the Department did not call for the necessary documents from the concerned bank branch like the account opening form, bank statement for this account and necessary documents to as to ascertain that the said bank account was in fact opened and operated by the assessee himself.
From a reading of the contents of the order passed by Ld. CIT(A), the only reason why this amount was confirmed in the hands of the assessee was that “there is nothing on record to establish that any inquiry was conducted by the Police Department”. We are of the considered view, that lack of inquiry by the Police Department cannot be the basis for confirming such a huge amount in the hands of the assessee, especially keeping into light the fact that no further information / details were called from the concerned bank like account opening form, no inquiry being made as to who had opened the bank account and who was effectively operating such bank account / making deposits in such bank account by calling for information from the concerned Bank Manager, the AO did not call for the necessary bank statement to ascertain the nature of deposits / frequencies etc. and thereafter confronting the same to the assessee and further, the AO also did not take into cognizance the fact that the assessee had specifically lodged a police complaint stating that the assessee had not opened the aforesaid bank account complaint.
Assessee had also specifically submitted that he was not in a financial position to deposit such huge amount in the bank account considering his age and lack of income earning capacity. In our considered view, there was an evident lack of inquiry while framing the assessment and also while confirming such a substantial amount in the hands of the assessee, when the assessee had clearly submitted at all stages of proceedings that he had neither opened the bank account, nor had deposited such a huge amount in the aforesaid bank account and further, also did not have the financial capacity to make the aforesaid deposits in the bank account.
Accordingly, in the interest of justice, and given the evident lack of inquiry in the matter at all stages of proceedings by the concerned Tax Authorities, the matter is hereby restored to the file of Assessing Officer for de-novo consideration.
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2025 (6) TMI 1541
Addition u/s 56(2)(x) - as per AO valuation for the purpose of section 56(2)(x) is the Fair Market Value [FMV] which is derived as prescribed method of valuation in accordance with the Rule 11U & 11UA of Income Tax Rule, 1962 with respect to the unquoted shares - CIT(A) deleted addition - HELD THAT:- Since the facts of the instant case are identical to the facts of the case already decided by the Tribunal in the case of ACIT vs. Dwarkaprasad Bhikulal Soni [2025 (2) TMI 1201 - ITAT PUNE] wherein as considered various factors such as different rules for valuation of Industrial NA plots based on criteria like open area, amenity area & parking area. Further, he has also given a finding that the land situated at Survey No.79, 82, 83 & 86 of Yerur village was an undeveloped industrial NA Land & the said land was a barren Land. Even as per the Stamp Duty Authority Rules, the said land is not demarcated as usable land. It was also found by Ld. CIT(A) that while preparing the valuation report Stamp Duty Authority Rules were followed for assessing the value of immovable property. Accordingly Ld. CIT(A) has accepted the valuation furnished by the valuer of the assessee of land situated at Yerur village.
A perusal of the order shows that Ld. CIT(A) has passed a detailed and speaking order wherein he has also provided the reasons for allowing 15% discount in the value calculated as per Rule 11UA of the IT Rules. No contrary material has been brought on record by Ld. DR against the detailed reasonings of the Ld. CIT(A) on this issue. Decided against revenue.
Addition on account of amount advanced on Hundi - amounts are advanced in cash - CIT(A) deleted the addition - HELD THAT:- Although the assessee had filed the copy of affidavit of M/s. Vikas Industries and the bank statement substantiating the loan of Rs. 25 lakh paid through banking channel and also the affidavit from Shri Murlidhar Mundada, proprietor of M/s Vikas Industries stating that as against the said unsecured loan he had issued two postdated cheques of Rs. 13 lakh each which includes the proposed interest of Rs. 1 lakh, we find the Assessing Officer rejected the same and made the addition merely on the basis of word “cash” written in the promissory note. There is no evidence with the Assessing Officer that the loan of Rs. 26.00 lakh is over and above the amount of Rs. 25.00 lakh paid by cheque or that the amount of Rs. 25.00 lakh has been refunded by cheque or cash. Therefore, under these circumstances, the order of the Ld. CIT(A) deleting the addition in our opinion cannot be faulted with.
Addition being the interest receivable on advances given in cash on Hundi - Since the assessee had not offered the same for taxation, the AO made the addition - CIT(A) deleted the addition - HELD THAT:- Since the assessee has admitted that he has given an amount of Rs. 25 lakh as loan to M/s. Vikas Industries, therefore, interest accrued on the same has to be added to the total income of the assessee. We, therefore, set aside the order of the Ld. CIT(A) and restore the order of the Assessing Officer on this issue. The ground No.9 raised by the Revenue is accordingly allowed.
Addition treating the agricultural income as “Income from other sources” - as per AO assessee has not provided the details in support of agricultural income - CIT(A) deleted addition - HELD THAT:-The order of the CIT(A) that the agricultural income per hectare is worked out to Rs. 43,353/- only which is very negligible agricultural income, cannot be accepted in absence of proof of cultivation, nature of products produced, names of persons to whom sold, amount of expenditure incurred for raising the agricultural products, etc. Therefore, the order of the CIT(A) deleting the entire addition cannot be accepted. However, since the assessee is holding 4 hectare 6 R of agricultural land and 7/12 extract shows the crop cultivation, therefore, considering the totality of the facts of the case and in the interest of justice and to put a quietus to the litigation, we are of the considered opinion that an amount of Rs. 75,000/- may be considered as reasonable from agricultural activity. Therefore, the balance amount of Rs. 1,01,015/- has to be treated as “Income from other sources”. The order of the Ld. CIT(A) is modified accordingly.
Appeal filed by the Revenue is partly allowed.
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2025 (6) TMI 1540
Validity of the reassessment notice issued u/s. 148 - same issued after 3 years from the end of the relevant assessment year - limit prescribed by Section 149(1)(b) - Assessee failed to explain the source of the investment by not filing the return of income - Whether the reopening of the assessment is valid in terms of Section 149(1)(b) - escaped assessment - HELD THAT:- The ld. AO has made an addition of Rs. 22,32,379/- which is no doubt the quantum of income which has escaped assessment for the year under consideration. The argument enhanced by the ld. DR that though for the impugned year the income escaped assessment is less, the overall sale consideration is beyond Rs. 50,00,000/-. We are not convinced with this contention of the ld. DR for the reason that the provision that was applicable during this period was that income escaped assessment should have been more than Rs. 50,00,000/- ‘for that year’ which clearly implies that the limit of income which has escaped assessment has to be considered qua the year under consideration and not the total sale consideration.
From the legal dictum of Sanath Kumar Murali [2023 (6) TMI 49 - KARNATAKA HIGH COURT], it is evident that only the income chargeable to tax which has escaped assessment has to be Rs. 50,00,000/- or more for the purpose of reopening which has to be qua the impend year and not the entire sale consideration. Even otherwise, the ld. AO has made an addition only to the extent of the part payment made towards the purchase of the property by the assessee during the impugned year which is much lesser than the limit prescribed by Section 149(1)(b) of the Act.
We find no ambiguity in the provisions of law were the intent of the legislature is very clearly worded. We therefore, deem it fit to hold that the notice u/s. 148 is invalid and bad in law for the reason that the time limit for notice u/s. 148 is available if 3 years but not more than 10 years have lapsed only when the income chargeable to tax which has escaped assessment amounts to or is likely to amounts to Rs. 50,00,000/- or more as per Section 149(1)(b) of the Act, which condition is not satisfied in assessee’s case were the income which has escaped assessment is much less than Rs. 50,00,000/-.
We therefore allow ground no. 2 raised by the assessee on the above observation. As we have quashed the reopening notice, the consequential assessment order is also held to be invalid and therefore, the other grounds of appeal raised by the assessee is rendered academic and requires no separate adjudication.
In the result, the appeal filed by the assessee is allowed.
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2025 (6) TMI 1539
Assumption of jurisdiction by the AO u/s. 153A - search warrant was not issued in the name of the Assessee
HELD THAT:- Assessment under section 153A cannot be upheld in the name of such person in whose case search action is not initiated u/s 132. Hence, the case of the assessee pari materia with the case of Sanjay Jain [2024 (5) TMI 1582 - ITAT DELHI]. The facts and circumstances of the case of the Assessee and those of the said case are identical.
We do not find any infirmity in the order of the Ld. CIT(A) quashing the reopening and thus we affirm the same and accordingly, dismissed this issue raised in Revenue’s Appeal. Assessee appeal allowed.
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