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Income Tax - Case Laws
Showing 461 to 480 of 175845 Records
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2025 (6) TMI 1476
Denial of exemption u/s 54F - as per revenue no reinvestment of sale consideration within two years from the date of original sale - HELD THAT:- The law is, when the assessee sold the property the sale consideration should be invested on the new property, however, the relevant property may be under consideration. What is relevant is, the assessee should have invested in the new property out of the sale proceeds and the new property should be constructed within three years from the date of sale of the property under consideration.
In the given case, assessee has sold the property on 26.09.2016 and assessee should have invested and acquired the property on or before 25.09.2019, since the provisions of section 54F allows for construction of the property within a period of three years. Therefore, in this case, assessee has invested sale consideration in the above said property and also taken the possession as well as executed sale deed on 21.12.2018 before the statutory period allowed. Therefore, the claim of the assessee is proper as per law. The tax authorities disallowed the claim of the assessee on the basis of purchase instead of construction. Therefore, we are inclined to allow ground raised by the assessee.
Addition made u/s 69B - difference of the value recorded in Balance Sheet versus the value recorded in the sale deed and stamp duty - HELD THAT:- We find that the assessee was neither required to maintain the books of account nor maintained the books of account, hence, the provision of section 69B are not applicable in the case of the assessee.
We further find that even otherwise, the AO as well as the ld. CIT(A) had admitted that the consideration amount of FLAT, as per the registered sale documents, was Rs. 88.03.650/- and the stamp duty amount was Rs. 4.40.200/- and total of these two amounts is Rs. 92,43,850/-. We observed that as regards the figure of Rs. 1,00,69,431/- shown in Schedule AL, it is explained that the difference amount under dispute includes the payment made by the assessee towards cost of FLAT, stamp duty charges registration charges, misc/allied charges etc and these payments were made through banking channel only. The tax authorities could have asked the assessee to file the relevant information before making the addition or sustaining the same. Accordingly, we are of the opinion that the addition made is not sustainable and accordingly the same is deleted and ground taken by the assessee is allowed.
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2025 (6) TMI 1475
Addition u/s 68 - unexplained cash credits - HELD THAT:- The Hon’ble Supreme Court in the case of Orissa Corporation reported in [1986 (3) TMI 3 - SUPREME COURT] has observed that when the assessee furnishes names and addresses of the alleged creditors and the GIR numbers, the burden shifts to the Department to establish the Revenue's case and in order to sustain the addition, the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non-compliance of summons issued by the Assessing Officer under section 131, by alleging the creditors will not be sufficient to draw an adverse inference against the assessee.
In the present case as observed above, no such exercise was carried out by the AO. In case, the AO was not satisfied with sources in the bank accounts of the lender company, the proper course would have been to make assessments in the cases of the lender company as unexplained investments under section 69 of the Act which also not done in the present case.
Additional onus of proof of satisfactorily explaining the source in the hands of the creditor, would not apply if the creditor is a well-regulated entity, i.e., it is a Venture Capital Fund, Venture Capital Company registered with SEBI. This amendment has taken effect from 1st April, 2023 and accordingly, applies in relation to the Assessment Year 2023-24 and subsequent assessment years. The year before us is AY 2016-17 thus this amendment is not applicable and as has been held in the case of Vrindavan farms [2015 (11) TMI 279 - DELHI HIGH COURT] when the assessee had filed all the details, the burden of proving the genuineness and creditworthiness of the creditor stood discharged by the assessee.
As observed above, the requirement of explaining ‘Source’ of ‘Source’ in respect of loans is applicable from A.Y. 2023-24 and subsequent years.
AO has not brought anything or any material on record to establish that the sources in the hands of lender company is non-genuine. Merely because it had NIL income or no sufficient sources as presumed by AO, loan taken by appellant from it cannot be held to be an accommodation entry. It is well-settled position of law that no matter how strong suspicion is, it cannot take place of the evidence. Therefore, in the absence of any evidence showing that in fact, appellant has given cash in lieu of unsecured loan taken, merely on the basis of suspicion, no addition can be made, for this reliance is placed on decision of Hon'ble Supreme court in the case of Daulatram Rawatmull [1964 (3) TMI 14 - SUPREME COURT]. Decided in favour of assessee.
Addition on account of sundry creditors held as bogus by the AO - HELD THAT:- During the course of appellate proceedings, the assessee has filed confirmed copy of the accounts of the creditors. Further, the fact remain that the assessee is a charitable institution registered u/s 12AA & 80G therefore, it is not a case where addition can be made on account of outstanding creditors. Once it is established that the supplies from the creditors is not doubted, outstanding balance in their accounts cannot be treated as income of the assessee. Accordingly, we hereby direct the AO to delete the addition made on account of sundry creditors. The grounds of appeal are allowed.
Disallowing depreciation on the new assets created during the year under appeal - CIT(A) though deleted the same however, has directed the AO to disallow the depreciation and financial expenses on the new assets added during the year - HELD THAT:- After perusing the material available and hearing both the parties, we find that Ld.CIT(A) has disallowed the depreciation for the sole reason that the assessee has failed to establish that new assets were put to use during the year. It is not disputed that amounts were spent and assets were created therefore, once the creation of assets is accepted, depreciation should be allowed if the assets is ready for put to use. We direct the AO to allow the depreciation if the assets are ready for put to use at the end of the previous year relevant to assessment year under appeal. With these directions, Ground No.5 of the assessee’s appeal is partly allowed for statistical purposes.
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2025 (6) TMI 1474
Addition u/s 69A - unexplained money - assessee is into the business of sweets and snacks shop - business had been transferred and is now being carried out in - two bills were found in the name of old name - HELD THAT:- The amounts mentioned in these two bills are meagerly Rs. 25,467/- and Rs. 68,977/. The entire exercise done by the AO may impress a student of mathematics but does not make any sense so far as the income tax proceedings are concerned. No effort was taken to verify from the books of Krishay Enterprises.
The month-wise details of sales made by two firms mentioned elsewhere speak for itself. As can be seen, Krishay Enterprises has actually shown more sales than the amount of sales estimated by the AO for 24/10/2018 and 25/10/2018.
Considering the fact that the entire assessment exercise is extrapolated on the basis of two bills found at the time of survey but explained to be recorded in the book of Krishay Enterprises, we do not find any reason to interfere with the findings of the ld. CIT(A) and dismiss the effective ground/s raised by the revenue.
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2025 (6) TMI 1473
Reopening of assessment u/s 147 - reasons to believe - two pieces of information that received from the office of the DDIT(Inv.), Unit-2(3), Kolkata by which the AO came to know that the parties mentioned hereinabove are engaged in providing accommodation entries and the second information was that Mr. Prem Sarogi received Rs. 100 Lakhs from Goldstar Metal Solutions Pvt. Ltd., and Goldstar Metal Solutions Pvt. Ltd. received from M/s. Vidarbha Mining Pvt. Ltd. and Mr. Prem Sarogi received from
HELD THAT:- Insofar as the first information from DDIT (Inv.), Unit-2(3), Kolkata is concerned, the seven parties mentioned therein have nothing to do with the assessee nor there is any mention of any transactions between the said parties and the assessee.
The second information does not make any sense as the Officer himself is mentioning the transfer of money from one account to another thereby explaining himself the identity and the source of the creditor. We fail to understand how the AO can allege that income has escaped assessment on such information for making addition u/s 68 of the Act when the alleged second information is self-explanatory and none of the parties mentioned in the second information are accommodation entry provider. They are all related parties and the transactions are between the related parties.
No merit in the reopening of the assessment. We accordingly set-aside the impugned notice u/s 148 of the Act thereby quashing the resultant re-assessment order. Appeals of the assessee are allowed.
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2025 (6) TMI 1472
Disallowance of expenditure u/s. 37(1) - addition made holding the expenditure to be non genuine - HELD THAT:- AO during assessment proceedings had issued notices to all the six creditors u/s. 133(6) - All the aforesaid six creditors replied to said notice, the assessee furnished reconciliation statements showing outstanding at the end of the year as per the show cause notice issued by AO viz a viz the amount actually shown outstanding in the books.
It is an admitted position that all the six parties have shown income received from the assessee in their respective return of income filed u/s. 44AD. On field enquiries by the Inspector though the premises of these parties were found to be in existence but there was no sign board on the premises to establish commercial activity.
This fact raised suspicion in the mind of AO regarding the genuineness of the transaction. It is also an undisputed fact that the assessee had deducted tax at source on the payments made to be aforesaid parties. The assessee had also furnished copies of bills invoices raised by these parties. Apart from suspicion there was no material before the AO to reject assessee’s contention.
We find that the reasoning given by the AO for making disallowance u/s. 37(1) of the Act is identical in the impugned assessment year, even some of the creditors in the impugned assessment year are common to AY 2018-19 [2025 (2) TMI 1199 - ITAT DELHI].Thus, we find no merit in appeal by the Department. Hence, impugned order is upheld and appeal of the Revenue is dismissed being devoid of any merit. Assessee appeal allowed.
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2025 (6) TMI 1471
Validity of Intimation passed u/s 143(1) - invocation of the provisions of section 43B of the Act - qualification in tax audit report - wrong mentioning of tax rate - non payment of GST before the due date of filing return u/s 139(1) - Computation of time - delayed deposit of employee's provident fund (PF) contribution - delay in PF deposit due to a holiday (Sunday) - disallowance made u/s 36(1)(va).
Disallowance made under section 43B - HELD THAT:- We are of the opinion that section 43B of the Act will be attracted only when the tax or duty or any other statutory liability has been claimed as a deduction but the said tax or duty or any other statutory liability has not been actually paid. When no deduction of GST by way of operating expenses has been claimed by the assessee company, then question of disallowance of the same does not arise in the present case. It is worthwhile here to note that the section 43B of the Act deals with the allowing of certain deductions on certain expenses only when such expenses are paid by the assessee and not when they have been incurred as per the accounting method of the assessee. Thus, section 43B of the Act states that certain deductions are to be allowed only on actual payment of the expenses for which the deduction is claimed. In the present case, on going through the balance sheet we find that there is no GST amount payable as on 31.3.2018 and therefore, the disallowance made u/s 43B of the Act based on incorrect tax audit report of a Chartered Accountant which is later on rectified by the auditor is unjustified. Accordingly, we delete this disallowance made under section 43B of the Act amounting to Rs. 2,60,67,039/- and allow this ground of appeal of the assessee.
Disallowance made u/s 36(1)(va) - We find that if any Act or proceeding allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open. Therefore we find force in the argument of the assessee that on 15.10.2017, the office of the assessee company was closed being holiday & for this reason the assessee company could not deposit the amount of PF on Sunday. This being so, we are of the considered opinion that the deposit of provident fund on the very next day i.e. on 16.10.2017 being Monday is within the time as per law and therefore, no disallowance is required to be made u/s 36(1)(va) of the Act and accordingly, we allow this ground of appeal also.
Erroneous claim of the basic tax rate - Lastly, with regard to the grounds related to erroneous claim of the basic tax rate @ 30% instead of correct base rate of 25% in the original return & not accepting the revised return, the ld. A.R. of the assessee during the course of hearing before us did not press this ground of appeal and accordingly we dismiss this ground of appeal of the assessee as not pressed. Accordingly, this ground of appeal is dismissed.
In the result, the appeal of the assessee is partly allowed.
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2025 (6) TMI 1470
Rejection of application for grant of Registration u/s 12AD - No proper opportunity of being heard - violation of principle of natural justice - cancellation of provisional registration granted under section 12AB - Validity of “impugned order” as no opportunity on “real time basis” were afforded to the assessee - HELD THAT:- From the “impugned order” it is also noticeable that the Ld. CIT (E) held an opinion that personal hearing is not required and submission can be made through electronic mode. With respect we cannot subscribe to such opinion of Ld. CIT (E) as it is incumbent upon Ld. CIT (E) to afford an opportunity of personal hearing to the assessee and then it is up to assessee whether to avail such an opportunity or not of personal hearing.
Further we hold that merely because Ld. CIT (E) opines that personal hearing is not required and submissions can be made through electronic mode is no ground to deny an opportunity of hearing to assessee. Nothing prevented Ld. CIT (E) to give video conference hearing to the assessee. We finally hold that there is indeed a violation of the principles of natural justice as Ld. CIT (E) erroneously held an opinion that personal hearing would not make a difference.
We basis premises drawn up by us as aforesaid set aside the “impugned order” and remand the case back to the file of Ld. CIT (E) to pass a fresh order on denovo basis after giving reasonable opportunity to the assessee to present his case in an effective manner. Assessee to be afforded an opportunity of personal hearing before the case is finally adjudged and adjudicated. Assessee to cooperate with the department of Income Tax and not to seek any unnecessary adjournments on flimsy grounds.
Appeal of the assessee is allowed for statistical purpose.
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2025 (6) TMI 1469
Validity of reopening of assessment u/s 147 - FAO did not provide the assessee a minimum period of four weeks to respond after disposing of the objections raised by the assessee against the reopening of the assessment - HELD THAT:- In the case of Asian Paint Ltd. [2007 (1) TMI 159 - BOMBAY HIGH COURT] wherein Hon’ble Court has held that “if the Assessing Officer does not accept the objections so filed, he shall not proceed further in the matter within a period of four weeks from the date of receipt of service of the said order on objections, on the assessee. Accordingly rule is made absolute”.
Examining the facts of the instant case in the light of above judgement in the case of Asian Paint Ld. (supra), we notice that the Ld. FAO disposed of the objection vide notice dated 16.03.2022 but he has concluded assessment proceedings on 24.03.2022 i.e. within a period less than four weeks.
Therefore, since the assessment order has been framed in less than four weeks from the date of disposing of both the objections on 08.03.2022 & 16.03.2022, case of the assessee stands squarely covered by in the case of Asian Paint Ltd. (supra) and, therefore, respectfully following the same, we are inclined to hold that the assessment proceedings carried out in the case of the assessee deserves to be quashed as the same has not been carried out in accordance with the settled judicial precedents. Accordingly, legal ground raised by the assessee is allowed.
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2025 (6) TMI 1468
Reassessment proceedings initiated under Sections 147/148 - additions u/s 68 made by the AO on account of alleged bogus purchases and sales - No opportunity for cross examination - Violation of statutory provisions and principles of natural justice - difference between making efforts and making ensure - HELD THAT:- From the perusal of assessment order, it reveals that vide response dated 16-03-2023 and 19-03-2023, placed request for opportunity of cross examination of Shri Ashok Gupta on whose statement, case was reopened for the assessment u/s 147 of the Act but desired cross examination couldn’t took place and the addition in question made on the basis of uncrossed statement as mentioned above and when such a material issue raised before the Learned CIT(A) by way of appeal, it is observed that the Learned AO has made every efforts to provide cross examination but in our humble opinion there is vast difference between making efforts and making ensure. It is also submitted that the notice in question SCN u/s 148A(b) issued to assessee is quite vague lacking application of mind.
There is material substance in the submission advanced on behalf of the assessee that the Learned AO solely relied upon the statement of Shri Ashok Kumar Gupta recorded during search and held that Shri Ashok Kumar Gupta himself admitted that he was engaged in providing accommodation entries of non-genuine purchases and non-genuine sales to various parties. AR in support to above submissions, relied upon assessee’s own case in the case of ITO Delhi v/s B.C. Enterprises [2025 (4) TMI 405 - ITAT DELHI].
On the basis of foregoing fact situation, the judicial precedents mentioned hereinbefore, and by following the same, we find that the addition made without providing an opportunity for cross examination is invalid in the eyes of law and there is material substance in the plea of assessee that the Learned AO supposed to provide all the relied-upon materials and relevant information alongwith notice u/s 148A(b).
Accordingly, in view of the foregoing discussion, the impugned assessment order dated 29.03.2024 passed under Section 147/144B and the first appellate order dated 30.08.2024 are held to be invalid and bad in law, having been passed in violation of statutory provisions and principles of natural justice. Consequently, the additions made therein are directed to be deleted.
As we have decided the legal issue in favour of the assessee.
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2025 (6) TMI 1467
Penalty u/s 270A - allegation of ‘under reporting the income’ - Assessee is a non-filer and has filed return of income for the year under consideration belatedly - HELD THAT:- While passing the assessment order a satisfaction has been recorded by the A.O. for ‘under reporting the income’. Consequent to the said satisfaction, penalty proceedings u/s 270A has been initiated for ‘under reporting the income’ and penalty has been imposed u/s 270A for ‘under reporting the income’.
As observed earlier, though the Assessee is a non-filer, while filing Return suo-moto belatedly, declared the total income which has been accepted by the Department and no addition has been made on the quantum. However, a penalty provision has been invoked u/s 270A for ‘under reporting income’.
The ‘under Reporting income’ occurs when a person discloses smaller amount than their actual income. In the present case, whatever income reported/declared by the Assessee has been accepted by the Department, therefore, it is not the case of reporting smaller amount than their actual income, thus, the limb of ‘under reporting’ in Section 270A is not applicable and the said Limb cannot to be invoked. Assessee appeal allowed.
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2025 (6) TMI 1466
Addition u/s 69A - bogus purchases - CIT(A) deleted addition - HELD THAT:- As evident that assessee claimed before the AO that he is engaged in a work of milling of rice wherein he has to deliver 67% of his production to government and the balance rice produced and the bye products are traded. Purchases of assessee are consisted of packaging material in cash. Cash entries in the bank statement in absence of any nexus with entry operator cannot be made on account of bogus purchase.
AO did not find any defect in books of account. AO accepted sales, so, no addition on account of bogus purchase could be sustained. Therefore, the discussion, reasons and findings recorded by CIT(A) being just, fair, reasonable and legal, deserves to be upheld. There are no reason to interfere with the process of reasoning and findings of Ld.CIT(A). Appeal of Revenue is dismissed.
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2025 (6) TMI 1465
Validity of reopening of assessment - information received from SFIO which in-turn was based on investigation made in the transactions of NSEL with regard to CCM carried out by few unscrupulous brokers - reassessment proceedings were initiated against the assessee after four years - HELD THAT:- In the instant case the observation of the AO with regard to absence of assessee not disclosing truly and fully all material facts is conspicuously missing. The assessment order is too shallow that even the Assessing Officer has not mentioned the name of the brokers through whom transactions were carried out by the assessee at NSEL. Further, the AO has not even carried out the exercise of identifying the scripts in which the assessee carried out CCM. In light of the above observations, we find no infirmity in findings of the CIT(A) in holding reopening of assessment as bad in law.
On merits of the addition, assessee has shown that the the gain on sale of such scrips (on which CCM is alleged) has already been offered to tax in the return of income. Assessee has referred to the transactions carried out by the assessee and their disclosure in the return of income. Also disputed trades have been mentioned in the return of income. CIT(A) correctly deleted addition. Decided in favour of assessee.
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2025 (6) TMI 1464
Exemption u/s 54F - computation of capital gain - long-term capital gains arising from the sale of urban agricultural land - HELD THAT:- We find that the assessee has made substantial compliance by making investment in the plot even before filing the income tax return. When he had already invested the amount there could not be any occasion to deposit the same under Capital Gain Account Scheme.
The objective of Section 54F is to promote investment in residential house and it is quite obvious that the cost of the plot is circumscribed into the cost of the house. There is no requirement under the law that capital gain account is to be opened by the assessee particularly when he has invested the entire sale receipts.
AO has made certain modification in the computation of capital gain. While we agree in principle that the deduction u/s 54F is permissible we direct the AO to recalculate the capital gain after taking into account the submissions of the assessee in this regard. With this direction we deem it fit and proper to remit the matter back to the AO to correctly recompute the amount of capital gain if any. The appeal is allowed for statistical purposes.
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2025 (6) TMI 1463
Computation of book profit u/s 115JB - Addition of “Exceptional Items” - whether the “written off” amount made by the assessee in his books of accounts, on account of capital reduction, does fall in clause (i) of Explanation 1 of section 115JB(2) of the Act, for the purpose of computing book profit? - assessee submitted before the assessing officer that the write off is on account of capital reduction of investment in equity shares and preference shares in the group companies - HELD THAT:- The assessee submitted the Copy of order of Bombay High Court, copy of petition for capital reduction and working of actual write off / loss on capital reduction has been submitted during the course of assessment proceedings. Under section 101 of the Companies Act, 1956, the company may reduce its share capital by extinguishing any of its shares subject to approval of members and High Court. In this case, both the shareholders, as well as, the High Court have duly approved the capital reduction of shares in all three companies.
Further, the same is also registered by the Registrar of Companies and issued certificate in respect thereof. Copy of certificate was submitted by the assessee during the assessment proceedings. Hence, capital reduction has resulted in extinguishment and cancellation of investment in the group company. It amounts to transfer u/s 2(47) of the Income Tax Act.
On approval of Capital Reduction by the Hon’ble Bombay High Court shares of the assessee -company gets cancelled, and rights attached with the shares – dividend, redemption, share in liquidation of company (in case of equity share), voting rights, etc. are extinguished. The name of assessee in the members register is also struck off, on approval of capital reduction by Hon'ble High Court. Therefore, respectfully following the binding precedent of the jurisdictional Hon`ble High Court of Gujarat, in the case of Torrent (P.) Ltd [2019 (6) TMI 709 - GUJARAT HIGH COURT] and in the case of Vodafone Essar Gujarat Pvt Ltd [2017 (8) TMI 451 - GUJARAT HIGH COURT] Hon’ble Supreme Court in the case of Apollo Tyres Ltd. [2002 (5) TMI 5 - SUPREME COURT] we allow ground No.2 raised by the assessee.
Enhancement of assessment made by the CIT(A) without giving show - cause notice to the assessee - We do not agree with revenue, to the effect that it is not necessary to issue the separate notice for enhancement. We note that sub-section 2 of section 251 of the Income Tax Act, clearly states that if the CIT(A) wants to enhance the assessment, a separate show-cause notice and of hearing should be given to the assessee.
CIT(A) has directed the AO to make a further addition on account of deemed dividend u/s 2(22)(d) of the Act and u/s 115QA of the Act, such direction is tantamount to enhancement of assessment. Therefore, before making any enhancement of the assessment, it is the duty of the Ld. CIT(A) to give a notice to the assessee to that effect and after getting reply from the assessee, the Ld. CIT(A) may enhance the assessment, if any, and for that we rely on the following judgments: (i) CIT vs. Rai Bahadur Hardutroy Motilal Chamaria [1967 (4) TMI 8 - SUPREME COURT] (ii) CIT vs. Shapoorji Pallonji Mistry [1962 (2) TMI 12 - SUPREME COURT] We also that capital reduction is carried out for NIL consideration, therefore, considering capital reduction of assessee- company, there should not be deemed dividend u/s 2(22)(d) of the Act. That is, no deemed dividend arises on losses/crystalised losses. Moreover, the said transaction is also not covered u/s 115QA of the Act as the capital reduction is carried out for NIL consideration. Considering these facts and circumstances, we allow ground No.2 raised by the assessee.
Deduction u/s 80IA - assessee has claimed such deduction in respect of CFS maintained and operated at Mundra and while calculating such deduction, the assessee has included a sum being rental income - HELD THAT:- Assessee- company had earned rent income from providing office space to various user’s agencies like Custom House Agents, Shipping Agent etc. and Stat Bank of India. Since these user’s agencies were covered under the permission letter granted by the Ministry of Commerce vide Sr. No.(b) & (c), the rental income earned from the CFS (Container Freight Station) was considered as income earned from the business of eligible industrial undertaking and hence, deduction u/s 80IA of the Income Tax Act, 1961 was claimed. This claim u/s 80IA is also supported by circular no.76/2017 dated 25.04.2017 issued by CBDT.
This issue has also been decided by Hon’ble ITAT Rajkot in assessee’s own case for A.Y 2006-2007, 2007-08 and 2008-09 and CIT(A) for AY 2013-14, 2012-13, 2011-12, 2010-11, 2009-10 where in appeal of the assessee is allowed holding that rental income of the CFS is a part of the income derived from the eligible business and therefore eligible for deduction u/s 80IA of the Income Tax Act, 1961.We note that there being no change either in facts or in law, as compared to the earlier and subsequent years, the position accepted/determined needs to be followed even on the principle of consistency. Assessee ground allowed.
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2025 (6) TMI 1462
Assessment u/s 68 - onus is on the assessee to explain simultaneously the identity, creditworthiness and genuineness of the transaction in respect of Section 68 - HELD THAT:- Hon'ble Apex Court in the case of CIT Vs. P. Mohanakala [2007 (5) TMI 192 - SUPREME COURT] clearly held that in case where explanation offered by the assessee about the nature and source of sums found credited in the books of account is not satisfactory then same would constitute prima-facie evidence against the assessee.
The main evidence to understand the creditworthiness and genuineness of the transaction is the books of account and balance sheet of the lenders who are providing funds to the assessee for making unsecured loan. That as evident at the stage of the A.O, the balance sheet of M/s. Girdhar Jaiswal, HUF was provided, to which, extent relief was given by the A.O to the assessee.
Regarding the remaining lenders, the amounts were added in the hands of the assessee. In this regard, it was submitted by the Ld. Counsel that a/w. Form 35 they have uploaded as additional evidences the balance sheet of the respective lenders and to demonstrate these facts, the Ld. Counsel had placed before me the copy of the said Form, in which, it is clearly mentioned that in the column attachments, there were attachments of balance sheet of the lenders, identity of the lenders, written submission and lenders financials. Unfortunately, the Ld. CIT(Appeals)/NFAC has not considered these additional evidence in terms with Rule 46A(3) of the Income Tax Rules. Therefore, the order of the CIT(Appeals)/NFAC is bereft of facts and is perverse since as quasi- judicial authority, it should have considered all the relevant evidence and should have called for a remand report from the A.O regarding those additional evidences and thereafter, should have come up with a speaking order. Appeal of the assessee is allowed for statistical purposes.
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2025 (6) TMI 1461
Validity of accorded approval u/s.153D - as argued approval granted u/s.153D of the Act by the competent authority is without application of mind - HELD THAT:- Competent authority writes at Para 4 that “you may act accordingly”. That when the competent authority is issuing approval u/s. 153D of the Act for 7 years, he is not writing any findings regarding the fact or for that matter he is not providing any reasons so to understand his reasoning for granting of such approval. It is obvious that the approval is granted in a mechanical and summary manner and that too on the same date, on which, the request letter has been furnished before the competent authority. That further, the entire action has been taken on the basis of borrowed satisfaction from the A.O.
As decided in the case of PCIT Vs. Shiv Kumar Nayyar [2024 (6) TMI 29 - DELHI HIGH COURT] had an occasion to deal with an almost identical issue i.e. grant of approval u/s. 153D of the Act in a mechanical manner and without application of mind.
Hon’ble High Court of Delhi in the case of Pr. CIT Vs. MDLR Hotels (P) Ltd. [2024 (8) TMI 1138 - DELHI HIGH COURT] has held that where competent authority accorded approval u/s. 153D of the Act as many as 246 proposed assessments mechanically by way of a single letter of approval without application of mind, the impugned assessment is liable to be quashed.
Thus, if there is any approval given in mechanical and summary manner that itself defeats the purpose of Section 153D of the Act. The competent authority shall examine the case records for each of the assessment years and though it is not mandatory to give exhaustive reasons for such approval but at least requirement of law shall be complied if such authority pronounces few words in the said approval given which shall reflect his independent application of mind.
Reverting to the present case, on a perusal of entire approval order and as examined hereinabove, no such exercise has been done by the competent authority which itself vitiates such approval in the eyes of law and any proceedings thereafter shall have to be declared non-est as per law. Appeal of the assessee is allowed.
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2025 (6) TMI 1460
Addition of cash payment - addition based on printed material containing an excel sheet found in the premise of the third party during the course of survey/search - HELD THAT:- This Tribunal in the case of Global Star Realtors Private Limited [2025 (5) TMI 1940 - ITAT BANGALORE] being the vendor has given a finding that there was no element of cash received from the assessee requiring any addition.
Once, the ITAT in the case cited above has concluded that the document based on which the addition was made by the Revenue, is dumb document. There cannot be any addition in the hands of the assessee based on the same set of documents.
The facts of the case in hand are identical to the facts of the case discussed above, therefore, hereby hold that there is no infirmity in the order of the ld. CIT(A) requiring any inference. Accordingly, we uphold the finding of the ld. CIT(A) and direct the AO to delete the addition made by him. Decided against revenue.
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2025 (6) TMI 1459
Rectification u/s 254 - Addition of cash deposited during demonetization period and taxed the same at enhanced rate of 60% u/s 115BBE - CIT(A) dismissed appeal of the assessee - ITAT allowed relief partly and directed AO to tax the remaining addition at normal rate of tax and applicable surcharges, if any.
HELD THAT:- Hon’ble Punjab & Haryana High Court in case of Popular Engineering Co. [2001 (1) TMI 76 - PUNJAB AND HARYANA HIGH COURT] held that absence of adequate reasons in an order passed u/s 254(1) cannot per se be regarded as a mistake apparent within the meaning of section 254(2) of the Act.
Likewise, the possibility of forming a different opinion than the one expressed in the order passed u/s 254(1) cannot be treated as a ground for entertaining an application u/s 254(2) of the Act.
As in case of Ms. Deeksha Suri [1997 (11) TMI 295 - DELHI HIGH COURT] held that the foundation for exercise of jurisdiction lies in the rectification of a mistake apparent from record which object is ensured by amending the order passed by the Tribunal. The said power does not, however, contemplate a re-hearing of appeal for disposal.
Doing so would obliterate the distinction between power to rectify mistakes and the power to review the order made by the Tribunal. In the present case, the appellant is canvassing for review of the order made by the Tribunal and not rectify any mistakes apparent from record. In view of the facts discussed above and the authoritative precedent, we do not find any merit in the MA filed by the assessee. Therefore, we do not find any mistake which could be said to be apparent within the meaning of section 254(2) of the Act. Accordingly, MA is hereby dismissed.
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2025 (6) TMI 1458
Addition u/s 68 - cash found deposited in its bank account during demonetization period source of which allegedly remained unexplained - onus to prove -HELD THAT:- The assessee has furnished copies of ledger accounts as also copies of receipts issued to them. Copy of the entire cash book of the assessee as also its entire books of accounts, which were duly audited, were furnished to the Revenue authorities. In the light of all these evidences before the Revenue authorities, wherein they had all information about the details and particulars of person from whom the assessee had received cash as repayment of loan, without finding any infirmity in these evidences, the Revenue authorities could not have adopted the data analysis technique for rejecting the assessee's explanation.
The course of action to be followed by the Revenue was to verify the details furnished by the assessee and if found to be incorrect or unreliable, then adopt any other method for arriving at any conclusion but without giving any plausible reason for rejecting assessee's specific explanation of the source of cash deposit supported with evidences, the adoption of data analysis for arriving at the conclusion that the assessee's explanation was not satisfactory is totally incorrect and against the due process of law.
No hesitation in holding that the basis adopted by the Revenue authorities for treating the cash deposits in the bank account of the assessee as unexplained is completely arbitrary and based on assumptions and presumption alone when the fact is that the assessee furnished explanation duly supported with evidences which has not been rejected nor any plausible reason for rejecting the same given by the Revenue authorities. The addition, therefore, made in the case of the assessee, hold it not sustainable and direct deletion of the same. Appeal filed by the assessee is allowed.
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2025 (6) TMI 1457
Addition on account of unsecured loan - increase in the unsecured loan balance - HELD THAT:- As explained by the assessee, the interest credit during the year was Rs. 61,14,262/- on which TDS of Rs. 6,11,425/- was made. Further, the assessee had made re-payment of loan of Rs. 2,60,435/-.
TDS amount and re-payment amount adjusted with the interest credit of Rs. 61,41,262/- explained the difference of Rs. 52,42,402/- as noted by the AO. It appears that the AO has only considered the fresh loan of Rs. 2.31 crores received during the year.
The interest credit, the TDS on the interest and part re-payment as explained by the assessee was not at all considered by the AO. When we take into account the interest credit reduced by TDS and the repayment, we do not find any difference in increase in unsecured loan balance. Therefore, the addition as made by the AO on account of difference in unsecured loan balance was not correct. Accordingly, the addition made by the AO is deleted. Assessee appeal allowed.
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