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Showing 61 to 80 of 1556 Records
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2025 (1) TMI 1497
Communication Letter of the 1st respondent wherein the petitioner has been reminded by the arrears of income tax of various Assessment Year 2010-2011 to the Assessment Year 2020-2021 - petitioner has also challenged the Impugned Assessment Order passed by the 2nd respondent u/s 143(3) r.w.s.143(3A) and Section 143(3B) - contention of the petitioner that the Impugned Assessment Order was not communicated to the petitioner by the respondents -
HELD THAT:- The challenge to the Impugned Assessment Order only on the ground that the same was not communicated to the petitioner cannot be countenanced, as the petitioner has not only participated in the proceedings but also was communicated with the Impugned Assessment Order dated 07.04.2021 through web portal. The petitioner has altered the E-mail ID and therefore, the petitioner has not received communication of passing of the Impugned Assessment Order dated 07.04.2021 through E-mail ID.
Demand in the Impugned Communication Letter for the Assessment Year 2018-2019 demanding a sum of Rs. 7,07,61,360/- from the petitioner would be in line with the computation u/s 156 which would have accompanied with the Impugned Assessment Order dated 07.04.2021. The petitioner, has, however not kept a copy of the same along with typed set of papers.
It is, therefore, open to the petitioner to file an appeal before the Appellate Commissioner under Section 246A of the Income Tax Act, 1961 against the Impugned Assessment Order dated 07.04.2021, since the present Writ Petition was filed on 09.09.2022.
Liberty is granted to the petitioner to file a statutory appeal under Section 246A within a period 30 days from the date of receipt of a copy of this order.
Stay of recovery of tax - As it is open to the petitioner to workout his remedy u/s 220(6) of the Income Tax Act, 1961 before the AO.
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2025 (1) TMI 1496
Penalty proceedings 271DA beyond the period of limitation - whether the impugned order is beyond the period of limitation as prescribed in 275 (1) (c)? - HELD THAT:- Undoubtedly in the present case, the proceedings during the course of which decision for that proceedings for levy of penalty u/s 269ST should be initiated, had taken place during the financial year 2023-24 as it is reflected in the assessment order dated 28.03.2024.
The assessment order clearly reflects that the penalty proceedings are being initiated separately. The order records that “separate reference is being sent to the office of Addl. CIT-Central Range-04, Delhi for initiation of penalty proceedings U/s 269ST.
AO has done so by making a reference on 08.04.2024. Thus, clearly the period of six months is required to be reckoned from the date of the reference, that is, from 08.04.2024 as that is the period which expires later than the end of the financial year in which the proceedings, during the course of which the decision was taken to initiate the penalty proceedings, were completed.
There is merit in the petitioner’s contention that the date of initiation of the penalty proceedings cannot be extended arbitrarily and indefinitely.
Clearly in cases where there is an inordinate delay in initiation of the proceedings, it would be necessary to examine whether the period of limitation would stand extended on account of such delay.
As settled law that in cases where no limitation period is mentioned for acts to be done, the same are required to be done within a reasonable period. See State of Punjab & Ors. vs. Bhatinda District Cooperative Milk Producers Union Ltd. [2007 (10) TMI 300 - SUPREME COURT]
Thus, in cases where the initiation of the penalty proceedings are inordinately and inexplicably delayed beyond a reasonable period, the said issue may rise for consideration.
In the present case no such issue arises for consideration of this court as the penalty proceedings were initiated within a period of eleven days of the culmination of the assessment proceedings whereas the decision to make a reference for initiation of the penalty proceedings was taken. We are unable to accept that this period can be termed as unreasonable.
No merit in the present petition. The same is accordingly dismissed.
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2025 (1) TMI 1495
Reopening of assessment u/s 147 - reason to believe - treatment of Foreign Exchange Loss and Premium on Forward Contracts - HELD THAT:- A reading of the documents that have been filed before this Court which have been referred to supra indicates that all the informations that were required for completing the Assessments were furnished by the petitioner in response to specific notices issued to the petitioner u/s 143(2).
Specifically, information relating to Foreign Currency transactions and the loss based on which the expenses was claimed as the deduction under Section 37 of the Act was claimed was subject matter of the query by the Department pursuant to which Assessment Order came to be passed on 17.12.2018.
Merely because, no opinion is expressed in the Assessment Order would not mean that the Assessment was completed without forming any opinion on the queries raised by the Department before the Assessment was completed. The Courts have taken a categorical stand that it cannot be assumed that Assessments were completed without forming an opinion.
Merely because, opinion is not reflected in the Assessment that was completed earlier will not mean no opinion was formed earlier.
If indeed no opinion was formed, as has been stated the remedy to correct such order lies by way of revision u/s 263 of the Income Tax Act, 1961. Therefore, impugned order has to go as the issue was considered before the Assessment Order dated was passed. Therefore, the impugned order is liable to be set aside. WP allowed.
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2025 (1) TMI 1494
Unexplained money u/s 69A - cash deposits during the demonetization period - HELD THAT:- AO had applied the net profit rate of 8% for the rest of the year and only the cash deposited during the demonetization period was treated as unexplained, which is not correct. Merely because the money was deposited during the demonetization period, the same, in the absence of any evidence to the contrary, cannot be treated as unexplained deposit; more so when the deposits during the rest of the financial year are being treated as the business income of the assessee.
Assessee had stated that the business was based on 100% cash transactions and total transactions in the bank account were due to business transactions, therefore, on the principle of consistency and without giving reasons why the specific amount was held to be not pertaining to the business, once the deposits for the rest of the year were being treated as part of the business income, the deposit during the demonetization period could not be excluded and added u/s 69A of the Act merely because they pertained to the demonetization period.
Assessee filed the written submission claiming that his entire business was in cash - Instead of adding a sum u/s 69A and the addition on account of business income AO is directed to apply the net profit rate of 8% on the entire bank deposits.
Appeal filed by the assessee is partly allowed.
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2025 (1) TMI 1493
Bogus purchases - Estimation of income - HELD THAT:- The entire books of accounts have been placed before the Learned AO and the book results were accepted by the Learned AO and the same were not rejected by him. At the same time, the assessee also from its side could not prove the purchases made from 22 parties beyond reasonable doubt. Hence, it becomes a case of unverifiable purchases.
We find that the average of last 3 years gross profit rate worked out to 1.55 percent and during the year under consideration, the assessee had earned gross profit of 1.6 percent.
AR also submitted that in most of the earlier years, the assessments were completed u/s 143(3) of the Act in the case of the assessee and no adverse inference was drawn thereon.
But the case involved herein is a case of unverifiable purchases where the profit margin would be slightly higher as purchases had been made in the grey market. Accordingly, we deem it fit and appropriate to estimate the profit margin embedded in the value of such disputed purchases at 2.5%, which in our considered opinion, would meet the ends of justice. Appeal of the assessee is partly allowed.
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2025 (1) TMI 1492
Income tax liability against company dissolved - Disallowance u/s 14A r.w.r.8D - HELD THAT:- Section 14 of IBC Code is very clear on the aspect that once moratorium is drawn and the insolvency commencement date is declared any institution of suits or definition of pending suits or proceedings against the creditor, debtor (in the present facts of the case of assessee before us) including the execution of any judgment, decree, or order in any Court of law, Tribunal, Arbitration Resolution Plan/Process has been accepted by the NCLT.
We refer to the decision of Ghanshyam Manz Retails Pvt. Ltd. Mishra and Sons Pvt. Ltd. Vs. Edelweiss Asset Reconstruction Co. Ltd. [2021 (4) TMI 613 - SUPREME COURT] wherein as considered a situation wherein, the resolution plan was approved by the adjudicating authority under Section 31(1) of the IBC Code - once the resolution plan was drawn, the claim as provided in the resolution plan stood frozen, and will be binding on the corporate debtor, its employee, its members, creditors, Central Government and any State Government or legal authority, guarantor and other stakeholders.
We also note that in the present facts of the case, the resolution plan is yet to be finalized. When, we read the newly inserted provisions of Section 156A of the Act, it is necessary to remand the appeal to the Ld. AO to take necessary steps/action as per Rules.
Hence, we deem it fit and proper to remand this appeal back to the file of Ld. Assessing Officer to take necessary steps as per Section 156A of the Act. Accordingly, we allowed the appeal filed by the assessee.
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2025 (1) TMI 1491
Genuineness of expenses claimed against the compensation received from assessee company - such expenses do not have any nexus with the assessee company nor does it affect the genuineness of compensation paid by assessee company - AO has made disallowance in the instance case solely by relying on the Report of Investigation Wing- Goa, wherein the Investigation Officer has expressed suspicion regarding the expenses booked by Mr. Surya - CIT(A) held perusal of order passed by the Ld. AO, it is crystal clear that no enquiry has been done and no even evidence has been collected and brought on record and addition has been made purely on conjuncture and surmises
HELD THAT:- We are of the opinion that there is a substance in the submissions of the assessee and the Ld. CIT(A) passed detailed order with full discussions and there is no any ground exist, for which needs to interfere. Hence, grounds raised by the Revenue are not allowable and accordingly dismissed.
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2025 (1) TMI 1490
Penalty levied u/s. 270A - guilty of misreporting of income - appellant had not filed original return of income and filed the return of income in response to notice u/s. 148 disclosing income - eligibility for immunity u/s 270AA - As per assessee income was offered voluntarily and also that the application u/s. 270AA of the Act seeking immunity from imposition of penalty was filed in the prescribed form
HELD THAT:- Case of the appellant does not fall under the category of unreported income. It can be considered under clause (b) of subsection (2) of section 270A of the Act.
So it cannot be said that the case of the appellant falls under subsection (9) of section 270A of the Act. Under the circumstances the AO was neither justified in rejecting the application u/s. 270AA of the Act nor ought not have levied penalty holding the appellant is guilty of misreporting of income. It is the settled position of law that when penalty proceedings were initiated invoking one limb of section 270A, penalty cannot be levied under another limb of this section.
As decided in Prem Brothers Infrastructure LLP [2022 (6) TMI 130 - DELHI HIGH COURT] AO as well as assessee had used same details to arrive at different quantum of disallowances, this by no stretch of imagination could be held to be misreporting and further, in absence of details as to which limb of section 270A was attracted, impugned penalty order was to be quashed and revenue was to be directed to grant immunity u/s 270AA. Decided in favour of assessee.
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2025 (1) TMI 1489
Revision u/s 263 - genuinity of assessee's claim of Long Term Capital Gain (LTCG) - as per CIT AO has mechanically accepted the reply filed by the Assessee and held that the capital gain earned on transfer of shares of M/s Trinity Tradelink Ltd. were genuine and further submitted that the SEBI has also amongst various penalty and declared M/s Trinity Tradelink Ltd. as a shell company itself declared as shell company and the said Company before the SEBI
HELD THAT:- Case of the Assessee was reopened by issuing notice u/s 148 based on the information from Investigation conducted by Income Tax Department.
After considering the reply filed by the Assessee and the document produced thereon, A.O. was fully satisfied about the genuineness of the transition and credits appearing in the bank account, accepted the Long Term Capital Gain as per Section 10(38) as genuine and framed the assessment order accepting in the returned income of the Assessee.
It is not the case of no enquiry conducted by the A.O., on the other hand. The Assessee was re-opened in respect of the transaction made with M/s Trinity Trade Link Ltd. Company on the issue of Long Term Capital Gain and the Assessee produced all the relevant documents and after verification of the documents and due diligence. A.O. fully satisfied about the genuineness of the transaction and accepted the exemption of LTCG as per Section 10(38) of the Act, therefore, in our considered opinion, the Ld. PCIT committed error in invoking provision of Section 263.
Also as on the date of issuing notice u/s 148 of the Act i.e. on 31/03/2021 and as on the date of passing assessment order u/s 147 of the Act i.e. on 14/03/2022, there was no such order of the SEBI and the SEBI has passed the order only on 29/06/2022, thus at no stretch of imagination, the A.O. could take cognizance to the findings of either SEBI or SAT orders. Decided in favour of assessee.
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2025 (1) TMI 1488
Unaccounted cash credit u/s 68 - Addition at higher tax rate of 60% u/s 115BBE - deposits during demonetization period - ignorance of documentary evidences filed by the appellant during the appellate proceedings - whether sales taken place in October and November, 2016 are non-genuine and taxability of such sales under section 68 justified? - HELD THAT:- AO doubted such sales because the average cash sales were highly abnormal than the average sales during the corresponding period of preceding years and backdating of sales during October and November, 2016 could not be ruled out as the due date of filing of VAT Return for the third Quarter (October, November & December, 2016) was 31.01.2017. However, there is no reference of any corroborating material to buttress such inference in the assessment order.
Revenue has not placed any material to demonstrate that the details of cash sales shown by the appellant/assessee are fictitious/bogus. The books of account have not been rejected by the AO. The AO has not-doubted/questioned either purchases or stock-in-trade.
AO has taxed the income embedded in the doubted/questioned sales of Rs. 63,37,500/- @ 30% and again taxing the doubted/questioned sales of Rs. 63,37,500/- u/s 68 @ 60%. Such contradictions; prima-facie, do not seem justified. The Revenue has also failed to place any material on the record to demonstrate that the VAT returns of the relevant year have not been accepted by the VAT authority. Decided in favour of assessee.
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2025 (1) TMI 1487
Nature of expenses - capitalization of license fee - license fee expenses incurred in lieu of rights to use telecommunication spectrum license - revenue v/s capital expenditure - HELD THAT:-We noted that this issue stands covered by Hon’ble Supreme Court decision in the case of assessee sister concern CIT Vs. Bharti Hexacom Ltd. [2023 (10) TMI 786 - SUPREME COURT] wherein held that the license fee paid under 1994 policy regime must be amortized as there is no basis to reclassify the same under the Policy of 1999 regime as revenue expenditure.
Thus, held that the payment of licence fee to DTO under Telecom Policy, 1999 was capital in nature and allowed this appeal of Revenue.
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2025 (1) TMI 1486
TP Adjustment - international transaction akin to an unsecured loan - delay in receiving the trade receivables is a separate international transaction akin to unsecured loan entered by the assessee with its Associate Enterprises(AE) and charged interest @ 5.068% for 93.6 days as being number of days over and above 30 days - HELD THAT:- We find that this issue is squarely covered by the decision of Kusum Health Care (P) Ltd. [2017 (4) TMI 1254 - DELHI HIGH COURT] wherein laid down ratio that where the assessee having factored the impact of receivables on the working capital adjustment thereby on its “pricing/profitability vis-à-vis that its comparables, any further adjustment on the basis of outstanding receivables would distort the profitability and re-characterize the transaction.
Disallowance the provisions of gratuity u/s 43B - HELD THAT:-We noted that the assessee has already added the provision of gratuity in its computation of income, which is not disputed by CIT-DR, however, to verify the same, we remit this issue to back to the file of the AO, who will verify the computation of income, whether the provisions of gratuity has been added by the assessee and not claim any further deduction. Hence, we remit this issue back to the file of the AO.
Late payment towards employee’s contribution to provident fund/ESI as prescribed - HELD THAT:- Assessee conceded this ground and stated that the issue is covered by decision of Checkmate Services Pvt. Ltd. [2022 (10) TMI 617 - SUPREME COURT] Since, payments are belated payments in terms of respective statutes of ESI and PF Act, and, hence, appeal of the assessee on this issue is dismissed.
Appeal filed by the assessee is partly allowed for statistical purposes.
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2025 (1) TMI 1485
Denial Foreign Tax Credit based on TDS Certificate u/s 90 of the Income Tax Act, 1961 read with Article 23 of the Indo Japan DTAA - claim of the assessee was declined by the Ld. CIT(A) on the basis that Form No. 67 was filed after a gap of five years - HELD THAT:- As we hold that the claim of FTC does not get controlled solely by the delay in filing of Form 67 prescribed under rule 128(9) of the Income Tax Rules. Hence, we set aside the action of the Ld. CIT(A) and direct the AO to take cognizance of Form No.67 so filed and grant FTC as may be entitled to the assessee in accordance with law.
Therefore, we here by direct the AO to allow benefit of Foreign Tax Credit subject to such enquiries and verifications as may be considered expedient. Appeal of the assessee is allowed for statistical purposes.
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2025 (1) TMI 1484
Addition u/s 68 - unsecured loan obtained by the assessee / appellant from his wife Freyan Jamshed Desai by alleging that source of credit - HELD THAT:- We find materials substance in the submissions of assessee / appellant by which is crystal clear that the identity of the lender, genuineness of the Transaction and creditworthiness of wife of assessee / appellant is beyond question and by furnishing documentary evidences, the assessee appellant succeeded to discharge primary onus to prove or establish the same and there is nothing on record to controvert which has to bring the necessarily on record by the Revenue as per law, and even the Ld. AO /CIT(A) nowhere doubted about genuineness of the document placed on record by assessee.
In above fact situation addition made by the Ld. AO on account of unsecured loan obtained by the assessee / appellant from his wife which was affirmed by the CIT(A) is quite unsustainable in the eye of law and hence ground no. 2, 2.1, and 2.2 is hereby allowed.
Denial of exemption u/s 10(13A) of the HRA alleging absence of proof regarding payment of actual rent - As relevant that alleging absence of proof regarding payment of actual rent is unwarranted more so when the eligibility to claim HRA exemption is not disputed by the Revenue. It is also submitted that strangely the Ld. CIT(A) while deciding the appeal, ignored the back account statement submitted before him and dismissed the plea by stating that in the absence of actual rent paid by the assessee the submissions of him not accepted and above all it is highly relevant that the case of the assessee / appellant for the subsequent assessment years i.e. 2018-19 was also selected for scrutiny assessment wherein identical issue relating to exemption of HRA was examined in detail and thereafter the assessing officer fully allowed the claim to appellant without any deviation / disallowance. We find substance in submissions which is supported with relevant material on record and hence this ground of appeal is allowed.
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2025 (1) TMI 1483
Addition u/s. 56(2)(vii)(b) - case was selected for "limited scrutiny"- assuming jurisdiction for making an addition u/s. 56(2)(vii)(b) an issue which did not form a basis for selection of the assessee’s case for “limited scrutiny”?
Whether or not, the A.O without making any reference to the valuation cell rightly triggered the provisions of Section 56(2)(vii) r.w.s. 50C(2) of the Act and substituted the FMV of the lands purchased by the assessee as against the actual purchase consideration?
Whether or not the A.O is right in law and facts of the case in concluding that the assessee had failed to substantiate his entitlement for claiming deduction u/s. 54B of the Act?
HELD THAT:- Admittedly, the examination of the difference/variance in the purchase consideration of the property i.e. land situated at Mouja : Khapargaunge, Bilaspur (admeasuring 206.143 Aq. Mtrs.) that was purchased by the assessee for a consideration of Rs. 5 lacs as against the FMV/stamp duty value of Rs. 55,65,900/- in the backdrop of Section 56(2)(vii)(b) of the Act was not an issue for which the case of the assessee was selected for “limited scrutiny” u/s. 143(2) of the Act.
Addition u/s. 56(2)(vii)(b) of the Act with respect to difference in the Fair Market Value (FMV) i.e. stamp duty/segment rate of property - Since the assessee’s case was selected for “limited scrutiny” under CASS with respect to certain specific issues, therefore, the jurisdiction of the A.O in the absence of getting the said case converted into complete scrutiny as per the CBDT Instruction No.20 of 2015 dated 29.12.2015, was confined only to the specific reason/issue based on which the case of the assessee was picked up for such scrutiny. Accordingly, on the basis of our aforesaid observations, we are of the considered view that the addition of Rs. 50,65,900/- (supra) made by the A.O u/s. 56(2)(vii)(b) is liable to be quashed for want of valid assumption of jurisdiction by the A.O while framing the “limited scrutiny” assessment vide his order u/s. 143(3) of the Act, dated 15.12.2017. Thus, the addition of Rs. 50,65,900/- made by the A.O. is vacated for want of valid assumption of jurisdiction.
Deduction u/s. 54B - We find that the agricultural lands sold by the assessee during the year under consideration, viz. (i) agricultural land admeasuring 1.424 hectares (out of 1.922 hectares) sold by the assessee vide registered sale deed dated 02.09.2014 i.e. (out of Khasra No.22/1, 22/4 and 28/2) situated at Mauja: Parsoda, Tehsil: Bilaspur; and (ii) agricultural land admeasuring 1.781 hectares (bearing Khasra No.17/1) situated at Mauja : Parsoda, Tehsil: Bilaspur sold by the assessee vide registered sale deed dated 02.09.2014, were in the two years immediately preceding the date on which they were transferred i.e. on 02.09.2014, being used by the assessee for agricultural operations i.e. growing paddy crop. Accordingly, we herein conclude that the aforesaid pre-condition contemplated u/s. 54B(1) of the Act i.e. usage of the agricultural lands in the two years immediately preceding the date on which they were transferred is duly satisfied by the assessee in so far the aforesaid agricultural lands admeasuring 1.424 hectares (supra) and 1.781 hectares (supra) are concerned.
We, thus, modify the order of the CIT(Appeals), and conclude that the pre-condition as regards usage of the lands sold by the assessee for agricultural purposes in the two years immediately preceding the date on which they were transferred is found to have been satisfied in so far the aforesaid lands are concerned, viz. (i) agricultural land admeasuring 1.424 hectares (out of 1.922 hectares) (supra); and (ii) agricultural land admeasuring 1.781 hectares (supra).
Accordingly, the A.O is directed to allow the assessee’s claim for deduction u/s. 54B of the Act in so far the same pertains to the aforesaid lands sold by him during the subject year are concerned subject to verification of satisfaction of the other conditions contemplated in the said statutory provision. Thus, the Grounds of appeal No.3 & 4 raised by the assessee are partly allowed in terms of our aforesaid observations.
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2025 (1) TMI 1482
Unexplained cash credit - On the date of search assessee stated that his father had the details of the cash found in his possession - assessee himself has disclosed the excess stock found during the course of the survey - HELD THAT:- Sales as shown which also include the sales which are treated as unexplained and added as unexplained cash credit by the Ld. AO however, the income from the same has not been excluded from the income computed by the assessee nor the purchases corresponding to the sales have been disturbed.
In case the purchases are not disturbed, but the sales are treated as bogus, the same would go to increase the closing stock of the assessee and, therefore, would cover part of the excess stock disclosed during the survey, which adjustment has not been done. The copy of statement recorded at the NSCBI Airport was requested, which has not been provided as per the statement made by the assessee.
Since the enhancement of income has been carried out without considering the submission of the assessee and apparently the cash sales have been included as part of the total sales and have also been added u/s 68 therefore, the treatment given to the transactions by the Ld. AO does not appear to be in consonance with the accounting principles.
As the sales were treated as unexplained cash credit, they ought to have been reduced from the sales shown in the profit and loss account and the profit and loss account should have been recast to arrive at the total income of the assessee. Hence, the order of the Ld. CIT(A) is set aside with the above observations and the Ld. CIT(A) is directed to examine the profit and loss account and provide another opportunity to the assessee to make his submission on the income enhanced, which shall be considered before making any enhancement or upholding the addition made by the Ld. AO. The assessee had included the excess stock as part of his income and at the same time has denied the disclosure on account of excess stock made. Appeal filed by the assessee is allowed for statistical purposes.
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2025 (1) TMI 1481
Addition on account of unsecured loans taken under limited scrutiny - procedure of converting the limited scrutiny assessment to the completed scrutiny - HELD THAT:- Since the assessee has not shown any income/loss from share transaction business in her return of income filed and further no details were filed with respect of the investment made in the share transactions business, in our opinion, the AO was well within the jurisdiction for examining the investments as they were not disclosed by the assessee which include the source thereof and identity, genuineness and creditworthiness of the transaction.
When the AO has reason to examine the issue of investment it covers all the aspects related to it i.e. source. As the assessee stated that investments were made out of loans taken, the AO has left with no other option but to examine these loans and it is the duty of assessee to establish the genuineness and creditworthiness of such loan creditors.
We are not inclined to accept the argument of the ld. AR that the AO has exceeded his jurisdiction without following the procedure of converting the limited scrutiny assessment to the completed scrutiny. Accordingly, this ground of appeal i.e. Ground No.1 of the assessee is dismissed.
Addition on account of loans taken by the assessee for making investments in the share business - We find that the assessee has submitted the affidavits and other documents which were also submitted before the AO during the course of hearing, however, besides filing these details no further evidence such as their return of income etc were filed to prove the creditworthiness of the loan creditors.
It is also seen that a sum of Rs. 21 lakhs was received by the assessee from her husband Shri Pradipta Kumar Pradhan and the immediate source of the same is explained as withdrawals from the bank account where he has taken loan against the property. All these facts need to be verified and considered by the AO, who has not made any comment on such evidences filed by the assessee.
Therefore, we set aside the issue to the file of AO to make necessary verification of the loan credits and if needed, necessary summons to be issued to such loan creditors as has been held in the case of Odisha Corporation (P) Ltd. [1986 (3) TMI 3 - SUPREME COURT] Thus, this ground of appeal is partly allowed for statistical purposes.
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2025 (1) TMI 1480
Revision u/s 263 beyond period of limitation - disallowance u/s 43B(e) of the Act on account of interest payable to scheduled banks on bank loan - HELD THAT:- Case the assessee filed the original return of income on 06.09.2017 the said return was processed and an intimation u/s. 143(1) was issued on 16.10.2018. Thereafter, notice u/s. 148 was issued on 17.03.2020 and that re-opened assessment order was passed on 15.04.2021. The issues on which PCIT is seeking to exercise the jurisdiction u/s. 263 of the Act were concluded by virtue of an intimation dated 16.10.2018 issued u/s. 143(1) of the Act which admittedly was done beyond a period of two years prior to the notice dated 14.02.2023 issued u/s. 263 of the Act.
As relying on CHAMBAL FERTILISERS [2024 (2) TMI 1381 - RAJASTHAN HIGH COURT] also confirmed by SC [2025 (1) TMI 463 - SC ORDER] the order of the PCIT was barred by limitation as prescribed under the Act and thereby we considered the ground no. 1 and 2 raised by the assessee.
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2025 (1) TMI 1479
Brought forward business loss set off against deemed short term capital gain taxable u/s 50 - assessee had transferred certain capital asset forming part of a block of depreciable assets and derived capital gain - HELD THAT:- Hon’ble Jurisdictional High Court has decided identical issue in favour of the assessee in case of PCIT vs. Alcon Developers [2021 (2) TMI 284 - BOMBAY HIGH COURT] this Court has accepted the position that it is not the requirement of section 72 of the said Act that such gain or profit must be taxable only under the head of "profits and gains of business or profession". The carry forward business losses would therefore be set off against the short-term capital gains on the sale of building, plant, and machinery. This is yet another reason not to accept the submissions of revenue and to answer the substantial questions of law against the Revenue and in favour of the assessee.
Special Leave Petition (SLP) filed by the Revenue [2022 (7) TMI 1574 - SC ORDER] against the aforesaid decision of the Hon’ble Jurisdictional High Court has been dismissed by the Hon’ble Supreme Court, of course, due to low tax effect.
Identical issue has been decided in favour of the assessee by the Coordinate Bench in case of Digital Electronics Ltd. [2010 (10) TMI 722 - ITAT, MUMBAI] and the decision has been upheld by the Hon’ble Jurisdictional High Court [2017 (3) TMI 274 - BOMBAY HIGH COURT]
Thus we direct the AO to allow assessee’s claim of set off of carried forward business loss against the deemed short term capital gain computed u/s. 50 of the Act. Assessee appeal allowed.
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2025 (1) TMI 1478
Final assessment order was passed u/s. 143(3) without first passing draft assessment order - HELD THAT:- A perusal of assessment order dated 12.12.2019 shows that the assessment order has been passed u/s. 143(3) of the Act and not u/s. 144C(1) of the Act. Further, issuance of demand notice and penalty notice along with said order clearly indicates that mentioning of section 143(3) of the Act, on the order is not merely a typo mistake but a well thought out final assessment order passed by the AO. The final assessment order passed without following mandatory provisions set out u/s. 144C of the Act is without jurisdiction, hence, liable to be quashed.
Timelines in passing the assessment order as time barred -Assessment order was passed by the AO on 29.09.2021 i.e. almost after 12 months from the end of month in which the DRP directions were passed. Even if, benefit of TOLA is allowed to the AO the notification issued on 27.04.2021 under TOLA, extended time for passing order u/s. 144C(13) of the Act up to 30.06.2021, hence, final assessment order passed by the AO is time barred. [Re. Shell India Markets P. Ltd. [2022 (2) TMI 1149 - BOMBAY HIGH COURT]). Hence, assessment order dated 29.09.2021 is barred by limitation.
Assessee appeal allowed.
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9911796707
