TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 795
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....t "the Act") for A.Y. 2022-23; (ii) the consequential demand notice issued under Section 156; and (iii) the penalty show cause notice issued under Section 274 of the Act. 3. At the outset it is stated that as the limitation period for filing an appeal before the Commissioner of Income Tax (Appeals) under Section 246A of the Act was expiring, the Petitioner, out of abundant caution and in an earnest attempt to safeguard against any potential risks and prejudice, filed an appeal on 19th April 2025, i.e., after lodging the present Writ Petition. 4. The relevant facts are as follows:- 4.1. The Petitioner is registered with SEBI as a Category II AIF - closed ended fund under the SEBI (AIF) Regulations, 2012. It carries on investment activitie....
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....th 115UB and taxable in the hands of the unit holders. 4.6. Insofar as the expenses of Rs. 118.99 Crores incurred during the year, the Petitioner states that no deduction whatsoever was claimed of such an amount. It is also stated that no carry forward of any loss under any head of income was claimed by the Petitioner. Moreover, it is also stated that a deduction of such an amount has also not been claimed by any of the unit holders as well. 4.7. During the assessment proceedings, various notices were issued by the Assessing Officer, which were duly responded to. After considering all submissions, the impugned assessment order was passed on 21st March 2025. The AO disallowed expenses of Rs. 103.15 Crores (expenses incurred towards managem....
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....he AO. Amongst other grounds, the primary challenge is on the ground that the AO has added expenses to the Petitioner's total income despite the fact that no deduction in respect of such expenses has been claimed either by the Petitioner or the unit holders, and, therefore, the question of adding such an amount could never have arisen. This aspect of the income tax law is fundamental. The addition made therefore, is wholly without jurisdiction, perverse and arbitrary. The AO miserably overlooked the fact that the Petitioner has been granted a passthrough status under the Act, and therefore, assuming for the sake of argument that the Petitioner incurred non-genuine expenses, nevertheless, such an addition could not have been made in the hand....
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....d rejected on the ground that the statement of profit and loss clearly established that non genuine expenses were in fact allocated to the unit holders; (iii) Alternatively, the matter be remanded back to the AO to reconsider the Petitioner's contentions. 7. We have heard learned Counsel for the parties. We have also perused the papers and proceedings in the above Writ Petition. 8. On the first objection of the Revenue that the Writ Petition ought not to be entertained because there is an alternate remedy available to the Petitioner, we find that in the peculiar facts and circumstances of this case, this Court can exercise its discretion under Article 226 of the Constitution of India and interfere in the above matter when an assessmen....
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....clusive for determining the taxable income under the Act. Whether an Assessee is entitled to a deduction or not entirely depends upon the provisions of the Act de hors the disclosure in its books of account. This has been clearly held by three different decisions of the Hon'ble Supreme Court in the case of Kedarnath Jute Manufacturing Company Ltd. v. CIT [(1971) 82 ITR 363 (SC)], Taparia Tools Ltd. v. JCIT [[2015] 55 taxmann.com 361 (SC)] and United Commercial Bank v. CIT [(1999) 240 ITR 355 (SC)]. 11. We, therefore, are of the humble opinion that the addition of Rs. 103.15 Crores made by the Assessing Officer in the Income Returned by the Petitioner is wholly unsustainable. 12. As far as the request made for remanding the matter back to ....