TaxTMI 
TaxTMI 
2025 (7) TMI 595
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....03.2025 passed by the ld. Commissioner of Income Tax (Appeals), Chennai - 20 (ld. CIT(A) in short) against the orders of assessment passed u/s. 143(3) r.w.s 153A of the Income-tax Act, 1961 (hereinafter referred to as Act) dated 31.03.2022 by the Deputy Commissioner of Income Tax, Central Circle - 3(1), Chennai (hereinafter referred to as AO). 2. The core issue that runs through all the 3 appeals is regarding the claim of software charges incurred by the assessee. The Assessing Officer (AO) passed assessment orders in all the 3 assessment years holding that the expenses claimed towards software development and support were paid without any actual service. He held the transactions as sham performed in the guise of expenses based only on a....
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.... AO, as the same has been made in the absence of any incriminating material to substantiate the same. 2.2 It being settled law that no addition can be made in a search assessment in the absence of any incriminating material, the Ld. CIT(A) erred in upholding the assessment made. 3. The CIT(A) erred in upholding the addition of Rs. 19,900/- stating that the gifts received by the Trust on behalf of others to this extent were not offered to tax by the recipients of the gifts. 4.1 The CIT(A) erred in failing to delete the addition of Rs. 1,80,000/- as the appellant did not incur the said expenditure during the year at all. 4.2 In any case, the addition having been made by the AO without any discussion regardi....
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....ERT by referring to a report of FDI Labs, which was in relation to the applications utilized by KERT, the CIT(A) erred in upholding the addition in the appellant's case on the basis of the same, as the report did not examine the applications utilized by the appellant. 6.3 In any case, the addition made by the AO by placing reliance on the biased report of FDI Labs ought to have been deleted by the CIT(A), as the same is not valid and does not hold any authority regarding the addition made in assessment. 6.4 The report of FDI Labs having nowhere been referred to or even considered by the AO, the CIT(A) erred in concluding that the AO made the addition on the basis of the same. 6.5 In any case, the CIT(A) failed to ....
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.... an elaboration of ground No.10 and is actually not an additional ground. Grounds 4 to 9 are taken up first. 5.1 The brief facts of the case are that the assessee is a Religious and Charitable Trust registered u/s. 12AA of the Act. Mr.Paul Dhinakaran is the Managing Trustee of the assessee Trust as well as an associate Trust M/s.Karunya Educational and Research Trust (KERT) which is a Public Charitable & Educational Trust. There was a search u/s. 132 of the Act on 20.01.2021 in the case of assessee as well as it's associate KERT. 5.2 The assessee had used software developed by Dimensions Innovations Lab, Kerala since the early years of 2000 until 2012. The software malfunctioned in 2012 and stopped responding and the assessee had many....
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....7.2025 in respect of these appeals. Considering all the facts and circumstances are identical regarding the issue in both the cases, we hold that the decision taken in the case of M/s.Karunya Educational and Research Trust in appeals ITA Nos.799/CHNY/2025 to 803/CHNY/2025 for assessment years (A.Y) 2017-18 to 2021-22, are applicable mutatis mutandis in the present case of the assessee under consideration for all 3 assessment years 2019-20 to 2021-22. As discussed in our orders in the case of M/s.Karunya Educational and Research Trust(supra) the disallowance of software charges made by the lower authorities is deleted and the grounds raised by the assessee are allowed. 7.1 Ground No. 3 is regarding confirming disallowance of Rs. 19,900/- ....
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.... the assessee is hereby allowed. 7.3 The provisions of section 56(2)(x)(a) stipulates that cash gifts received in excess of Rs. 50,000/- are to be treated as income u/s. 56(1) of the Act. As the entire cash gifts received by Ms.Sharon Angel Dhinakaran are less than Rs. 50,000/- the same are not taxable in her hands. Hence, the addition is deleted and the ground is allowed. 8. As the grounds raised are substantively allowed on merits, the legal grounds raised at number 2 and 10 are held as infructuous and do not require adjudication. In the result, disallowance made by the lower authorities is deleted and appeal of the assessee for AY 2019-20 is allowed. 9. It is seen that the remaining 2 appeals in ITA Nos.797/CHNY/2025 and 798/CHN....