TaxTMI 
TaxTMI 
2026 (9) TMI 1403
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....come Tax Act, 1961 [the 'Act'] impugning an order dated 15.12.2025 passed by the learned Income Tax Appellate Tribunal [Tribunal]. 2. The Tribunal had passed the impugned order in three separate appeals: ITA No.1419/Bang/2025, ITA No.1420/Bang/2025 and ITA No.1457/Bang/2025 in respect of the Assessment Year [AY] 2022-2023. The Assessee had filed the said appeals from the orders passed by the National Faceless Appeal Centre [NFAC]. 3. ITA No.1419/Bang/2025 was filed by the Assessee against the Assessment Order dated 18.03.2024 under Section 143(3) of the Act, whereby the Assessment Officer [AO] made additions, including on account of a variation on account of loss of sale of assets and provisions for doubtful debts. The AO asse....
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....f compulsorily Debentures (CCDs) into Compulsorily Convertible Preference Shares (CCPs) does not attract the provisions of section 68, without appreciating that the underlying credits representing share premium remained unexplained and unverified? 2. Whether on the facts and in the circumstances of the case, the Tribunal erred in law in relying upon documents and evidences furnished for the first time at the appellate stage, without affording an opportunity to the assessing officer to examine the same, in violation of Rule 29 of the Appellate Tribunal Rules 1963? 3. Whether on the facts and in the circumstances of the case, the Tribunal was justified in deleting the penalty levied under section 271AAC(1) of the act solely ....
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....reference shareholders, which the AO found wanting, and accordingly made an addition of Rs.56,07,00,000/-, which was reflected as share premium. 12. The Assessee reported that it had issued CCPS to persons in the financial year 2020-21, which were subsequently converted into preferential shares. 13. The tabular statements indicating the details of the CCDs, dates of issue, and conversion into preference shares as reproduced by the Tribunal in the impugned order, is set out below: Table A-Details of issue of CCD and date on which funds received in AY 2021-2022 Sl. Name of the Investors No. of CCD held Amount received Date of receipt of funds Date of allotment of CCD 1. JJ Family Office LLP (Who sold it to Bee....
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....represent credit of any sum received by the Assessee during the previous year relevant to AY 2022-23. 16. In this view, the learned Tribunal held that no addition could be made in the assessment year in question (AY 2022-23) as the allotment of shares did not reflect the receipt of any sum, and there was a book entry whereby CCDs were converted to preferential shares. 17. Section 68 of the Act reads as under: "Cash credits. 68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be c....
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.... (23FB) of Section 10." 18. Concededly, the expression "any sum found in the books of credit" refers to an amount received by an assessee during the previous year. Since no amount was received by the Assessee during the previous year, no addition on account of premium could be made under Section 68 in the relevant assessment year. In this view, the first question as projected by the Tribunal does not arise 19. In this view, no substantial question of law arises in the context of the said addition. 20. The learned Tribunal had set aside the additions made on account of disallowance of expenses to the extent of Rs.24,06,60,000/-, being 20% of the advertisement and business promotion expenses. The AO made the addition solely on the ba....