|
Advanced Search Options
Case Laws
Showing 381 to 400 of 1557 Records
-
2025 (1) TMI 1178
TP Adjustment - allocation of expenses and the segmental report prepared by the assessee based on the accepted method of allocation - benchmarking the transactions of purchase of books from its AEHELD THAT:- Since the books of account maintained by the assessee are exactly similar, it is only a re-appreciation of facts and allocation of expenses following allocation key of respective sales. In our considered view, the above additional evidences are relevant and accepted.
We are inclined to remit this issue to the file of AO/TPO to verify the allocation of expenses and the segmental report prepared by the assessee based on the accepted method of allocation in AY 2021-22 and also the details of discount offered by its AE and may be compared with the discount offered by the AE in the uncontrolled transactions and directed to compare the internal CUP available in this case to benchmark the transactions of purchase of books from its AE.
We direct the AO/TPO to benchmark the international transactions based on the additional evidences brought on record by the assessee as per law after giving proper opportunity of being heard to the assessee. Accordingly, ground no.3 raised by the assessee is allowed for statistical purposes.
Sundry creditors outstanding shows that there is an enhancement in the trade payables/creditors from the preceding years - We observed that the relevant confirmations and explanations were not readily available during assessment proceedings. However, it is brought to our notice that all the confirmations and other details are available, accordingly ld. AR of the assessee prayed that the same may be accepted and remitted the same before the Assessing Officer to verify the relevant information available on record. In this view of the matter, we remit the issue to the file of the AO to verify the relevant information available on record and then decide the issue as per law after giving proper opportunity of being heard to the assessee. Accordingly, ground no.4 raised by the assessee is allowed for statistical purposes.
-
2025 (1) TMI 1177
Unexplained expenditure u/s 69C - assessee had not explained the source of the funds for each item of expenditure - HELD THAT:- We are in agreement with the logical analysis of telescoping the additional surrender without any specific incriminating evidences against the additions made by the AO including but not limited to unexplained expenditure u/s 69C and other items recorded in ground no.4, raised by the Revenue.
CIT(A) was absolutely right in considering that the said addition is a covered by the declaration made by the Assessee and consequently no separate additions are warranted and in our considered view correctly deleted the additions made.
We accordingly hold that the CIT(A) rightly deleted the additions and further on the ground that the same are already covered in the declaration of income made by the assessee and in view of separate taxation of the above issues as well as ad–hoc surrender will be a travesty of justice which is not conscionable as per Article–265 of the Constitution of India, no separate addition is warranted under law. Thus, grounds no.1 to 4, are dismissed in line of our above observations.
Addition on account of excess Stock - Correct valuation of stock - Determination of gross profit on alleged deficit stock - HELD THAT:- It is beyond doubt that there is no difference in physical quantity. The books of account have never been rejected and no discrepancies have been pointed out u/s 145(3) of the Act. The difference in valuation at the midst of financial year cannot give rise to any income particularly when the year end valuation has been accepted without any grain of salt.
We accordingly hold that the addition made by the AO towards the excess stock was not justified and the same has correctly been deleted by the learned CIT(A). We further hold that the addition as confirmed by the learned CIT(A) considering the gross profit on alleged deficit stock also deserves to be telescoped against the ad–hoc surrender and hence directed to also be deleted. The grounds no.5 and 6, are also hereby accordingly dismissed.
-
2025 (1) TMI 1176
Unexplained money u/s 69A - difference between agreement to sale value and final sale deed value which has been framed as unexplained money - CIT(A) deleted addition - HELD THAT:-Assessee had stated that on the request of customer agreement to sale were prepared for ₹ 36,73,500, so that the customer can avail maximum possible housing loan amount. The agreement to sale was not registeredWe further find that the assessee had mentioned the same during the assessment proceedings, but the same was not been considered by the AO while passing the assessment order and resultantly the addition was made to the income of the assessee.
DR could not bring any material or evidence to take a view other than the view taken by the learned CIT(A). The evidentiary value of registered sale deed cannot be dislodged whimsically. Hence, keeping this in view, we do not find any infirmity in the impugned order passed by CIT(A) which is hereby upheld by deleting the addition. Ground no.1, raised by the Revenue is hereby dismissed.
Addition u/s 69A based on loose paper seized during the search - HELD THAT:- No addition ought to have been made on account of amount mentioned on loose paper. Assessee had mentioned the same during the assessment proceedings but the AO failed to considered the same while passing the assessment order and resultantly the addition was made to the income of the assessee. W
Assessee has enclosed therewith the photocopy of Document, and the same entries are reconciled in the books of account and yet the addition was made. Addition to the income cannot be made by the Assessing Officer based on the dumb documents, loose paper containing scribbling, rough/vague notings in the absence of any corroborative material, evidence on record and finding that such dumb documents had materialized into transactions giving rise to income of the assessee which had not been disclosed in the regular books of account by the assessee. No effective arguments could be made by DR to rebut the arguments. Decided against revenue.
Undisclosed cash receipts - Addition based on document found and impounded from the business premises of M/s.Tirupati Developers, which was framed as unexplained money under section 69A - HELD THAT:- We find that the transactions are duly accounted in the books of Tirupati Developers through the capital account of Shri Prashant Bongirwar, the common Partner in both the firms. The assessee had mentioned the same during the assessment proceedings, but had not been considered by the Assessing Officer while passing the assessment order and addition of ₹ 26 lakh was added to the income of the assessee. We also find that the assessee has furnished copy of Capital Account in respect of Shri Prashant Bongiwar, who also said to be a common Partner in M/s. Tirupati Developers, and the assessee firm, where the entries are accounted. Additions to be deleted.
Unexplained expenditure u/s 69C - HELD THAT:- The transactions are duly accounted in the books of Tirupati Developers through the Capital Account of the common partner in both the firms. Hence, no addition ought to have been made on account of unexplained expenditure by the assessee. The assessee had mentioned the same during the assessment proceedings also, but the Assessing Officer did not consider the same which resulted in addition of ₹ 10 lakh. Even otherwise also, we find that the burden squarely lies on the Revenue to establish that the assessee had made alleged payments so as to warrant addition u/s 69C. In fact, the Revenue failed discharge the said burden - Additions to be deleted.
Whether loose sheets are admissible as evidences on the basis of which the addition is sustainable? - HELD THAT:- As decided in Sunil Kumar Sharma [2024 (2) TMI 116 - KARNATAKA HIGH COURT] loose sheets/diaries are contrary to law, which require to be set aside in these writ appeals, as the same are void and illegal. Thus ground dismissed holding that loose sheets are dumb documents.
Transactions in agreement to sale are sacrosanct vis–a–vis registered sale deeds no account that some cheque payments are tallying - HELD THAT:- It is manifest from the order that the assessee had duly explained the circumstances explaining the difference in case of Narendra Deshmukh as regards to the difference in cheque payment. No contrary evidences have been placed on record to dislodge the explanations. The contents of registered sale deed cannot be doubted on mere ipse discit of the AO without any corroborate the evidences. Accordingly, we are not inclined to interfere in the findings of the learned CIT(A). Consequently, grounds is dismissed.
-
2025 (1) TMI 1175
Valuation of the property by the Departmental Valuation Officer (DVO) - whether report of DVO is a valid and reasonable report than the report of registered valuer? - HELD THAT:- Assessee has challenged the basis of valuation by the DVO, stating that the same is highly arbitrary and have no legal or other basis, however, there was no whisper about any corroborative support to substantiate that the report of DVO was arbitrary or unreasonable.
Assessee’s reference to 1st proviso of section 56(2)(vii) r.w.s. 50C and its applicability in the present case, nothing has been submitted before us to support such claim, in terms of corroborative evidence, also apparently no such claim was made before the AO while seeking rectification u/s 154, therefore, we are unable to consider and to persuade with such contention of the assessee under the grounds of appeal in the present case.
As described by the CIT(A) allegations by the assessee are only averments with no cogent documentary support. Before us also the assessee has not placed any documentary evidence, so as to dislodge the decisions taken by the revenue authorities.
Thus, we find substance in the decision of CIT(A) that the appellant has not pointed out any real defect in the valuation report of DVO, hence the report of DVO is valid and reasonable as against the report of registered valuer, we, thus, there was no error in the findings of Ld. CIT(A) which needs our indulgence to correct the same. Decided against assessee.
-
2025 (1) TMI 1174
Bogus LTCG/STCG - Addition u/s 68 - assumption made by AO about jacking of prices and booking of capital gains - HELD THAT:-We find that on similar set of facts in assessees group case, the SMC bench of this Tribunal in Neelu Mahansaria [2023 (8) TMI 1611 - ITAT SURAT] held that assessee made sale of shares through BSE and paid security transaction tax and there is no allegation against the share broker through whom assessee has made sales that they were indulging any price manipulation.
Therefore, no justification in treating the LTCG as unexplained cash credit in absence of any cogent evidence. Addition of undisclosed income under section 68 is deleted. Ground of assessee is allowed.
-
2025 (1) TMI 1173
Unexplained investment u/s 69 - addition provisions of Section 115BB - Reliance on statement recorded u/s 131(1A) - as argued statement recorded u/s.131 at the of the survey cannot be used partially and it should be accepted in toto meaning thereby that deposits in the bank account of M/s Nirav & Co. represented the sales made by the assessee
Whether statement recorded u/s 131(1A) under coercion and duress? - HELD THAT:- CIT(A) has dismissed the ground by holding that the assessee and Mr. Nirav & Co. operated the impugned bank account for mutual benefit and hence statement of assessee was not under any coercion or duress. No specific details or evidences were given to the CIT(A) to support the above ground.
Addition u/s 69A - CIT(A) has partly allowed the issue adopting the theory of peak credit to sustain the addition - appellant claimed to have sold the bullion during the demonetization period and the demonetized currency was deposited in the bank account of Nirav & Co - survey team of the Investigation Wing and the AO have made detailed enquiry in the case - AO had added these amounts based on the statement of one of the partners of the assessee-firm - HELD THAT:- CBDT has issued the above SOPs/Instructions/Internal guidelines note for handling cases related to demonetization. A verification check list - cash deposit was given for providing assistance to AO for verification of cash deposits and framing of assessment in demonetization related cases. It is found from the assessment order that the AO has not followed the above SOP/Guidelines/Instruction issued by the CBDT while passing the assessment order. It is well-settled that the Instruction /Circulars issued by the CBDT are binding on all officers and persons employed in the CBDT.
Hon’ble Supreme Court in case of Navnitlal C. Jhaveri vs. K. K. Sen, [1964 (10) TMI 16 - SUPREME COURT] held that Circulars issued by CBDT are binding on all officers and persons employed in execution of the IT Act, even if they deviate from the provisions of the Act.
As stated earlier, the AO has made various additions primarily on the basis of statement of one of the partners of the assessee-firm, and the survey/inquiry report of the Investigation Wing. He has not followed the SOP / Instruction / Guidelines issued by CBDT. In order to ensure uniformity in approach of AOs in handling OCM cases, it was incumbent upon the AO to follow such SOP/Instruction etc.
As decided in M/s Bhavana Co-operative Credit Society Niyamita [2022 (9) TMI 1606 - ITAT BANGALORE] has, under similar circumstances, set aside the matter to the AO for verification and to pass fresh assessment after hearing the assessee.
Thus we deem it proper to set aside the order of CIT(A) and restore the matter to the file of AO for verification of all the details and evidences as mandated under the said SOP/ Guidelines etc. The AO is also directed to verify all details filed by the assessee before the lower authorities and the Tribunal and to consider claim of the assessee in accordance with law - Accordingly, the ground is allowed for statistical purpose.
-
2025 (1) TMI 1172
Reopening of assessment - Unexplained investment - additions on account of ‘on-money’ paid by the assessee to the builder for allotment of the residential unit - action taken by the AO of relying on the pen drive and some documents seized during search and seizure operation u/s 132 from third party - HELD THAT:- Throughout the proceedings, the assessee categorically denied having paid any amount in cash over and above the agreement value. AO has neither confronted assessee with any of the material found during the search on Kamla Group and even no evidence or seized document has been referred to where any name of the assessee has been explicitly mentioned of paying on-money.
Although it has been claimed in the order of assessment that summons u/s 131 of the Act were issued to gather further details, but again no such statement has been confronted, neither the seized material /documents /pendrive was confronted to the assessee nor the copy of statement of Nilesh Gavade or Mahendra Rawal was confronted.
Therefore, information if any found in the pendrive etc., cannot be considered as ‘credible evidence’, unless they have been corroborated with any other evidence. In my humble opinion, since the assessee was not provided with the adverse material, if any, based on which notice u/s 148 of the Act, was issued, it hampers the primary and fundamental requirement of natural justice.
Information claimed in pendrive - The same was not found from the possession of the assessee but was found as per order of assessment, during search and seizure conducted in the case of third party therefore, in the absence of corroborative evidence to establish that the contents of pendrive are correct and authenticated to the extent assessee paid ‘on-money’ in cash. No addition can be made and even otherwise during the entire reassessment proceedings the veracity and reliability of the data recorded in the pendrive was not checked or tested. Therefore, in such a scenario no addition is warranted in the case of assessee - Decided in favour of assessee.
-
2025 (1) TMI 1171
Best judgment assessment - AO has made additions towards net profit from business by estimating 10% profit on total turnover of the assessee - HELD THAT:- Unless the AO reject the books of accounts with valid reasons, he cannot resort to estimation of profit even in case of best judgement assessment. Although in best judgement assessment, there is certain degree of guess work, but the said guess work cannot arbitrary and without any basis. In the present case, the assessee claims that profit margin in this line of business is very low and compared to net profit rate adopted by the AO, it is on higher side. In our considered view, although no evidences have been filed to justify its argument that the net profit adopted by the AO is on higher side, in our considered view, since the AO has not given any reasons for rejection of books of accounts and also estimated 10% net profit on turnover without any basis, the matter needs to be set aside to the file of the lower authorities for reconsideration of the issue.
Additions made u/s 68 towards liabilities - The assessee has filed unaudited, unsigned copy of balance sheet, but as per the said balance sheet, the total non-current liabilities under the long-term borrowings. The assessee claims that it has received loans and advances from related parties and obtained all the information including confirmation letters from the parties and requested to give another opportunity to explain its case. Since the assessment order passed by the AO is ex-parte and there is no occasion for the assessee to file relevant evidences, in our considered view, this issue also needs to go back to the file of the lower authorities for reconsideration.
Addition u/s 69A - unexplained money towards cash deposited in the bank account during the demonetisation period - AO has made additions towards total cash deposited during demonetization period without any analysis, whether it is recorded in the books of accounts of the assessee or it is unexplained money, not recorded in the books of accounts of the assessee, to make additions u/s 69A of the Act. In our considered view, in order to make additions u/s 69A of the Act, the AO has to give a clear finding that the assessee is owner of the money and could not explain the source of the said money to the satisfaction of the AO. Since the AO has not recorded any findings as to how the money is as in the nature of unexplained money and made additions only on the basis of bank statements, in our considered view, this issue also needs to go back to the file of the lower authorities for re-examination of the facts.
Since the assessment proceedings are ex-parte u/s 144 of the Act and further during the appellate proceedings, the assessee could not file relevant evidences to justify its case, the matter needs to be set aside to the file of the CIT(A) for fresh examination and to give another opportunity of hearing to the assessee.
Penalty levied u/s 270A for under reporting of income as a consequence of misreporting and Penalty levied u/s 271AAC towards additions made u/s 69A - Since the addition made by the Assessing Officer on both the issues has been set aside to the file of the Ld.CIT(A) for denovo consideration, in our considered view, the consequent penalty levied by the AO u/s 270A and 271AAC of the Act and confirmed by the CIT(A) also needs to be set aside to the file of the CIT(A) for reconsideration.
-
2025 (1) TMI 1170
Penalty u/s 271(1)(c) - AO found that the appellant-assessee had not commenced business and hence disallowed the expenses AND also treated the interest income (received from fixed deposit) as ‘income from other sources’ and not ‘income from profits and gains from business or profession’ - HELD THAT:- It is a matter of record and it is not even in dispute that net loss, which was returned, is the same as loss assessed by the Assessing Officer. The only concurrent finding by the Assessing Officer as well as the CIT(A) in the earlier round of litigation is about the treatment of interest income, which the authorities below found is to be treated as ‘income from other sources’ and not as ‘income from profits and gains from business or profession’ as claimed by the assessee. In our opinion, this cannot lead to any conclusion about assessee having furnished inaccurate particulars of income or even of its concealment or evasion of any tax. The order imposing penalty stands deleted. Decided in favour of assessee.
-
2025 (1) TMI 1169
Revision u/s 263 - computation of short term/long term capital gain in respect of three properties - HELD THAT:- Considering the behavior of the assessee and also the relevant facts on record, we observed that the AO stumbled upon the information during the course of recovery and subsequently on verification, the assessee herself accepted the fact that the relevant transaction was in fact carried on by the assessee and failed to offer the same and agreed to offer the same in due course. Therefore, the information stumbled upon by the AO is found to be correct and the information submitted by the AO even though captioned as proposal u/s 263, however in actual, the same was the information brought to the notice of the ld. PCIT for further course of action. After considering the overall facts on record, we do not see any reason to disturb the findings of ld. PCIT in this regard and the proceedings u/s 263 is properly initiated and concluded. Accordingly, the submissions made by the ld. AR on the validity of the 263 based on the information supplied by the AO are found to be defective and accordingly the above submission is dismissed.
Prayer of the assessee that the initiation of proceedings u/s 147 of the Act was sanctioned by the ld. PCIT-21 whereas the present proceedings were initiated by ld. PCIT-12 - As observed that from the order passed by the ld. PCIT and the proposal was submitted by the Assessing Officer before present ld. PCIT-12, it shows that the ld. PCIT has initiated proceedings u/s 263 with the clear observation that during recovery proceedings, the AO found that the assessee had sold immovable properties and also leased out the property at Gurgaon. The abovesaid facts were found to be correct and also the same was accepted by the assessee before the authorities.
AO has brought to the notice of ld. PCIT-12 and accordingly, the proceedings initiated show that the jurisdiction of the AO lies with ld. PCIT-12. The relevant assessment order was passed on 28.12.2018 and at that point of time, jurisdiction may be with ld. PCIT-21 and accordingly the same was approved and now the present proceedings were initiated on 22.02.2021.
AO has approached ld. PCIT-12 to initiate the proceedings shows that the jurisdiction of the AO lies with ld. PCIT-12, therefore, the proceedings were initiated by the ld. PCIT-12. Therefore, now the assessee cannot raise this issue as critical and seeking for cancellation of the proceedings u/s 263 of the Act, in our view, is not justified and also we observed that even before ld. PCIT, the assessee has agreed to settle the dispute and still failed to submit any proper documents within the time frame allowed by the authorities and even before ld. PCIT, assessee has herself submitted a calculation determining the tax liability and failed to substantiate by filing the relevant documents. Therefore, considering the factual matrix on record, we do not see any reason to disturb the findings of the ld. PCIT u/s 263 of the Act.
Appeal filed by the assessee is dismissed.
-
2025 (1) TMI 1168
Cancellation of provisional registration granted u/s 12AB r.w.s. 12A(1)(ac)(vi) - HELD THAT:- In recent decision of this Tribunal in the case of Sovo Foundation [2024 (12) TMI 1521 - ITAT PUNE] has remanded the matter involving the issue of 12AB registration back to the file of Ld. CIT, Exemption to decide the issue afresh since the application was decided ex-parte i.e. for want of prosecution.
Accordingly, in the instant case also we deem it appropriate to set-aside the order passed by Ld. CIT, Exemption, Pune and remand the matter back to him with a direction to decide the issue afresh - Grounds of appeal raised by the assessee in this appeal are partly allowed.
-
2025 (1) TMI 1167
Addition u/s 68 - excess of SBNs deposited in the bank account of assessee charged to tax u/s. 115BBE - As argued assessee has received the above cash on account of his business of Bar & Restaurant - HELD THAT:- As decided in Sreelekha Bannerjee [1963 (3) TMI 47 - SUPREME COURT] whole issue will depend in the manner in which the evidences brought by the taxpayer are viewed. The issue would be quite different when the assessee has maintained books of account which are accepted and there is a credit balance sufficient to cover the deposit of SBNs.
All these facts would have to be examined. Thus, if in this case, the assessee establishes that the amount of cash deposit is generated out of its business, no addition deserves to be made, because the AO has accepted the book results of Bar & Restaurant business.
Therefore, it is for the assessee to establish that the cash deposit by the assessee is business income, profit of which is already offered for taxation. If the assessee is able to establish that there is sales recorded in the books of accounts in cash and source of deposit is available with the assessee out of such sales, naturally no addition can be made in the hands in the Assessee.
Assessee is directed to show the above details before ld AO, which may be examined by him and then decide the issue afresh. Appeal filed by the assessee is allowed for statistical purposes.
-
2025 (1) TMI 1166
Validity of Reopening of assessment - shorter time period of only 5 days given to file his explanation - HELD THAT:- As relying on M Wonder Park Private Limited vs. Union of India & Others [2022 (6) TMI 1523 - CHHATTISGARH HIGH COURT] wherein held that the time period of 7 days provided to the assessee vide notice u/s 148A(b) of the Act was unreasonably short, and thus, violative of principles of natural justice.
Thus, we quash the order passed by the A.O. u/s 148A(d) and also notice u/s 148 and restore the matter back to the file of the A.O. with a direction to afford a proper opportunity of being heard to the assessee firm as per the mandate of section 148A(b) of the Act, and thereafter, decide the matter afresh in accordance with law. Ground of appeal allowed for statistical purposes.
-
2025 (1) TMI 1165
TDS u/s 194A/193 - Assessee-in-Default for non-deduction of TDS - failure to deduct tax at source from accrued interest on ICDs and Term Loans in terms of Section 194A and accrued interest on NCD’s in terms of Section 193 - order passed u/s 201(1)/201(1A) - HELD THAT:- The provisions of Section 193/194A of the Act having already been triggered and complied with at the time of credit of interest income to the account of PEL in the books of accounts of the borrowers [i.e. the person responsible for making payment of such interest income at the relevant time], would not again get triggered on payment of the same interest income by the Appellant to PEL.
In case the contention of the Revenue is accepted it would amount to subjecting same interest income to deduction of tax at source once at the time of credit and then again at the time of payment. Whereas Section 193/194A provide for deduction of tax at source at the time of credit or payment, whichever is earlier. Therefore, we hold that, given the facts and circumstances of the present case, the provisions contained in Section 193/194A of the Act were not attracted and therefore, the question of Appellant committing default in complying with the same does not arise.
It is also admitted position that when the interest income had accrued to PEL, there existed lender-borrower relationship between PEL and the borrowers. Subsequently, the Appellant stepped into the shoes of PEL and as a result, lender- borrower relationship between the Appellant and the borrowers came into existence. The borrowers continued to be under contractual obligation to make payment of interest/accrued interest while the Appellant acquired the right to receive the same. There is no dispute as to the fact that no lender-borrower relationship existed between the Appellant and PEL at any point in time. Therefore, in absence of any statutory/contractual obligation on the part of Appellant to discharge the borrowers obligation to make payment towards interest/accrued interest to PEL, the Appellant cannot be regarding as person responsible for paying income by way of interest/interest on securities to PEL in terms of Section 194A/193 of the Act.
We accept the contention of the Appellant that in absence of any moneys borrowed or debt incurred, payments made by the Appellant to PEL in excess of the principle value of the ICDs/NCDs/Term Loans recorded in the books of accounts of PEL cannot be regarded as ‘interest’/‘interest on securities’ as defined in Section 2(28A)/2(28B) of the Act.
As held in the case of State Bank of India [2024 (5) TMI 1176 - ITAT MUMBAI] the nature of income in the hands of the recipient and the nature of expenditure of the said sum in the hands of the payer need not be the same.
Accordingly, delete the demand raised upon the Appellant vide order passed under Section 201(1)/201(1A). Assessee appeal allowed.
-
2025 (1) TMI 1164
Bogus purchases - HELD THAT:- We delete the addition made by the ld. AO in respect of purchases made from the 10 parties which were held as non-genuine purchases, since nothing cogent have been brought on record to controvert the corroborative documentary evidences placed on record and pointing out any discrepancies or defects in the same. Accordingly, ground no.1 taken by the assessee is allowed.
Disallowance u/s. 40(a)(ia) for not furnishing Form-15G/H - as submitted Forms-15 G/H produced by the assessee during the remand proceedings - HELD THAT:- Since authorities below have recorded non furnishing of these documents before them, we find it appropriate to remit this issue before the file of ld. Jurisdictional Assessing Officer (JAO) for the limited purpose of verification of Form - 15G/H in respect of the disallowance made u/s. 40(a)(ia). Ld. JAO is directed to verify and examine the same and if found proper in accordance to the provisions of the law, consider the claim of the assessee, accordingly. Thus, ground no.2 raised by the assessee is allowed for statistical purposes.
-
2025 (1) TMI 1163
LTCG - denial of exemption u/s 54F - Multiple house property owned by assessee - HELD THAT:- We hold that the assessee was not owning more than one house property on the date of transfer of original capital asset and accordingly would be entitled for claim of exemption under section 54F of the Act in the sum of Rs. 3,83,55,102/-. Accordingly, ground raised by the assessee are allowed.
-
2025 (1) TMI 1162
Unexplained credit entries in bank account - DR submitted that it was onus of the assessee to prove that his bank account was misused and some fraud has been committed by some other person because the bank account is in the name of the assessee and therefore, assessee has to explain the nature of credit entries - HELD THAT:- Once there are deposits and corresponding withdrawals through cheques and the transfer of amount from one account to other, the entire deposit cannot be treated as income of the assessee.
The corresponding withdrawals has to be seen. Even if assessee’s plea is not substantiated that this account was opened fraudulently by some Shri Ashish Agarwal and now that he has already died and assessee cannot prove his bonafide, then also if at all it can be inferred that it could be some kind of undisclosed business.
Thus, the proper course would be that whatever withdrawal has been made should have been added or some kind of net profit can be applied. The reason being if the amounts have been deposited through some transfer entry of cheque and same cheque has been issued to some other firm, then without giving benefit of the withdrawals and transfer through cheque, the entire deposit cannot be added.
It would be appropriate to apply net profit rate of 1% on the entire deposits. Thus, addition is sustained to the extent of net profit rate of 1%. Appeal of the assessee is partly allowed.
-
2025 (1) TMI 1161
Addition of income from other sources u/s 56(2)(x)(b) - addition made to the income of the assessee on account of immovable properties purchased by it for a consideration less than the stamp duty value - Whether orders passed by the lower authorities were in violation of the principles of natural justice due to their non-speaking nature?
HELD THAT:- Clearly the ld.CIT(A)’s order appears to have been passed without any application of mind at all. Without finding any infirmity in the assesses submissions, CIT(A) appears to be luking for reasons to dismiss assesses appeal when he states that the assessee had given no reason why the sale deed was registered in 2019. This when neither the AO nor the CIT(A) ever asked the assessee the reason why the registration took place after so many years.
As both the authorities below have passed non-speaking orders. There is no reason at all in the orders of the authorities below for rejecting assesses explanation and invoking section 56(2)(x) of the Act. Resulting in no clarity as to what finding is to be challenged in appeal against the said orders. Such orders are violative of the principles of natural justice embodied in the maxim audi alteram partem which demand justice not only to be done but also appear to be done. Decided in favour of assessee.
-
2025 (1) TMI 1160
Revision u/s 263 - assessee has not offered the interest income - Taxation of accumulated interest on debentures converted into equity shares - HELD THAT:- It is very clear that the assessee has not offered the interest income to tax on the ground that she is following cash system of accounting and the same would be taxable in the year of sale of equity shares. This plea is bereft of any substance.
It is very clear that the whole interest amount is deemed to be received by the assessee upon conversion of debentures into equity shares in this year. If the amount of Rs. 61.97 Lacs is not brought to tax, the same would never be brought to tax.
Pertinently, the conversion of debentures into shares have happened for face value of debentures for Rs. 2000/- plus accumulated interest of Rs. 1500/- per debenture.
The value of shares essentially has two components i.e., face value of debentures of Rs. 2000/- and other component is accumulated interest of Rs. 1500/- per debenture. The capital gains on sale of shares would naturally be computed in the year of sale by adopting cost of acquisition accordingly. Therefore, the plea that if the interest component is taxed in this year, the same would amount to double taxation, is fallacious and hence, not acceptable.
The cost shall include both the components in terms of Sec. 49(2A). There is no quarrel on the issue that such conversion of debentures into equity shares would not be regarded as transfer as per Sec. 47(x) so far as the computation of capital gain is concerned. However, here is question is of taxability of interest component of debenture that has accrued to the assessee up-to the date of conversion. Therefore, we conclude that the action of Ld. AO in accepting the return of income was not in accordance with law. The order has errors which is prejudicial to the interest of the revenue. Under these circumstances, the revision of the order could not be faulted with. Decided against assessee.
-
2025 (1) TMI 1159
Revision u/s 263 - disallowance of payment made towards transport charges and outward transport charges u/s 40a(ia) of the Act which was subject matter of pending adjudication before the National Faceless Appeal Centre, New Delhi - HELD THAT:- As decided in Renuka Philip [2018 (12) TMI 129 - MADRAS HIGH COURT] when the appeal is pending before the Commissioner, the exercise of jurisdiction under Section 263 of the Act is barred. Thus, finding rendered by the Commissioner is wholly unsustainable, since the assessee went on appeal against the re-assessment order stating that his claim for deduction under Section 54 should be accepted.
Also in the process of considering as to what relief the assessee is entitled to, the AO held that the assessee is entitled to claim deduction u/s 54F of the Act and assigned certain reasons for that. Therefore, the larger issue was pending before the Commissioner of Appeals, and in such circumstances, the Commissioner could not exercise power under Section 263 of the Act on account of the statutory bar. Decided in favour of assessee.
............
|
9911796707
