ITO 22 1 6 MUMBAI, MUMBAI vs. ARCIL CPS 012 I TRUST, MUMBAI

ITA 3303/MUM/2026Status: DisposedITAT Mumbai22 June 202611 pages
AI SummaryDismissed

What were the facts?

The assessee, a trust, declared nil income and claimed to be a revocable determinate trust under SARFAESI Act, with income taxable in the hands of beneficiaries under Sections 61-63. The AO treated it as an Association of Persons (AOP) due to profit motive and organized commercial activities, taxing income of Rs. 8,88,51,828/-.

What did the Tribunal hold?

The Tribunal held that the assessee is a valid securitisation trust entitled to assessment under Sections 61-63, not as an AOP. Mere participation of beneficiaries does not constitute an AOP, and the trust structure under SARFAESI Act with identifiable beneficiaries and revocable contributions aligns with Sections 61-63.

What were the issues?

Whether the assessee trust is to be assessed as a pass-through entity under Sections 61-63 or as an Association of Persons (AOP) due to its commercial activities and profit motive.

Which sections of the Income-tax Act were involved?

Section 61,Section 62,Section 63

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: HON’BLE BEENA PILLAI & HON’BLE JAGADISH

Pronounced: 22/06/2026

PER BEENA PILLAI, JUDICIAL MEMBER:

Present appeal filed by the revenue arises out of the order passed by NFAC, Delhi [hereinafter referred to as “the Ld. CIT(A)”], dated 27/02/2026, for AY 2016, on the following grounds of appeal:-

“1) Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in not upholding the action of the Assessing Officer in treating the assessee as an Associati

The order continues below.

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