DEPUTY COMMISSIONER OF INCOME TAX, NUNGAMBAKKAM vs. SATHYABAMA RAMACHANDRAN , ALWARTHIRUNAGAR

ITA 821/CHNY/2025Status: DisposedITAT Chennai23 September 2025AY 2017-18Bench: SHRI MANU KUMAR GIRI (Judicial Member), SHRI S.R. RAGHUNATHA (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the amount received for the reduction in profit-sharing ratio in an LLP does not constitute goodwill or a transfer of assets. The amendments made by the Finance Act, 2021, are prospective and not applicable to the assessment year in question.

What were the facts?

The assessee received Rs. 1,98,86,210/- from Elior India Catering LLP, which the Assessing Officer treated as 'Goodwill' and added to the assessee's income. The assessee contended it was compensation for a reduction in profit-sharing ratio in CRCL LLP.

What were the issues?

Whether the amount received for reduction in profit-sharing ratio in an LLP is taxable as goodwill or capital gains. Applicability of amendments made by Finance Act, 2021.

Which sections of the Income-tax Act were involved?

Section 45,Section 9B

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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S.R. RAGHUNATHA

Hearing: 26.06.2025Pronounced: 23.09.2025

PER MANU KUMAR GIRI (Judicial Member): The captioned appeal filed by the revenue is directed against order of the Ld. Commissioner of Income Tax (Appeals) (NFAC), Delhi [CIT(A)] dated 08.02.2025 for Assessment Year 2017-18. 2. The revenue has raised the following legal grounds of appeal:

1.

The order of the learned Commissioner of Income Tax (Appeals) in ITA. dated 08.02.2025 for the ITBA/NF

The order continues below.

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