2025 (7) TMI 1051

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.... 1 is against the order of Ld. CIT(A) upholding the assessment order wherein the Assessing Officer assessed the income by applying @ 8% on the total turnover by rejecting the claim of the assessee u/s. 10(26AAA) of the Act. 3. The facts in brief are that the assessee is a sole proprietor under the name and style of M/s. Chandra Sales Agency with Mrs. Menuka Devi Agarwal who is resident of Sikkim and is engaged in the business of operating a petrol pump. Mrs Agarwal is a bona fide resident of Sikkim and is entitled to exemption u/s. 10(26AAA) of the Act in respect of her income which accrued to the assessee in the state of Sikkim. The case of the assessee was selected for scrutiny on the ground that the assessee has deposited substantial ....

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....,16,87,660/- and also treated the difference between the total turnover and contra entries which aggregated to Rs. 16,36,23,070/- and total credit entry in the bank account of Rs. 23,60,94,580/- which comes to Rs. 7,24,71,510/- and added the same to the income of the assessee in the assessment framed u/s. 144 of the Act dated 21.12.2019. 4. The Ld. CIT(A) also confirmed the said order of the AO by even ignoring the decision of the Hon'ble Apex Court in the case of Association of Old Settlers of Sikkim Vs. Union of India [2023] 146 taxmann.com 271 (SC). 4. After hearing the rival contentions and perusing the material available on record, we find that the assessee is a bona fide resident of Sikkim and is settled in Sikkim prior to 01.04....

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....certificate issued by the Govt. The Ld. CIT(A) did not consider the issue of assessee being bona fide Sikkim of resident and upheld the order rejecting the claim to exemption u/s. 10(26AAA). In our opinion the order of Ld. CIT(A) has been passed without considering the decision of the Hon'ble Apex Court in the case of Association of Old Settlers of Sikkim (supra) wherein it has been held as under: "the Taxpayers challenged the constitutional validity of S.10(26AAA) on the ground that it created discrimination between two categories of similarly placed individuals without any intelligible criteria which has a rational nexus to the object of exemption. The Taxpayers sought extension of exemption to individuals who were settled in Sik....

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....interest of justice and in the facts and circumstances of the present case. 8. The Hon'ble Supreme Court of vide Interim order dated 11.02.2013 has ordered in the meanwhile no coercive steps shall be taken for recovery of amount pursuant to demand notice or insist for tax deducted at source (TDS) from the person referred to in para 6(a) of the stay application. The Supreme Court further ordered on the date 14.03.2016 that interim order, passed earlier shall continue. 9. On 13.01.2023, the Hon'ble Supreme Court of India in [2023] 146 Taxmann.com 271 (SC) in the case of Association of Old Settlers of Sikkim v. Union of India held that: a. All citizens of India having a domicile in Sikkim on day it merged with In....