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The Tribunal upheld the deletion of additions related to cash payments for flats, finding that the loose papers alone did not establish the entire cash as unexplained money of the assessee. The Tribunal also upheld the deletion of Rs.98,01,469/- added under section 69C for alleged cash payments to Chinese suppliers, agreeing with the assessee that these payments related to procurement of goods for the business and that a separate addition would duplicate the profit already taxed. Regarding stock valuation, the Tribunal found that neither the entire physical stock value nor the estimation of profit on it was justified. The valuation difference of Rs.17,74,324/- was restricted to 5% of this difference, amounting to Rs.88,716, in place of Rs.21,43,312 sustained by the CIT(A). The Tribunal dismissed the Revenue's grounds concerning the absence of a remand report and the cumulative effect of evidence. The assessee's appeals were partly allowed, and the Revenue's appeals were dismissed.
The Tribunal upheld the deletion of additions related to cash payments for flats, finding that the loose papers alone did not establish the entire cash as unexplained money of the assessee. The Tribunal also upheld the deletion of Rs.98,01,469/- added under section 69C for alleged cash payments to Chinese suppliers, agreeing with the assessee that these payments related to procurement of goods for the business and that a separate addition would duplicate the profit already taxed. Regarding stock valuation, the Tribunal found that neither the entire physical stock value nor the estimation of profit on it was justified. The valuation difference of Rs.17,74,324/- was restricted to 5% of this difference, amounting to Rs.88,716, in place of Rs.21,43,312 sustained by the CIT(A). The Tribunal dismissed the Revenue's grounds concerning the absence of a remand report and the cumulative effect of evidence. The assessee's appeals were partly allowed, and the Revenue's appeals were dismissed.
The Tribunal held that the grounds of appeal raised by the Revenue were squarely covered by its own decision in the assessee's case for AY 2012-13. The Tribunal reiterated that to invoke the extended limitation period under the fourth proviso to Section 153A, it is mandatory for the AO to demonstrate that the escaped income is "in the form of an asset" and its value exceeds Rs. 50 lakhs. The Tribunal found that the AO had not shown that the alleged income escaped assessment was represented "in the form of an asset." The additions made under Section 69A and 69C were not based on any specific asset discovered during the search. Therefore, reopening the assessment beyond six years was in violation of Section 153A/153C, rendering the reassessment order void-ab-initio. The Tribunal affirmed the order of the CIT(A). The assessee's cross-objection was dismissed as infructuous due to the dismissal of the Revenue's appeal.
The Tribunal admitted the additional ground as it was purely a legal ground concerning the jurisdiction and validity of the assessment order. The Tribunal noted that the assessment for AY 2010-11 was reopened beyond four years by a notice under Section 148 dated 31.07.2017, issued by an ITO below the rank of Joint Commissioner. As per Section 151(2) of the Act (relevant for the assessment year), such a notice issued after four years requires the satisfaction of the Joint Commissioner on the reasons recorded by the Assessing Officer. The notice issued did not specifically mention from which higher authority the approval was obtained, nor was a copy of the sanction provided to the assessee. The Tribunal observed that the Assessing Officer did not provide a copy of the sanction/approval granted by the Joint Commissioner for the issuance of the notice. Since the Assessing Officer did not provide a copy of the approval from the specified authority, or specifically mention it in the notice, the notice issued under Section 148 was held to be bad in law. Consequently, the assessment framed based on such an invalid notice was also held to be bad in law. The reassessment order was quashed, and the additional ground raised by the assessee was allowed. No other issue was decided.
The Tribunal upheld the deletion of additions related to cash payments for flats, finding that the loose papers alone did not establish the entire cash as unexplained money of the assessee. The Tribunal also upheld the deletion of Rs.98,01,469/- added under section 69C for alleged cash payments to Chinese suppliers, agreeing with the assessee that these payments related to procurement of goods for the business and that a separate addition would duplicate the profit already taxed. Regarding stock valuation, the Tribunal found that neither the entire physical stock value nor the estimation of profit on it was justified. The valuation difference of Rs.17,74,324/- was restricted to 5% of this difference, amounting to Rs.88,716, in place of Rs.21,43,312 sustained by the CIT(A). The Tribunal dismissed the Revenue's grounds concerning the absence of a remand report and the cumulative effect of evidence. The assessee's appeals were partly allowed, and the Revenue's appeals were dismissed.
The Tribunal upheld the deletion of additions related to cash payments for flats, finding that the loose papers alone did not establish the entire cash as unexplained money of the assessee. The Tribunal also upheld the deletion of Rs.98,01,469/- added under section 69C for alleged cash payments to Chinese suppliers, agreeing with the assessee that these payments related to procurement of goods for the business and that a separate addition would duplicate the profit already taxed. Regarding stock valuation, the Tribunal found that neither the entire physical stock value nor the estimation of profit on it was justified. The valuation difference of Rs.17,74,324/- was restricted to 5% of this difference, amounting to Rs.88,716, in place of Rs.21,43,312 sustained by the CIT(A). The Tribunal dismissed the Revenue's grounds concerning the absence of a remand report and the cumulative effect of evidence. The assessee's appeals were partly allowed, and the Revenue's appeals were dismissed.
The Tribunal found that the assessee had not been able to effectively substantiate his engagement in any business activity by producing cogent and corroborative evidence. The claim that receipts represented business receipts liable under Section 44AD remained unsubstantiated. Furthermore, the declared turnover of ₹1,09,05,007/- exceeded the threshold of ₹1 crore prescribed for AY 2016-17 under Section 44AD, disentitling the assessee from presumptive taxation. The Tribunal also noted that addition under Section 68 could not be sustained for the entire receipts without examining corresponding credits and withdrawals. Therefore, the matter was restored to the Assessing Officer (AO) for fresh adjudication. The AO is directed to examine the complete bank account, with reference to deposits and withdrawals, and determine the nature and source of transactions. If unexplained funds/investments are found, the AO may consider the unexplained peak amount for taxation under Section 69. The assessee will be afforded an opportunity to present evidence and explanations. The appeal was allowed for statistical purposes.
The Tribunal dismissed the appeal for non-prosecution. The Bench noted that the assessee neither appeared nor filed any request for adjournment or written submissions. Citing the Hon'ble Bombay High Court's decision in Chemipol Vs. Union of India and the Hon'ble Supreme Court's decision in Nandramdas Dwarkadas, the Tribunal held that it is axiomatic that proceedings cannot continue when a party who moved the court or tribunal has not appeared or remained present. The Tribunal possesses the inherent power to dismiss an appeal for non-prosecution when an adequate and reasonable opportunity of being heard has been granted. Therefore, without delving into the merits of the case, the appeal was dismissed. However, liberty was granted to the assessee to seek recalling of the order by substantiating the reasons for non-compliance.
The Tribunal held that while the CIT(A) correctly identified that the alleged on-money receipts were connected to the assessee's regular business activity and represented suppressed business turnover, the estimation of the profit element needed adjustment. The CIT(A) had estimated the profit at 18.60% of the alleged on-money receipts. However, the Tribunal, considering the net profit ratios of the concerned assessees across various assessment years (ranging from 2.18% to 8.96%), determined that an average net profit rate of 4.5% would be a more reasonable estimate of the profit element embedded in the suppressed business receipts. Consequently, the Tribunal directed that the additions in the respective assessee appeals be restricted to 4.5% of the alleged on-money receipts. The Revenue's appeal challenging the treatment of receipts as business income was dismissed. The Tribunal clarified that other grounds raised by the assessees regarding the validity and evidentiary value of the material were not adjudicated.
The Tribunal held that the issue required fresh examination at the Assessing Officer's level. It noted that both the assessment order and the Remand Report indicated that complete details necessary for verifying the claim under section 80JJAA had not been furnished by the assessee. The Tribunal observed the absence of complete employee-wise details, month-wise salary particulars, and reconciliation of additional employee cost with bank statements. Consequently, the Tribunal was of the view that the matter should be restored to the file of the Assessing Officer for de novo consideration. The Assessing Officer was directed to afford a reasonable opportunity to the assessee and call for necessary details and supporting evidence for proper verification of the claim. The assessee was directed to cooperate and furnish complete details. The order of the CIT(A) was set aside, and the matter was restored to the AO for fresh adjudication. The appeal was allowed for statistical purposes.
The Tribunal found that the reasonableness of the professional fees paid to a trustee cannot be solely judged by its percentage of the trust's receipts or expenditure. However, when payment is made to a specified person, the assessee must substantiate, with verifiable material, that the amount is commensurate with the nature, extent, and value of services rendered, as per Section 13(2)(c). The Tribunal considered it appropriate to examine the issue of reasonableness of professional fees afresh. The matter was set aside to the file of the Ld. AO for verification of the reasonableness of the professional fees paid to Shri Debi Goenka. The assessee was directed to furnish adequate documentary evidence, including a comparative year-wise chart of fees paid, time devoted by the trustee, basis/structure of fee determination, and a proper comparative analysis of fees for similar work. The Ld. AO was to examine this evidence and determine the issue afresh, affording the assessee a reasonable opportunity of being heard. Consequential issues dependent on this determination were also to be reconsidered. The Tribunal explicitly stated that the remand was confined to the verification and determination of the reasonableness of the professional fees and no opinion was expressed on the merits.
The Tribunal upheld the order of the CIT(A), dismissing the Revenue's appeals. The primary finding was that the reassessment proceedings initiated under Section 147 of the Income-tax Act, 1961, were invalid due to the prior approval of the Resolution Plan under the Insolvency and Bankruptcy Code, 2016 (IBC). The Tribunal reasoned that a reduction in the determined loss for an earlier assessment year has a consequential bearing on the tax attributes of the Corporate Debtor, including losses available for carry forward and set-off in subsequent years. Therefore, such proceedings directly impacted the tax position relating to the period prior to the Resolution Plan's approval. The Tribunal referred to the decisions of the Bombay High Court in Alok Industries Ltd. v. ACIT and Uttam Value Steels Ltd. v. ACIT, which considered the effect of approved Resolution Plans on reassessment proceedings for periods prior to approval. The Tribunal noted that while the Resolution Plan allowed for carry forward of losses, this did not grant the Revenue an unrestricted power to reopen assessments concluded before the plan's approval. The Tribunal found no infirmity in the CIT(A)'s conclusion that reassessment proceedings could not be validly initiated after the Resolution Plan's approval. Consequently, the reassessment proceedings were liable to fail on jurisdictional grounds. The Tribunal found it unnecessary to adjudicate the validity of the reopening under the first proviso to Section 147 or the issue of change of opinion, as well as the allowability of depreciation, as these became academic. The addition/disallowance of Rs. 8,38,63,725/- made by the AO was consequently deleted.
The Tribunal dismissed the appeal for non-prosecution. The primary reason for dismissal was the non-appearance of the assessee on the date of hearing, despite adequate opportunity. The Tribunal cited the decision of the Hon'ble Bombay High Court in Chemipol Vs. Union of India and the Hon'ble SC in Nandramdas Dwarkadas to support its inherent power to dismiss an appeal when the appellant fails to appear. The Tribunal explicitly stated that it would not delve into the merits of the case. However, liberty was granted to the assessee to seek recalling of the order by substantiating the reasons for non-compliance with the notice. No finding was given on the substantive grounds of appeal related to section 69A or the admission of additional evidence.
The Tribunal upheld the deletion of additions related to cash payments for flats, finding that the loose papers alone did not establish the entire cash as unexplained money of the assessee. The Tribunal also upheld the deletion of Rs.98,01,469/- added under section 69C for alleged cash payments to Chinese suppliers, agreeing with the assessee that these payments related to procurement of goods for the business and that a separate addition would duplicate the profit already taxed. Regarding stock valuation, the Tribunal found that neither the entire physical stock value nor the estimation of profit on it was justified. The valuation difference of Rs.17,74,324/- was restricted to 5% of this difference, amounting to Rs.88,716, in place of Rs.21,43,312 sustained by the CIT(A). The Tribunal dismissed the Revenue's grounds concerning the absence of a remand report and the cumulative effect of evidence. The assessee's appeals were partly allowed, and the Revenue's appeals were dismissed.
The Tribunal allowed the assessee's appeal, directing the deletion of all additions. Regarding the Rs. 23,00,000/- loan addition under section 68, the Tribunal found that the assessee had provided primary documents like loan confirmation, bank statements, and the lender's financial material, establishing the lender's identity and creditworthiness. The Tribunal noted that the AO's reliance on Shri Mehta's statement was not sufficiently substantiated by independent adverse findings concerning the loan transaction itself, especially when the assessee sought cross-examination. The Tribunal distinguished the present case from Bajaj International Realty by emphasizing the availability of primary documents and audited accounts, and the revenue's failure to point out defects in the assessee's material. The Tribunal held that an untested general statement could not overcome the assessee's transaction-specific explanation without an inquiry addressing that explanation. For the commission addition of Rs. 12,420/- under section 69C, the Tribunal found no evidence that the assessee incurred such expenditure. The rate was derived from Shri Mehta's statement concerning unrelated transactions, and the assessment order did not show a distinct proposed commission addition. The Tribunal directed deletion of this addition. For the interest disallowance of Rs. 1,69,003/-, the Tribunal noted that the AO's sole reason was the characterization of the principal loan as unexplained, which had been set aside. The Tribunal also observed that the assessee claimed income under section 44ADA, where interest is deemed to have been allowed. The Tribunal directed deletion of this disallowance. The AO was directed to recompute the income and tax liability accordingly.
The Tribunal upheld the deletion of additions related to cash payments for flats, finding that the loose papers alone did not establish the entire cash as unexplained money of the assessee. The Tribunal also upheld the deletion of Rs.98,01,469/- added under section 69C for alleged cash payments to Chinese suppliers, agreeing with the assessee that these payments related to procurement of goods for the business and that a separate addition would duplicate the profit already taxed. Regarding stock valuation, the Tribunal found that neither the entire physical stock value nor the estimation of profit on it was justified. The valuation difference of Rs.17,74,324/- was restricted to 5% of this difference, amounting to Rs.88,716, in place of Rs.21,43,312 sustained by the CIT(A). The Tribunal dismissed the Revenue's grounds concerning the absence of a remand report and the cumulative effect of evidence. The assessee's appeals were partly allowed, and the Revenue's appeals were dismissed.
The Tribunal held that the initiation of assessment proceedings under Section 153A of the Income Tax Act, 1961, was bad in law. It relied on the Supreme Court's decision in PCIT v. Abhisar Buildwell P. Ltd., which clearly states that in cases where no incriminating material is unearthed during a search, the Assessing Officer cannot assess or reassess total income in respect of completed/unabated assessments. The Tribunal noted that the regular assessments for AY 2013-14 and AY 2014-15 were completed and unabated at the time of the search on 04.10.2018. The Tribunal further observed that a Coordinate Bench of the Tribunal, in the case of Sapphire Developers v. ACIT, dealing with the same search and similar issues, had applied the ratio of Abhisar Buildwell. The Sapphire Developers' case also examined the nature of statements recorded during the search, spot verification, post-search inquiries, and third-party statements, concluding that such material, when not found during the assessee's search, cannot form the basis for additions in unabated assessments under Section 153A. Consequently, the additions made under Sections 68 and 69C were quashed as the foundational assessment under Section 153A was invalid. The issue of set-off of losses was not decided as the primary issue of the validity of the assessment itself was decided against the revenue.
The Tribunal held that the reasons provided by the assessee for the delay in filing the appeals before the CIT(A) were reasonable and sufficient. The assessee had relied on their tax consultant, and the delay was not intentional. The Tribunal referred to the principles laid down by the Supreme Court in Collector, Land Acquisition, Anantnag & Anr. v. Mst Katiji & Ors. and the Madras High Court in Sreenivas Charitable Trust, emphasizing a pragmatic approach to condoning delays to advance substantial justice. The Tribunal also noted that the revenue had not filed any counter-affidavit opposing the delay condonation application. Furthermore, the Tribunal observed that the show-cause notice issued by the Assessing Officer provided insufficient time (less than 4 days), violating principles of natural justice. Consequently, the Tribunal condoned the delay of 465 days in filing the appeal for the quantum assessment and restored the matter to the Assessing Officer for fresh assessment, providing sufficient opportunity to the assessee. For the penalty appeal, since the assessment order was set aside, the consequential penalty order was also set aside and restored to the Assessing Officer for disposal in accordance with the fresh assessment order. The appeals were allowed for statistical purposes.
The Tribunal held that the initiation of assessment proceedings under Section 153A of the Income Tax Act, 1961, was bad in law. It relied on the Supreme Court's decision in PCIT v. Abhisar Buildwell P. Ltd., which clearly states that in cases where no incriminating material is unearthed during a search, the Assessing Officer cannot assess or reassess total income in respect of completed/unabated assessments. The Tribunal noted that the regular assessments for AY 2013-14 and AY 2014-15 were completed and unabated at the time of the search on 04.10.2018. The Tribunal further observed that a Coordinate Bench of the Tribunal, in the case of Sapphire Developers v. ACIT, dealing with the same search and similar issues, had applied the ratio of Abhisar Buildwell. The Sapphire Developers' case also examined the nature of statements recorded during the search, spot verification, post-search inquiries, and third-party statements, concluding that such material, when not found during the assessee's search, cannot form the basis for additions in unabated assessments under Section 153A. Consequently, the additions made under Sections 68 and 69C were quashed as the foundational assessment under Section 153A was invalid. The issue of set-off of losses was not decided as the primary issue of the validity of the assessment itself was decided against the revenue.
The Tribunal upheld the order of the CIT(A), dismissing the Revenue's appeals. The primary finding was that the reassessment proceedings initiated under Section 147 of the Income-tax Act, 1961, were invalid due to the prior approval of the Resolution Plan under the Insolvency and Bankruptcy Code, 2016 (IBC). The Tribunal reasoned that a reduction in the determined loss for an earlier assessment year has a consequential bearing on the tax attributes of the Corporate Debtor, including losses available for carry forward and set-off in subsequent years. Therefore, such proceedings directly impacted the tax position relating to the period prior to the Resolution Plan's approval. The Tribunal referred to the decisions of the Bombay High Court in Alok Industries Ltd. v. ACIT and Uttam Value Steels Ltd. v. ACIT, which considered the effect of approved Resolution Plans on reassessment proceedings for periods prior to approval. The Tribunal noted that while the Resolution Plan allowed for carry forward of losses, this did not grant the Revenue an unrestricted power to reopen assessments concluded before the plan's approval. The Tribunal found no infirmity in the CIT(A)'s conclusion that reassessment proceedings could not be validly initiated after the Resolution Plan's approval. Consequently, the reassessment proceedings were liable to fail on jurisdictional grounds. The Tribunal found it unnecessary to adjudicate the validity of the reopening under the first proviso to Section 147 or the issue of change of opinion, as well as the allowability of depreciation, as these became academic. The addition/disallowance of Rs. 8,38,63,725/- made by the AO was consequently deleted.
The Tribunal held that the aircraft leases under consideration are dry operating leases and cannot be characterized as finance leases. Consequently, the lease rentals cannot be treated as interest income under Article 11 of the India-Ireland DTAA. The Tribunal relied on its previous decision in Sky High XLIII (supra) and the Delhi Tribunal's decision in Celestial Aviation Trading 15 Ltd. v. Asstt. CIT, which examined similar lease agreements and concluded they were operating leases. The revenue failed to provide any distinguishing contractual features to warrant a departure from these precedents. Therefore, the AO's approach of treating the entire lease receipts as interest income under section 115A was not sustained. The contention regarding bifurcating principal and interest components also did not survive. Grounds No. 11 to 16 were allowed. Ground No. 19 (interest under section 234B) was consequential and restored to the AO. Grounds No. 1 to 4, raising general and legal contentions, were rendered academic and left open without expressing an opinion on their merits. The appeal was allowed.
The Tribunal held that the matter required reconsideration at the first appellate stage due to the admission of additional evidence without affording the Assessing Officer (AO) an opportunity to examine it, as mandated by Rule 46A of the Income-tax Rules, 1962. The Tribunal noted that the NFAC relied on labour bills, ledger accounts, and bank statements, but there was no record of the AO being given a reasonable opportunity to examine or rebut this evidence. This violated the principles of natural justice. Therefore, the Tribunal set aside the NFAC's order and restored the matter to its file for fresh adjudication. The NFAC is directed to afford the AO a reasonable opportunity to examine and rebut the additional evidence and then adjudicate the appeal afresh. The Tribunal explicitly stated it was not expressing any opinion on the merits of the addition under Section 68, including issues of identity, creditworthiness, genuineness, or the information from the Investigation Wing. These issues are left open for the NFAC's consideration. Ground No. 4 raised by the Revenue was allowed for statistical purposes.
The Tribunal held that the assessee was not afforded an adequate and reasonable opportunity to present its case before the CIT(E). The Tribunal noted that the assessee had already been granted registration under Section 12AA(1)(b)(ii) on December 30, 2021. The CIT(E) issued a notice for documents and a hearing date of January 16, 2026. The assessee sought an adjournment, but the CIT(E) rejected the application for renewal without granting further opportunity. Applying the principles of natural justice, the Tribunal restored the matter to the file of the CIT(E) for fresh consideration after granting the assessee a reasonable opportunity of being heard. The Tribunal directed the CIT(E) to first adjudicate the application for registration under Section 12AB and then proceed with the application for approval under Section 80G(5). The appeals were allowed for statistical purposes.
The Tribunal held that the notice under Section 148 was issued on 18.04.2022 for AY 2015-16, which is beyond six years from the end of the relevant assessment year (31.03.2016). Applying the first proviso to Section 149(1), the limitation period as it stood prior to 01.04.2021 is applicable. The Tribunal found that the notice was barred by limitation, as the fifth and sixth provisos to Section 149(1) do not extend the period of limitation applicable to this case. Consequently, the assumption of jurisdiction by the Assessing Officer was invalid, and the assessment order passed pursuant to this invalid assumption of jurisdiction was liable to be quashed. The additions and disallowances made in the assessment proceedings, therefore, do not survive. Any other grounds raised by the assessee were rendered academic and did not require separate adjudication.
The Tribunal upheld the deletion of additions related to cash payments for flats, finding that the loose papers alone did not establish the entire cash as unexplained money of the assessee. The Tribunal also upheld the deletion of Rs.98,01,469/- added under section 69C for alleged cash payments to Chinese suppliers, agreeing with the assessee that these payments related to procurement of goods for the business and that a separate addition would duplicate the profit already taxed. Regarding stock valuation, the Tribunal found that neither the entire physical stock value nor the estimation of profit on it was justified. The valuation difference of Rs.17,74,324/- was restricted to 5% of this difference, amounting to Rs.88,716, in place of Rs.21,43,312 sustained by the CIT(A). The Tribunal dismissed the Revenue's grounds concerning the absence of a remand report and the cumulative effect of evidence. The assessee's appeals were partly allowed, and the Revenue's appeals were dismissed.
The Tribunal held that while the CIT(A) correctly identified that the alleged on-money receipts were connected to the assessee's regular business activity and represented suppressed business turnover, the estimation of the profit element needed adjustment. The CIT(A) had estimated the profit at 18.60% of the alleged on-money receipts. However, the Tribunal, considering the net profit ratios of the concerned assessees across various assessment years (ranging from 2.18% to 8.96%), determined that an average net profit rate of 4.5% would be a more reasonable estimate of the profit element embedded in the suppressed business receipts. Consequently, the Tribunal directed that the additions in the respective assessee appeals be restricted to 4.5% of the alleged on-money receipts. The Revenue's appeal challenging the treatment of receipts as business income was dismissed. The Tribunal clarified that other grounds raised by the assessees regarding the validity and evidentiary value of the material were not adjudicated.
The Tribunal condoned the delay of 40 days in filing the appeal, finding no intentional or deliberate delay. On merits, the Tribunal acknowledged the assessee's submission regarding duplicate PANs and the resulting non-service of proper notices. The assessee had made a limited prayer to restore the matter to the AO for a fresh assessment and verification of the source of the time deposit. The Tribunal noted that one of the PANs under which the assessment order was passed had been surrendered, and the assessee was allowed to use PAN AASCF 5875 H. Consequently, the Tribunal restored the matter to the file of the AO with a direction to pass a fresh assessment order after verifying the source of the time deposit. The assessee was also directed to be more vigilant in future and make timely compliance. The AO was instructed to provide a fair and reasonable opportunity to the assessee before passing the fresh order. The appeal was allowed for statistical purposes.
The Tribunal held that the principle laid down by the Supreme Court in CIT v. Manmohan Das is apposite, stating that the eligibility of a loss for carry forward and set-off, including its true nature, is to be examined in the assessment year in which the set-off is claimed. The view taken by the Income-tax Officer in computing the loss in the previous year is not binding in the subsequent year. The Tribunal found no statutory embargo upon examining the allowability of the underlying expenditure under any other applicable provision of the Act in the year of set-off, especially if the expenditure is otherwise eligible and the benefit of section 35(2AB) was not ultimately availed. The legislative intent of section 115BAA(2) is to deny specified incentives, not actual expenditure otherwise allowable. Therefore, the matter was restored to the AO to examine whether the underlying expenditure satisfies the conditions under sections 35(1)(i), 35(1)(iv), and/or 37(1). The AO was directed to re-compute the eligible carried-forward loss without granting the additional weighted deduction under section 35(2AB). The Tribunal set aside the CIT(A)'s order on this issue and directed the AO to allow the brought-forward loss after factual verification.
The Tribunal held that Ground No. 1, concerning the addition of Rs. 26,18,080/- under Section 69, is dismissed. The assessee claimed the amount was received as gifts/contributions from family members out of past savings. However, the Tribunal found that no cogent documentary evidence was placed on record to substantiate the identity and creditworthiness of the alleged donors or the genuineness of the receipts. A mere assertion without supporting documentary evidence is insufficient to satisfactorily explain the source of investment. Therefore, the order of the CIT(A) sustaining the addition was found to be without infirmity. Regarding Ground No. 2, concerning the addition of Rs. 1,05,66,500/- under Section 69A, the Tribunal dismissed the appeal. While the assessee claimed the cash deposits represented business collections from a retail pharmacy business with substantial turnover, the Tribunal noted that the mere fact of having a business does not, by itself, establish that specific cash deposits were generated from that business. The source of particular deposits must be established with reference to books of account and contemporaneous records. The assessee failed to produce the cash books, bank book, and contemporaneous sales records despite opportunities, thus failing to establish a satisfactory documentary trail correlating the deposits with business cash generation. The Tribunal distinguished the cited case of Smt. Tripta Rani, as in that case, books of account were produced and accepted.
The Tribunal held that the assessments for assessment years 2009-10 to 2013-14 were unabated. The disallowances made by the Assessing Officer were in respect of excavation expenses and professional charges debited to the profit and loss account and forming part of work-in-progress. The Tribunal observed that none of these disallowances were based on any incriminating material seized during the search. Following the decision of the Hon'ble Supreme Court in PCIT v. Abhisar Buildwell Private Limited, the Tribunal held that additions cannot be sustained in the absence of any incriminating material. The Tribunal also noted that the CIT(A) had deleted the disallowances on merits after appreciating the evidence furnished by the assessee. Therefore, the Tribunal sustained the order of the CIT(A) for assessment years 2009-10 to 2014-15 and rejected the Revenue's grounds. Regarding the cross-objections, the Tribunal found that the Revenue failed to provide evidence of a reference to FT & TR, which was claimed to extend the limitation period. In the absence of such evidence, the assessment orders passed on 22.12.2017 were held to be beyond the original limitation of 31st December, 2016, and thus barred by limitation. Consequently, the assessments were set aside as bad in law and void ab initio. The issue regarding approval under section 153D was not expressly decided.
The Tribunal noted that the primary dispute concerns the applicability of Section 14A. It observed that the assessee claimed that as a mutual concern, no expenditure was incurred and claimed against exempt income, and that income was offered on a gross basis. The Tribunal referred to a coordinate Bench decision in ACIT vs. Bombay Gymkhana Ltd. (ITA No. 6410/Mum/2016), which dealt with identical facts and circumstances concerning a mutuality concern that did not claim any expenditure. In that case, the CIT(A) had deleted the disallowance, agreeing that when income is offered on a gross basis and no expenditure is claimed, the question of disallowance under Section 14A does not arise. However, in the present case, the Tribunal found a slight difference: it was admitted that at least 5% of expenses related to sponsorship income were claimed, and not the entire income was grossed up with no expenses. Therefore, the issue was set aside to the AO for verification of the claim that expenses related solely to sponsorship income and not to investments yielding exempted income. The AO was directed to restrict the disallowance accordingly. Regarding the contention of consistency in prior assessment orders, the Tribunal dismissed this ground, stating that the principle of res judicata is not applicable to income tax proceedings, and each year is a separate assessment event. The appeal was partly allowed for statistical purposes.
The Tribunal upheld the deletion of additions related to cash payments for flats, finding that the loose papers alone did not establish the entire cash as unexplained money of the assessee. The Tribunal also upheld the deletion of Rs.98,01,469/- added under section 69C for alleged cash payments to Chinese suppliers, agreeing with the assessee that these payments related to procurement of goods for the business and that a separate addition would duplicate the profit already taxed. Regarding stock valuation, the Tribunal found that neither the entire physical stock value nor the estimation of profit on it was justified. The valuation difference of Rs.17,74,324/- was restricted to 5% of this difference, amounting to Rs.88,716, in place of Rs.21,43,312 sustained by the CIT(A). The Tribunal dismissed the Revenue's grounds concerning the absence of a remand report and the cumulative effect of evidence. The assessee's appeals were partly allowed, and the Revenue's appeals were dismissed.
The Tribunal held that the adjustment amount of Rs. 1,26,05,962/- requires verification with reference to the business transfer arrangement and the accounting treatment under Appendix C to Ind AS 103. The Tribunal noted that the Assessing Officer had not afforded sufficient time to the Assessee for substantiation, and the detailed working was not examined by the CIT(A). Therefore, the Tribunal restored this limited issue to the file of the jurisdictional Assessing Officer for the purpose of verification of the correctness and quantification of the adjustment. The Assessee is to furnish complete working, reconciliation, and supporting documents, and the AO is to verify the same after affording a reasonable opportunity of being heard. This remand is confined to the verification of the adjustment and does not reopen any other concluded issue. Consequently, grounds 1 to 5 of the Assessee's appeal relating to this disallowance are restored to the AO. Ground 6 of the Assessee's appeal regarding penalty proceedings under Section 270A is consequential and does not require separate adjudication at this stage. The Tribunal dismissed the Revenue's appeal and partly allowed the Assessee's appeal for the limited purpose of verification.
The Tribunal held that a protective addition cannot result in the same income being ultimately subjected to tax in the hands of two different assessees. In this case, the AO made the addition protectively in the assessee's hands, while the substantive addition was made in the hands of Shri Mohnish Mohan Mukkar. The CIT(A) had confirmed the substantive addition in Shri Mukkar's case. The Tribunal found that the uncertainty justifying the protective assessment no longer survived, as the Revenue had proceeded substantively against Shri Mukkar and the addition was confirmed. The mere pendency of further appellate proceedings for the substantive addition does not, by itself, justify sustaining the protective addition in the assessee's hands. Such a situation would render the protective assessment a parallel substantive assessment. The Tribunal found no infirmity in the CIT(A)'s order deleting the protective addition, as the Revenue had not provided material to demonstrate independent assessability in the assessee's hands or that the amount was liable to tax in the assessee's hands notwithstanding the substantive addition in Shri Mukkar's case. The grounds raised by the Revenue were dismissed.
The Tribunal held that for a receipt to be taxed under Section 45(1), there must be a capital asset as defined under Section 2(14), held by the assessee, transferred under Section 2(47), and profits arising from such transfer. In this case, the Will of the deceased owner clearly delineated the ownership and life interest, excluding the assessee. The share certificates were in the name of the mother-in-law, and she and the grandson were the sole transferors. The assessee was merely a confirming party. The Tribunal found that the CIT(A) erred in assuming the assessee possessed 'possession' or 'possessory interest' constituting a capital asset, as no material was produced to establish any lawful tenancy or legally recognized possessory title. The payment of Rs. 2,96,25,000/- was explicitly stated in the sale deed to be at the request of the First Transferor out of her share, as compensation for alternate accommodation. Merely signing as a confirming party does not confer ownership or create a capital asset. The case laws relied upon by the CIT(A) were distinguishable as they involved documented possessory or contractual rights, which were absent here. Therefore, in the absence of a capital asset held and transferred by the assessee, Sections 45 and 48 are not applicable, and consequently, deductions under Sections 54/54EC cannot arise. The AO was justified in treating the sum as 'Income from Other Sources'. The CIT(A)'s order was set aside, and the AO's order was restored.
The Tribunal condoned the delay of 60 days in filing the appeal. It found that the notices issued by the CIT(A) were subsequent to the death of the assessee, Mr. Dhanji Ghellabhai Gala, making it plausible that the appeal remained unattended by the legal heirs. Therefore, sufficient cause was made out for condonation. The Tribunal also noted that the appeal was not decided on merits by the CIT(A), presumably due to non-appearance. In the interest of justice, one opportunity was granted to the appellant to prosecute the appeal. The impugned order of the CIT(A) was set aside, and the appeal was restored to the file of the CIT(A) for disposal on its own merits and according to law. The appellant was directed to cooperate for appropriate disposal, and an adequate opportunity of being heard would be afforded. No issue was expressly left undecided.
The Tribunal held that the material on record did not establish with sufficient reliability that the assessee received the alleged cash amount of ₹3.83 crore during the relevant previous year. The inconsistencies in statements and lack of particulars did not prove the cash receipt by the assessee.
The Tribunal held that there was no violation of the directions issued by the Hon'ble Bombay High Court by the Assessing Officer. The directions were to be read in their entirety, requiring the assessee to furnish a response within two weeks of communication and the Assessing Officer to pass the order within four weeks of receiving the reply, after providing a personal hearing. The Tribunal found that the assessee's conduct, including seeking extensions and providing a complete response on 20.10.2022, meant the assessment order dated 28.10.2022 (digitally signed 01.11.2022) was passed within the stipulated four weeks from the receipt of the full response. Regarding the additions, the Tribunal admitted the additional evidence submitted by the assessee, finding it germane to the matter. Consequently, the matter was remitted to the Assessing Officer for necessary examination and verification, to decide afresh after providing a reasonable opportunity to the assessee. All contentions on merit were left open. The ratio is that the timeline for assessment orders under High Court directions must consider the complete sequence of events, including the assessee's actions and the final submission of documents, and that additional evidence relevant to the dispute should be admitted for fresh adjudication.
The Tribunal held that for a completed/unabated assessment year, the initiation of proceedings under Section 153C requires incriminating material relatable to the assessee and the assessment year. The Tribunal found that the Excel sheet relied upon by the AO, which calculated the alleged on-money by extrapolating a rate of Rs. 4,200/- per sq. ft. to the area of the shops and deducting the registered consideration, did not constitute incriminating material. The sheet lacked details of cash payments, dates, mode of payment, recipient, or acknowledgements. The Tribunal noted that the presumption under Sections 132(4A) and 292C is not applicable as the document was not found from the assessee's possession. Furthermore, extrapolating a project-level rate without independent corroborative evidence linking it to the assessee's actual payment was not permissible. The Tribunal also referred to deletion of similar additions in other cases arising from the same search. Consequently, the addition of Rs. 65,62,000/- was deleted as the material did not establish actual payment of unaccounted consideration and the absence of incriminating material went to the root of the jurisdiction under Section 153C for a completed assessment. Grounds 1, 2, and 6 were allowed. Ground 3 (jurisdiction) and Ground 4 (opportunity) were dismissed as infructuous. Ground 5 (penalty) was dismissed as premature. The appeal was partly allowed.
The Tribunal held that there is no reason to interfere with the impugned order of the CIT(A). The Tribunal noted that both the AO and the CIT(A) made additions on the basis of estimation, with the AO estimating gross profit at 25% and the CIT(A) reducing it to 12.5% of total turnover. The Tribunal reiterated the well-settled principle that where additions are made on an estimation basis, penalty is normally not called for. The Tribunal referred to the decision of the Punjab & Haryana High Court in Harigopal Singh, which was also relied upon by the CIT(A), as an authority for this proposition. The Tribunal found no illegality in the impugned order and dismissed the appeal as without merit. No issue was expressly left undecided.
The Tribunal set aside the order of the learned CIT(A) and restored the entire matter to the file of the Assessing Officer for de-novo consideration. The Tribunal acknowledged the assessee's repeated and deliberate failure to comply with the proceedings before both the AO and the CIT(A), noting that the assessee consistently failed to avail opportunities granted by the lower authorities and approached higher appellate forums only after adverse orders were passed. The Tribunal observed that this conduct could not be encouraged as it delays proceedings and wastes judicial time. However, considering the substantial additions involved and the request for a final opportunity, the Tribunal granted one last chance to the assessee to place relevant evidence before the AO. This indulgence was made subject to the payment of a cost of ₹1,00,000/- to the Prime Minister's Relief Fund, with proof of payment to be furnished to the AO. The AO is directed to decide the issues afresh after giving a reasonable opportunity of hearing. The Tribunal clarified that this is the final opportunity and if the assessee fails to comply again without sufficient cause, the AO is at liberty to proceed as per law. The appeal was allowed for statistical purposes.
The Tribunal noted that the AO had not taken cognizance of the revised return of income filed on 17.02.2017, which was on record. The CIT(A) had also not considered the assessee's grievances as there was no acknowledgment of the revised return on record. The Tribunal acknowledged that for subsequent assessment years, the assessee was granted exemption by the CBDT. Considering these peculiar facts, the Tribunal deemed it appropriate to restore the matter to the file of the Jurisdictional AO (JAO) to consider the revised return of income and pass a fresh assessment order in accordance with the law. The JAO was directed to consider that exemption under Section 10(46) was allowed in subsequent periods and to provide the assessee with a fair and reasonable opportunity to substantiate its claim. Ground No. 3 of the appeal was allowed for statistical purposes. All other grounds of appeal were treated as not pressed as they were not argued by the assessee's AR. The operative direction was to restore the matter to the AO for fresh assessment.
The Tribunal noted that the facts were materially identical to the case of Ketan Himatlal Mehta v. DCIT. The Tribunal observed that the assessee was in possession of the property since FY 2008-2009 and had offered rental income. The consideration was settled through drawings from capital, evidenced by the Deed of Declaration. The Tribunal found that the assessee had furnished various documents before the CIT(A) which did not appear to have been considered in the impugned order, and these were not forwarded to the AO for a remand report. Therefore, the Tribunal restored the matter to the file of the AO for the limited purpose of examining and verifying the veracity of these documents. The legal principle would remain in parity with the decision in Ketan Himatlal Mehta. The AO was directed to determine the applicability of Section 56(2)(x)(b) by adopting the Stamp Duty value prevailing as on the date of execution of the Deed of Declaration, subject to verification of the additional evidence. The addition made by the AO was set aside and the issue was restored to the AO. The remaining grounds were rendered academic.
The Tribunal considered the assessee's grounds of appeal regarding the invalidity of the assessment order and the disallowance of expenditure. For grounds 1 and 3, the Tribunal found no infirmity in the assessment order and dismissed these grounds due to the absence of cogent evidence. Regarding ground 3, concerning the disallowance of Rs. 1,41,88,378/-, the Tribunal noted the AO's detailed investigation and the CIT(A)'s in-depth deliberation. However, the Tribunal found merit in the assessee's contention that the Investigation Wing's report was never confronted. Following the principles of natural justice and fair play, the Tribunal held that any material used by the AO to draw adverse inferences must be duly confronted to the assessee. Therefore, the issue was remanded back to the AO with a direction to supply the incriminating materials relied upon, elicit the assessee's reply, and pass a fresh assessment order. The ground was allowed for statistical purposes.
The Tribunal held that the delay of 345 days in filing the appeal before the CIT(A) should be condoned in the interest of substantial justice. The Tribunal noted the assessee's status as an NRI residing and working in the USA, his unfamiliarity with electronic assessment, and the personal circumstances involving his father's serious illness and subsequent demise, as well as his mother's care. The Tribunal found these circumstances could not be brushed aside. Citing the Supreme Court's decisions in Collector, Land Acquisition v. Mst. Katiji & Others and N. Balakrishnan v. M. Krishnamurthy, the Tribunal emphasized a liberal approach to condonation of delay to avoid defeating substantial justice on technicalities. The length of delay is not decisive; a reasonable explanation and the merits of the case are material. Since the appeal had not been examined on merits by the CIT(A), the Tribunal condoned the delay and set aside the CIT(A)'s order. The matter was restored to the file of the Assessing Officer for de novo consideration. The Tribunal did not decide on the other grounds raised by the assessee, as the appeal was allowed on the preliminary issue of condonation of delay.
The Tribunal held that the first ground regarding the invalidity of the appellate order due to the assessee's death was dismissed. The Tribunal found no substance in the contention as the appellate order did not indicate that notices were issued to the deceased or that the assessee objected to such omission. The Tribunal found that the CIT(A) failed to appreciate the facts and circumstances concerning the addition of Rs. 7,95,000 and disallowance of expenses. The CIT(A) rejected additional evidence on a technical ground without adjudicating the issue on merit. Therefore, the Tribunal remitted the entire matter back to the CIT(A) for a de novo order after allowing adequate opportunity of hearing. The grounds related to penalty proceedings under Section 270A were dismissed as premature, as no penalty order had been passed. The ground pertaining to interest under Section 234B was also not adjudicated, being consequential and mandatory. The appeal was partly allowed.
The Tribunal allowed the assessee's appeal on Ground No. 2 for AY 2017-18, directing deletion of the disallowance of Rs.2,89,380/- under section 36(1)(iii). The Tribunal held that the Revenue failed to establish that the Kotak Mahindra Bank borrowing was for a non-business purpose. Applying the principle from CIT (LTU) v. Reliance Industries Ltd., where interest-free funds exceed non-business deployment, a presumption arises that such deployment was from interest-free funds. The Revenue did not rebut this presumption or establish a nexus between interest-bearing borrowings and personal expenditure. The fact that the loan was used for repayment of an earlier liability did not establish diversion of borrowed funds. The Tribunal also rejected the contention of double disallowance of interest. The ratio is that in cases of mixed funds, if interest-free funds are sufficient to cover non-business deployment, the latter is presumed to be out of interest-free funds, unless rebutted by the Revenue. The Tribunal also allowed the assessee's appeal on Ground No. 3 for AY 2017-18, directing deletion of the disallowance of loan-processing charges of Rs.5,21,400/-. The Tribunal held that since the underlying borrowing was found to be connected with the assessee's financing business, the expenditure incurred for obtaining such borrowing is also allowable as business expenditure. The sole basis for disallowance, i.e., utilization for non-business purpose, no longer survived. The appeals filed by the Revenue for AYs 2017-18 and 2018-19 were partly allowed for statistical purposes. The appeal filed by the assessee for AY 2021-22 was partly allowed and partly allowed for statistical purposes. The judgment does not explicitly state findings on all grounds raised by the Revenue for AY 2017-18 and AY 2018-19, nor on the assessee's appeal for AY 2021-22, beyond the specific grounds discussed.
The Tribunal held that in view of the CBDT circulars enhancing the monetary limit for filing appeals, the appeal filed by the Revenue was not maintainable. The Tribunal dismissed the appeal as not maintainable.
The Tribunal held that the Assessing Officer's conclusion did not establish why the entire Rs. 2,23,345/- was chargeable under section 68. The Tribunal noted that the AO did not reject a specific purchase as fictitious, identify an unexplained credit for each disputed trade, or find that an identified person returned the assessee's cash through the broker. The AO's stated reason for rejecting the assessee's reply was that it had transacted in the scrip under investigation. The Tribunal found that the AO's order did not reconcile this conclusion with the assessee's explanation that a substantial part of the gross sale figure related to same-day trades settled by net differences. The Tribunal emphasized the distinction between same-day trades (Rs. 2,03,119/- purchase, Rs. 2,14,862/- sale, resulting in Rs. 11,743/- difference) and a separate delivery-based sale (Rs. 8,483/- sale against Rs. 12,174/- cost). It stated that a transaction cannot be treated as genuine merely by producing broker statements, demat statements, or bank entries, nor can the gross value of a contract be treated as an unexplained receipt without addressing an explanation of net difference settlement. The CIT(A) did not cure this deficiency by addressing the composition of the amount or the asserted net settlement. The addition was found to rest on the characterization of the scrip and a general account of accommodation entries, without a finding connecting the assessee's particular trades to such an arrangement or demonstrating that the stated gross sale value represented an unexplained sum credited to it. The Tribunal relied on the reasoning in ITO v. Champalal Gopiram Agarwal and the Gujarat High Court's decision in PCIT v. Champalal Gopiram Agarwal, which affirmed that income cannot be held bogus solely on the basis of modus operandi or generalization without specific evidence proving collusion. Therefore, the Tribunal set aside the CIT(A)'s order and directed the AO to delete the addition of Rs. 2,23,345/-.
The Tribunal held that the reopening of assessment under Section 147 was valid. The reassessment proceedings were initiated based on tangible material gathered during investigation, indicating that the assessee was not carrying on genuine business activity and was providing accommodation entries. The Tribunal found that the assessee's registered office was found closed, it had negligible employees despite substantial turnover, and lacked commensurate funds, all pointing towards a lack of genuine business. The contention that the company had ceased to exist was not considered a bar to reassessment as the application for striking off was filed after the financial year under assessment. The Tribunal also held that the notice under Section 148 was not bad in law as the AO had the jurisdiction to issue it. The addition of Rs. 29,35,917/- by estimating deemed profit at 0.25% on the turnover of Rs. 1,17,43,66,894/- was upheld, as the assessee failed to establish the genuineness of its transactions and business activities. The Tribunal found that the assessee's business was not genuine and it was engaged in providing accommodation entries. Consequently, the levy of interest under Sections 234B and 234D was also confirmed. The initiation of penalty proceedings under Section 270A was also upheld. The Tribunal did not explicitly address the argument regarding the notice being issued by the Jurisdictional AO instead of the Faceless Assessing Officer, nor did it detail the revenue's specific arguments on each ground.