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Showing 341 to 360 of 1519 Records
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2025 (5) TMI 1179
Depreciation on right acquired in terms of non-compete agreement entered into by the appellant-company with its earlier promoters - HELD THAT:- As perused the non-compete agreement entered into by the appellant-company with the promoters on 29th April, 2009. The agreement had showed a payment of consideration of Rs.5 crore in consideration of the promoters not carrying on the business relates to the appellant for a period of three years within the territory of India. The department does not dispute the existence of such an agreement nor there was any allegation that it is a sham document. The non-compete fee paid by the appellant-company was for the purpose of its business having enduring benefit resulting in an acquisition of intangible asset, which qualifies for allowance of depreciation u/s.32(1). See MUSIC BROADCAST PRIVATE LIMITED, [2023 (8) TMI 827 - BOMBAY HIGH COURT], M/S. AREVA T & D INDIA LTD., CHENNAI-43. [2021 (4) TMI 32 - MADRAS HIGH COURT] and M/S. INGERSOLL RAND INTERNATIONAL IND. LTD. [2014 (6) TMI 934 - KARNATAKA HIGH COURT].
Thus, we are of the considered opinion that the claim of allowance of depreciation on the payment of non-compete fee results in an acquisition of intangible asset, which qualifies for allowance of depreciation u/s 32(1)(ii) of the Act. Accordingly, this grounds of appeal stands allowed.
Disallowance of belated remittance of the employees’ contribution to ESI and Labour Welfare Fund paid before the due date for filing the return of income - The said issue is no longer res integra, as it stood settled in the case of Checkmate Services Pvt. Ltd [2022 (10) TMI 617 - SUPREME COURT (LB)]. Since the decision of the CIT(A) is in consonance with the law laid down by the Hon’ble Apex court, we do not find any merit in the grounds of appeal raised by the assessee. Accordingly, this grounds of appeal stand dismissed.
Disallowance u/s.14A - AO made the disallowance by holding that the provision of sec.14A are attracted even in the absence of exempt income - HELD THAT:- The statute is amended by insertion of explanation to sec.14A of the Act, by Finance Act, 2022 proposing to make disallowance of expenditure even in the absence of actual exempt income u/s.14A. This explanation was held to be prospective in nature applicable from assessment year 2023-2024 in the case of Pr.CIT v. Era Infrastructure (India) Ltd [2022 (7) TMI 1093 - DELHI HIGH COURT] cannot be presumed to have been retrospective effect. CIT(A) had clearly fell in error in confirming the disallowance u/s.14A of the Act, placing reliance on the explanation to sec.14A. Thus, grounds of appeal No.2 filed by the assessee stands allowed.
Disallowance of rights issue expenditure - HELD THAT:- Undisputedly, the expenditure was incurred by the appellant on a proposed rights issue expenditure, which was abandoned for the reasons best known to the appellant-company. The expenditure was not incurred during the previous year relevant to the assessment year under consideration. Thus, the condition precedent for allowance of deduction as revenue expenditure u/s.37(1) of the Act, does not stand settled and there was no material on record to show that even the proposed rights issue was abandoned during the previous year relevant to the assessment under consideration. Moreover, any expenditure incurred on the expansion of capital base of the appellant-company is nothing but a capital expenditure as allowed in the case of Brook Bond India Limited [1997 (2) TMI 11 - SUPREME COURT] and Kodak India Limited[2001 (10) TMI 7 - SUPREME COURT]. Thus, we do not find any infirmity either in law or in facts in the orders of the authorities below. This grounds of appeal is dismissed.
Denial of brought forward MAT credit for the year under consideration - No material was shown to us the availability of brought forward MAT credit. We do not find any reason to interfere with the orders of the authorities below. This grounds of appeal is dismissed.
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2025 (5) TMI 1178
Penalty u/s 270A - under-reporting of income when the return of income was filed for the first time u/s 148 - HELD THAT:- The provision of section 270A(2)(b) of the Act stipulates that a person shall be considered to have under-reported his income where no return of income is furnished or where the return is furnished for the first time under section 148 of the Act. In the present case, the assessee had filed his return of income for the first time under section 148 of the Act. Therefore, the provisions of section 270A(2)(b) of the Act was squarely applicable to the case of the assessee.
As per section section 270A(6)(a), where the assessee offers an explanation for non-filing of return and if the explanation of the assessee is found to be bona fide, then it will not be considered as under-reporting of income. In the present case, the assessee had explained that he had already paid self-assessment tax on 23.07.2019, which was much before the date of issue of notice under section 148 of the Act on 25.03.2021.
The assessee was prevented from filing the return after payment of self-assessment tax, for the reason that the return filing window did not allow him to file the return. From the copy of return filed by the assessee in response to section 148 of the Act notice, it is found that the assessee had paid self-assessment tax of Rs. 10,41,140/- on 23.07.2019; the credit of which was also allowed in the computation sheet of the order u/s 147 of the Act dated 24.03.2022.
Thus, the assessee had disclosed the income to the Department by paying the self-assessment tax on 23.07.2019.
The explanation of the assessee for not furnishing the original return is found to be bona fide. It is also found that the self-assessment tax paid by the assessee was higher than the amount of Rs. 10,12,950/- on which 50% penalty u/s 270A was imposed. Considering the explanation and the conduct of the assessee, the case is found to be covered in the exception provided u/s 270A(6)(a) of the Act. Under the circumstance, no penalty u/s 270A of the Act was called for in this case. Appeal of assessee are allowed.
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2025 (5) TMI 1177
Denial of deduction u/s 80JJA - return of income was not filed within the due date as stipulated u/s 139(1) - assessment was completed u/s 143(3) - HELD THAT:- The assessee had submitted before the AO that it was unaware of the introduction of this new provision introduced from this year. Considering the fact that this was only a procedural requirement and the change in the statute was effected from this year only, the AO is directed to take a lenient view in the matter and allow the deduction, if otherwise admissible. The deduction u/s 80JJA of the Act is admissible for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which the business commences. It is not evident from the return of income that the claim of deduction under section 80JJA of the Act for this year was within the prescribed period of five years from the date of commencement of bio-fertilizer business of the assessee. In the Tax Audit Report also this detail is not available. Nothing has been brought on record by the assessee in this regard in the course of this appeal proceeding as well. Under the circumstances, we deem it proper to set aside the matter to the file of the AO with a direction to examine the fulfilment of this condition and thereafter re-decide the matter. The ground taken by the assessee is allowed for statistical purpose.
Addition u/s 14A - excess expenses claimed against exempt income - allocation of expenses between agricultural and non-agricultural activities - HELD THAT:- Basis of allocating the direct and indirect expense incurred in respect of agricultural operation has not been explained by the assessee. Further, no separate account in respect of agricultural operation was produced before the Assessing Officer or the CIT(A); nor such account has been brought on record before us. In the Tax Audit Report, the Auditor had certified inadmissible expense under section 14A in respect of agricultural operation at Rs. 50,53,608/- without mentioning any break-up or the basis thereof. In the absence of any explanation for the basis of the agricultural expenses as disclosed by the assessee, the Assessing Officer had no option but to allocate the indirect expense on proportionate basis. The Assessing Officer had allocated the expenses under four heads proportionately
Employee Benefit Expenses - Total expenditure in respect of employee benefit expenses debited to Profit & Loss Account was Rs. 2,58,39,481/- which pertained to salary, wages, bonus, gratuity provision and staff welfare. According to the assessee, only 8 employees were deployed towards agricultural activities whereas 81 employees were working in bio-division.
The root was taken out after two and half months from the agricultural land, which was sold as bio-fertilizer. Further, that the entire agricultural activity was specialised one wherein skilled and qualified persons were engaged for growing/inspection/maintenance etc. From the nature of agricultural activity as explained by the assessee, it is apparent that the process was not only specialized but also labour intensive as the upper growth of each plant had to be cut off and that such activity couldn’t have been carried out with manpower of only 8 employees over an area of 18512 sq. mt. (4.57 acre). With such specialised and labour-intensive deployment of manpower, the salary expenses and daily wages as allocated to agricultural activity is found to be too low, considering the total employee benefit expense incurred by the assessee. Therefore, the allocation of employee benefit expense on proportionate basis, as done by the Assessing Officer, is upheld.
Finance Costs - AO has not brought any evidence on record that the borrowed funds were utilised for agricultural operations. Considering the fact that the assessee had its own surplus funds, the allocation of finance cost towards agricultural activity was not called for. Accordingly, the allocation of finance cost towards agricultural operation, as done by the AO, is deleted.
Depreciation and Amortisation Expenses - Assessee has contended that it had already disallowed depreciation of Rs. 6,23,991/- in respect of the agricultural activities. However, the details of assets deployed for agricultural activities are nowhere appearing in Schedule-3 of audited annual account. The matter is, therefore, set aside to the jurisdictional AO to verify the assets deployed for agricultural operation and, thereafter, disallow the depreciation on the assets which were actually utilised for agricultural activities. The assessee is also directed to produce the details of assets deployed for agricultural activities before the AO.
Other Expenses - assessee has contended that selling and distribution expenses, legal and professional expenses, rent, insurance, packing material expense, freight and forwarding expense, Directors’ renumeration etc. were not at all incurred for agricultural activities and, therefore, the AO was not correct in allocating them proportionately towards agricultural expenses - The agricultural activity was a more remunerative operation for the company and the involvement of Director’s in the decision-making process was imperative. The Director’s mayn’t have technical knowledge of manufacturing process as well. Therefore, the technical knowledge is not the deciding factor and the action of AO in allocating the Directors remuneration towards agricultural operation can’t be faulted. At the same time, legal and professional expense, rent, insurance and other expenses, which were not at all related to agricultural activities, were not required to be allocated towards agricultural operation. This matter is, therefore, set aside to the file of the jurisdictional Assessing Officer with a direction to verify the expenses which had a connection with the agricultural operation and thereafter allocate only those expenses which had a bearing on agricultural operation of the assessee and also considering our findings as recorded earlier.
Appeal of the assessee is partly allowed for statistical purpose.
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2025 (5) TMI 1176
Denial of deduction u/s. 10B - filing revised return does not amount to substitution of the original return filed u/s. 139(1) of the Act, and therefore, does not constitute a sufficient compliance - HELD THAT:- The claim made in the revised return of income, although not made in the original return of income, amounts to claim made in the original return of income. It is nowhere prescribed that the claim should be made only in the original return of income filed u/s.139(1) of the Act. The only requirement under the provisions of section 10B of the Act is that only the return of income should be filed within the due date prescribed u/s. 139(1) of the Act, and similarly, filing of the prescribed audit report before the date of completion of the assessment proceedings constitutes a sufficient compliance in view of the judgment of G.M. Knitting Industries Pvt. Ltd. [2015 (11) TMI 397 - SC ORDER], therefore, in the light of above legal position, reasoning of the lower authorities cannot be sustained in the eyes of law.
Since the AO had no occasion to examine the satisfaction or otherwise of the other conditions prescribed u/s. 10B of the Act, we remit the matter back to the file of the AO with a direction to allow the deduction u/s. 10B of the Act, on being satisfied that the other conditions prescribed for allowing of deduction u/s. 10B were satisfied. Appeal filed by the assessee stands partly allowed.
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2025 (5) TMI 1175
Unexplained investment u/s 69 - data uploaded by the sub-registrar's office mistakenly included an extra digit, reflecting the property value as Rs. 1,36,26,000/- instead of Rs. 13,25,500/- - HELD THAT:- While furnishing the AIR information, the Sub Registrar Office had wrongly mentioned the immovable property value as Rs. 1,36,26,000 instead of Rs. 13,25,500. In the interest of justice and equity, we are of the view that this aspect of the matter needs to be examined by the AO. Accordingly, we restore this issue to the files of the AO.
The assessee is directed to furnish all the necessary evidences to prove the impugned property has been purchased by the assessee (the land and building value) for Rs. 13,25,500. Since we have restored the issue of main addition to the files of the AO, the other subsidiary issues such as addition made on account of purchase of shares / mutual funds and credit card bills payments are also restored to the files of the AO. Appeal filed by the assessee is allowed for statistical purposes.
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2025 (5) TMI 1174
Penalty u/s. 271D - violation of the provisions of sec.269SS - accepting loans or deposits in cash from members - Scope of the term `bona fide belief’ - HELD THAT:- If the element of honesty is present, the requirement of good faith is satisfied. But this requires to be judged taking into consideration the factual situation prevailing in a particular situation. In the present case, on a careful perusal of the orders of the lower authorities, it would reveal that no factual foundation is laid as to how the appellant-society had entertained a bonafide belief that the provisions of sec.269SS of the Act have no application to it. In the absence of this factual foundation, no relief can be granted based on the bald submissions. Thus, we do not find any merit in the contention that it is under the bonafide belief that provisions of sec.269SS of the Act have no application.
Transactions of acceptance of loans or deposits in cash as genuine and bonafide - The argument made on behalf of the appellant-society that there was a reasonable cause for accepting loans or deposits in cash from members, and therefore, no penalty can be levied u/s. 271D of the Act also cannot be accepted for the reason that the appellant had failed to show the reasons which compelled the appellant-society to accept the loans and deposits in cash. Thus, this contention also cannot be accepted for the failure of the appellant to prove its reasonable cause. Therefore, we do not find any reason to interfere with the orders of the authorities below. Accordingly, the appeal filed by the assessee is dismissed by confirming the penalty u/s. 271D of the Act. Appeal filed by the assessee stands dismissed.
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2025 (5) TMI 1173
Characterization of receipt - Exemption from income tax u/s 10(37) - enhanced compensation received by the appellant in terms of arbitration award given by the Principal Sub-Court of Kozhikode - HELD THAT:- Considering true nature of the subject land, which were acquired by the Government of Kerala. From the statement of facts narrated above, it is clear that the appellant had entered into agreement along with other eight persons to develop this property. The appellant along with other eight persons had entered into an agreement with the sellers and it is mutually agreed to share the profits as per the terms stipulated in the said agreement.
These facts would clearly establish that the subject land was purchased by the appellant along with eight other persons with an intention to resale the same for profit, which constitute “an adventure in the nature of trade”. Therefore, it is clearly a stock in trade as held in the case of Ashok Kumar [2017 (12) TMI 1358 - KERALA HIGH COURT] following the judgment of [1993 (10) TMI 41 - BOMBAY HIGH COURT] and also there is no evidence on record to show that the appellant had carried out any agricultural activity on the subject land. Therefore, the compensation received by the appellant is not eligible for exemption under the provisions of section 10(37). Appeal filed by the assessee stands dismissed.
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2025 (5) TMI 1172
Disallowance of guarantee commission paid to the State Government of Kerala, under the provisions of section 40(a)(iib) - HELD THAT:- This issue is no longer res integra as it stood covered against the assessee by the decision of the Hon’ble Apex Court in the case of Kerala State Beverages (Manufacturing & Marketing) Corporation Ltd. [2022 (1) TMI 184 - SUPREME COURT]
Hon’ble Apex Court clearly held that having regard to the intention of the Legislature that any fees paid by the State Government Undertaking to the State Government is hit by the provisions of section 40(a)(iib) of the Act. The provisions of section 40(a)(iib) of the Act contemplates disallowance of any amount paid by way of royalty, licence fee, service fee, privilege fee, service charges or any other fee or charge, by whatever name called, which is levied exclusively on, or which is appropriated, directly or indirectly, from a State Government undertaking by the State Government. Undoubtedly, the guarantee commission paid by the appellant company falls within the ambit and scope of the terms “any other fee” and hit by the provisions of section 40(a)(iib)of the Act, and therefore, we do not find any reason to interfere with the orders passed by the lower authorities. This grounds of appeal stands dismissed.
Disallowance of provision for bad and doubtful debts - AO had disallowed the claim for deduction in respect of provision for bad and doubtful debts by holding that the appellant had failed to substantiate that this amount was offered to tax in the earlier years and the amounts were written off irrecoverable - HELD THAT -CIT(A) while accepting the contention of the appellant that debiting the provisions for bad and doubtful debts to the profit and loss account and reducing the same from the advances in the balance sheet constitute a “write off”, however, mixed up the issue with the deduction u/s. 36(1)(vii) and 36(1)(viia) of the Act, which is patently wrong, as both the deductions stand a different footing and the material on record does not indicate that the appellant made out claim of deduction u/s. 36(1)(viia) of the Act. Therefore, we are of the considered opinion that the matter requires remand to the file of the AO to decide the issue of allowbility or otherwise of the provisions of bad and doubtful debts in the light of the decision of the Hon’ble Supreme Court in the case of Vijaya Bank [2010 (4) TMI 46 - SUPREME COURT] after affording a reasonable opportunity of being heard to the appellant. This grounds of appeal stands partly allowed for statistical purposes.
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2025 (5) TMI 1171
Scrutiny assessment - Assessment framed u/s. 143(3) - HELD THAT:- Return of the assessee filed on 31.12.2020 for A.Y. 2020-21 was processed u/s.143(1)(a) of the Act on 11.10.2021 but prior to passing of the intimation u/s.143(1) case of the assessee selected for scrutiny and intimation u/s.143(1) of the Act was issued on 29.06.2021
Ideally once the notice has been issued u/s.143(2) of the Act, CPC should not have carried the proceeding u/s. 143(1) but the interesting point is that even after the notice was issued u/s. 143(2) on 29.06.2021 but still ld. AO while concluding the proceedings on 22.09.2022 has taken into consideration the adjustments made in the order u/s. 143(1) of the Act and even reversed one of the adjustment made by CPC by allowing deduction u/s. 10AA of the Act which was disallowed in the income computed by CPC u/s. 143(1) of the Act.
In one of the impugned order which was filed against the intimation u/s. 143(1)(a) there was delay of 827 days in filing of the appeal for which valid reasons were given. Ld.CIT(A) ought to have condoned the delay and dealt with merits of the case. However, ld.CIT(A) has dismissed the appeal in limine. It is also noticed that another appeal filed before the ld.CIT(A) against the order u/s. 143(3) of the Act though ld.CIT(A) has passed an elaborate order but the order is general/cryptic and not specific and the same deserves to be re-adjudicated considering the facts and circumstances of the case.
Both the impugned orders are restored to the file of ld.CIT(A) who shall carry out the appellate proceedings for the various issues raised in the intimation order u/s. 143(1)(a) as well as assessment order u/s. 143(3) of the Act. Needless to say that sufficient opportunity of hearing will be provided to the assessee. Appeals of the assessee are allowed for statistical purposes.
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2025 (5) TMI 1170
Addition u/s 68 - bogus LTCG - assessee has taken accommodation entries for claiming exempt income in guise of exempt LTCG - HELD THAT:- AO and CIT(A) has applied the concept of Human probabilities and held the above said scrip to be a penny stock without bring on record how the assessee is involved in any of the scrupulous activities or directly linked to one of the person who has involved in manipulation/rigging of share prices, entry operator or exit provider as observed in the case of Ziauddin A Siddique [2022 (3) TMI 1437 - BOMBAY HIGH COURT]. Therefore, there is no material with the tax authorities to substantiate their findings that the impugned transaction is non-genuine. Therefore, we are inclined to allow the grounds raised by the assessee.
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2025 (5) TMI 1169
Unexplained credits u/s 68 - creditworthiness & genuineness of transactions were not proved in this case - CIT(A) held that the "as there is no credit outstanding in the books of the appellant in case of fully repaid loans, these credits cannot be treated as unexplained credits" - HELD THAT:- Inspector submitted the Report stating that all the address of the various lender companies are found to be ‘bogus’. Apart from the same, the Assessee has not produced any of the Directors and it is found that all those Companies were showing either loss of marginal profit and have no creditworthiness of lend such huge loan. Even during the first appellate proceedings, the Assessee called for Remand Report.
AO in his Remand Report categorically stated that the additional evidence produced by the Assessee should not be admitted since the same are not admissible as per Rule 46A of IT Rules.
CIT(A) erroneously observed that ‘after furnishing the documents by the Assessee, the AO did not carry out any necessary enquiries independently’. It is found that the AO indeed carried out enquiries and found that the addresses of the lender companies are ‘bogus’ and there were immediate credits and debits in the accounts of those Companies.
Apart from the same, the Assessee has also not produced any of the Directors before the AO to prove the genuineness of the transaction and creditworthiness of the parties. Onus on the Assessee to prove the identity and creditworthiness of the creditors and genuineness of the transaction which has not been discharged by the Assessee in the present case.
CIT(A) has recorded factually incorrect finding and deleted the addition. In view of the same, we set aside the order of the CIT(A) and remand the matter to the file of the CIT(A) with a direction to the Assessee to produce all the lenders and substantiate its claim in order to contest the additions made by the AO. CIT(A) is directed to pass the order afresh in accordance with law after providing opportunity of being heard to the Assessee. Appeal of the Revenue is partly allowed for statistical purpose.
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2025 (5) TMI 1168
Denial of exemption claimed u/s 11 and 12 - non-filing of the audit report in Form 10B electronically along with the return of income was justified - HELD THAT:- As observed that the assessee was claiming the benefit u/s 10B(8) of the Act as per the provisions of section 10B and the assessee has to comply certain conditions failing which the assessee will loose the benefit. In the present case, the assessee has to file the audit report in Form 10B before the due date as per Rule 12A(1)(b) of the Rules.
As observed that the above conditions of filing the Form 10B was relaxed by the CBDT in the earlier assessment years, therefore, it clearly shows that it is only directory in nature and not mandatory, since, it is in compliance with Rules framed for availing the benefit under the provisions of Section 11 and it is held that to be directory in nature.
We are inclined to allow the claim made by the assessee and, accordingly, we direct the AO to allow the claim of the assessee u/s 11 and 12. Appeals filed by the assessee are allowed.
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2025 (5) TMI 1167
Revision u/s 263 - inadequacy in enquiry on LTCG claimed - re-assessment order so framed u/s 147 r.w.s. 144B be modified/set aside on the ground that such order of the AO is erroneous and pre-judicial to the interest of the Revenue - HELD THAT:- We are unable to see any purport in alleged inadequacy of enquiry of such points. Once the assessee has sold the shares on the platform of exchange at the quoted price, the obligation of the assessee ends unless there is any positive material in the possession of the Department to suggest that the assessee has indulged in any concerted action giving rise to unlawful profits to the assessee. The Pr.CIT, to our mind, has attempted to shift the burden on the assessee on the points where he has no control.
The enquiry could have been made by the Revenue from the Exchange. No such enquiry has been made or proposed by the Pr.CIT. The Pr.CIT has made allegations cursorily without collecting any material adverse to the assessee. The Pr.CIT has merely alleged inadequacy in enquiry without any sound basis and without making even some minimal enquiry himself. No third party statement or SEBI report etc. is available adverse to the assessee to impair the bonafides of claim of the assessee. No adverse material has been brought on record to warrant a further probe as suggested in the allegation made u/s 263 of the Act. In our opinion, the view taken by the AO thus cannot be assailed solely based on suspicion & surmises.
We also find merit in the contention of the assessee that some inadequacy in the manner of inquiry cannot necessarily be a ground for invocation of powers under s. 263 of the Act.
Such view has been expressed in the judgments rendered in the case of CIT vs. Sunbeam Auto Ltd. [2009 (9) TMI 633 - DELHI HIGH COURT] DG Housing Projects Ltd. [2012 (3) TMI 227 - DELHI HIGH COURT], Clix Finance India Pvt. Ltd. And Klaxon Trading Pvt. Ltd. etc. [2024 (3) TMI 157 - DELHI HIGH COURT]. In the instant case, the alleged inadequacy on various points beyond the command of assessee is also devoid of any rationale. Appeal of the assessee is allowed.
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2025 (5) TMI 1166
Unexplained cash deposits in the bank account - assessee has not disclosed the purpose of withdrawal and redeposit of such entries - HELD THAT:- We observed that the case of the assessee was reopened on the basis of cash deposits in its bank account and assessee has explained the sources of cash deposits.
AO has accepted the same, however rejected the cash deposits out of cash withdrawals. Before us, assessee brought to our notice that during the year, assessee has withdrawn cash of Rs. 13,30,000/- and re-deposited out of withdrawals. We observed that the cash withdrawals are traceable to the respective cash deposited within the intervals of one month.
In our considered view, there are enough cash withdrawals made by the assessee during the year and there are re-deposits traceable like cash withdrawn on 13.05.2010 and re-deposited the same on 16.06.2010 of Rs. 9,00,000/- and similarly other deposits. Therefore, there are sufficient cash withdrawals to support the submissions of the assessee. Accordingly, we are inclined to allow the grounds raised by the assessee.
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2025 (5) TMI 1165
Addition u/s 68 - transactions with the directors are not genuine which is evident from the comparison of figures of loan given and income of the individuals as mentioned in the ITRs which proves that creditworthiness of to such extent of loan is not justified - CITA(A) deleted addition - HELD THAT:- Assessee has discharged the onus of proving the creditworthiness from Smt. Neerja Ghura. In so far as Ms.Zenia Ghura is concerned CIT(A) observed that the said Miss Zenia Ghura was having joint account with Sh. Gurdeep Singh and also found that there were number of transaction in the account which are made through Karur Vysya Bank and further observed that there were sufficient opening balance in the account and the payment and the receipt from her were made through banking channel. Thus, the Ld. CIT(A) held that the Assessee has discharged its onus of proving the credits from Miss Zenia Ghura.
AO while making the addition added difference between opening and closing balance without examining the various entries in the accounts in cases of Ms. Zenia Ghura, Sh. Gurdeep Singh.
CIT(A) found that there was no basis for either consider the credit as not genuine or making difference in opening and closing balance as basis for addition. Even in the case of Sh. Grudeep Singh, there were sufficient opening balance and there were various debits and credits which were payment received and payment made by Sh. Gurdeep Singh through cheque of Karur Vysya Bank and the entire transactions were made through banking channel.
Considering the fact that the transactions were made through banking channel and the identity of the creditor and the creditworthiness of the creditor as well as genuineness of the transaction has been duly proved by the Assessee. In the absence of bringing any material on record by the Revenue to disprove the transaction or to controvert the findings of the Ld. CIT(A), we find no reason to interfere with the findings and the conclusion of the Ld. CIT(A) in deleting the addition. Accordingly, Ground No. 1 of the Revenue is dismissed.
Disallowance of loss from sale of liquor being destroyed due to repair work -Assessee has shown the sale of liquor at Rs. 3,40,385/- as against cost shown at Rs. 7,43,703/- - HELD THAT:- It was the case of the Assessee that stock was badly destroyed due to repair work carried out in the premises and the bottles kept thereon were broken. In the absence of no reason to disbelieve the version of the Assessee, the AO committed error in disbelieving and the claim of the Revenue and disallowed the loss. CIT(A) after appreciating the facts rightly deleted the disallowance which is in our considered opinion requires no interference, accordingly, Ground No. 2 of the Revenue is dismissed.
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2025 (5) TMI 1164
Addition u/s 14A - disallowance of expenditure incurred to earn exempt income - HELD THAT:- CIT(A) vide his order held that provisions of section 14A of the Act are not applicable in the instant case as no exempt income has been earned by the appellant for the year under consideration and accordingly no expenditure should be disallowed as no part of it has been incurred for the purpose of earning exempt income.
In view of above specific observations, the arguments of Learned Authorised Representative for the Revenue being de void of merit are untenable. Ground of appeal no. 1 is dismissed.
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2025 (5) TMI 1163
Validity of assessment order passed by the ITO, Ward-34(4), Delhi u/s 144 - addition of 8% of the turnover - HELD THAT:- As no notice u/s 143(2) of the Act being served upon the assessee and the addition of 8% of the turnover by the assessee annually on the basis of the documents so furnished before the said authorities though alleging non filing of any supporting document in support of the cash deposits made in the ICICI Bank, is found to be erroneous, total non-application of mind, bad in law and, thus, liable to be deleted. The addition made by the Ld. AO confirmed by the First Appellate Authority is, thus, deleted. Appeal filed by the assessee is allowed.
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2025 (5) TMI 1162
Denial of deduction u/s. 80P(2)(d) - interest income earned from the scheduled banks and co-operative banks - concept of mutuality ceases to exists when the nominal members are present and not entitled to share the profits or losses and also barred from holding voting rights - HELD THAT:- The assessee society is entitled for deduction u/s. 80P(2)(a)(i) of the Act even though the society is having nominal members. Since we are granting the relief in respect of the interest income claimed u/s. 80P(2)(a)(i) of the Act, the order of the Ld.CIT(A) remanding the matter to the AO for bifurcating the interest income obtained from the members as well as from the co-operative banks is not required.
We set aside the findings of the Ld.CIT(A) insofar as the claim made u/s. 80P(2)(a)(i) is concerned and allow the appeal filed by the assessee. In view of this order, the assessee is entitled for deduction both under Section 80P(2)(a)(i) as well as under Section 80P(2)(d) of the Act. The above said finding given in respect of the A.Y. 2015-16 shall apply mutatis mutandis to the other appeals in respect of A.Ys. 2016-17 to 2018-19. Appeals filed by the assessee are allowed.
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2025 (5) TMI 1161
Denial of LTCG claimed exempt u/s. 10(38) - addition u/s 68 - HELD THAT:- Assessee does not have any history of investment in previous years and succeeding years. Despite of having opportunity to substantiate the transactions she failed to do the same for the reasons best known to her. A person first time enters into a transaction with large quantity of shares, and made a huge profit in that, despite the fact that never before that and after that she entered into any transaction of shares. Views of the revenue further fortified in the matter of Suman Poddar vs. Income Tax Officer [2019 (11) TMI 1237 - SC ORDER] wherein seen that the Cressanda Solutions Ltd. was in fact identified by the Bombay Stock Exchange as a penny stock being used for obtaining bogus Long Term Capital Gain. No evidence of actual sale except the contract notes issued by the share broker was produced by the assessee. No question of law therefore arises in the present case and the consistent finding of fact returned against the Appellant are based on evidence on record. Appeal of the assessee is dismissed.
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2025 (5) TMI 1160
Deduction claimed u/s. 10AA - AO had allowed it in the order under section 143(3), despite the initial disallowance by the CPC u/s 143(1) - HELD THAT:- We find that in the order u/s. 143(3), which was selected for scrutiny inter alia, for examining 10AA claim, no disallowance has been made u/s.10AA by the AO u/s. 143(3) of the Act.
We find that CIT(A) has taken a correct view, hence, we do not find any infirmity in the order of the Ld. CIT(A). Ld. DR could not controvert the above facts, therefore, we uphold the order of the CIT(A) and reject the ground raised by the assessee.
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