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133 orders · Page 2 of 3
The Tribunal held that the approval granted under Section 153D for assessment orders passed under Section 153C was mechanical and lacked application of mind, rendering it invalid. Consequently, the assessment orders were quashed.
The Tribunal held that the assessee is a 'State' within the meaning of Article 289(1) of the Constitution of India due to deep and pervasive State control, monopoly status, and public importance of its functions. Consequently, the assessee's income is not chargeable under the Income Tax Act.
The Tribunal held that additions based on unverified loose papers without corroborative evidence are not sustainable. It also noted that attributing profits from related entities to the assessee would lead to double taxation.
The Tribunal held that the AO's rejection of books of accounts and subsequent addition were not justified, especially since the assessee's declared profit margin was better than in preceding years. The Tribunal deleted the trading addition.
The tribunal held that the addition of Rs. 19,00,000 for the flat purchase should be restricted to Rs. 4,75,000 as the source of the remaining amount could not be established. The disallowance under Section 80C and the addition for FDRs were set aside.
The Tribunal held that additions based on unverified loose papers without corroborative evidence are not sustainable. It also noted that attributing profits from related entities to the assessee would lead to double taxation.
The Tribunal held that additions based on unverified loose papers without corroborative evidence are not sustainable. It also noted that attributing profits from related entities to the assessee without sufficient proof could lead to double taxation.
The Tribunal held that additions based solely on unverified loose papers without corroborative evidence are not sustainable. It also noted that attributing profits from related entities to the assessee without sufficient proof would lead to double taxation.
The Tribunal held that the assessee is a 'State' within the meaning of Article 289(1) of the Constitution of India due to deep and pervasive State control, monopoly status, and public importance of its functions. Consequently, the assessee's income is not chargeable under the Income Tax Act.
The Tribunal noted that the appeals were filed against orders passed under Section 153A and Section 143(3) of the Income Tax Act, 1961, and that the grounds raised by the assessee were common across various assessment years. The primary ground challenging the jurisdiction of the AO in passing orders under Section 153A was raised. The assessee also contested additions made on account of alleged opening unexplained capital, unexplained loans, and estimated gross profit. The Tribunal observed that the specific details and reasoning for these additions were not fully elaborated in the provided text. However, the structure of the grounds suggests a challenge to the validity of the assessment proceedings and the substantiation of the additions made by the AO and confirmed by the CIT(A). Without the complete judgment, the Tribunal's specific findings on each issue, the reasoning, and the ratio decidendi cannot be determined. The operative directions are also not discernible from the provided text.
The Tribunal held that the approval granted under Section 153D for assessment orders passed under Section 153C was mechanical and lacked application of mind, rendering it invalid. Consequently, the assessment orders were quashed.
The Tribunal held that the assessee had discharged the onus of proving the genuineness of the transactions and the claim for exemption under Section 10(38). This was supported by previous orders from the CIT(A), ITAT, and the Rajasthan High Court in similar cases, including the assessee's husband's case, and the revocation of SEBI's interim order against the assessee.
The Tribunal noted that the genuineness of the commission expenditure was an issue and the assessee failed to submit relevant documentary evidence before the authorities. Therefore, the matter deserved to be remanded to the Assessing Officer for effective adjudication.
The Tribunal held that when the AO rejects books of account and estimates profit, no separate addition under Section 68 can be made for unexplained credits, as the estimation encompasses such discrepancies. Furthermore, opening balances carried forward from prior years, which do not represent fresh credits in the current year, cannot be subject to addition under Section 68.
The Tribunal condoned the delay in filing the appeal, noting that the assessee was not aware of the ex-parte order due to issues with communication. The matter was restored to the AO for fresh adjudication, subject to a cost of Rs. 1,000/-.
The Tribunal rejected the assessee's contention that opening balances from earlier unassessed years could be considered as a source for credit entries in subsequent years. It was held that such a practice would defeat the purpose of Section 68 and open doors to tax evasion.
The Tribunal held that the protective addition was made solely on the statement of Shri Mohit Garg without any corroborative evidence linking the transaction to the assessee. The department failed to establish a connection between the PAN disclosed by Shri Mohit Garg and the assessee for the said transaction.
The Tribunal held that the Assessing Officer had not issued notice under Section 143(2) of the Act, which is a fatal defect rendering the assessment order illegal. The CIT(A) had also failed to decide this issue.
The Tribunal held that the CIT(A) was justified in deleting the addition related to bogus LTCG as no incriminating material was mentioned in the satisfaction note. However, the direction to issue notice under section 148 for LTCG was set aside.
The Tribunal decided to dispose of the appeals with a common order. Regarding the issue of unaccounted sales and GP rates, the Tribunal noted that the assessee had surrendered amounts based on seized documents, but the AO applied a higher GP rate (10%) than what the assessee declared (5%). The specific grounds concerning GP rates on various amounts of unaccounted sales (Grounds 1, 3, and 9) and the addition for excess stock (Ground 8) were not explicitly decided in the provided excerpt. However, the judgment extensively discusses the principle of telescoping. The Tribunal referred to the case of Assistant Commissioner of Income Tax vs. Kashmir Trading Company, which held that if sales outside the books have been ploughed back in the form of deposits, a separate addition under Section 68 is not called for, and telescoping of additions against the peak of credits found in 'Dasti Bahi' is justified. The Tribunal also mentioned that the issue of not allowing the benefit of telescoping against surrendered income/additions sustained (Ground 6) was a key point. The decision on the interest under Sections 234B & 234C (Ground 5) and the clarity on set-off of surrendered income (Ground 4) were also raised. The judgment indicates that the Tribunal is examining these grounds in light of the principles discussed, particularly concerning telescoping and the treatment of unaccounted transactions.
The Tribunal held that the revised limit for leave encashment exemption of Rs. 25,00,000, effective from 24.05.2023, is applicable. Since the assessee's claim of Rs. 6,97,100 (corrected from 10,54,799 in the facts) falls within this revised limit, the AO is directed to allow the claim.
The Tribunal held that the CIT(A) was justified in setting aside the assessment orders. The additions made under Section 153A were incorrect because the incriminating material was found in the search of a third party (Ramesh Manihar Group), thus requiring action under Section 153C of the Act. The CIT(A)'s reliance on the Supreme Court and Rajasthan High Court decisions was appropriate.
The Tribunal condoned the delay in filing the appeal, accepting the assessee's contention of contacting legal experts which caused the delay. The Tribunal acknowledged that a notification dated 24.05.2023 extended the benefit of leave encashment to non-government employees with retrospective effect.
The Tribunal held that the CIT(A) was correct in deleting the additions made by the AO under Section 153A for unexplained cash credits, commission expenses, and interest expenses, as there was no incriminating material found during the search to substantiate these additions. The Tribunal further held that the CIT(A) erred in directing the AO to proceed under Section 147 of the Act. Citing the Supreme Court's observation that there must be a point of finality in legal proceedings and stale issues should not be reactivated, the Tribunal found that the CIT(A)'s direction to reopen the assessment under Section 147 was ultra vires its powers. The CIT(A)'s authority ended with deciding the sustainability of the Section 153A additions. Therefore, the cross-objections of the assessee were allowed, and the appeals of the revenue were dismissed. The decision in the lead case was applied mutatis mutandis to the other assessment years.
The Tribunal decided the issues as follows: On the issue of GP rate on unaccounted sales (Grounds 1, 3, and 9), the Tribunal noted that the assessee had surrendered income on unaccounted sales and the AO had applied a 10% GP rate. The CIT(A) had confirmed this. The Tribunal found that the assessee's claim for a 5% GP rate was not supported by any evidence. The AO's action of applying a 10% GP rate on unaccounted sales was found to be reasonable, considering the nature of the business and the fact that the assessee had not provided any contrary evidence. Therefore, the addition made by the AO and confirmed by the CIT(A) was upheld. Regarding the interest income (Ground 2), the Tribunal observed that the AO had made an addition based on rough calculation and estimation. The CIT(A) had confirmed this. The Tribunal found no specific error in the AO's estimation, as the assessee had not provided any concrete evidence to disprove it. Thus, the addition was sustained. On the issue of set-off of surrendered income and additions sustained (Ground 4), the Tribunal noted that the CIT(A) had not given a clear finding. This issue was remanded back to the CIT(A) for a fresh adjudication with clear findings. Concerning the adjustment of PD account funds against tax liability and interest under Sections 234B and 234C (Ground 5), the Tribunal found that the assessee had made a specific request in the return filed under Section 139. The AO had rejected this. The Tribunal held that the money lying in the PD account should be adjusted against the advance tax liability and self-assessment tax, and consequently, interest under Sections 234B and 234C should not be charged on the amount adjusted. This issue was allowed in favour of the assessee. Regarding telescoping (Ground 6), the Tribunal noted that the CIT(A) had not given a clear finding. This issue was also remanded back to the CIT(A) for a fresh adjudication. On the addition for excess stock (Ground 8), the Tribunal found that the AO had made additions after considering the assessee's explanation. The CIT(A) had confirmed this. The Tribunal found no specific error in the AO's action and upheld the addition.
The Tribunal held that the CIT(A) was justified in setting aside the assessment orders. The additions made under Section 153A were incorrect because the incriminating material was found in the search of a third party (Ramesh Manihar Group), thus requiring action under Section 153C of the Act. The CIT(A)'s reliance on the Supreme Court and Rajasthan High Court decisions was appropriate.
The Tribunal held that the CIT(A) was correct in deleting the additions made under Section 153A for want of incriminating material. However, the CIT(A) acted ultra vires by directing the AO to re-open the assessment under Section 147. The Tribunal emphasized the principle of finality in legal proceedings, citing the Apex Court's view that stale issues should not be reactivated beyond a particular stage. The CIT(A)'s authority was limited to deciding the sustainability of the addition under Section 153A. Therefore, the cross-objection of the assessee is allowed, quashing the direction to re-open under Section 147. The appeals of the revenue are dismissed. The decision in the lead case applies mutatis mutandis to the other assessment years.
The Tribunal held that the assessment framed under Section 153A of the Income Tax Act, 1961, was bad in law and deserved to be quashed. The reasoning was based on the principle that an assessment under Section 153A must be made on the basis of seized material or other post-search material that can be related to the evidence found. In the absence of any incriminating material unearthed during the search, completed assessments can only be reiterated, and abated assessments can be made. The Tribunal relied on the decisions of the Hon'ble Delhi High Court in CIT vs. Kabul Chawla and the jurisdictional High Court in Meeta Gutgutia. Since the assessment itself was set aside, the Tribunal found it unnecessary to delve into the merits of the individual grounds of appeal. Consequently, the additions made in the case of the assessee were quashed based on the judicial precedent. The Tribunal noted that the facts were similar across the appeals, and the decision was based on the absence of incriminating material. Grounds 1 and 2 raised by the assessee were allowed. Ground 3 was general and did not require a finding. The operative direction was to quash the assessment.
The Tribunal noted the assessee's plea regarding technical glitches and non-service of notices, and the delay in filing the appeal. Considering the need for substantial justice, the Tribunal restored the matter to the AO for fresh adjudication.
The Tribunal held that the lis between the parties should be decided on merits to ensure that no party's rights are prejudiced without an opportunity of being heard. Consequently, the Tribunal restored the matter to the file of the CIT(A) with a direction to decide it afresh. The CIT(A) is to provide one more opportunity of hearing to the assessee. However, the assessee is directed not to seek any adjournment on frivolous grounds and to remain cooperative during the proceedings. The Tribunal clarified that this decision to restore the matter does not reflect any opinion on the merits of the dispute, which will be adjudicated independently by the CIT(A) in accordance with law. The appeal of the assessee is allowed for statistical purposes.
The Tribunal quashed the assessment framed under section 153A of the Act, holding it to be bad in law. This was based on the principle that assessments under section 153A must be based on seized material, and in the absence of incriminating material, completed assessments cannot be interfered with.
The Tribunal held that the assessee had established the identity, genuineness, and creditworthiness of the lenders. Transactions were through banking channels, and lenders were regular taxpayers, thus the additions were unwarranted.
The Tribunal held that the assessee had presented sufficient reasons and documents to justify the delay in filing the appeal before the CIT(A), attributing it to marital discord and non-receipt of proper communication. Therefore, the delay was condoned.
The Tribunal allowed the assessee's cross-objection and dismissed the Revenue's appeals. Regarding the Assessee's cross-objection (Issue 4), the Tribunal held that the CIT(A) had exceeded its jurisdiction by directing the AO to re-open the assessment under Section 147 after deleting the additions made under Section 153A. The Tribunal cited the principle of finality in legal proceedings and the apex court's view that stale issues should not be reactivated. The CIT(A)'s authority ended with deciding the sustainability of the addition under Section 153A, and by directing re-opening under Section 147, the CIT(A) acted ultra vires. Therefore, the cross-objection was allowed. Consequently, the Revenue's appeals were dismissed. The Tribunal did not explicitly rule on the merits of the additions under Sections 68 and 69C (Issues 1-3) as the appeals were dismissed based on the procedural issue raised in the cross-objection.
The Tribunal held that the CIT(A) was correct in deleting the addition of Rs. 9,21,07,800/- made under Section 68. The primary reason for this deletion was the lack of incriminating material unearthed during the search that directly linked the unsecured loans to undisclosed income for the purpose of assessment under Section 153A. The Tribunal noted that while the AO relied on the Director's statement and the non-existence of companies, the CIT(A) correctly applied the principle that additions under Section 153A require incriminating material. The Tribunal also addressed the assessee's cross-objection, finding that the CIT(A) had acted ultra vires by directing the AO to consider re-opening the assessment under Section 147. The Tribunal emphasized that the CIT(A)'s authority ended with deciding the appeal on the Section 153A addition. Therefore, the cross-objection was allowed, and the direction to re-open under Section 147 was set aside. The appeal of the Revenue was dismissed, and the cross-objection of the assessee was allowed.
The Tribunal held that the reassessment proceedings initiated under Section 147 read with Section 148 of the Income Tax Act, 1961, were invalid and without jurisdiction. The primary reason for this decision was the discrepancy in the amount of cash deposits alleged by the AO (Rs. 3,28,98,301/-) in the reasons recorded and the notice issued under Section 148, compared to the actual cash deposit found in the bank account (Rs. 1,97,67,171/-). The Tribunal found that the AO did not have cogent material to form a 'reason to believe' that income had escaped assessment, and the reassessment was initiated based on suspicion and unverified data, not tangible material. The Tribunal cited Supreme Court judgments like CIT vs. Kelvinator of India Ltd. and CIT vs. Sun Engineering Works Pvt. Ltd., emphasizing that reassessment must be based on tangible material and not mere suspicion or change of opinion. The Tribunal also noted that the AO failed to independently form the 'reason to believe' and that the reassessment was initiated on a wrong PAN. Consequently, the reassessment proceedings, the notice under Section 148, and the assessment order under Section 147/144 were quashed as void ab initio. Grounds 1 and 2 of the assessee's appeal were allowed.
The Tribunal allowed the appeal on the issue of addition of Rs. 31,79,223/-. The Tribunal found that the seized loose sheet, which formed the basis of the addition, contained only figures, names, and abbreviations without any mention of payments made or recipients. The revenue failed to clarify how the AO interpreted 'comms earned in 16-17' as commission payment made by the assessee. The Tribunal noted that loose sheets seized during a search are often rough workings and do not automatically reflect actual transactions. The onus was on the Department to collect corroborative evidence, which was not done. The Tribunal held that unsubstantiated, unsigned, and uncorroborated seized material alone cannot be considered conclusive evidence for making additions, citing the fundamental judicial view that arbitrary additions based on 'dumb documents' without materialized transactions are not permissible. The Tribunal relied on the decisions of the Hon'ble Karnataka High Court in DCIT/CIT(A) Vs. Sunil Kumar Sharma and the Hon'ble High Court of Madhya Pradesh in PCIT-I Vs Shri Pukhraj Soni, which held that loose sheets have no evidentiary value without corroborative evidence. Therefore, the addition of Rs. 31,79,223/- was directed to be deleted. The issue regarding the initiation of proceedings under section 153A was not explicitly decided in the provided excerpt.
The Tribunal held that the reassessment proceedings initiated under section 147 read with section 148 were bad in law and without jurisdiction. The Tribunal found that the AO's 'reason to believe' was not independently formed and was based on incorrect information (NMS data suggesting Rs. 3,28,98,301/- deposited, whereas actual cash deposit was Rs. 1,97,67,171/-). The Tribunal noted that the AO failed to demonstrate an independent formation of belief, relying on external sources and unverified figures. The reassessment was initiated on conjecture and suspicion without concrete material, violating the principles laid down by the Supreme Court in cases like CIT vs. Kelvinator of India Ltd. and CIT vs. Sun Engineering Works Pvt. Ltd. The Tribunal also noted the initiation on a wrong PAN. Consequently, the reassessment proceedings, the notice under section 148, and the assessment order under section 147/144 were quashed as void ab initio. Since the legal issue was decided in favour of the assessee, the other grounds became academic and were not adjudicated. The appeals were allowed.
The Tribunal addressed several grounds of appeal. Regarding the use of unexplained stock in manufacturing activities, the Tribunal acknowledged that seized material included repaired/reworked items and items made from melting old stock. While the explanation was not entirely matching, a 30% rebate was granted on the material cost of gold/silver items, leading to a deletion of Rs. 6,43,316/-. For additions made at a presumptive rate of 20% for precious and semi-precious stones, the Tribunal deleted 30% of the addition (Rs. 1,44,518/-) for consistency. For the remaining additions related to stock, the Tribunal directed the AO to restrict the addition to the profit element embedded therein, calculating it at 30.90% of the cost of goods sold, resulting in an addition of Rs. 9,40,207/- as profit. Regarding wages for repair/reworked work, the Tribunal allowed telescoping of the cash expenditure of Rs. 3,26,415/- against the brought-forward unaccounted profit of Rs. 17,01,179/- and the current year's determined profit of Rs. 9,40,207/-, totaling Rs. 26,41,386/-. Finally, an addition of Rs. 30,900/- based on a seized sheet mentioning 'SOLD' against a painting was deleted due to the absence of corroborative evidence proving cash receipt.
The Tribunal held that the very foundation for reopening the case under Section 147 and making an addition under Section 68 was factually incorrect. The transaction was a debit entry (loan given by the assessee) and not a credit entry (loan received by the assessee), thus Section 68 was not applicable.
The Tribunal upheld the order of the CIT(A) and dismissed the appeal of the Revenue. The Tribunal noted that the CIT(A) had correctly appreciated that the Assessing Officer (AO) had misconstrued the affidavit of Shri Mahesh Gupta. The affidavit listed persons/concerns from whose possession documents were seized, and Shri Mahesh Gupta had owned up transactions related to data found from the premises of Shri Sunil Sharma, from which the impugned addition originated. The Tribunal found that Shri Mahesh Gupta's statement confirmed that the cash stated to have been paid by the assessee to him actually belonged to Shri Mahesh Gupta and was delivered by his employees to the assessee for safekeeping, and was subsequently taken back. Therefore, the cash was held by the assessee only as a trustee for a period. The CIT(A) had rightly concluded that the addition should be considered in the hands of Shri Mahesh Gupta and not the assessee. The Tribunal found no infirmity in the CIT(A)'s order and directed the deletion of the addition.
The Tribunal partly allowed the appeals. It granted relief on additions related to unexplained stock by allowing a rebate and restricting additions to the profit element. It also allowed telescoping of cash expenses against unaccounted profits and deleted an addition based on a seized document lacking corroborative evidence.
The Tribunal held that the requirement of auditing account books was not applicable to the assessee as their turnover was less than the prescribed limit. Therefore, the claim of the assessee for setting off the business loss against other income deserved to be allowed.
The Tribunal noted that the CIT(A) had passed an ex-parte order dismissing the assessee's appeal due to the non-furnishing of substantial written submissions or documentary evidence. The CIT(A) explicitly stated that the onus was on the appellant to support their claims with cogent evidence and, in its absence, there was no basis to take a contrary view, thus sustaining the additions. The Tribunal observed that the assessee, during the hearing before it, provided a detailed written submission outlining the facts of the transaction involving the plot purchase, including the agreement and payment details. The Tribunal found that the CIT(A) had not considered these facts as the appeal was dismissed ex-parte. Therefore, the Tribunal decided to set aside the order of the CIT(A) and remanded the matter back to the CIT(A) for fresh adjudication on merits after considering the submissions and evidence that the assessee intended to present. The issue of penalty proceedings under Section 271(1)(c) was also remanded for fresh consideration.
The Tribunal partly allowed the appeals. It granted relief on additions related to unexplained stock by allowing a rebate and restricting additions to the profit element. It also allowed telescoping of cash expenses against unaccounted profits and deleted an addition based on a seized document lacking corroborative evidence.
The Tribunal partly allowed the appeals. It granted relief on additions related to unexplained stock by allowing a rebate and restricting additions to the profit element. It also allowed telescoping of cash expenses against unaccounted profits and deleted an addition based on a seized document lacking corroborative evidence.
The Tribunal noted the significant delay in filing the appeal (2188 days) and the consistent non-compliance by the assessee throughout the appellate proceedings. The assessee failed to represent the case or provide substantiating evidence.
The Tribunal held that the reassessment proceedings initiated under Section 147 read with Section 148 were invalid and liable to be quashed. The primary reason was the AO's failure to independently form a 'reason to believe' based on tangible material. The AO relied on incorrect information (NMS data suggesting Rs. 3,28,98,301/- in deposits) without proper verification, and the actual cash deposit found was Rs. 1,97,67,171/-. This discrepancy indicated a lack of concrete material and a failure to establish a live nexus between the information received and the alleged escapement of income. The Tribunal cited Supreme Court judgments in CIT vs. Kelvinator of India Ltd., CIT vs. Sun Engineering Works Pvt. Ltd., and Raymond Woollen Mills Ltd. vs. ITO, emphasizing that reassessment cannot be based on mere suspicion or conjecture. The AO's belief was considered borrowed and mechanical, not independent or genuine. Furthermore, the reassessment notice was issued on a wrong PAN. Consequently, the reassessment proceedings, the notice under Section 148, and the assessment order under Section 147/144 were quashed as void ab initio. Grounds 1 and 2 were allowed. Since the appeal was allowed on legal grounds, other grounds were rendered academic and not adjudicated.
The Tribunal allowed the assessee's appeals. On the primary legal issue concerning the validity of reassessment proceedings, the Tribunal found that the notice under section 148 was issued on an incorrect PAN (AADCR1819C) while the assessee had already intimated the correct PAN (AACAR7371J) two years prior. The Tribunal held that issuing a notice on a wrong PAN, especially when the correct PAN was known, renders the notice and subsequent assessment proceedings invalid and without jurisdiction. The Tribunal relied on precedents that emphasize the necessity of issuing notices to the correct assessee and the invalidity of proceedings initiated on incorrect particulars. Furthermore, the Tribunal noted that the AO's belief to reopen the assessment was not based on independent formation of 'reason to believe' supported by tangible material, but rather on unverified figures and suspicion, citing judgments like CIT vs. Kelvinator of India Ltd. and Raymond Woollen Mills Ltd. vs. ITO. The discrepancy in the amount of alleged deposits (Rs. 3,28,98,301/- versus Rs. 1,97,67,171/-) also raised questions about the basis of reassessment. Consequently, the Tribunal quashed the reassessment proceedings and the consequent assessment order dated 28.03.2022 as void ab initio. Since the legal grounds were allowed, other grounds were rendered academic. The CIT(A)'s order was quashed.
The Tribunal condoned the 39-day delay in filing the appeal, citing the principle of substantial justice and the inadvertence of the legal counsel. However, on merits, the Tribunal upheld the disallowance of Rs. 9,23,400/-, finding that the assessee failed to substantiate the expenses at any stage (AO, CIT(A), or ITAT) and that the claim appeared to be an afterthought.