2025 (7) TMI 533 - SCH - Income Tax

SC upholds right to file revised return under Income Tax law after cancellation of sale agreements with associates

The SC upheld the HC's decision allowing the assessee to file a revised return after cancellation of five sale agreements with associate parties, ... Validity of revised return filed by assessee - declared income on account of sales of land/FSI to five parties which were its associates/sister concerns - Allegation of sham transaction -income declared in the original return in respect of the five transactions of sale of land/FSI to the five parties stands withdrawn due to cancellation of the five Sale Agreements - as argued that the assessee discovered an omission of cancellation of the Sale Agreements which was not disclosed in the original return and hence the revision of the same by filing a revised return of income. HC [2015 (4) TMI 840 - BOMBAY HIGH COURT] held once income had not accrued to the assessee in the real sense, then the original return represents wrong statement which was corrected by the assessee by filing a revised return. Therefore, no hypothetical income of the assessee could have been brought to tax. Tribunal correctly found that the requirement of sub-section (5) of Section 139 is thus complied with. It is also found on merits of the revised return that a scrutiny thereof reveals no income accruing to the assessee from the five transactions in the immovable properties, which were cancelled subsequently. Such findings of the Tribunal are essentially on facts. They are consistent with the material placed on record HELD THAT:- No good reason to interfere with the impugned order dated 13-04-2015 passed by the High Court of Judicature at Bombay. Civil Appeal is, accordingly, dismissed. The Supreme Court, through Justices J. B. Pardiwala and R. Mahadevan, after hearing Senior Counsel Mr. Arijit Prasad for the appellant (Revenue) and reviewing the record, found 'no good reason to interfere with the impugned order dated 13-04-2015 passed by the High Court of Judicature at Bombay.' Consequently, the Civil Appeal was dismissed, and all pending applications were disposed of.