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TMI Blog2025 (2) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... "Act"] by the National Faceless Assessment Centre, Delhi [hereinafter referred to as "AO"] for Assessment Year 2015-16. Facts of the Case: 2. The assessee filed his return of income for A.Y. 2015-16 on 23.12.2015, declaring total income of Rs. 2,51,400/-. In the return, the assessee claimed an exempt income of Rs. 93,86,517/- as his share of profit from M/s. Ice Worth Reality LLP. The assessment was reopened under Section 147 on the basis of information received from ITO Ward 25(2)(5), Mumbai, stating that M/s. Ice Worth Reality LLP was engaged in accommodation entries through penny stock transactions. The (AO) issued a notice under Section 148 on 31.03.2021, which remained un-responded. Subsequent notices under Section 142(1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Aggrieved by the order of the CIT(A), the revenue is in appeal before us with following grounds of appeal: (a) The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,57,93,993/- made by AO on account of undisclosed income out of benefit taken by the assessee as a partner in M/s Ice Worth Reality LLP, which has claimed bogus LTCG exemption u/s. 10(38) of IT Act on sale of penny stock M/s Sun Asian, without appreciating that: (i) The Firm M/s Ice Worth Reality LLP, in which the assessee is a partner (having 2.6% share), was engaged in providing accommodation entries of bogus capital gain/loss through penny stock transactions at various levels of operators. The firm has shown Long- Term Capital Gain (LTCG) on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is in appeal against the deletion of an addition of Rs. 1,57,93,993/- made by the AO under Section 68 of the Act, treating it as undisclosed income in the hands of the assessee. The CIT(A) deleted the addition on the ground that the income was already assessed in the hands of M/s. Ice Worth Reality LLP, and taxing the same in the hands of the partner would lead to double taxation, which is contrary to the provisions of the Act. 7.1. The Authorised Representative (AR) of the assessee, through a written submission, has also brought to our notice that the tax effect in the present appeal is Rs. 52,55,553/-, which is below the enhanced monetary limit of Rs. 60 Lacs for filing appeals before the Tribunal, as prescribed in CBDT Circular No. 09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of accounts. In this case, the assessee's share of profit from M/s. Ice Worth Reality LLP is fully explained and recorded in the LLP's books, which were assessed separately. Since the income was already disclosed at the LLP level, there was no unexplained credit in the partner's books, and invoking Section 68 in the partner's case was unjustified. 7.5. The AR has pointed out that the tax effect in the present appeal is Rs. 52,55,553/-, which is below the revised monetary threshold of Rs. 60 Lacs for filing appeals before the Tribunal. As per the CBDT's policy, the Department is instructed not to file appeals before the Tribunal where the tax effect is below the prescribed limit unless the case falls within specific exceptions. The Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enuine cases of tax evasion and revenue leakage. We hope that the authorities take cognizance of such instances and refrain from unnecessary litigation that does not serve the intended purpose of tax collection but merely adds to avoidable legal proceedings. 7.7. The Revenue's appeal lacks merit, as the scheme of taxation for LLPs and partners is clear under the Act. The addition of Rs. 1,57,93,993/- in the hands of the assessee is unsustainable. The CIT(A) correctly deleted the addition, applying the correct legal principles. 7.8. The appeal is also liable to be dismissed on the ground that the tax effect is below the prescribed monetary limit of Rs. 60 Lacs, as per CBDT Circular. 8. In the result, the appeal filed by the Revenue is dis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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