TaxTMI 
TaxTMI 
2025 (6) TMI 1998
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....sed u/s.250 of the Income Tax Act, 1961 ('the Act'), pertaining to the Assessment Year ('A.Y.' for short) 2017-18. 2. The solitary ground of appeal raised by the revenue challenges the order of ld. CIT(A) on deletion of addition of Rs. 2,71,66,500/- made by the learned Assessing Officer ('ld. A.O.' for short) u/s. 68 r.w.s. 115BBE of the Act as unexplained credit as being without considering the provisions of Section 47(xiiib)(f) of the Act. 3. Brief facts of the case are that the assessee firm is engaged in the business of trading and installation of carpets and floor coverings dealing in variety of tufted carpets, rugs, wooden floorings. The assessee also undertakes installation, reinstallation and cleaning of carpets an....
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....rusal of the documentary evidences, it is observed that there has been no direct or indirect payment made to the partners' account from the LLP towards the accumulated profit for a period of 3 years and therefore held that Section 47(xiiib)(f) of the Act is not attracted as the transfer of the capital asset by private limited company to LLP has been tax neutral and as per the conditions specified in proviso (a) to (f) of the Section 47(xiiib)(f) of the Act. 5. The revenue is in appeal before us, challenging the impugned order of the ld. CIT(A). 6. The learned Departmental Representative ('ld. DR' for short) for the revenue contended that the assessee has credited the entire reserves and surplus to the capital accounts of the p....
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.... materials available on record. The moot issue that requires adjudication is whether the addition made u/s. 68 r.w.s. 115BBE by the ld. AO has to be upheld or whether the ld. CIT(A) was right in deleting the impugned addition. It is observed that in the balance sheet of NICALF, the share capital and the reserves and surplus was Rs. 11,95,410/- and Rs. 2,71,66,498/-, respectively, as on date of conversion and post conversion, the same was owned up in the hands of the partners which according to the ld. AO was utilization of accumulated profits reflecting in the accounts of the company which were not distributed to the shareholders for evading payment of dividend distribution tax by directly crediting the same to the capital account of the pa....
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.... (d) the aggregate of the profit sharing ratio of the shareholders of the company in the limited liability partnership shall not be less than fifty per cent at any time during the period of five years from the date of conversion; (e) the total sales, turnover or gross receipts in the business of the company in any of the three previous years preceding the previous year in which the conversion takes place does not exceed sixty lakh rupees; (ea) the total value of the assets as appearing in the books of account of the company in any of the three previous years preceding the previous year in which the conversion takes place does not exceed five crore rupees; and (f) no amount is paid, either directly or indirectly....
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....the ld. AO has specifically mentioned that the assessee has violated the conditions u/s. 47(xiiib)(f) of the Act, he has proceeded to make addition u/s. 68 of the Act, which is specifically for credits in the books of the assessee for which the assessee offers no explanation as to the nature and source to the satisfaction of the ld. AO. 11. In the present case in hand, it is not the issue of credits found in the assessee's books of accounts rather it is the allegation that the assessee firm upon conversion to LLP has transferred the share capital and reserves and surplus to the partners' accounts, which is quite evident that the nature and source of the credit is not unexplained. Further, the ld. AO has also erred in making addition in t....