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Showing 441 to 460 of 1519 Records
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2025 (5) TMI 1079
Addition u/s 68 - appellant opts for “presumptive taxation” u/s 44AD - HELD THAT:- In the case of Nandlal Popli [2016 (6) TMI 883 - ITAT CHANDIGARH], it was held that even where appellant opts for presumptive taxation scheme, the addition u/s. 68 can be made.
Neither in section 68, nor in section 44AD, there is an express prohibition that an addition relating to cash credit cannot be made where appellant opts for presumptive taxation method.
On 21.3.2025, during the hearing proceedings before the ITAT, the Ld. AR of the appellant has pleaded that the purchase transaction is genuine and they can prove the same before the AO if an opportunity is given, as the payment for purchase of these diamonds in question was made through banking channel in subsequent year and the same was not examined by any authority.
As decided by the Bench that the issue of payment through banking channels in subsequent year may be verified and genuineness of payment is to be examined by the Ld. AO. As the issue was not examined by the Ld. AO, on these lines, the same is remanded to the file of the Ld. AO and accordingly, the Ld. AO is directed to pass the order after giving an opportunity to the appellant.
If the transaction is found to be fictitious and its only an accommodation entry, the recent decision in the case of PCIT Vs. Buniyad Chemicals Ltd. [2025 (3) TMI 881 - BOMBAY HIGH COURT] may be taken into consideration by the Ld. AO. Secondly, the purchases made through the entity “Namo Diamonds” and corresponding sales of these diamonds may be thoroughly investigated to find out the genuineness of the transaction.
Issue is remitted to the file of the Ld. AO.The appeal of appellant is allowed as above for statistical purposes.
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2025 (5) TMI 1078
Black money - Penalty u/s 43 of the BMA for non-disclosure of foreign assets - AO had received a credible information to the effect that the Assessee had foreign assets in the form of investments in the financial entities registered in United Arab Emirates and Isle of MAN - HELD THAT:- Admittedly, the provisions of section 43 of the BMA provides that where the person is a beneficial owner or otherwise or in respect of which he was a beneficiary, or relating to any income from a source outside India, at any time, during such previous year, fails to furnish any information or furnishes inaccurate particulars relating to any such asset, then the AO may direct that such person shall pay by way of penalty, a sum of Rs. 10,00,000/-.
In the instant case, as the Assessee has claimed that life insurance policy from RL 360 Life Insurance Company (Isle of Man) was taken by Mr. Zahid Kothari (brother in law of Assessee) in order to protect/save his sister, as the Assessee was used to visit foreign countries frequently and therefore there was probability of any mis-happening /causality and the Assessee neither purchased this policy nor paid any premium for the same. If that is the case so, then in our considered opinion, the Assessee cannot be held as beneficial owner or beneficiary of the policy, as the Assessee’s wife was inducted as a beneficiary and therefore the liability on the Assessee for imposing the penalty, cannot be fastened.
And therefore, we are inclined to delete the penalty imposed qua insurance policy obtained from RL 360 Life Insurance Company (Isle of Man), however, subject to verification by the AO qua purchasing and making subsequent payment of the instant insurance policy.
Coming to second life insurance policy of Zurich International Life Ltd. – Branch (United Arab Emirates), the Assessee has claimed that since Assessee’s job had involved travelling to various countries and had also considerable risks and therefore, the said policy was bought by the Assessee in the year 2010. Somehow the said policy lapsed after 2014 and therefore the same ceased to be an asset and thus there was no requirement to disclose such asset in a FA Schedule of ITR. The Assessee, in support of such claim, has also filed a copy of summary of policy, according to which the same was started on 01.09.2010 and last premium was paid on 24.03.2014, thereafter, nothing appears from the policy document, “as to whether any subsequent premium has been paid or not”. In the policy, “status” of the policy is mentioned as “lapse” meaning thereby the policy lapsed due to non-payment of premium, which was lastly paid on 24.03.2014. Admittedly, the provisions for imposing the penalty u/s 43 of the BMA 2015, came into effect from A.Y. 2016-17 onwards and therefore policy if any lapsed before introducing the provisions for levy of penalty for not disclosing the asset, could not be made applicable.
We are of the considered view that since the necessary condition to hold a particular foreign asset as undisclosed foreign asset located outside India as provided u/s 2(11) of Black Money Act, 2015 remained to be fulfilled, ld. AO was not justified in invoking the provisions of Black Money (UFIA) And Imposition of Tax Act, 2015 to make an addition in the hands of the assessee at Rs. 1,08,01,726/-. We, thus, reverse the finding of ld. CIT(A) and delete the addition made in the hands of the assessee and allow ground nos. 1 to 5 raised by the assessee in the instant appeal.
Admittedly, the insurance policy obtained from Zurich International Life Ltd. – Branch (United Arab Emirates) has elapsed for non-payment of premium in the year 2014 itself and/or before the enactment and enforcement of the penalty provisions by BMA and therefore the penalty on this particular insurance is un-sustainable and thus we are inclined to delete the penalty imposed on this insurance policy of Zurich International Life Ltd. – Branch (United Arab Emirates).
Thus, the penalty imposed, is deleted in the aforesaid terms. Resultantly, the orders passed by the authorities below are set aside and appeal filed by the Assessee is allowed.
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2025 (5) TMI 1077
TP Adjustment - comparable selection - HELD THAT:- Accropetal Technologies Ltd and Cross Domain Solutions Pvt.Ltd. - Merely because TNMM is adopted, cannot be the reason to consider a company which is not functionally similar with that of assesse. It is necessary for the comparable to be similar qualitatively in functions in order to determine the comparability. In the present facts of the case, admittedly the assessee is a low risk captive service provider only rendering services to its AEs whereas this company is a high and KPO and entrepreneur in itself.
We, therefore, direct the TPO to exclude Accropetal Technologies Ltd and Cross domain solution Pvt.Ltd form the final list.
TPO bench marked the reimbursement of expenses with the mark up based on the transfer pricing order passed by the predecessor for preceding assessment year - It is an admitted fact that, expenses has been incurred by the assessee on behalf of its AE and the same is allocated using allocation key consistently followed by the assessee. In so far as the services rendered by the assessee are concerned, they are simplicitor business process outsourcing services without any involvement of skill, knowledge. Further these are pass through costs and hence no mark up is required to be charged.
Respectfully following the view taken by the co-ordinate bench in assessee's own case for A.Y. 2007-08, we direct the Ld.AO/TPO to delete the adjustment made in this regard.
Disallowance of mark to market loss on forex derivatives - There is no dispute that, such contracts have been entered into by assessee in order to protect its interest against fluctuation in foreign currency in respect of consideration for export proceeds which are revenue in nature. Thus, in our view consequent effect of this accounting treatment is to recognized as exchange fluctuation gain or loss in the profit and loss account as on the valuation date.
Hon'ble Supreme Court in case of CIT us Woodward Governor India (P) Ltd. [2009 (4) TMI 4 - SUPREME COURT] Hon'ble Supreme Court established a precedent regarding the tax treatment of foreign exchange losses on both revenue and capital account transactions. Hon'ble Court held that, transaction in which a legal liability is incurred before it is actually disbursed, would be regarded as revenue in nature. In the present facts of the case, assessee incurred foreign exchange loss for year under consideration towards dealing in forex derivatives, it is directly attributable to business of assessee, which is an allowable expenditure. We direct the Ld.AO to allow the deduction in respect of marked to market losses earned by the assessee.
Disallowance computed u/s 14A relating to the exemption claimed by the assessee u/s 10(15), 10(34) & 10(35) - HELD THAT:- It is noted that assessee suo moto disallowed of Rs.11.94 crores, however for the year under consideration 14A disallowance has to be computed as per Rule 8D. AO is directed to verify the same and to consider the disallowance in accordance with law.
Disallowance bad debt written off - HELD THAT:- As in the present facts of the case it is noted that the Ld.AO/CIT(A) did not verify the issue based on the ratio laid down in case of TRF Ltd. vs CIT [2010 (2) TMI 211 - SUPREME COURT] and Vijaya Bank Ltd. [2010 (4) TMI 46 - SUPREME COURT] We accordingly direct the Ld.AO to verify the claim of assessee in the light of the ratios by Hon'ble Supreme Court in the above referred decisions in accordance with law.
Disallowance of business loss and other expenses - We direct the Ld.AO to carry out fresh examination of the based on the documents furnished by the assessee in respect of the loan given to the individual customers and the nature of the assets repossessed and the sale value of the repossessed assets. Assessee is directed to furnish all relevant details in respect of the same. Ld.AO is directed to consider the claim in accordance with law. Needless to say that proper opportunity of being hurt must be granted to assessee.
Disallowance of provision of expenses - HELD THAT:- It is an admitted fact that in the kind of business carried out by the assessee most of the times the bills are not received by 31st March of the financial year relevant to the assessment year under consideration. In such cases the year and provision are made on an estimate basis and subsequently are reversed in the books of account on the 1st day of the next year upon receipt of their invoices. It is also not disputed that in the subsequent financial year the payments made by the assessee has been subjected to TDS. Further various courts and Hon'ble Supreme Court in case of Eli Lilly &Co [2009 (3) TMI 33 - SUPREME COURT] and GE India Technologies [2010 (9) TMI 7 - SUPREME COURT] held that, if the income component itself is not embedded in the amount provided, then there cannot be any liability to deduct tax at source even though TDS is a vicarious liability.
Thus we are of the opinion that year end provision was made on estimate basis by the assessee cannot be denied in such facts as observed herein above.
Disallowance of contribution to pension and that it is paid on account of Sanghli Bank Ltd. - Admittedly the claim was raised by the assessee during the assessment proceedings and no revised return was. The authorities below under such circumstances do not have the power to examine a claim is does not form part of the return of income. However Hon'ble Supreme Court in case of Goetz India Ltd .[2006 (3) TMI 75 - SUPREME COURT]
Disallowance of discount expenses claimed by the assessee on bonds - We direct the Ld.AR to allow the claim of the assessee on proportionate basis.
Short grant of relief under section 90 - Admittedly assessee made additional claim during assessment proceedings against which the TDS certificate was been submitted. The Ld.AO is directed to verify the same and consider the claim of assessee in accordance with law.
MAT - applicability of provision of section 115 JB - This issue is no longer res integra as it has been held by Hon'ble Bombay High Court and Hon'ble Supreme Court that provisions of 115 JB of the act is not applicable to banking institutions. Respectfully following the view, we do not find any merit in the applicability of section 115 JB of the act to the facts of the present assessee.
Claim of depreciation on leased assets - As no new lease transaction has been entered into by the assesse, we do not find any infirmity in the view taken by the Ld. CIT(A).
Club membership fees being allowed as expenditure under section 37 by CIT(A) - In assessee's own case for assessment in 2007-08 [2024 (2) TMI 101 - ITAT MUMBAI], this Tribunal followed the ratio of Hon'ble Bombay Court in case of Otis elevators company India Ltd. [1991 (4) TMI 53 - BOMBAY HIGH COURT] We therefore do not find any infirmity in the view taken by the Ld.CIT(A) and the same is upheld.
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2025 (5) TMI 1076
Assessment u/s 153C - recording of satisfaction note by the AO of the appellant company for initiating assessment proceeding u/s 153C in the case of the appellant company - HELD THAT:- The issue raised in additional ground is squarely covered by the decision of Super Mall Pvt. Ltd. [2020 (3) TMI 361 - SUPREME COURT] and Ganpati Fincap Services Pvt. Ltd. [2017 (5) TMI 1425 - DELHI HIGH COURT] We therefore, following the reasoning given in above mentioned decisions, hold that the AO has not recorded satisfaction note for initiating proceedings under section 153C of the Act in the hands of the appellant/company; M/s. Esteem Steel (P.) Ltd. Accordingly, the assessment order is held void ab-initio. Consequentially, the impugned order is set aside and the addition is deleted.
Addition on surrender of income - share application money - HELD THAT:- The submission filed on behalf of Shri K. N. Shukla that he had not surrendered the said share application money of Rs. 2.24 Crores and had not given any authority to anyone for surrounding the said share application money of Rs. 2.24 Crores is found factually incorrect which is evident from the above scanned surrendered letter. The material on the record clearly demonstrates that Shri K. N. Shukla has surrendered the said share application money of Rs. 2.24 Crores and requested for adjustment of taxed out of seized assets. The subsequent retraction of the said surrender by not offering the income of Rs. 2.24 Crores for tax is without any basis and justification. Thus, it is held that the said share application money of Rs. 2.24 Crores is of Shri K. N. Shukla, whose genuineness and source thereof are not explained by Shri K. N. Shukla. Thus, in view of the above, we set aside the impugned order and upheld the addition of Rs. 2.24 Crores on substantive basis.
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2025 (5) TMI 1075
Reopening of assessment - Addition of interest, salary, other credits in the bank account and cash deposit as income of the assessee - HELD THAT:- The assessee is a retired person from Indian Railways and getting pension. While assessment proceedings, assessee has stated that assessee being a senior citizen and his total income was less than the basic exemption limit during the said financial year, return of income was not filed. Even the assessee has neither filed ROI in response to the notice issued u/s 148 nor furnished any computation of total income. Based on that set of facts AO considered the pension income and interest income as undisclosed income in the hands of the assessee.
Since the assessee is retired government employee his pension income cannot be considered as unexplained income and thereby even the interest income also so far as the principal amount is not disputed. Therefore, we direct the ld. AO to tax that income regular income of the assessee. Based on this observation ground no. 5 raised by the assessee is allowed.
Receipts as rent from the son’s property - The money has been credited every month in the bank account of the assessee. AO has treated that amount as unexplained cash credits in the absence of evidence. Records also reveal that verification of record were called for from Shri Ravi Kumar Chugh and he has replied by giving his ITR. AO added that amount only on ground that the ITR does not shows income, how income which is received by his father be recorded in his sons ITR at most he musth have claimed expenses, but the ld. AO has not called for any further details thus, the income received on account of the rent cannot be considered as unexplained at most the same can be considered as income without owning property be taxed as other income in the hands of the assessee when the ld. AO has not made any further verification of facts with Shir Ravi Kumar. Based on that set of facts the AO directed to charge that income as other income in the hands of the assessee therefore, ground no. 6 is disposed off with that observation.
Addition being the amount of cash deposited in his bank account The assessee also deposited a sum of Rs. 5,00,000/- on 28.07.2011. The source of that money claimed to have been received from his sister in law Indu Mendiaratta on account of engaged of her daughter, which was taken care of by the assessee and his son Shri Ravi Kumar. In support of that claim assessee filed a signed letter of gift dated 25.07.2011 and in furtherance to that an affidavit duly singed and notarized before the notary public dated 02.04.2025 she has confirmed the fact of giving the gift to the assessee.
AO though this information available on record has merely called the ITR of Ravi Kumar but not confirmed the marriage gift and ld. AO also remained silent on the gift received from Mrs. Indu. The affidavit of the his son and Mrs. Indu were placed on record in furtherance to the facts already on record and therefore, the same cannot be considered as additional evidence but it is considered to render substantial justice to the assessee. Based on those facts which are already on record and further supported by an affidavit we see no reason to sustain that addition of Rs. 10 lac in the hands of the assessee and thereby we considered ground no. 7 raised by the assessee.
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2025 (5) TMI 1074
Denial of Registration u/s 80G(5) - donation was made to support Cultural activities and National Building activities, but the assessee failed to submit documentary evidences in support of the same and thereby denied registration u/s. 80G(5)(iii) - HELD THAT:- Submissions of the assessee are without proper materials and no evidences placed before us in support of the claim made by the assessee that the amount of Rs. 1,00,000/- used for the Celebration of Independence Day. In the absence of the same, we do not find any merits in the claim made by the assessee Trust. Thus the ground raised by the assessee is devoid of merits and the same is liable to be dismissed. Appeal filed by Assessee is dismissed.
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2025 (5) TMI 1073
Validity of 143(1) order in absence of prior show cause notice having been issued to the assessee - assessee submitted that no prior intimation was sent to the assessee before making adjustment in the intimation u/s 143(1) - HELD THAT:- From the User Profile Administration, which has been brought on record by the Revenue, it is found that a communication was sent to the assessee on email address “[email protected]”. Thereafter, intimation order dated 24.12.2019 was emailed to the assessee on 26.12.2019 on the same email ID i.e. “[email protected]”. The assessee has not denied the receipt of intimation order dated 24.12.2019 on this email address. As rightly pointed out by the Revenue, when the subsequent intimation u/s. 143(1) of the Act sent to the assessee on this email address was duly received by the assessee, it cannot take a plea that the earlier notice for adjustment sent on this email address was not received. A copy of the notice dated 23.03.2019 for the proposed adjustment u/s 143(1)(a) of the Act has also been brought on record by the Revenue. Therefore, the contention of the assessee that no prior intimation of the adjustment was given is found to be incorrect.
Objection of the assessee is that the email address mentioned in the ITR and email ID on which the communication was sent was different - CPC had all along made all communication with the assessee on the email ID “[email protected]” only, which belonged to the assessee. Therefore, the communication regarding proposed adjustment before processing of the return of income, sent on this email ID, was legally valid intimation. The facts involved in the present case are identical to the facts of A.Y. 2019-20. Therefore, following the decision of the Co-ordinate Bench of the Tribunal for A.Y. 2019-20, we do not find an y merit in the ground taken by the assessee and the same is dismissed.
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2025 (5) TMI 1072
Reopening of assessment u/s 147 - Reasons to believe - assessee has sold immovable property during the year and has not filed his return of income - submission of assessee that the property is jointly held by 5 others apart from the assessee and also in the case of the brother of the assessee, no such reopening of assessment has taken place.
HELD THAT:- Since it is not known as to what has happened in the case of the other 5 co-owners and since it is the submission of the Ld. Counsel for the assessee that no notice u/s 148 of the Act has been issued in the name of the brother of the assessee for his share of consideration in the property in question, therefore, considering the totality of the facts of the case and in the interest of justice, we deem to proper to restore the issue to the file of the Ld. CIT(A) / NFAC with a direction to re-adjudicate the issue as per fact and law including the issue of validity of re-assessment proceedings after giving due opportunity of being heard to the assessee. Appeal filed by the assessee is partly allowed for statistical purposes.
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2025 (5) TMI 1071
Exemption u/s 194A (3)(v) - assessee cooperative bank paid/credited interest to nominal members without deducting TDS - non-deduction of TDS on interest credits of nominal members who are not actual member as per definition of person who is eligible for membership as per clause no 4(ix) and Rule 9(d) of the By-laws of this appellant cooperative society - CIT(A) deleted addition - HELD THAT:- CIT(A)/NFAC has placed reliance on case of UOI vs. Jalgaon District Central Co-op. Bank Ltd. [2003 (9) TMI 56 - BOMBAY HIGH COURT] The assessee also relied on case of Mandheshwari Urban Development Co-op. Bank Ltd. & Others [2022 (8) TMI 778 - ITAT PUNE] wherein under identical facts & similar circumstances the addition made by the AO u/s 40(a)(ia) r.w.s. 194A was deleted as held that the provisions of Maharashtra Cooperative Societies Act provides that the members includes nominal members and, therefore, we do not see any reason as to why the exemption under clause (v) of sub-section (3) of section 194A of the Act cannot be given in the case of members referred to above. Therefore, the reasoning of the lower authorities cannot be appreciated in the eyes of law. Accordingly, the orders of the lower authorities are hereby reversed and direct the Assessing Officer to delete the addition made u/s 40(a)(ia) of the Act for non-deduction of TDS on interest paid on deposit received from the nominal members of the society.
Applicability of principle of mutuality to transactions between the assessee cooperative bank and other cooperative societies - We find that the Assessing Officer has not mentioned anything in the assessment order regarding principle of mutuality and the addition was made on the basis of Ld. CIT(A)- 7, Pune’s order passed in the case of Nilkanth Urban Co-op. Bank Ltd. [2020 (9) TMI 461 - ITAT PUNE] and subsequently the above decision was set-aside by Co-ordinate Bench of this Tribunal in the case of Nilkanth Urban Co-op Bank Ltd. vs. ACIT [2020 (9) TMI 461 - ITAT PUNE]. Accordingly, ground raised by the Revenue is also dismissed.
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2025 (5) TMI 1070
Denial of grant of exemption claimed by the assessee u/s. 11 - assessee trust was not registered as a charitable society u/s. 12AA - HELD THAT:- DR was unable to controvert the contention of the ld. Counsel for the assessee in support of the proposition that the assessee was entitled to the benefit of second proviso to section 12A(2) of the Act on account of which since the appeal proceedings in the present cases were pending on the date of grant of registration u/s. 12A of the Act for subsequent assessment years, the benefit of section 11 & 12 of the Act would apply to the assessment years pending on the date of granting registration also.
DR could also not bring to our notice any contrary decision of High Court and Supreme Court in this regard. In the light of the same, we have no hesitation in holding that in the facts and circumstances of the present cases, which clearly demonstrate that on the date of grant of registration u/s. 12A of the Act to the assessee w.e.f. 01.04.2013 vide order of CIT(Exemption) dated 15.12.2018, the appeal proceedings for all the impugned years before us were pending before the CIT(Appeals) who in turn had passed order in 2024,the assessee was entitled to claim exemption of its income u/s. 11 of the Act in view of second proviso to section 12A(2) of the Act as per the various judicial decisions cited by assessee before us. Appeals of the assessee stand allowed.
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2025 (5) TMI 1069
Rejection of books of accounts u/s 145(3) - estimated addition based on Net Profit (NP) rate - inflated purchases were found - HELD THAT:- Due to non-inclusion of items coming to knowledge of the AO from any mode/source, yet he can make assessment based on such accounts without rejecting the books of accounts u/s 145(3) of the Act and going ahead with making specific disallowances/additions under section 28 to 44DB, 68 to 69D of the Act as the case may be.
This can never be the purpose of the statute to propagate the mischief which is otherwise sought to be plugged under that section of the Act. It is trite law that the statutory provisions must be interpreted in to further the intent and purposes of Act and avoid absurdity. All such absurdities can be averted only if the invocation of powers under 145(3) of the Act is held to be discretionary due to use of the word 'may' instead of 'shall'.
As per section 145 of the Act, it is for the AO to be satisfied about the correctness or completeness of the accounts of the assessee, or the assessee has not followed regular method of accounting provided in section 145(1) of the Act or the assessee has not computed his income in accordance with the standards notified under section 145(2)of the Act.
In the present case, neither the CIT(A) nor the AO has held that the assessee’s books of accounts are incorrect/incomplete or the assessee has not maintained his books of accounts as per regular followed method of accounting or the assessee’s income cannot be worked out in accordance with the notified standards. Before the Ld. CIT(A), books of accounts were not produced for examination. The Ld. CIT(A)has not recorded his categorical satisfaction about the incorrectness or incompleteness of the books of accounts of the assessee, or failure of the assessee to maintain his books of accounts as per the method of accounting provided in section 145(1) of the Act or the assessee has not computed his income in accordance with the standards notified under section 145(2) of the Act.
It is for the AO to be satisfied about the correct income; (i) either by making specific disallowances/additions only if possible or (ii) by estimating income after rejecting the books of accounts. In the present case, the AO chose the first option and made specific disallowances/additions over the second option of the average Gross Profit rate addition after rejection of books of accounts under section 145(3) of the Act.
CIT(A) is not justified in applying NP rate after rejecting the books of accounts under section 145(3) of the Act particularly when the AO, on same sets of facts, has categorically held that the assessee, as tactical move, has requested for application of average Gross Profit rate after rejection of books of accounts under section 145(3) of the Act to avoid specific disallowances. Rejection of books of accounts of the assessee by the Ld. CIT(A) therefore, is held unjustified.
Unverifiable/unexplained purchases - The assessee has not brought any material on the record to contradict the finding of the AO. The genuineness of purchases was not established/demonstrated either before us or authorities below. We therefore, find no infirmity in the AO’s order in this regard. Therefore, the impugned order is set aside and the disallowance of purchases is sustained.
Disallowances u/s 40(a)(ia) and 40A(3) - It cannot be ruled that the payments made in contravention to the provisions of sections 40(a)(ia) and 40A(3) of the Act might have not been done/embedded for/in such purchases. Accordingly, the impugned order is set aside in this regard. We also delete disallowance made in the assessment order for contravention to the provisions of sections 40(a)(ia) and 40A(3) of the Act.
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2025 (5) TMI 1068
Bogus purchases - as argued when the department itself is accepting the purchase in assessee’s sister concern as genuine, the action taken in the hands of the assessee by treating the same as non-genuine is unjustified - HELD THAT:- Revenue has not brought any evidence on record that purchase made from these parties are bogus or hawala transactions or accommodation entries. Assessee has brought on record the fact that these concerns run into heavy losses and to avoid the payment to the creditors, they have left their premises and are absconding for which copy of the case filed by these parties against these suppliers for dishonoring the cheques against the supply of goods to them was filed.
Assessee has also linked the purchases made from these parties with the corresponding sales and the GP rate and NP rate declared by the assessee during the year is comparable with earlier years.
CIT(A) considering these facts has also held that addition is not justified. This finding of Ld. CIT(A) is not challenged by the revenue. Assessee has placed on record the decision of Suresh Kishinchand Changwani [2025 (1) TMI 1164 - ITAT MUMBAI] where addition for alleged non genuine purchases made from 10 parties was deleted by holding that assessee has placed on record all the corroborative documentary material to establish the genuineness of the purchases, mapping them to the export sale made by him, revenue has accepted the purchases made from the same parties in the subsequent years and therefore merely because the suppliers did not appear before the Ld. AO or Ld. CIT(A), it cannot be concluded that the purchases were not made by the assessee. Appeal filed by the revenue is dismissed.
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2025 (5) TMI 1067
Presumptive income - Shipping business - Inclusion of Goods and Services Tax (GST) in computation of income u/s 44BB - HELD THAT:- As per this Tribunal in assesses own case for earlier assessment years [2025 (3) TMI 1266 - ITAT MUMBAI] and respectfully following the same, the assessing officer (AO) directed to exclude the amount of GST while computing gross receipt in the hands of assessee. In the result, ground of the appeal is allowed.
Short grant of TDS - We find that the assessee while making his submission fairly submitted that he has already filed application before the AO vide application dated 25.03.2025 and necessary direction may be given to the AO for verification of fact and allow appropriate relief to the assessee - As assessee has already moved application for rectification of the assessment order, therefore, the AO is directed to verify the TDS claim and allow appropriate relief to the assessee.
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2025 (5) TMI 1066
Rejection of books of accounts u/s 145(3) - as proposed that the gross profit @ 8 % of sales computed - HELD THAT:- While examining the books no defects as such was observed in the books of accounts which suggest the rejection of book results based on the provision of the Act as discussed herein above. Thus, the ld. AO or that of the ld. CIT(A) cannot reject books of accounts based on conjectures and surmises as such there is no comments on the books of accounts so maintained and produced forget about the comments on record placed on record.
The assessee's books of account are regularly maintained, audited and no discrepancies whatsoever have been indicated by the CIT(A). This is an utter disregard of the fact that all the books of account were maintained and regularly audited were simply not relied and rejected based on one simple reason that there exist a difference in the figure of purchase reported in the books and in the portal data base of the revenue and there is no other reasons.
So far as the rent on godown, transportation of the goods and labour, the lower authority failed to understand that nature of business carried on by the assessee. The records reveals that the assessee performs the duty of commission agent who purchase the perishable goods from the agricultural products producers and then forward the same to the ultimate whole vendor or the retail and therefore, the person comes with their own vehicle and deliver the goods in the Mandi itself as per the direction of the assessee and the Mandi provide the storage facility for the temporary period. Thus, the rejection of books is purely based on surmises and conjectures and against the set of records made available on record.
when the records produced does not shows any defect which are in accordance with that of the provision of section 145(3) of the Act the rejection of the book results were merely based on the surmises and conjectures. Based on the reasons of the scrutiny there is no case of the revenue that the assessee has shown the bogus purchase to claim the lower profit in fact the ld. AO says that the assessee has not accounted various expenses and thus, the scope of scrutiny cannot be expanded without following the sanctioned route for that even on that aspect of the matter revenue has not demonstrated that there is no force in the arguments of the assessee. and therefore, we see no reason to support the rejection of the book results as the assessee figure is more than the what is reported in the portal for purchases.
Since we have ordered that the rejection of the books results were not correct, the consequential addition making addition of profit on estimate basis deserves to be deleted. Appeal of the assessee is allowed.
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2025 (5) TMI 1065
Interest allowable u/s. 244A - contention of the assessee is that this interest was only for the period from 1st day of April of assessment year to the date of intimation u/s. 143(1) of the Act dated 14th March, 2019 - HELD THAT:- As per provision of Section 244A of the Act, the assessee is entitled to simple interest u/s. 244A of the Act for the period from 1st day of April of the assessment year to the date on which the refund is granted. Since, the refund was granted to the assessee in this case vide order u/s. 154 of the Act dated 23.03.2020, the assessee was entitled to interest u/d 244A of the Act for the period from 1st day of April of the assessment year till the date of granting of refund i.e. till 23rd March, 2020.
The matter is, therefore, set aside to the file of the Jurisdictional AO with a direction to allow interest u/s. 244A till the date of grant of refund vide order u/s. 154 of the Act i.e. till 23rd March, 2020. AO is also directed to intimate the assessee with the working of interest allowable u/s. 244A of the Act and consider the objection of the assessee, if any, in this respect; before passing the final order. Appeal filed by the assessee is allowed for statistical purposes.
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2025 (5) TMI 1064
Reopening of assessment - addition was made on the cost of acquisition - denied the benefit of the cost of acquisition of the same property for which the capital gain was subjected to the re- assessment proceeding
HELD THAT:- The expenditure incurred is in the nature of current repairs and maintenance and furniture and fixture which cannot be treated as cost of improvement to the capital asset sold.
Therefore, considering the findings given by the A.O. in the assessment order as well as the details and documentary evidences provided by the appellant during the course of appellante proceedings, appellant's claim of indexed cost of acquisition is not an allowable deduction while computing taxable capital gains. The action of the A.O. in denying the same is therefore in accordance with the provisions of law and hence upheld.
This ground of appeal raised by the appellant is thus dismissed. With that observation he confirmed the view of the ld. AO and thereby not considered the claim of the assessee. Before us the ld. AR of the assessee specifically argued that considering the principles of natural justice the assessee be given a change to represent the facts of the claim before the ld. AO.
The bench noted that Principles of natural justice are soul of an administration of justice and need to be adhered to in order to make the order as a just and fair order. We are also of the view that is between the parties to be decided on merits so that nobody’s rights could be scuttled down without providing an opportunity of being heard to the assessee.
Thus, the bench noted that considering the overall facts of the case the assessee given a chance to represent their claim before the ld. AO on mercy ground to allow one more chance.
Considering that peculiar aspect of the matter we deem it fit to remand the matter to the file of the ld. AO who will consider the factual aspect of the matter as raised by the assessee after due verification of the facts and charge the correct income in hands of the assessee if so to be taxed in accordance with law after affording due opportunity to the assessee. Based on these observations ground no. 2 & 3 raised by the assessee are allowed for statistical purposes.
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2025 (5) TMI 1063
Denial of benefit of the lower tax rate u/s 115BAC - assessee has not filed Form 10-IE electronically before due date for filing return of income u/s 139(1) - directory v/s mandatory provision - HELD THAT:- ADIT (CPC) had failed to consider that the minor technical lapse cannot disentitle the assessee from substantial benefit. It is a matter of record that form 10IE was available with CPC at the time of processing return u/s 143(1). Further, filing of form 10IE is directory and not mandatory. In this regard your kind attention is drawn towards the following case of AKSHAY DEVENDRA BIRARI [2024 (6) TMI 272 - ITAT PUNE] where it was held that that the Form No. l0 IE was available with the CPC at the time of processing the return, and it was not a mandatory requirement but directory in nature. Therefore, the Tribunal directed the CPC to consider the Form No. l0 IE and allow the benefit of the New Tax Regime.
We find that the Assessee could not file its return of income on or before the date of filing of return of income as required u/s 139 of the Act but filed its ITR within the extended period of time (extended by CBDT). But in this case, there was some technical glitch on the part of the CPC and Income Tax Portal of filing of return of income.
Assessee has already brought on record different case laws in its favour passed by different authorities
Assessee has filed its return during the extended period (as already extended for filing of the return by the CBDT vide its different Circulars mentioned above). A copy of form 10IE was also filed before the processing of the return - Assessee appeal allowed.
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2025 (5) TMI 1062
Assessment u/s 153A - valid approval granted for various AYs u/s 153D or not? - additions dehors incriminating material found in the course of search from the premises of the assessee in concluded assessment - HELD THAT:- As discernible from the combined approval memo, the sanctioning authority (Addl CIT) has, in fact, relegated his statutory duty to the subordinate AO, whose action the Addl. CIT, was supposed to supervise as per the scheme of the Act. Manifestly, the Addl. CIT, without any consideration of factual and legal position in proposed additions/disallowances and without the availability of incriminating material collected in search etc. has buckled under statutory compulsion and proceeded to grant a symbolic approval to meet the statutory requirement. This approach of the Addl. CIT has ipso facto rendered the impugned approval to be a mere ritual or an empty formality to meet the statutory requirement and is thus incapable of being sustainable in law.
Assessee has also demonstrated glaring lapses in the respective assessment orders which could easily be detected on a bare reading of such orders. Impliedly, the Addl. CIT has not even cared to read the assessment orders while entrusted with the task of approval of such orders.
A common approval for all assessment years in complex matters of search without identifying or discussing any issue in relation to any assessment year further shows no semblance of any application of mind to any aspect of any assessment years.
CIT(A) in first appellate order has brushed aside the legal objection summarily merely on an inept & indifferent premise that the assessment order makes mention of the approval from Addl. CIT u/s 153D of the Act and such powers are in the nature of administrative powers and a purely internal matter. The cryptic conclusion drawn by the CIT(A) is bereft of any plausible reasons whatsoever and thus cannot be reckoned to be a judicial finding on the point. The observations so made are not tenable in law.
We are unhesitatingly disposed to hold that the integrity and propriety of various assessments under captioned appeals based on such combined approval memo under s. 153D in question cannot be countenanced in law.
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2025 (5) TMI 1061
Penalty u/s 270A(8) - under reporting of income in consequence of misreporting income - It is only because of the revenue action, the under reporting of income was unearthed - HELD THAT:- Without the charge of under reporting of income, the AO cannot straightaway jump with the charge of misreporting of income. In the present case the AO without even a whisper as to how the ingredient of sub-section (2) of section 270A is satisfied, has also not specifically mentioned the exact limb of misreporting as per section 270A(9) of the Act. Further, the AO stated under reported income in his penalty order but levied 200% penalty.
By respectfully following the judgment of Schneider Electric South East Asia (HQ) PTE Ltd. [2022 (3) TMI 1295 - DELHI HIGH COURT] we are of the considered view that failure on the part of the AO to show cause which of the specific action of the assessee company from clause (a) to (f) of Section 270A(9) was determinant before imposing penalty u/s 270A of the Act has rendered the proceedings invalid and thus untenable in the eyes of law.
Therefore, it goes without saying that for the applicability of section 270A of the Act, the condition stated therein must be strictly followed. On going through the order of CIT(A), we find that even ld. CIT(A) was also confused whether the assessee has under reported his income or mis reported his income.
We are further of the considered opinion that the penalty by hereditary nature is always discretionary. The legislature has used the word “may” in section 270A(1) of the Act which clearly says that it is discretionary on the part of the AO to levy penalty or not.
The primary onus is on the revenue to prove that assessee falls under particular limb of default. The AO has to bring the case in the four corners of the sections in order to levy penalty, which in our opinion, the authorities below failed to do so. In view of the above, we delete the penalty u/s 270A - Assessee appeal allowed.
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2025 (5) TMI 1060
Addition u/s 36(1)(va) r.w.s.43B - amount deposited towards employees contribution to EPF and ESIC after the due date in the respective statutes but was made before filing of the return u/s 139, especially in a case, where the return of the assessee is processed u/s 143(1)(a) - HELD THAT:- As decided in M/s BPS Infrastructure [2024 (4) TMI 1006 - CHHATTISGARH HIGH COURT] Payments qua the employees’ contribution to provident fund made after the due date under the relevant statutes shall be liable to be disallowed, even if the ITR is processed u/s 143(1) prior to the pronouncement of Judgment of Hon’ble Apex Court in the case of Checkmate [2022 (10) TMI 617 - SUPREME COURT (LB)]. In view of such observations the decision of CIT(A) following the decision of Allied Motors (P) Ltd. [1997 (3) TMI 9 - SUPREME COURT] which is in concurrence with the view taken by Hon’ble Apex Court in Checkmate (supra), was justified well-reasoned and acceptable.
Thus we are of the considered view that the issue raised by the assessee assailing the applicability of the decision of Checkmate (supra), qua the disallowance regarding employee’s contribution to provident fund under the provisions of section 143(1) on a date prior to the date of the order of Hon’ble Apex Court cannot be accepted and allowed. Appeal of the assessee is dismissed.
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