DEPUTY COMMISSIONER OF INCOME TAX, CHENNAI vs. SUNDARAM ALTERNATIVE OPP SERIES HIGH YIELD SECURED DEBT FUND, CHENNAI

ITA 3532/CHNY/2025Status: DisposedITAT Chennai01 June 2026AY 2020-2117 pages
AI SummaryDismissed

What were the facts?

The Revenue appealed against the CIT(A)'s order granting exemption under Section 10(23FBA) to an Alternative Investment Fund (AIF) for income earned. The Assessing Officer had treated the income, including processing fees, as business income and disallowed the exemption.

What did the Tribunal hold?

The Tribunal held that the Assessing Officer erred in recharacterizing the AIF's income as business income without proper inquiry or applying settled judicial tests. The processing fee was intrinsically linked to investments and not business income.

What were the issues?

Whether income earned by a Category II AIF, including processing fees, is eligible for exemption under Section 10(23FBA) and whether it should be treated as business income.

Which sections of the Income-tax Act were involved?

Section 10(23FBA),Section 115UB,Section 10(23FB),Section 115U

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

Before: SHRI ABY T. VARKEY & MS. PADMAVATHY.S

Hearing: 07.05.2026

Heard together (2 matters)

ITA No.3532 /Chny/2025
ITA No.3533 /Chny/2025

Read from the judgment's own cause title. This page is filed under one of them.

PER PADMAVATHY.S, A.M: These appeals by the Revenue are against the separate orders of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi [in short, 'CIT(A)'], Chennai-16, both dated 24.09.2025, passed under Se

The order continues below.

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