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Showing 121 to 140 of 7309 Records
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2025 (5) TMI 1322
Reopening of assessment u/s 147 - correct jurisdiction to issue notice - addition u/s 68 - assessee contends that no share capital or loan was received during the year and the order passed by DCIT, Circle-1(1), Kolkata was without jurisdiction
HELD THAT:- Since the case of the assessee had been transferred u/s 127 of the Act to Ahmedabad where the Assessing Officer had made the assessment prior to finalization of the assessment proceeding by the Assessing Officer of Kolkata; therefore, the order passed by the Assessing Officer, Kolkata being without jurisdiction was invalid and the same is hereby quashed. Appeal filed by the assessee is allowed.
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2025 (5) TMI 1321
Settlement of matter under DTVSV 2020 - HELD THAT:- The appellant has enclosed said order dated 26.03.2021 passed by ld. CIT(A), wherein, it is specifically mentioned that the appellant opted for the Vivad se Vishwas scheme pursuant thereto, the PCIT-12, Delhi has certified the full and final payment as taxes in terms of Form No. 5. In view of this, assessee’s appeal is liable to be dismissed as infructuous.
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2025 (5) TMI 1320
TP Adjustment - specified domestic transactions u/s 92BA clause (1) - CIT(A) deleted addition based only on judicial precedents - HELD THAT:- In the case of M/s. DVC Emta Coal Mines Ltd. [2019 (5) TMI 1709 - ITAT KOLKATA] ITAT Kolkata as reproduced the finding of the ITAT Bangalore and thereafter held that effect of Finance Act, 2017 for omission of sub-clause to Section 92BA is that it would be deemed that such clause was never been on the statute book and, therefore, no Transfer Pricing adjustment can be examined.
We have no hesitation in holding that the cognizance taken by the Assessing Officer u/s 92CA is invalid and bad in law. Therefore, the consequential order passed by the TPO and DRP is also not sustainable in the eyes of law. Hence, the impugned order on this issue does not require interference. Appeal of the revenue is dismissed.
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2025 (5) TMI 1319
Unaccounted investments u/s. 69 - AO concluded that the fixed deposits were all made by the Directors of the Seyad group and that the deposits appearing in the name of beedi rollers were nothing but unaccounted money of the directors - HELD THAT:- We find that the ld.CIT(A) had merely adopted the order passed by the ITSC in the case of the assessee’s group with respect to the subject issue, applying the same in respect of the assesses before him, without independent application of mind and appreciating the fact that the said ITSC order was passed in case of other three directors and that to in the back of assessee’s. Therefore, the reliance placed solely on the order of ITSC by the CIT(A) in respect of the additions made in the case of present assessee’s will tantamount to grave miscarriage of justice. Any decree passed in the case of two contesting parties which will be binding on parties inter vivos, cannot bind or executable against the third party / unrelated party.
We also find that the AO had solely relied on the statement of Shri P.K.Meeran Mohideen, without seeking explanation from the directors of M/s.Seyad Cotton Mills Ltd. during search or post-search proceedings.
As undisputed fact that no incriminating evidence found to show that the funds from the directors were deposited in the name of beedi rollers except relying on assumptions and statement of Shri.P.K.Meeran Mohideen who had also admitted that deposits were also made by beedi rollers. We find that Shri.P.K.Meeran Mohideen has clearly bifurcated the amount of deposits pertaining to the assesses and their family members and the amount pertaining to beedi rollers vide response to question no.3 of his sworn statement dated 01.08.2017.
We also find that the AO had just concluded that investments were made by the assessee’s’, merely on basis of genuine/bonafide clerical and inadvertent errors in the deposit forms of beedi rollers which is inevitable in manual filing of forms, by stating that “no specific date was mentioned in the KYC form for receipt of deposits and no entry was made in the columns 'FOR OFFICE USE'.” It is trite law that who alleges the factum of any act has onus to prove. In this case AO has miserably failed to show that the aforesaid deposits were made by the assessee’s from their coffers instead of the beedi rollers hands.
We are of the considered view that the CIT(A) erred in confirming the additions made by the AO in the assessment along with proceedings enhancing the additions made by the AO in the assessment. Hence, we are setting aside the order of the Ld.CIT(A) and delete the additions made u/s. 69 of the Act. Decided in favour of assessee.
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2025 (5) TMI 1318
MAT - Determination of Book Profit u/s 115JB - inclusion of CSR amount debited in the profit and loss account as per provisions of the Companies Act 2013 - Ascertained liability or unascertained liability - HELD THAT:- We find that the CBDT circular No 1/2025 dated 21/01/2015, relied upon by the AO, (page 13 of assessment order), is in relation to non allowability of deduction of CSR expenditure, for the purpose of computing the taxable income of the company and there is nothing contained in the said circular relating to its applicability for computation of book profits as per provisions of section 115JB of the Act.
In the instant case there is nothing on record to show that the statement of profit and loss is not prepared as per the accounting standard or the assessee has not followed the accounting policies or the same is not in accordance with the provisions of the Companies Act 2013, and we are also of the same view that the AO has no power to recompute the book profits and has to rely on the statement of accounts of the company compiled as per the provisions of the Companies Act 2013.
As such respectfully following the law laid down in the case of Apollo Tyres Ltd [2002 (5) TMI 5 - SUPREME COURT] and HCL Comnet Systems and Services Ltd [2008 (9) TMI 18 - SUPREME COURT] and Sony India Pvt. Ltd. [2024 (10) TMI 872 - DELHI HIGH COURT] we are of the opinion that except for adjustments as expressly set out u/s 115JB of the Act, book profits are required to be determined on the basis of accounts maintained in accordance with generally accepted accounting principles and in accordance with the provisions of the Companies Act and it is not within the power of the A.O. to recompute the same. Decided against revenue.
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2025 (5) TMI 1317
Disallowance u/s 37(1) - payments characterized as "penalties" or "late fees" incurred by the assessee during the course of executing government contracts - HELD THAT:- As we find that the expenses incurred by the assessee towards penalty and late fees do not constitute an infraction of law. Rather, such payments arose from contractual terms in the normal course of business and were intended to preserve and facilitate business relationships with government entities. The Coordinate Benches of the Tribunal, in the cases cited above, Mahavir Multitrade (P) Ltd [2019 (12) TMI 29 - ITAT DELHI] Farseen Rubber Industries Ltd [2023 (12) TMI 452 - ITAT KOLKATA], and Ripley & Co Ltd [2017 (4) TMI 164 - ITAT KOLKATA] have consistently held that such payments do not attract disallowance under Explanation 1 to Section 37(1) of the Act.
Disallowance made by the AO u/s 37(1) is not sustainable. Decided in favour of assessee.
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2025 (5) TMI 1316
Addition as unexplained assets in the form of gold and jewellery - assessee, an individual, was subject to a search u/s 132 - HELD THAT:-It is an admitted fact that the assessee declared income falling under the higher tax bracket. The income declared over the years is sufficient to justify the impugned investment in gold.
Thus, we hold that the addition made by the lower authorities is not sustainable. The revenue has not brought any contrary evidence regarding the assessee’s declared income, except for the impugned investment in gold. Therefore, the value of the unexplained gold is insignificant compared to the declared income. Accordingly, we set aside the findings of the CIT(A) and direct the AO to delete the addition. The assessee’s ground of appeal is allowed.
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2025 (5) TMI 1315
Excess stock found during Survey - applicability of provisions of section 115BBE in respect of income declared during the course of survey proceedings and offered to tax in the return of income -
HELD THAT:- Admittedly, the value of excess stock found during the course of survey was offered for taxation as an additional income. Therefore, the amount representing excess stock is certainly undisclosed business income and cannot be termed as unexplained investment. Therefore, the presumption is to be drawn that the additional income was derived from the business.
Thus, it cannot be said that the source for the additional income remain unexplained and, therefore, the provisions of section 115BBE have no application to the present case.
Case of PCIT vs. Bajargan Traders [2017 (11) TMI 388 - RAJASTHAN HIGH COURT] & also other decisions relied on by the assessee are squarely applicable to the facts of the present case.
Thus, as additional income was derived from business orders of the Assessing Officer as well as of Ld. CIT(A) are reversed and accordingly the Assessing Officer is directed not to tax the additional income under the provisions of section 115BBE. Appeal filed by the assessee stand allowed.
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2025 (5) TMI 1314
Penalty 271(1)(c) - assessee had failed to prove the capacity of the alleged loan creditors - CIT(A) dismissing the appeal as non-est without adjudication on merits - HELD THAT:- As observed that there was delay of 614 days in filing of appeal before CIT(A) against the penalty order passed by the Assessing Officer u/s 271(1)(c).
Assessee also did not provide any explanation for such delay before Ld. CIT(A). However, it is a well settled law that if the quantum additions are themselves deleted on merits, then in respect of such quantum additions, there is no question of levy of penalty u/s 271(1)(c)for concealment of income.
Accordingly, in the interest of justice, the levy of penalty is set-aside to the file of Ld. CIT(A), to be taken up along with appeal filed by the assessee against quantum proceedings.
Appeal of the assessee is allowed for statistical purposes.
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2025 (5) TMI 1313
Delay of 536 days - Eligible reasons pf delay - HELD THAT:- Upon analyzing the reasons cited for the delay, we observe that the employee whose email ID was used in Form 35 had left the assessee’s organization. Due to this, the assessee was unaware of the order passed by the CIT(A). This point raised by the AR was not disputed by the ld. DR.
Thus, we find that there is a reasonable cause that prevented the assessee from filing the appeal within the statutory time limit. Accordingly, we condone the delay in filing the appeal and proceed to adjudicate the matter on merits.
TDS u/s 194C - non deduction of TDS - assessee contended that all the recipients of the payments had accounted for the income and filed their income tax returns. Therefore, the assessee argued that he should not be treated as an assessee-in-default - HELD THAT:- Now before us, the assessee has submitted additional evidence such as a Chartered Accountant's certificate, Form 26A with annexures, income tax returns, and Form 3CD, showing that the payments made by the assessee were duly considered as income by the recipients in their tax returns. These documents are relevant and necessary to decide the matter. Hence, under Rule 29 of the Income Tax (Appellate Tribunal) Rules, we admit these additional evidences as they were not examined by the lower authorities. Accordingly, we set aside the matter to the file of the learned CIT(A) for fresh adjudication, in accordance with law.
Stay petition - Assessee has already paid more than 20% of the outstanding demand. Additionally, the assessee appears to have a strong case on merits. Therefore, we are of the view that the balance of convenience lies in favour of the assessee. Accordingly, we grant a stay on the recovery of the remaining outstanding demand by the Revenue. Hence, we also direct the Revenue to lift the attachment on the assessee’s bank account. Hence, the stay petition filed by the assessee is allowed.
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2025 (5) TMI 1312
Denial of benefit of sections 11 and 12 - non-filing of Form No.10B within the prescribed time limit - directory v/s mandatory obligation - as submitted Form No.10B filed at the later stage which was filed at the appellate proceedings - HELD THAT:- We note that in the case of S.M. K.R. Vashi High School [2023 (12) TMI 711 - ITAT SURAT] has held that even if the Form No.10B could not be uploaded due to some technical error on the income-tax portal, benefit of section 11 could not be denied merely on account of delay in furnishing the audit report.
Also in the case of CIT (Exemption) Anjana Foundation [2024 (10) TMI 664 - GUJARAT HIGH COURT] has held that filing of Form No.10B is a procedural requirement and benefit of section 11 should not be denied for delay in furnishing Form No.10B.
We therefore hold that the assessee holding valid registration u/s.12A of the Act has filed Form No.10B belatedly but during the appeal proceedings itself and filing of such report is directory and not mandatory therefore, benefit of sections 11 and 12 claimed by the assessee in income-tax return deserves to be allowed. Grounds of appeal raised by the assessee are allowed.
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2025 (5) TMI 1311
Denial of exemption u/s 11 and 12 - Addition invoking the provisions of Section 13(1)(c)(ii) r/w Section 13(2)(c) by stating that the remuneration paid to a specified person, was unreasonable and excessive - HELD THAT:- We find that the AO has invoked the provisions of section 13(3)(cc) r.w.s. 13(2)(c) of the Act without making any enquiry regarding the payments being made to the members were in excess of what may be reasonably paid for such service. When the Specified Person is having relevant qualification for the job and when there is no material brought on record to substantiate that the salary or remuneration paid to the members was excessive, the provisions of Section 13(1)(c) cannot be invoked to deny the exemption u/s 11 of the Act.
AO had failed to establish as to why salary paid by the assessee to the specified person, Mrs. Renuka Gupta is considered by him excessive to invoke the provisions of Section 13(1)(c) of the Act. The decision of the CIT(A) to allow the exemption u/s 11 of the Act to the assessee is justified.
Further, the onus to prove that salary payments made to specified persons are excessive and unreasonable lies on the Revenue department. We find the salary payments made by the assessee to Mrs. Renuka were genuine and reasonable given the nature and scale of operations of the assessee. Decided against revenue.
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2025 (5) TMI 1310
Denial of benefit of exemption u/s. 10(23C)(iiiad) - assessee preferred appeal before CIT(A) who has dismissed the assessee’s appeal for non-compliance - HELD THAT:- CIT(A) gave very short time to the assessee to furnish the details and prima-facie it shows that fair opportunity of hearing was not given to the assessee. We therefore considering the prayer of the assessee and also in the larger interest of justice deem it proper to restore the issue raised on merits to the file of CIT(A) for denovo adjudication.
Assessee is directed to provide latest email id and contact detail to the department for receiving the notices from ITBA portal. Assessee is further directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause, failing which the CIT(A) shall be free to proceed in accordance with law. Assessee appeal allowed for statistical purposes.
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2025 (5) TMI 1309
CIT(A) disposing of the appeal ex parte - HELD THAT:- Hon'ble Jurisdictional High Court in the case of PCIT(C) Vs. Prem Kumar Arjundas Luthra (huf) [2016 (5) TMI 290 - BOMBAY HIGH COURT] has held that Ld. CIT(A)NFAC is obliged to dispose the appeal on merits even in the ex-parte order.
Examining the impugned order in light of the above judgement, we find that Ld. CIT(A) failed to deal with merits of the case and did not passed a speaking order. We also note that the assessee has also not made proper compliance before Ld. CIT(A) and therefore in the larger interest of justice and being fair to both the parties, we deem it appropriate to remit all the issues raised for necessary adjudication as contemplated in section 250(6) - Effective grounds of appeal raised by the assessee are allowed for statistical purposes.
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2025 (5) TMI 1308
Unexplained cash deposited in bank accounts - unexplained money u/s. 69A - HELD THAT:- We have gone through the order of the CIT(A) and with a sense of deep disappointment, we find that the order passed in first appeal is sheer waste of assesses right to appeal before the First Appellate Authority. The reason being that the order of the CIT(A), other than reproducing the facts of the case and the contentions of the assessee, does nothing else other than arriving at the conclusion that the credits in the bank account are to be deleted while those on account of cash needs to be confirmed. This is evident from the one-page order passed by the FAA.
Assessee had explained the source of cash deposit in the bank account as from his business of Charcoal trading and agricultural income - assessee had substantiated the same by furnishing copy of the P&L account of his business and agricultural receipts.
CIT(A), gives no reason absolutely for finding no merit in the assessee’s explanation of the source of cash deposit in the bank account. It is a classic case of a nonspeaking order and as we have stated above it has resulted in waste of the right exercised by the assessee before the First Appellate Authority for addressing his grievances.
As assessee has given a reasonable explanation of source of cash deposited in the bank account duly substantiated with evidence and since the Ld.CIT(A) has given no reason absolutely for disbelieving the explanation of the assessee, we see no reason to confirm the order of the Ld. CIT(A). Decided in favour of assessee.
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2025 (5) TMI 1307
Addition made solely on the basis of the statement recorded during the survey held at the premises of the appellant - Undisclosed business income - HELD THAT:- Neither any evidence of the expenses incurred by the assessee is found available either in the impounded documents or in the statement as made by the assessee in the course of survey.
Merely because the assessee had stated the figure of Rs. 1,17,05,820/- as ‘income’ in his statement in the survey, the same cannot be considered as a gospel truth. The gross turnover corresponding to this income should have been enquired in the course of survey.
When the assessee had raised the issue in the course of assessment that this figure was not income but turnover, the Revenue was duty bound to examine the contention of the assessee and verify as to what was actual turnover of the assessee corresponding to income of Rs. 1,17,05,820/-
This exercise was not carried out by the AO and the contention of the assessee was summarily rejected. We, therefore, deem it proper to set aside the matter to the file of the JAO to examine as to whether the figure as recorded in the impounded documents BF-1 as well as BF-2 represented turnover or the income of the assessee.Thus, the matter is set aside to the file of the JAO.
On-money receipt on sale of property - The total on-money received in cash was rightly treated as income of the assessee for the current year. In fact the evidence for application of this income was also found in the course of survey. As per these documents, the assessee has advanced Rs. 35,00,000/- to Shri Jairam S Sewani for purchase of property. Another sum Rs. 31,00,000/- was paid to Shri Rajendrakumar N Patel as advance towards purchase of another property. The source of these cash payments was explained as on-money receipt by the assessee on sale of two shops as well as undisclosed income derived from business during the year. Considering these evidences found in the course of survey as well as the statement of the assessee, the addition on account of on-money receipt by the assessee was correctly made. Accordingly, the addition made by the Assessing Officer is confirmed to this extent.
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2025 (5) TMI 1306
Addition u/s 69A - cash deposited during demonetization as unexplained money - HELD THAT:- The assessee filed a Paper Book containing the cash book and bank statements and other details. Perusal of the same makes it very clear that the deposits were made on account of sale of milks and agricultural income.
There is no substantial increase in the cash deposits during demonetization period comparing with the earlier years. Thus CIT(A) is not correct in holding 50% cash deposit as unexplained. Therefore the entire addition made by the Assessing Officer is hereby deleted. Appeal filed by the Assessee is allowed.
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2025 (5) TMI 1305
Addition of cash deposited to the Bank u/s 69 r/w Section 115BBE - HELD THAT:- Revenue could not dispute the source of cash deposits, however supported the order passed by the Lower Authorities.
It is seen from the CIT(A)’s order, the Ld. CIT(A) deleted the addition based on the explanation namely deposit of own savings fund by the assessee but upheld the addition partly as not explained properly. Whereas in the reconciliation statement, the assessee has demonstrated the source out of cash sales of Rs. 2, 10,500/- and cash withdrawal from same bank of Rs. 9,60,000/-. Therefore, the addition confirmed by the Ld. CIT(A) is directed to be deleted. Appeal filed by the Assessee is hereby allowed.
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2025 (5) TMI 1304
Revision u/s 263 - Reassessment order passed u/s. 147 r.w.s. 144B challanged - AO mentioned that as the information received in the category of high risk transaction on Insight Portal, assessee has significant financial transactions of unaccounted cash - HELD THAT:- As in the reasons recorded for reassessment, wrong information / incorrect information is mentioned. With respect to the information available with the AO is merely tax evasion petition wherein one person has informed that assessee has sold goods in cash out of books of account.
Merely the names of parties are mentioned along with the amount against their names. There was no evidence with respect to any sale bill or any chit or any note showing the sale material and amount. The AO also did not make any enquiry before reopening of the assessment. Thus, naturally the reasons recorded on reopening of assessment are not sustainable. Therefore reopening is bad.
We find that the foundation of revisionary proceedings u/s. 263 culminating into revisionary order is the reassessment proceedings. If the reassessment proceedings itself are based on invalid assumption of jurisdiction u/s. 147 of the Act, naturally the subsequent proceedings u/s. 263 of the Act cannot stand.
Even otherwise, on merits of the case, the ld. PCIT has not mentioned what further enquires the AO should have made which he has failed to make.
PCIT did not refer to any material which even remotely suggested that assessee has made sales in cash which is not recorded in the books of account. On the examination of cash sales summary, it is apparent out of total sales of Rs. 10.14 crores, sale of Rs. 96.86 crores is recorded in cash in the cash book of assessee. Beyond that, no information is available with the Revenue that any sum received by assessee on sale of goods of fabric is not recorded in the books of account. It was further shown that the amount that has been stated as sales summary without bill is already in the books of account of the assessee. E.g., in case of Progress Zone, Bangalore a sum of Rs. 1,03,061/- was not stated to be accounted for in the books as per the TEP. However, on receipt of information from the same party it was found that Bill No. 708 dated 9.3.2017 is recorded in the books of account of the buyer and the seller. The same facts are available in case of other 3 parties shown before us which is also being noted that in case of Fashion Era all payments are made by the buyer by cheque. Therefore, even in the reassessment proceedings in the absence of evidence no addition was made. The ld. PCIT also did not mention reference to any evidence.
Therefore it is an accepted fact that no addition could have been made in the hands of the assessee in the absence of any information. The information is to be reliable and with evidence. The AO has made enquiries by obtaining information u/s. 133(6) from some of the parties and found that there is no substance in the tax evasion petition. Even that enquiry could have been made by the AO prior to issue of notice u/s. 142(1) of the Act.
On the basis of these information, the revisionary order passes is not sustainable for the reason that reassessment proceedings u/s. 147 of the Act are invalid and further, even otherwise, the order is neither erroneous nor prejudicial to the interests of the revenue, because it was framed on the basis of information available on record and no tangible information is available with respect to unaccounted cash sales by the assessee as alleged in the tax evasion petition.
Revisionary order passed u/s. 263 of the Act by the ld. PCIT is quashed - Decided in favour of assessee.
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2025 (5) TMI 1303
Cancellation of registration granted u/s 12A and u/s 12AB(4) -registration granted u/s 12A cancelled with retrospective effect or not? - HELD THAT:- As observed that the PCIT has invoked the explanation to section 12AB(4) to hold the assessee committed "specified violations," particularly in terms of application of income and genuineness of the activities.
As the Finance Act, 2022, introduced the concept of "specified violations" u/s 12AB(4), became effective only from April 1, 2022. Accordingly, order of CIT(E) in cancelling the registration granted u/s 12A to the assessee society from AY 2018-19 is set aside and registration u/s 12A to the assessee is restored. The ground of appeal No. 1 of the assessee is allowed.
Withdrawal/cancellation of the registration w.e.f. Asst. Year 2022-23 granted u/s 12A(1)(ac)(i) vide Unique Registration Number - allegations of the Ld. CIT(E) that the income of the assessee was mainly applied for a particular religious community which is in contraventions to provisions of clause (a), (d) and (e) of Explanation to Section 12AB(4) - HELD THAT:- Appellant society is engaged in the providing charitable activities as defined in section 2(15) of the Act. It is also seen that that the assessee society is providing education where the schools are being run by adopting the existing facility and further developing by getting lease and constructing building. The assessee society having CBSE affiliated school where students from all the sections of society irrespective of their caste and creed are admitted and getting education. It is also seen that assessee society has been able to demonstrate that the registration process for getting admission in these schools is not restricted to the students of a particular community. Likewise, assessee has been able to demonstrate that it is providing scholarship to the student coming from all the communities and only criteria is weak financial background with promising results.
Merely because the schools are situated in the area where dominant population is of a particular religious community, majority of the students getting admission are from that particular community however, it is an admitted fact that the assessee society is not running Madrassa. Since main object of assessee society is to provide quality of life to the weaker sections of the society, it always tried hard to provide benefit to the poor and in order to achieve these objects, schools were opened in the area where economically weaker sections of society are main residents.
As the assessee society is working for a public at large, it cannot be said that it had applied its income for the benefit of a particular community. It is further seen that not only education but also the free medical facilities, drinking water, child support, distribution of free food, low cost housing etc. were also provided where all the weaker sections of the society got benefited. Once, it is established that the main object is of charitable in nature, and objects are for the benefit for the whole mankind and for all the citizens of county, benefit of exemption u/s 12A cannot be withdrawn. The assessee society never restricted its benefit to any caste or community, in other words it never intended to serve a particular caste or community rather the assessee society is working for the benefit of mainly for weaker sections of the society.
Looking to the facts that assessee society is providing education, medical facility, relief to poor as defined in section 2(15) of the Act which has not been doubted by the Ld. CIT(E) who merely for the reason that major beneficiaries are from a particular religious community has cancelled the registration, which is contrary to the facts of the present case as discussed above. The assessee society never intended to restrict the benefits to a particular religious community and the beneficiaries includes all the sections of the society irrespective of their casts and creed and, therefore, the action of the Ld. CIT(E) in withdrawing registration granted u/s 12A w.e.f. AY 2018-19 and further registration granted in 12A(1)(ac)(i) of the Act w.e.f. AY 2022-23 is not in accordance with law. Appeal of assessee allowed.
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