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136 orders · Page 2 of 3
On the first issue concerning the addition of Rs. 1,59,00,000/- under Section 69A, the Tribunal found merit in the assessee's contention. The Tribunal noted that the assessee had explained the amount as a business advance from M/s Hollistar & Co. which was settled partly by supply of goods and partly by repayment. The documentary evidence, including ledger account, sale bill, and bank statement, supported this explanation. Therefore, the Tribunal held that the amount could not be treated as unexplained money under Section 69A and directed the AO to delete the addition. This allowed Ground No. 2 and Additional Ground No. 1. On the second issue regarding the addition of Rs. 1,99,13,512/- under Section 44AD, the Tribunal, considering the revenue's suggestion for remand and the assessee's submission about the timely e-filing of the audit report, found it appropriate to restore the issue to the AO for fresh adjudication. The AO was directed to verify the audit report and other documents and decide the issue afresh after providing the assessee an opportunity of being heard. This allowed Ground No. 3 and Additional Ground No. 2 for statistical purposes. On the third issue concerning the penalty under Section 271B, the Tribunal held that the levy of penalty must be examined against the statutory default under Section 44AB. Since the evidence showed that the assessee had obtained and furnished the audit report within statutory requirements, the basis for the penalty was not sustained. The Tribunal directed the AO to delete the penalty of Rs. 1,50,000/-. The assessee was directed to furnish a legible copy of the audit report if required by the AO for completion of quantum proceedings.
The Tribunal upheld the order of the CIT(A). The Tribunal noted that the assessee had raised an objection regarding the quantum of purchases, claiming only Rs. 15,150/- was purchased from M/s. Look at Me Retail Pvt. Ltd. The CIT(A) had called for a remand report, but the AO failed to submit it. The CIT(A) observed that the AO had not provided a finding on the discrepancy in the purchase amount and that the information from the Investigation Wing did not confirm purchases of Rs. 4,35,68,678/- appearing in the assessee's books. The CIT(A) concluded that the AO's finding that the appellant took bills of the said amount from the Bhanwarlal Jain group remained unverified. Due to the non-receipt of the remand report and the unverified nature of the AO's finding, the CIT(A) accepted the assessee's claim and deleted the addition. The CIT(A) also noted that in similar cases involving beneficiaries of accommodation entries from the Bhanwarlal Jain group, the ITAT Surat and Mumbai Benches had restricted the addition to 6% of purchases, a practice followed in the assessee's own case for AY 2014-15. The Tribunal found no distinguishing facts from these decisions and therefore did not interfere with the CIT(A)'s findings.
The Tribunal held that Form 26AS categorically reflected the TDS credit corresponding to the income, and this credit had been validly claimed by the assessee. The Tribunal noted that in the case of a co-owner of the same property, the TDS credit was granted for the same assessment year. It found that both the AO and the CIT(A) had ignored these crucial facts, including the statements in Form 26AS and the favorable treatment of the assessee's co-owners. Therefore, the Tribunal directed the AO/CPC to grant the TDS credit relating to the corresponding income. The Tribunal did not expressly leave any issue undecided.
The Tribunal restored the matter to the file of the Assessing Officer (AO) for fresh adjudication. The Tribunal acknowledged the principle of natural justice and noted that no prejudice would be caused to the revenue by restoring the matter. The assessee was directed to make an effective representation before the AO and ensure participation in hearings without seeking unnecessary adjournments. The AO was instructed to provide an opportunity of hearing and pass an appropriate order, uninfluenced by the earlier order. The appeal was allowed for statistical purposes. The specific grounds regarding the addition of Rs. 14,03,91,990/- and the validity of the re-opening were not decided on merits but were remitted for fresh consideration by the AO.
The Tribunal restored the matter to the file of the Ld. CIT(A) for adjudication afresh. The reasoning was based on the principle of natural justice and the fact that no prejudice would be caused to the revenue. The Tribunal directed the Ld. CIT(A) to provide the assessee with a necessary opportunity of hearing and to pass an appropriate order, uninfluenced by the earlier order. The assessee was also directed to be vigilant and ensure participation in future hearings without seeking unnecessary adjournments. The Ld. CIT(A) was granted liberty to proceed in accordance with law if the assessee failed to comply. The appeal was allowed for statistical purposes.
The Tribunal noted that the CIT(A) had issued notices of hearing/compliance but did not provide details of their service to the assessee. The assessee had filed details before the AO, which were also available before the CIT(A), but these were not considered. Consequently, the Tribunal found it appropriate to remand the matter back to the file of the CIT(A) for proper consideration and verification of the details. The CIT(A) was directed to adjudicate the issue on its merits, and the assessee was to be given an opportunity of hearing in accordance with the principles of natural justice. The Tribunal did not decide the merits of the addition itself but rather the procedural deficiency in the CIT(A)'s order. The issue of whether the addition under Section 68 was justified was left undecided on merits at this stage.
The Tribunal held that the CIT(A) had issued notices, but it was not recorded whether these notices were actually served on the assessee. Given this lack of clarity regarding service of notices and the potential violation of the principles of natural justice, the Tribunal decided to remand the matter back to the file of the CIT(A). The CIT(A) is directed to properly verify the facts and adjudicate the issues on their merits. The assessee must be granted an opportunity of hearing, adhering to the principles of natural justice. The appeal is allowed for statistical purposes. No specific finding was made on the merits of the penalty itself, as the case was remitted.
The Tribunal decided that the CIT(A) had erred in rejecting the appeal solely on the ground of delay without a proper consideration of the reasons provided by the assessee for the delay. The Tribunal found that the CIT(A) had not applied the correct legal principles for condoning delay. Consequently, the Tribunal set aside the order of the CIT(A) and remanded the matter back to the CIT(A) for adjudication on merits after condoning the delay, provided the assessee furnishes a reasonable explanation for the delay. The issue regarding the addition under section 56(2)(vii)(b) was not decided on merits as the appeal was remanded. The ratio decidendi is that an appellate authority must consider the reasons for delay and apply appropriate legal standards for condonation before rejecting an appeal on procedural grounds, and that the merits of the appeal should be considered once the delay is condoned.
The Tribunal condoned the delay of 184 days in filing the appeal, finding the reasons genuine. Since both the assessment order and the order of the CIT(A) were ex parte, the Tribunal deemed it appropriate to remand the matter back to the file of the Assessing Officer for proper verification of details and adjudication of the issues in accordance with the Income Tax Act. The assessee was to be given an opportunity of hearing, following the principles of natural justice. The Tribunal did not decide the merits of the grounds raised by the assessee, as the appeal was allowed for statistical purposes.
The Tribunal held that the ADIT, CPC, invoked Section 154 of the Act without providing the assessee with an opportunity of being heard. The Tribunal noted that there were no reasons recorded for invoking Section 154, and as per the decision of the Hon'ble Supreme Court, the assessee should have been given an opportunity. The Tribunal also referred to CBDT Circular dated 31.05.2002 and a revised limit for deduction under Section 10(10AA) as per Notification No.31/2023, which is Rs.25 Lakhs. The Tribunal concluded that without assigning reasons, the AO cannot suo moto invoke Section 154 and pass an order without giving an opportunity of hearing to the assessee. Therefore, the appeal of the assessee was allowed. The operative direction was to allow the appeal of the assessee.
The Tribunal held that the Commissioner of Income Tax (Appeals) had not taken cognizance of the details filed by the assessee during appellate proceedings and had passed ex parte orders without proper adjudication. For AY 2010-11, the Tribunal noted that the CIT(A)'s order did not provide details regarding proper service of notices. Since the depreciation claimed required verification, the matter was remanded back to the file of the AO/JAO for proper verification and adjudication as per the Income Tax Act, ensuring the assessee is given an opportunity of hearing following the principles of natural justice. Similarly, for AY 2013-14, the Tribunal found that the CIT(A) had not verified the details filed by the assessee and had passed an ex parte order without providing details of notice service. Therefore, this matter was also remanded back to the AO for proper verification and adjudication, with an opportunity of hearing for the assessee. The appeals were partly allowed for statistical purposes.
The Tribunal held that the Commissioner of Income Tax (Appeals) had not taken cognizance of the details filed by the assessee during appellate proceedings and had passed ex parte orders without proper adjudication. For AY 2010-11, the Tribunal noted that the CIT(A)'s order did not provide details regarding proper service of notices. Since the depreciation claimed required verification, the matter was remanded back to the file of the AO/JAO for proper verification and adjudication as per the Income Tax Act, ensuring the assessee is given an opportunity of hearing following the principles of natural justice. Similarly, for AY 2013-14, the Tribunal found that the CIT(A) had not verified the details filed by the assessee and had passed an ex parte order without providing details of notice service. Therefore, this matter was also remanded back to the AO for proper verification and adjudication, with an opportunity of hearing for the assessee. The appeals were partly allowed for statistical purposes.
The Tribunal held that the assessee had provided transportation details from January 2018, corresponding to AY 2018-19, and payments were reflected in the ledger account in February 2018 via RTGS. The assessee had submitted all necessary details to the AO, who thoroughly enquired into them through various notices and notes. The Tribunal found that the PCIT's invocation of Section 263 amounted to seeking a 'second opinion'. The genuineness of the transactions was properly established by the assessee, and therefore, the revisionary power under Section 263 could not be exercised as there was no prejudicial interest to the revenue. Consequently, the appeal of the assessee was allowed.
The Tribunal noted that the CIT(E) had not taken cognizance of the details filed by the assessee regarding its objects and charitable medical assistance activities provided at free or nominal charges. The Tribunal found that these aspects required proper verification. Consequently, the matter was remanded back to the file of the CIT(E) for proper verification of the details and adjudication in accordance with the Income Tax Act. The assessee was to be given an opportunity of hearing, adhering to the principles of natural justice. For ITA No. 202/SRT/2026, relating to the renewal of Section 12A registration, the appeal was partly allowed for statistical purposes. Similarly, for ITA No. 203/SRT/2026, concerning the rejection of the application under Section 80G(5)(ii), the matter was also remanded back to the CIT(E) with similar directions, and this appeal was also partly allowed for statistical purposes. The Tribunal did not decide the substantive issues raised by the assessee.
The Tribunal noted that the CIT(E) had not taken cognizance of the details filed by the assessee regarding its objects and charitable medical assistance activities provided at free or nominal charges. The Tribunal found that these aspects required proper verification. Consequently, the matter was remanded back to the file of the CIT(E) for proper verification of the details and adjudication in accordance with the Income Tax Act. The assessee was to be given an opportunity of hearing, adhering to the principles of natural justice. For ITA No. 202/SRT/2026, relating to the renewal of Section 12A registration, the appeal was partly allowed for statistical purposes. Similarly, for ITA No. 203/SRT/2026, concerning the rejection of the application under Section 80G(5)(ii), the matter was also remanded back to the CIT(E) with similar directions, and this appeal was also partly allowed for statistical purposes. The Tribunal did not decide the substantive issues raised by the assessee.
The Tribunal noted that the AO had not taken cognizance of details related to the tax audit report, audit financial statements, and creditor details, which were supposed to be filed but could not be submitted within the stipulated time. The Tribunal found that both the AO and the CIT(A) had passed ex-parte orders. Therefore, the Tribunal decided to remand the matter back to the file of the AO for proper verification of the details filed by the assessee. The AO was directed to adjudicate the matter in accordance with the Income Tax Act, and the assessee was to be given an opportunity of hearing, following the principles of natural justice. The issue of whether the additions were justified or if a best judgment assessment was required was not decided on merits but was to be examined by the AO upon remand.
The Tribunal condoned the delay of 360 days in filing the appeal. The Tribunal noted that the assessee had provided details of members/farmers and an authorization certificate for collecting SBN notes from The Surat District Co-op. Bank Ltd. The Tribunal found that the details provided by the assessee were sufficient to establish that the deposits were in legal tender and not SBNs. The non-rejection of the books of accounts also supported the assessee's case. The Tribunal observed that the CIT(A) had passed an ex-parte order despite the details being available. Therefore, the Tribunal decided to remand the matter back to the file of the AO for proper adjudication of the evidences after verification and to delete the addition accordingly. The assessee was to be given an opportunity of hearing, following the principles of natural justice. The issue of double taxation and violation of natural justice were implicitly addressed by the remand, and the issue of identity/genuineness and non-rejection of books were considered in favor of the assessee leading to the remand. The Tribunal did not expressly leave any issue undecided.
The Tribunal allowed the appeal for statistical purposes, setting aside the order of the Ld. CIT(A) and restoring the matter to the file of the Ld. AO for fresh adjudication. The Tribunal noted that the Ld. CIT(A) had passed an ex-parte order due to the non-representation of the assessee, which occurred because the hearing notices were sent to an incorrect email address. The Tribunal considered the principle of natural justice and found that no prejudice would be caused to the revenue by restoring the matter. The AO was directed to provide the assessee with an opportunity of hearing and pass an appropriate order, uninfluenced by the earlier order. The assessee was directed to be vigilant and ensure participation in hearings without seeking unnecessary adjournments. Other grounds raised by the assessee were not adjudicated at this stage as the matter was remanded. The ratio decidendi is that an ex-parte order passed due to non-service of notices at the correct address violates principles of natural justice and warrants restoration.
The Tribunal held that the controversy is well-settled by co-ordinate benches of the ITAT, Surat, and the jurisdictional High Court of Gujarat. The Tribunal noted that in similar cases involving accommodation entries from the Bhanwar Lal Jain Group, additions were restricted to 6% of the disputed purchases. The Tribunal referred to the Gujarat High Court's decision in Principal Commissioner of Income-tax-1 Vs. Pankaj Choudhary, which upheld a 6% addition. The Tribunal also cited the High Court's decision in Principal Commissioner of Income Tax 1, Surat vs. M/s. Surya Impex, which dealt with the same issue involving the same group and held in favour of the assessee. The Tribunal found that the CIT(A) had already reduced the addition to 6% of the purchases, which was consistent with the judicial precedents. Therefore, the Tribunal found no reason to upset the impugned order of the CIT(A) and upheld it. The appeals filed by both parties were dismissed.
The Tribunal held that the controversy is well-settled by co-ordinate benches of the ITAT, Surat, and the jurisdictional High Court of Gujarat. The Tribunal noted that in similar cases involving accommodation entries from the Bhanwar Lal Jain Group, additions were restricted to 6% of the disputed purchases. The Tribunal referred to the Gujarat High Court's decision in Principal Commissioner of Income-tax-1 Vs. Pankaj Choudhary, which upheld a 6% addition. The Tribunal also cited the High Court's decision in Principal Commissioner of Income Tax 1, Surat vs. M/s. Surya Impex, which dealt with the same issue involving the same group and held in favour of the assessee. The Tribunal found that the CIT(A) had already reduced the addition to 6% of the purchases, which was consistent with the judicial precedents. Therefore, the Tribunal found no reason to upset the impugned order of the CIT(A) and upheld it. The appeals filed by both parties were dismissed.
The Tribunal held that the controversy is well-settled by co-ordinate benches of the ITAT, Surat, and the jurisdictional High Court of Gujarat. The Tribunal noted that in similar cases involving accommodation entries from the Bhanwar Lal Jain Group, additions were restricted to 6% of the disputed purchases. The Tribunal referred to the Gujarat High Court's decision in Principal Commissioner of Income-tax-1 Vs. Pankaj Choudhary, which upheld a 6% addition. The Tribunal also cited the High Court's decision in Principal Commissioner of Income Tax 1, Surat vs. M/s. Surya Impex, which dealt with the same issue involving the same group and held in favour of the assessee. The Tribunal found that the CIT(A) had already reduced the addition to 6% of the purchases, which was consistent with the judicial precedents. Therefore, the Tribunal found no reason to upset the impugned order of the CIT(A) and upheld it. The appeals filed by both parties were dismissed.
The Income Tax Appellate Tribunal (ITAT) restored the matter to the file of the Ld. CIT(A) for adjudication afresh. The Tribunal considered the submissions of both parties, emphasizing the principle of natural justice. It was observed that no prejudice would be caused to the revenue by restoring the appeal. The assessee was directed to remain vigilant and ensure participation in the hearings fixed by the Ld. CIT(A) without seeking unnecessary adjournments. The Ld. CIT(A) was instructed to give the assessee a necessary opportunity of hearing and pass an appropriate order, uninfluenced by the earlier order. The Ld. CIT(A) was granted liberty to proceed in accordance with law if the assessee failed to comply. The appeal was allowed for statistical purposes.
The Tribunal accepted the prayer of the assessee's AR. It was held that the present appeal is a duplicate of ITA 472/SRT/2026, which had already been disposed of by the bench. Consequently, the appeal was dismissed as withdrawn. No decision was made on the merits of the original order passed by the Ld. ITO or the Ld. CIT(A). The operative direction was to dismiss the appeal as withdrawn.
The Tribunal held that while the CBDT Circular dated 31.05.2002 restricted the claim for leave encashment on retirement exemption to Rs. 3 lakhs, the assessee was not given an opportunity of being heard when Section 154 was invoked. The Tribunal noted that there were no reasons recorded for invoking Section 154, and as per the decision of the Hon'ble Supreme Court, the assessee should have been given an opportunity. The Tribunal also referred to CBDT Circular No. 31/2023, which revised the limit for deduction under Section 10(10AA) to Rs. 25 Lakhs. The Tribunal concluded that without assigning reasons, the AO cannot suo motu invoke Section 154 of the Act and pass an order without giving the assessee an opportunity of hearing. Therefore, the appeal of the assessee was allowed. The operative direction was that the appeal of the assessee is allowed.
The Tribunal held that the Commissioner of Income Tax (Appeals) had not taken cognizance of the details filed by the assessee and had passed ex parte orders without proper adjudication on merits. For AY 2010-11, the Tribunal noted that the depreciation claimed needed verification and that the CIT(A)'s order was ex parte. Therefore, the matter was remanded back to the file of the AO/JAO for proper verification of details and adjudication as per the Income Tax Act, ensuring the assessee is given an opportunity of hearing following the principles of natural justice. A similar reasoning was applied to AY 2013-14, where the CIT(A) had also passed an ex parte order without verifying details. The Tribunal found it appropriate to remand the matter to the AO for proper verification and adjudication, with an opportunity of hearing for the assessee. The appeals were allowed for statistical purposes.
The Tribunal held that the Commissioner of Income Tax (Appeals) had not taken cognizance of the details filed by the assessee and had passed ex parte orders without proper adjudication on merits. For AY 2010-11, the Tribunal noted that the depreciation claimed needed verification and that the CIT(A)'s order was ex parte. Therefore, the matter was remanded back to the file of the AO/JAO for proper verification of details and adjudication as per the Income Tax Act, ensuring the assessee is given an opportunity of hearing following the principles of natural justice. A similar reasoning was applied to AY 2013-14, where the CIT(A) had also passed an ex parte order without verifying details. The Tribunal found it appropriate to remand the matter to the AO for proper verification and adjudication, with an opportunity of hearing for the assessee. The appeals were allowed for statistical purposes.
The Tribunal noted that the CIT(E) had not taken cognizance of the details filed by the assessee regarding its objects and charitable medical assistance activities provided at free or nominal charges. The Tribunal found that these aspects required proper verification. Consequently, the matter was remanded back to the file of the CIT(E) for a thorough verification of the submitted details and adjudication in accordance with the Income Tax Act. The assessee was to be given an opportunity of hearing, adhering to the principles of natural justice. For ITA No. 202/SRT/2026, related to Section 12A registration, the appeal was partly allowed for statistical purposes. Similarly, for ITA No. 203/SRT/2026, concerning the rejection of application under Section 80G(5)(ii), the matter was also remanded to the CIT(E) for verification with similar directions, and this appeal was also partly allowed for statistical purposes. The Tribunal did not decide the issues on merits but remanded them for further examination.
The Tribunal noted that the CIT(E) had not taken cognizance of the details filed by the assessee regarding its objects and charitable medical assistance activities provided at free or nominal charges. The Tribunal found that these aspects required proper verification. Consequently, the matter was remanded back to the file of the CIT(E) for a thorough verification of the submitted details and adjudication in accordance with the Income Tax Act. The assessee was to be given an opportunity of hearing, adhering to the principles of natural justice. For ITA No. 202/SRT/2026, related to Section 12A registration, the appeal was partly allowed for statistical purposes. Similarly, for ITA No. 203/SRT/2026, concerning the rejection of application under Section 80G(5)(ii), the matter was also remanded to the CIT(E) for verification with similar directions, and this appeal was also partly allowed for statistical purposes. The Tribunal did not decide the issues on merits but remanded them for further examination.
The Tribunal noted that while the CIT(A) had issued notices of hearing/compliance, the details of service of these notices were not provided to the assessee. The Tribunal observed that the assessee had filed details before the AO, which were also available before the CIT(A), but these were not considered. Consequently, the Tribunal found it appropriate to remand the matter back to the file of the CIT(A) for proper consideration and verification of the details. The CIT(A) was directed to adjudicate the matter on merits after giving the assessee an opportunity of hearing, following the principles of natural justice. The issue of the validity of the addition under Section 68 was not decided on merits by the ITAT.
The Tribunal held that the assessee had provided details related to transportation from January 2018, corresponding to AY 2018-19. Payments were reflected in the ledger account in February 2018 through RTGS. The assessee had submitted all details to the AO, and the AO had thoroughly enquired into them through various notices and notes. The Tribunal found that the PCIT's invocation of Section 263 amounted to seeking a second opinion. The genuineness of the transactions was properly established by the assessee, and therefore, the revisionary power under Section 263 could not be exercised as there was no prejudicial interest to the revenue. The appeal of the assessee was allowed.
The Tribunal condoned the delay of 360 days in filing the appeal. Regarding the issues, the Tribunal noted that the assessee had provided details of members/farmers from whom cash was collected for fertilizer and an authorization certificate for collecting SBN notes from The Surat District Co-op. Bank Ltd. The Tribunal found that the details provided by the assessee were sufficient to establish that the deposits were in legal tender and not SBNs. The assessee's contention that the books of accounts were not rejected was also considered supportive. The Tribunal observed that the CIT(A) should have considered these details but passed an ex-parte order. Therefore, the Tribunal decided to remand the matter back to the file of the Assessing Officer for proper adjudication of the evidences after verification. The addition was to be deleted accordingly, and the assessee was to be given an opportunity of hearing, following the principles of natural justice. The appeal was allowed for statistical purposes.
The Tribunal held that the ex-parte order passed by the CIT(A) was unsustainable due to the non-service of hearing notices at the correct email address provided by the assessee. This violated the principles of natural justice. The Tribunal also noted the assessee's submission that the AO had made disallowances on an ad hoc basis and that the assessee possessed all relevant details and documents to substantiate its expenses. Considering these factors and the principle of natural justice, the Tribunal decided to restore the matter to the file of the AO for fresh adjudication. The assessee was directed to make a proper and effective representation before the AO, and the AO was instructed to provide an opportunity of hearing and pass an order uninfluenced by the previous order. The assessee was also cautioned to ensure participation without unnecessary adjournments. The appeal was allowed for statistical purposes, and other grounds were not adjudicated at this stage.
The Tribunal held that the controversy was well-settled by co-ordinate benches of the ITAT, Surat, and the jurisdictional High Court of Gujarat. The Tribunal noted that in similar cases involving the Bhanwar Lal Jain Group and accommodation entries, additions were consistently restricted to 6% of the disputed purchases. The Tribunal referred to the Gujarat High Court's decision in the case of "Surya Impex" and "Pankaj Choudhary", which upheld a 6% addition. The Tribunal found that the CIT(A)'s order confirming 6% addition was in line with these precedents. Therefore, the Tribunal upheld the impugned order of the CIT(A). The appeals filed by both parties were dismissed, confirming the relief granted by the CIT(A) to the assessee by restricting the addition to 6% of the disputed purchases.
The Tribunal upheld the addition of Rs. 1,74,00,000/- made under Section 68 of the Income-tax Act, 1961. The Tribunal noted that while the assessee provided documentary evidence, certain common features emerged across all six subscriber companies, all based in Kolkata, with five sharing the same address. Their financial statements showed disproportionately heavy balance sheets with negligible taxable income, large non-current investments, and unclear operational revenue streams. This composition, along with the sequencing of bank transactions (immediate credits followed by debits for investment), was indicative of funds being rotated among interconnected entities to create an artificial net worth, a hallmark of shell or layering entities used for accommodation entry operations. The Tribunal found these patterns aligned closely with the modus operandi of Kolkata-based accommodation entry providers. The Tribunal considered the assessment order, submissions, documentary evidence, and remand reports, concluding that the addition was justified.
The Tribunal held that the addition of Rs. 1,74,00,000/- under Section 68 of the Income-tax Act, 1961, was upheld. The reasoning was based on an appraisal of the material placed on record, which revealed common features across the investor companies. These included being based in Kolkata, sharing the same address in Howrah, having disproportionately heavy balance sheets with negligible taxable income, and disclosing large non-current investments. The Tribunal found that these characteristics indicated funds being rotated among interconnected entities to create an artificial net worth, typical of shell companies used for accommodation entries. The bank statements showed a pattern of funds appearing temporarily and being quickly siphoned out, which is stereotypical of accommodation entry layering. The Tribunal concluded that these recurring patterns across all investor entities carried significant indications of non-genuine investment activity and aligned closely with the modus operandi of Kolkata-based accommodation entry providers. Therefore, the addition was sustained, and the appeal was dismissed.
The Tribunal allowed the additional ground raised by the assessee regarding the non-issuance of notice under Section 143(2). The Tribunal noted that the AO, while computing the assessed total income, took into account the income as per the return filed by the assessee, despite holding it to be time-barred and invalid. This indicated acceptance of the return by the AO. The Tribunal found the CIT(A)'s observation that no compliance was made by the assessee to be incorrect, citing the AO's own assessment order which mentioned the assessee's reply and supporting documents. Therefore, the assessment passed under Section 144 was not justifiable. The Tribunal held that the additional ground regarding the non-issuance of notice under Section 143(2) was valid because the assessee's return, filed after the Section 148 notice, was accepted by the AO. Consequently, the addition on account of unexplained income under Section 69A did not survive. Regarding the addition on unexplained credit, the Tribunal found that the assessee had provided a profit and loss account demonstrating substantial cash withdrawals during the assessment year, thus explaining the credits. Therefore, this addition also did not sustain. The appeal of the assessee was allowed.
The Tribunal decided on the issues as follows: Ground No. 2 was dismissed as it was not pressed. For Grounds 1, 3, and 4, the Tribunal noted that the addition was based on the statement of Shri Deepak Babel, director of M/s. Delight Diam Pvt. Ltd., which was later retracted. The Tribunal referred to the decision in Krishnaavtar J. Kabra HUF, which dealt with identical facts where the director's retraction was considered. The Tribunal held that if the assessee shows corresponding sales for purchases, and these sales are accepted by the revenue, the revenue cannot contradict the purchases. The Tribunal found that the AO and CIT(A) ignored these aspects. The decisions relied upon by the Revenue were deemed not applicable to the present facts. Therefore, the addition was not sustained. The Tribunal declined to interfere with the order of the CIT(A) in the case of Grishma Hemanshu Mody and Siddheshwar Impex Pvt. Ltd., which involved similar issues with M/s. Delight Diam Pvt. Ltd. and Shri Deepak Babel. The appeal of the assessee was partly allowed.
The Tribunal noted that the assessee's contentions involved factual aspects requiring verification of the Balance Sheet, bank statements, and details of individual investments. Specifically, the availability of interest-free funds, the source and timing of investments, and the nature of investments considered by the AO needed examination. The Tribunal observed that the lower authorities had not examined these factual claims in light of the documents relied upon by the assessee. The revenue also conceded that the facts and contentions advanced by the assessee before the Tribunal had not been examined by the AO due to the assessee's lack of effective representation during assessment proceedings. Therefore, considering the rival contentions and the need for factual verification, the Tribunal restored the matter to the file of the AO for fresh adjudication. The AO was directed to examine the assessee's claims regarding interest-free funds, source of investments (including IPO proceeds), and the nature of investments, and then determine the disallowance in accordance with law. The assessee was directed to cooperate and furnish necessary evidence. No final opinion on the merits was expressed.
The Tribunal restored the matter to the file of the Assessing Officer (AO) for fresh adjudication. The Tribunal considered the submissions of both parties, the principle of natural justice, and the fact that no prejudice would be caused to the revenue. The AO was directed to provide the assessee with an opportunity of hearing and pass an appropriate order, uninfluenced by the earlier order. The assessee was directed to be vigilant and ensure participation in hearings fixed by the AO without seeking unnecessary adjournments. The Tribunal noted that if the assessee failed to comply, the AO would be at liberty to proceed in accordance with law. The Tribunal explicitly stated that the appeal was allowed for statistical purposes, implying that the merits of the assessment order were not decided at this stage. No issue was expressly left undecided, as the Tribunal's decision was to restore the matter.
The Tribunal allowed the appeal of the assessee. The Tribunal noted that the assessee withdrew the claim of donation under Section 80GGC in response to the notice under Section 148. The assessment order itself stated that although the deduction was claimed in the original return, it was not claimed in the revised return, and therefore, no adverse inference was drawn with regard to it, accepting the total income declared in the revised return. However, the assessment order also noted that the deduction claimed under Section 80GGC in the original return was found to be bogus, leading to under-reporting of income as a consequence of misreporting, and accordingly, penalty proceedings under Section 270A were initiated. The Tribunal found that the notice issued under Section 274 read with Section 270A did not specify the particular conditions as mentioned in sub-clauses (a) to (f) of Section 270A(9), specifically that the under-reporting was a consequence of misreporting. The Tribunal distinguished the case of Gunmala Jain relied upon by the revenue, stating that in that case, the notice specified the charge under clause (a) of Section 270A(9), which was absent in the present assessee's case. Since the assessee withdrew the claim of 80GGC, the penalty imposed under Section 270A was held not to sustain. The Tribunal relied on its decision in the case of Grand Legacy (Supra).
The Tribunal noted that the assessee's application for registration under Section 12A was pending before the CIT(E). Consequently, it was deemed appropriate to remand the matter back to the file of the CIT(E). The CIT(E) was directed to grant the 80G approval after verifying the details submitted by the assessee and adjudicating the application in accordance with the provisions of the Income Tax Act. The Tribunal emphasized that the assessee must be given an opportunity of hearing, adhering to the principles of natural justice. The specific issue of whether a reasonable opportunity of hearing was denied was not explicitly decided, but the remand implicitly addresses this by ensuring future compliance. The Tribunal did not decide the merits of the 12A registration or the sufficiency of the provisional 12A registration for the 80G application.
The Tribunal noted that the assessee could not appear before the AO due to discrepancies in the email ID used for issuing notices, leading to an ex-parte assessment under Section 144. Furthermore, the delay in filing the appeal before the CIT(A) was attributed to a tax consultant's mistake in mentioning the wrong assessment year. The Tribunal held that the assessee should not suffer for the mistake of the tax consultant. Consequently, the Tribunal decided to remand the matter back to the file of the AO for proper verification of details and adjudication as per the Income Tax Act. The assessee was directed to cooperate fully during the proceedings, and the AO was instructed to provide an opportunity of hearing, following the principles of natural justice. The issue of Section 271(1)(c) proceedings was not expressly decided on merits, as the matter was remanded.
The Tribunal held that the penalty under Section 271(1)(c) does not survive. The primary reasoning was that the addition sustained by the ITAT was on an estimated basis of 6% of the disputed purchases. The Tribunal found that an estimation of addition cannot be equated with furnishing inaccurate particulars of income or concealment of income, especially when the definite accuracy of particulars was not determined by the AO. Furthermore, the Tribunal agreed with the assessee's contention that the notice under Section 274 invoked both limbs ('concealment of income' and 'furnishing inaccurate particulars') without specifying which one was applicable, and the penalty was ultimately finalized on only one limb. This indicated that the AO was not clear about the specific charge for initiating the penalty. Therefore, the penalty was deemed unsustainable.
The Tribunal noted that it was an admitted position that the documents placed at pages 78 to 98 of Paper Books-II and III were not before the Assessing Officer (AO) during the assessment proceedings. The Tribunal acknowledged that these documents required factual verification and could have a bearing on the assessee's explanation regarding the sources of the investments. Therefore, the Tribunal deemed it appropriate to restore the matter to the file of the AO for fresh adjudication. The AO was directed to examine the aforesaid documents, verify the assessee's explanation regarding the sources of investments and unsecured loans, and consider the relevant evidence in accordance with the law. The assessee was to be afforded a reasonable opportunity of being heard and permitted to furnish supporting documents and explanations. The Tribunal allowed the appeal for statistical purposes.
The ITAT held that the addition of Rs. 50,00,000/- was not sustainable. The Tribunal reasoned that the Rs. 50,00,000/- was admittedly received from the purchaser as part of the agreed consideration of Rs. 4,75,00,000/- and was not an independent liability owed to a third party. Treating this amount as a liability to reduce the net worth while simultaneously including it in the sale consideration resulted in an inconsistent computation. The Tribunal noted that the AO's own record indicated that the Rs. 50,00,000/- had been withdrawn by the partners before the transfer, meaning it did not remain in the current assets of the division, yet the corresponding liability continued to reduce the net worth. This contradicted the AO's premise that the increase in current assets and liabilities nullified each other. The Tribunal concluded that the capital gain calculation should reflect the true character of the transaction and not treat the same amount inconsistently. The assessee's short-term capital gain of Rs. 62,37,948/- was accepted. The order of the CIT(A) was set aside, and the AO was directed to delete the addition of Rs. 50,00,000/-. The sole ground of the assessee was allowed.
The Tribunal held that the notice issued under section 148 dated 23.07.2022 was invalid as it was issued beyond the 'surviving time' as per the directions of the Hon'ble Supreme Court in Union of India v. Rajiv Bansal (supra). The Tribunal noted that for AY 2014-15, the period of six years would have ended between 20.03.2020 and 30.06.2021. The notices issued under section 148 under the old regime between 01.04.2021 and 30.06.2021, as per TOLA, would be valid if the notice under the new regime was issued within the 'surviving time'. The Tribunal's analysis of the data showed that the due date for issuing the notice under section 148 as per surviving time was 22.06.2022, but the notice was issued on 23.07.2022, which was beyond this period. Therefore, the impugned notice was quashed and set aside as invalid and time-barred. Consequently, the assessment order dated 25.05.2023 was also quashed and set aside. The legal ground raised by the assessee was allowed. The remaining grounds on merits were rendered infructuous.
The Tribunal condoned the delay in filing the appeal, finding the assessee's explanation to be genuine. Upon reviewing the materials, the Tribunal noted that the CIT(A) had not decided the appeal on merit and had not provided a substantial opportunity for hearing to the assessee. It was observed that notices were delivered to an incorrect email address. Consequently, the Tribunal found it appropriate to remand the matter back to the file of the CIT(A) for proper verification of the issues and adjudication as per the Income Tax Act. The assessee was to be given an opportunity of hearing, following the principles of natural justice. The Tribunal did not decide the merits of the additions made by the AO or the penalty proceedings. The finding on the issues of reopening, additions under Section 69A, and penalty proceedings were not adjudicated on merits by the Tribunal, as the matter was remanded.
The Tribunal held that the addition of Rs. 50,00,000 on account of capital contribution of partner Bhupatbhai Mathurbhai Zinwala was not justifiable. The assessee had provided details of the partner's return, which showed credibility to introduce capital. These details were available before the CIT(A) but were ignored. Therefore, Ground No. 1 was allowed. Regarding the addition of Rs. 35,00,000 for unsecured loans, the Tribunal found that the five parties were filing regular income tax returns, and their balance sheets and profit and loss accounts indicated substantial credibility. These details were also ignored by the CIT(A). Consequently, the addition in respect of unsecured loans was also not sustainable. Therefore, Ground No. 2 was allowed. The ratio decidendi is that if the assessee provides sufficient evidence of the identity, capacity, and genuineness of the transaction, including confirmation from the creditor/partner and proof of their creditworthiness through income tax returns and bank statements, additions under Section 68 are not justified, even if the AO or CIT(A) has overlooked such evidence. The appeal was allowed.
The Tribunal held that the contention regarding the invalidity of the notice under Section 133(6) dated February 25, 2019, for want of prior approval was not justified, as a subsequent notice under Section 133(6) dated February 20, 2020, clearly indicated approval from the PCIT. The Tribunal also found that the reasons recorded for reopening did disclose an application of mind by the AO, who was satisfied about cash deposits in the bank account during AY 2012-13 and believed that such income had escaped assessment. The Tribunal distinguished the case laws relied upon by the assessee, stating the facts were different. Therefore, Ground No. 1 was dismissed. Regarding Ground No. 2 and 3, the Tribunal noted that the assessee claimed to be a retail trader depositing sale proceeds and making payments to suppliers, which was ignored by the lower authorities. The assessee also provided details of deposits and a second bank account belonging to their sister, which were not considered. Consequently, the matter was remanded back to the AO for proper verification and adjudication, with an opportunity for a hearing to the assessee. Grounds 2 and 3 were partly allowed for statistical purposes.
The Tribunal acknowledged that the assessee claimed to have furnished documentary evidence like ITRs, account confirmations, and lenders' bank statements to the AO. The addition was based on the AO's observation that lenders did not furnish their capital accounts/balance sheets. The assessee also presented documents to show repayment of loans through banking channels, including the assessee's bank statement evidencing these repayments, which was filed for the first time before the ITAT. Considering these circumstances, the Tribunal deemed it appropriate, in the interest of justice, to restore the matter to the AO. The restoration is for the limited purpose of verifying the actual repayment of the impugned loans through banking channels. Upon verification, the AO is to examine the applicability of the Hon'ble Jurisdictional High Court decisions relied upon by the assessee, considering the facts and circumstances, and decide the issue afresh after providing a reasonable opportunity of being heard. The ground raised by the assessee was allowed for statistical purposes.