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Showing 501 to 520 of 1644 Records
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2025 (4) TMI 1144
Seeking cancellation and setting aside of the regular bail granted to the Respondent - fraudulent billing racket, operating through 16 firms/ companies, engaged in the practice of issuing GST invoices without the actual supply of goods or services - HELD THAT:- While it is undisputed that no further investigation was conducted after the issuance of the first bail order, it was not the case before the CJM that the investigation had been completed, which would have warranted the Respondent’s release on bail. The Court finds that there was no material change in circumstances, as held by the CJM in the impugned order. Therefore, in the opinion of the Court, the CJM’s conclusion regarding a material change in circumstances is unfounded. To this extent, the observations made in the impugned order are deemed incorrect and are hereby set aside.
The Court proceeds to examine as to whether the Respondent is now required to be re-arrested and committed to custody. On this issue, Mr. Harpreet Singh has apprised the Court that the investigation is now complete, and the Petitioner department is on the verge of filing a prosecution complaint. As previously mentioned, the Petitioner department, on 28th February 2025, with permission from the CJM, Patiala House Courts, recorded the Respondent’s statement while he was in judicial custody. Therefore, as such, there is no requirement to direct the detention of the Respondent. Additionally, the Respondent has fully cooperated in the investigation and, after being released from custody, has informed the authorities that he is available for further statements as and when needed.
Conclusion - The CJM's conclusion regarding a material change in circumstances is unfounded and set aside.
The Court is of the opinion that significant time has elapsed since the issuance of the impugned order - Petition disposed off.
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2025 (4) TMI 1143
Cancellation of registration as a taxpayer due to non-filing of returns for six months continuously - returns are filed for a few months, subsequent to the issuance of SCN - HELD THAT:- A perusal of Rule 21 (h) and Section 29 (2) (c) of the CGST Act makes it explicit that when there is a failure to file returns for a continuous period of six months it gives a cause of action for the proper officer to cancel the registration after issuing a show cause notice. However, once the show cause notice is issued, the taxpayer is given the liberty to avoid cancellation of registration by filing the returns for all six months along with the tax interest and late fee. A piecemeal filing of returns is not contemplated by the Rules, as is evident from the proviso to Rule 22 (4) of CGST Rules. Unless the returns for all six months; along with tax interest and late fee, are submitted, the cause of action that arose due to non filing of returns for six months will not be wiped-off. In order to avoid the serious repercussion of cancellation of registration, it is an obligation for the taxpayer to file all the returns and pay the tax interest and late fee, after the show cause notice was issued.
In the instant case, show cause notice was issued on 12.03.2024, while the petitioner filed Ext.P2 return on 13.03.2024 i.e., after the issuance of show cause notice. Two weeks later, she filed returns for yet another month. Still, the requirement of the proviso to Rule 22 (4) was not satisfied. The taxpayer had the liberty to avoid cancellation, by filing returns for all the six months. Once the cause of action arose by issuance of show cause notice, the end result can be avoided only by filing returns for all six months along with the tax interest and late fee.
In the instant case, since petitioner had filed Ext.P2 return on 13.03.2024, after the issuance of the show cause notice, that too, initially for one month and two weeks later, for yet another month, the requirement of the proviso to Rule 22 (4) has not been satisfied - The default of non filing of returns for a continuous period of six months remained as on the date of show cause notice, and petitioner failed to rectify the mistake by filing all the returns along with the tax interest and late fee. Thus, the order cancelling the registration is legally justified and the same warrants no interference.
Conclusion - The default of non filing of returns for a continuous period of six months remained as on the date of show cause notice, and petitioner failed to rectify the mistake by filing all the returns along with the tax interest and late fee. Thus, the order cancelling the registration is legally justified and the same warrants no interference.
Petition dismissed.
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2025 (4) TMI 1142
Levy of GST - apartments and duplex row houses allotted to the petitioners - whether the petitioners had entered into agreement with respondent-BDA at the time prior to completion of the construction? - HELD THAT:- The completion certificate as produced by the respondent- BDA at Annexure-R2 would indicate that the project has been completed on 31.12.2018 - Reading of the completion certificate with the payment schedule and the completion certificate produced at Annexure-R2 would indicate that the project was completed only in the month of December, 2018, by which time, the petitioner had paid 4 instalments towards the cost of the construction, clearly indicating that the petitioner having paid the part of consideration during the process of construction. In other words, payments were made even before the completion of construction in terms of an agreement that had been entered into between the petitioner and the respondent -BDA.
The petitioners in these writ petitions had applied for allotment of apartment/houses, which even as seen in the notification calling upon for application by the respondent-BDA, were still under construction. The said notification also specifically points out that applicable GST to be paid separately by allottees. The payment schedule referred to above would indicate that the part of the sale consideration was paid during the process of construction and much prior to issuance of completion certificate. It may be that there is no separate work contract entered into between the petitioners and the respondent- BDA, but what is the essence of law as found at Section 7 and Schedule II to the Central Goods and Services Tax Act, 2017 extracted above as well as the law laid by the Apex Court in the case of Larsen and Toubro Limited [2013 (9) TMI 853 - SUPREME COURT], is that if the transaction is entered into before the completion of construction and the consideration was paid (partly or fully) before issuance of completion certificate, the same would amount to supply of services requiring payment of the service tax.
Conclusion - The petitioners had entered into contracts and made payments during the construction period, prior to issuance of completion certificates. Therefore, the demand for GST by the respondent-BDA is in accordance with the provisions of the CGST Act, 2017.
Petition dismissed.
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2025 (4) TMI 1141
Challenge to assessment order - challenge on the ground that the said proceeding does not contain the signature of the assessing officer - HELD THAT:- The effect of the absence of the signature, on an assessment order was earlier considered by this Court, in the case of [2023 (2) TMI 1224 - ANDHRA PRADESH HIGH COURT].
A Division Bench of this Court, had held that the signature, on the assessment order, cannot be dispensed with and that the provisions of Sections-160 & 169 of the Central Goods and Service Tax Act, 2017, would not rectify such a defect. Following this Judgment, another Division Bench of this Court, in the case of M/s. SRK Enterprises Vs. Assistant Commissioner, [2023 (12) TMI 156 - ANDHRA PRADESH HIGH COURT], had set aside the impugned assessment order.
Another Division Bench of this Court in the case of M/s. SRS Traders Vs The. Assistant Commissioner ST & ors, [2024 (4) TMI 894 - ANDHRA PRADESH HIGH COURT], following the aforesaid two Judgments, had held that the absence of the signature of the assessing officer, on the assessment order, would render the assessment order invalid and set aside the said order.
Conclusion - The impugned assessment order would have to be set aside on account of the absence of the signature of the assessing officer, on the impugned assessment order.
Petition disposed off.
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2025 (4) TMI 1140
Non-production of the documents by the petitioner during the audit - HELD THAT:- . It was submitted that the main grievance of the petitioner, so far as paragraph No.1 to 5 of the LAR No. 101 is concerned, the same are closed. The same has been accepted by the respondents in their affidavit-in-reply dated 28th January, 2025. Therefore, no purpose would be served by keeping this petition pending.
Petition disposed off.
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2025 (4) TMI 1139
Ex-parte order passed by High court - reopening of assessment - Entitlement to exemption under Sections 11 and 12 - HELD THAT:- We take notice of the fact that after the impugned order came to be passed by the High Court, the petitioner preferred a review petition trying to make good his case that in fact, there was no service effected of the notice issued by the High Court.
We are of the view that as the review petition is pending before the High Court, we should not say anything further in the matter. Let the High Court look into the review petition and take an appropriate decision in accordance with law.
In the event, if the order is adverse to the petitioner, it shall be open for him to avail appropriate legal remedy before the appropriate forum in accordance with law.
Since demand has already been raised and there is some urgency, we request the High Court to take up the review petition and see to it that the same is disposed of on its own merits within a period of four weeks from today.
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2025 (4) TMI 1138
Validity of Revision u/s 263 as set aside by ITAT - estimation of bogus expenditure - As decided by HC [2023 (7) TMI 1570 - CALCUTTA HIGH COURT] invoking his power u/s 263 has proceeded based on conjecture and there is no finding recorded that the books of accounts of the assessee were rejected. The specific issue raised by the assessee that the documents and details were furnished before the assessing officer was not found to be incorrect.
HELD THAT:- No satisfactory explanation has been offered to condone the delay in filing the Special Leave Petition.
Even otherwise on merits also, no case for interference is made out in exercise of our jurisdiction under Article 136 of the Constitution of India. The Special Leave Petition is accordingly dismissed on the ground of delay as well as on merits.
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2025 (4) TMI 1137
Validity of revision u/s 263 - as per HC [2024 (9) TMI 1725 - PUNJAB & HARYANA HIGH COURT] simply by holding that the AO was required to make more enquiries, would not be a valid ground for treating the order of the AO as erroneous and prejudicial to the interests of the revenue. The power u/s 263 of the Act cannot be invoked in such circumstances by the PCIT. The order, therefore, passed by the PCIT is not sustainable in the eyes of law and the same has been quashed by the ITAT.
HELD THAT:- Order passed by the High Court, which upheld the decision of the Tribunal, is correct on facts and in law as case does not involve a failure by the assessing officer to conduct an investigation. Instead, according to the Revenue, it is a case where the assessing officer having made inquiries erred by not making additions.
The assessee does not have control over the pen of the AO. Once the AO carries out the investigation but does not make any addition, it can be taken that he accepts the plea and stand of the assessee.
In such cases, it would be wrong to say that the Revenue is remediless. The power u/s 263 can be exercised by the Commissioner of Income Tax, but by going into the merits and making an addition, and not by way of a remand, recording that there was failure to investigate. There is a distinction between the failure or absence of investigation and a wrong decision/conclusion. A wrong decision/conclusion can be corrected by the Commissioner of Income Tax with a decision on merits and by making an addition or disallowance.
There may be cases where the AO undertakes a superficial and random investigation that may justify a remit, albeit the CIT must record the abject failure and lapse on the part of the Assessing Officer to establish both the error and the prejudice caused to the Revenue. Recording the aforesaid, the special leave petition is dismissed.
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2025 (4) TMI 1136
Validity of Revision u/s 263 - ITAT held that order passed by the PCIT in exercise of Section 263 of the Act, 1961 is not in accordance with law as no reasonable opportunity of hearing was granted to the assessee/respondent and also incidentally held that the action of the A.O. is not erroneous.
HELD THAT:- Where an A.O. has applied her/his mind (even if briefly) and arrived at a logical conclusion, the revisional authority cannot intervene under Section 263 of the Act, 1961 just because it has a different view or because he expected a more exhaustive reasoning in the order. To hold otherwise would convert the revisional power into an appellate review, which is not its intent.
Prejudicial to interests of Revenue as provided in Section 263 of the Act, 1961 typically meaning that the error has caused a loss of tax revenue (short levy of tax) or posed a potential threat to the Revenue's ability to collect the rightful tax. If an error has no bearing on the taxable income (for instance, a procedural irregularity that doesn't affect the tax computation), revision is not justified.
Though the PCIT has found the order of the A.O. erroneous in so far as it is prejudicial to the interest of Revenue, but no reasonable opportunity of hearing was aforded to the assessee/respondent herein to defend himself in light of provisions contained in Section 263 and, therefore, the order of the PCIT is liable to be quashed/set aside.
We are of the considered opinion, order passed by the PCIT is in teeth of principles of provisions contained in Section 263 of the Act, 1961 as no reasonable opportunity of hearing was afforded to the assessee and also in light of principles of law laid down in the matter of Amitabh Bachchan [2016 (5) TMI 493 - SUPREME COURT]
Since the ex parte order was passed invoking Section 263 by the PCIT without hearing the assessee/respondent herein, the finding recorded by the PCIT that the order is erroneous in so far as it is prejudicial to the interest of Revenue, is not the correct finding based on the records and, therefore, it has rightly been set aside by the ITAT. As such, we do not find any merit in the present tax appeal. Consequently, the question of law is answered in favour of the assessee and against the Revenue.
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2025 (4) TMI 1135
Reopening of assessment u/s 147 - Reason to believe - whether interest cost claimed by the petitioner u/s 37(1) is capital or revenue expenditure? - HELD THAT:- It is not in dispute that the case of the petitioner was under scrutiny and after calling for information and considering the material available on record, the AO passed the order under section 143(3). It is also apparent from the facts of the record that the impugned notice is issued after four years and therefore, as per the proviso to section 147 when the petitioner has disclosed fully and truly all material facts for the purpose of assessment and assessment order is passed after scrutiny under section 143(3) of the Act, no action could have been taken by AO by assuming jurisdiction to reopen the assessment for the year under consideration.
Moreover in facts of the case the consideration of issue as to whether interest cost claimed by the petitioner u/s 37(1) is capital or revenue expenditure is nothing but mere change of opinion by the respondent Assessing Officer while assuming jurisdiction which is not permissible in view of decision of Kelvinator of India Ltd [2010 (1) TMI 11 - SUPREME COURT]
The impugned notice issued u/s 148 along with consequential proceedings are hereby quashed and set aside - Decided in favour of assessee.
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2025 (4) TMI 1134
Validity of reassessment notice - providing shorter period to respond - HELD THAT:- As rightly contended by the learned counsel for the petitioner, a plain reading u/s 148A(b) will indicate that the minimum statutory period prescribed therein is 7 days as held in the case of Janaki Aenuga[2024 (1) TMI 1456 - KARNATAKA HIGH COURT]
In the instant case, a perusal of the impugned notice will indicate that it was issued on 20.03.2022 by granting time up to 25.03.2022 to the petitioner to submit his reply which clearly short of the minimum period of 7 days prescribed in the said provision and consequently, on this ground alone, the impugned notice at Annexure – B and consequential proceedings including the impugned assessment order notices etc., deserves to be quashed. Decided in favour of assessee.
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2025 (4) TMI 1133
Assessment order passed in the name of non-existing bank/OBC - unexplained investment addition u/s 69 - HELD THAT:- As it is apparent that respondent No.1 as well as NFAC Center who has passed the impugned order is without application of mind and without considering the fact that the OBC in whose name impugned assessment order is passed, does not exist and therefore, no assessment order could have been passed in the name of the OBC.
Procedural requirements under the Act, including prior approval - On the basis of the Multi Year MNS data which is an abstract phenomenon unknown to anyone nor disclosed in the assessment order as to what type of Multi Year MNS Data is made available to the AO the AO has proceeded to make addition without making any inquiry ignoring the factual submission made by the petitioner-PNB to the effect that the OBC Bank does not exist after 01.04.2020 and therefore, there could not have been any assessment order being passed in the name of the said Bank having PAN “AAACO7436M”.
The impugned assessment proceedings have been initiated with prior permission of the higher authorities u/s 151. It appears that the Additional CIT, Range-2(1), Vadodra, also without application of mind, has sanctioned the approval for issuance of the notice u/s 148 of the Act. Decided in favour of assessee.
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2025 (4) TMI 1132
Validity of Assessment u/s 153A/153C - As alleged approval u/s.153D by the JCIT is mechanical and without application of mind - HELD THAT:- The approval of JCIT should reflect application of mind, which is missing in the instant case. The requirement of approval cannot be treated as mere formality and the mandate of the Act is that the approving authority has to act in a judicious manner by due application of mind in a manner of a quasi-judicial authority.
It is settled law that if the approval has been granted by the approving authority in a mechanical manner, the very purpose of obtaining approval u/s. 153D of the Act and the mandate of the enactment by the legislature will be defeated. However, JCIT without any consideration of merits in proposed additions with reference to the incriminating material collected in search etc. has proceeded to grant a simplicitor approval. This approach of the JCIT has rendered approval to be a mere formality and cannot be countenanced in law.
In view of the peculiar facts and circumstances of the case, we are of the considered view that approval by JCIT is not valid, hence, deserves to be quashed. In view of above, it is clear that Jt. Commissioner of Income Tax has given approval which is purely mechanical and without application of mind. Appeal of assessee allowed.
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2025 (4) TMI 1131
Income chargeable to tax in India or not - Service fees received from Indian affiliate constitute "Fees for Technical Services" (FTS) taxable in India u/s 9(1)(vii) and Article 12 of the India-USA DTAA - meaning of the phrase ‘make available’ - HELD THAT:- Section 5(2) of the Act provides that the income of a non- resident tax payer can be taxed in India if it is received or is deemed to be received in India or accrues or arises in India. Section 9(1)(vii) of the Act provides that income by way of FTS payable by any resident assessee of India shall be deemed to accrue and arise in India in the hands of non- resident assessee.
In view of the above decision in the case of IMG [2024 (7) TMI 287 - DELHI HIGH COURT], we analyze the facts that whether the service rendered by the assessee fall under the head FTS. Counsel did not bring any material on the record to contradict the finding of the AO that ‘the service provider (the assessee) is using the human resource with technical experience and expertise. The nature of service provided by the service provider (the assessee) are not limited to the general and administrative services as contended by the assessee. This suggests that the service provided by the assessee are technical in nature within the meaning of Section 9(1)(vii).
By plain reading of the Article-3 of the above mentioned service agreement, the prima-facie inference emerged is that the services rendered by the assessee to the Crocs India are not purely general in nature as evident from this Article that the services had been provided by the competent technical expertise and qualified professionals. Thus, this Article buttresses the AO’s inference that the service provided by the assessee are technical in nature within the meaning of Section 9(1)(vii).
We are of the considered opinion that the services rendered by the assessee to the Crocs India are in the nature of FTS.
Whether the ‘make available’ condition can be said to have been satisfied? - FTS with “make available” clause restricts the interpretation of what would fall within the meaning of FTS. It is not just technical knowledge being transferred but also the recipient being able to utilise the same without any assistance from the service provider; i.e. the assessee. Section 90(2) of the Act along with well-settled jurisprudence allows assessee’s to take the Act or the DTAA whichever is beneficial to them. In the present case the assessee has preferred DTAA over the Act. Given this background, we now look at Section 9(1)(vii) of the Act and then the DTAA’s with the make available clause interpretation of Section 9(1)(vii) of the Act.
Here, in the present case, the contract in the matter was only for provision of services and not for supply of technical designs or plans. The assessee has not made available the technical knowledge and its expertise to the Crocs India. Several judicial decisions have clearly outlined the ambit of the “make available”.
The Hon’ble Delhi High Court in the case of IMG [2024 (7) TMI 287 - DELHI HIGH COURT] has held that the real test for “make available” clause is to ascertain that whether the recipient of service has absorbed the skills and expertise of the service provider and have the capability to deploy that knowledge or skill without reference to the original service provider. The transfer of capabilities and not just temporary use of the provider’s knowledge, skill or expertise was held to be the decisive factor for satisfaction of ‘make available’ clause.
The impugned assessment order has not mentioned any fact, which may demonstrate that the condition of “make available” clause gets satisfied. Applying the above tests to the facts of the case at hand, we find that there was no expertise, skill or know-how which could be said to have been made available by the assessee to the Crocs India, inasmuch as various services provided by the assessee were absorbed by the Crocs India to enable or equip it with the special knowledge underlying the service provided.
The relatively long tenure of 15 years of the agreement weighed in favour of the assessee that it was not a case of transfer of knowledge or skill to the Crocs India. Thus, we held that the condition of “make available” is not fulfilled in the present case. Therefore, the service charges received by the assessee from Crocs India, though FTS, is not chargeable to tax as per the India-US DTAA. We therefore, delete the income. Appeal of the assessee is allowed
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2025 (4) TMI 1130
Validity of jurisdiction assumed u/s 153C - scope of ‘satisfaction note’ recorded by the AO - HELD THAT:- Mere drawing of a perfunctory satisfaction without meeting basic ingredients of providing some tangible & descript information and application of mind thereon has no standing in law and would not confer drastic jurisdiction of assessment u/s 153C of the Act on a person other than searched person.
The jurisdiction assumed based on such lackadaisical ‘satisfaction note’ beset with vital infirmities cannot be countenanced in law. The objections raised on behalf of the assessee towards lack of jurisdiction based on a cryptic and non-descript satisfaction thus deserves to be sustained. While recording a consolidated ‘satisfaction note’ is not a bar in law per se as rightly contended on behalf of the revenue, but however, in the same vain, the documents/assets searched need to be specified against each year covered in the satisfaction note to depict application of mind and initiation of action u/s 153C of the Act qua such assessment years.
AO has apparently failed to do so in the present case. As a corollary, the notice issued u/s 153C and consequent assessment order passed u/s 153C is vitiated in law and requires to be quashed.
The jurisdiction assumed u/s 153C based on vague and non-descript ‘satisfaction note’ is vitiated at the threshold. The consequence assessment order passed u/s 153C thus has no force of law. Appeal of the assessee is allowed.
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2025 (4) TMI 1129
Disallowance of claim u/s. 54 - intimation u/s. 143 (1) disallowing the alleged claim - HELD THAT:- An intimation is issued in respect of a return filed by the assessee. Such intimation is to make adjustment in regard to certain specific issues which are provided in the provisions of section 143 (1) (a). The assessee had admittedly not made a claim u/s. 54 in the return filed by him. Since the assessee has not made the claim u/s. 54, hence it no more lies in the realm of the 143 (1) (a) to enter into any issue which has not been claimed by the assessee and for making any disallowance.
As there is no claim u./s. 54 of the Act in the return filed by the assessee, the disallowance made in the intimation u/s. 143 (1) (a) in respect of the valuation itself is inadmissible. This being so, the addition as made in the intimation u/s. 143 (1) (a) and ad decided by the Ld. CIT(A) stands deleted. Appeal of the assessee is allowed.
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2025 (4) TMI 1128
Cancelling the registration of the assessee-trust by passing an order u/s. 12AB(4) - AO’s reference as per the provision of second proviso to section 143(3) - AO discovered based on search materials that the trustees owned hotels, bars, and a marriage hall in their personal capacity, however, the expenditures incurred on the renovation and alteration of these establishments were borne by the assessee’s funds. Additionally, the AO found that the assessee had accepted loans and made repayments in violation of the provisions of sections 269SS and 269T
HELD THAT:- We note that the cancellation of the registration by the Learned PCIT was primarily based on the reference made by the AO under the second proviso to section 143(3) of the Act. The assessee has rightly contended that this provision was inserted by the Finance Act, 2022, with effect from April 1, 2022, making it applicable only from AY 2022-23 onwards. Since, the AO’s reference pertains to AY 2021-22, which falls before the enactment of this provision, the invocation of this provision for making a reference to the ld. PCIT is legally untenable. It is the trite law that the provisions of law as applicable to the relevant year has to be applied in that year.
Thus, we hold that any action based on such an invalid reference lacks legal sanctity, rendering the subsequent cancellation order unsustainable. See LAKHMI CHAND CHARITABLE SOCIETY [2024 (8) TMI 1297 - ITAT DELHI]
PCIT has invoked the explanation to section 12AB(4) of the Act to hold the assessee committed "specified violations," particularly in terms of fund diversion for the personal benefit of the trustees and non- application of funds in accordance with the objectives of the trust - As rightly pointed out by AR, the Finance Act, 2022, which introduced the concept of "specified violations" u/s 12AB(4) of the Act, became effective only from April 1, 2022. Since the assessment year in dispute is AY 2021-22, these provisions were not applicable at the relevant point of time. Consequently, the PCIT’s reliance on these provisions is erroneous, and the cancellation of the trust’s registration based on inapplicable legal provisions cannot be sustained.
AO's satisfaction, which formed the basis for the reference to the PCIT - We find merit in the argument of the ld. AR that the AO’s satisfaction regarding the assessee's alleged violations was formed without independent inquiry or verification of the materials seized during the search proceedings.
AO appears to have solely relied on the seized documents and statements recorded during the search without conducting any further independent inquiry into the genuineness and authenticity of such materials. This fact can be verified form the notices issued u/s 142(1) by the AO during the assessment proceeding. It is a well-settled principle that mere possession of incriminating material does not automatically establish wrongdoing unless corroborated with substantive evidence through an independent inquiry.
Provision of section 132(4A) and 292C of the Act provide presumption that in the course of search proceeding any books of account or other document etc found in possession of any person then it may be presumed that such books of account or other document etc belong to such person and content of such books of account or document are true. However, it is settled possession of law that impugned presumption is rebuttable presumption. In the case of hand, it appears that the AO has drawn presumption reading the seized material being true and accordingly made refence to PCIT for alleged violation as specified in the amended provision of section 12AB(4).
However, we note that AO has drawn such presumption without affording opportunity to the assessee to rebut the same. Hence it can be safely assumed that the AO merely relied on the seized material forwarded the search authority without applying mind. The AO’s satisfaction, therefore, appears to be a case of borrowed satisfaction, which is legally unsustainable.
Considering the legal infirmities in the reference made by the AO, the incorrect application of amended provisions retrospectively, the absence of independent verification, we find that the cancellation of the assessee’s registration u/s 12AB is legally unsustainable. Appeal of the assessee is allowed.
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2025 (4) TMI 1127
Addition of 2% of the expenditure incurred in cash - cash withdrawals has been treated as unexplained expenditure and added the same u/s 68 - HELD THAT:- We note that the assessee is acting on behalf of the jute mills as Kachcha Arahtiya on commission basis. The assessee has been engaged in this business for the past several years and continuously following the same system of accounting as well i.e. receiving payments from jute mills and passing the same to cultivators/jute growers and the revenue has accepted the income of the assessee in all the assessment years in the summary proceedings u/s 143(1) of the Act.
There are no pending proceedings against the assessee in any other assessment year where the case of the assessee has been reopened on the basis of any scrutiny proceedings for current assessment year.
CIT(A) has simply confirmed the addition partly @ 2% of total expenditure incurred in cash without any reasoning. CIT(A) has partly confirmed the addition on surmises and presumption without any basis and therefore the appellate order cannot be sustained. Accordingly, we set aside the order of the ld. CIT(A) and accordingly direct the Assessing Officer to delete the impugned addition. Decided against revenue.
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2025 (4) TMI 1126
Disallowance of interest due to some interest free advance given by the assessee - HELD THAT:- The assessee has not paid any interest to partners’ capital and the balance in average is more than ₹ 200 lakh. The assessee received loans and advances from relatives to the extent of ₹ 1.79 lakh that too without interest to the assessee. Some more loans and advances were received by the assessee against which no material shows that the assessee has paid interest.
Assessee’s factory is situated at Burhanpur, which constructed on the land which belongs to Shri G.N. Bhattad, who is one of the partners in assessee’s firm. In the interest of assessee’s business the money has been paid to Shri G.N. Bhattad, failing which Shri G.N. Bhattad, would have forced the assessee to vacate the land. Shri G.N. Bhattad, is said to be father of one of the partners and also the real uncle of the partners of the assessee firm.
Therefore, the money being rotated was within the family members of the assessee firm. Since the assessee has not paid any interest on capital of approx. ₹ 200 lakh, the amount of ₹ 44.27 lakh or average balance of ₹ 67.47 lakh is hereby treated as capital advance and treating the same as interest paid on advance is not correct.
Accordingly, AO was not justified in making addition on account of upholding the addition made by the AO on account of disallowance of interest due to some interest free advance given by the assessee is not justified. Decided in favour of assessee.
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2025 (4) TMI 1125
Cash Payment exceeding Rs. 20000/- - Addition by invoking the provisions of Section 40A(3) - payments toward purchase of land/plots/expenses made/incurred by assessee - HELD THAT:- It is not the case of the AO that the cash payments were not genuine and intended to evade taxes. Therefore the cash payments made by the assessee were out of business compulsion and commercial consideration and are covered by the exception provided in Rule 6DD. The facts of the instant case are materially similar as decided by the co-ordinate bench above. Therefore, respectfully following the case of M/s A Daga Royal Artis [2018 (6) TMI 1240 - ITAT JAIPUR] we set aisle the order of the ld. CIT (A) and direct the ld. AO to delete the addition.
Cash deposits during the demonetization period - HELD THAT:-As we find that the money was received from different persons to whom the payments were made on account of advances for land purchase/plots. We have examined the cash book of the assessee and find that assessee has duly shown these receipts against the advances already given against purchase of land/plots.
Therefore, we are not in agreement with the conclusion drawn by the ld. CIT (A) on this issue and accordingly, we set aside the order of the ld. CIT (A) on this issue by directing the ld. AO to delete the addition. The appeal of the assessee is allowed.
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9911796707
