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TMI Blog2025 (2) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... h Reality LLP, has already deleted the said addition, holding that the LTCG transactions were not taxable. Since the same income has already been taxed at the LLP level and subsequently deleted in appeal, taxing it again in the partner's hands would lead to double taxation, which is impermissible under the Act. Section 68 of the Act applies when an assessee fails to explain the source of a credit in his books of accounts. In this case, the assessee's share of profit from M/s. Ice Worth Reality LLP is fully explained and recorded in the LLP's books, which were assessed separately. Since the income was already disclosed at the LLP level, there was no unexplained credit in the partner's books, and invoking Section 68 in the partner's case was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 147 on the basis of information received from ITO Ward 25(2)(5), Mumbai, stating that M/s. Ice Worth Reality LLP was engaged in accommodation entries through penny stock transactions. The (AO) issued a notice under Section 148 on 31.03.2021, which remained un-responded. Subsequent notices under Section 142(1) of the Act were issued on 16.08.2021, 16.12.2021, and 08.03.2022, which were also not complied with. The AO observed that the LLP had claimed Rs. 60,74,61,289/- as exempt LTCG under Section 10(38) on the sale of shares of Sun Asian. It was alleged that the LLP was a paper entity, providing accommodation entries, and that its LTCG was bogus. The AO held that since the assessee was a 2.6% partner in the LLP, he was a benefic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Sun Asian, without appreciating that: (i) The Firm M/s Ice Worth Reality LLP, in which the assessee is a partner (having 2.6% share), was engaged in providing accommodation entries of bogus capital gain/loss through penny stock transactions at various levels of operators. The firm has shown Long- Term Capital Gain (LTCG) on the sale of penny stock M/s Sun Asian and claimed it as exempt under Section 10(38) of the IT Act. M/s Ice Worth Reality LLP is nothing but a paper firm functioning as a conduit only to benefit its partners, as they are the ultimate beneficiaries of the said LTCG of Rs. 60,74,61,289/-. (ii) The addition made in the hands of LLP firm on account of bogus LTCG has still not reached finality. (b) The appellant crav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the Act. 7.1. The Authorised Representative (AR) of the assessee, through a written submission, has also brought to our notice that the tax effect in the present appeal is Rs. 52,55,553/-, which is below the enhanced monetary limit of Rs. 60 Lacs for filing appeals before the Tribunal, as prescribed in CBDT Circular No. 09/2024 dated 17.09.2024. Further, the AR has placed on record the order of CIT(A), Ahmedabad, in the case of M/s. Ice Worth Reality LLP [Appeal No. CIT(A), Ahmedabad-5/10757/2019-20, dated 24.09.2020], wherein the addition made at the LLP level was already deleted. 7.2. Section 10(2A) of the Act explicitly provides that a partner's share of profit from an LLP is exempt from tax in his hands. The LLP is a distinct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal is Rs. 52,55,553/-, which is below the revised monetary threshold of Rs. 60 Lacs for filing appeals before the Tribunal. As per the CBDT's policy, the Department is instructed not to file appeals before the Tribunal where the tax effect is below the prescribed limit unless the case falls within specific exceptions. The Revenue has not demonstrated that this case falls within any such exception. Thus, the appeal is liable to be dismissed on this ground alone. 7.6. Before concluding, we find it imperative to address a broader concern regarding the Revenue's approach in filing appeals that are neither maintainable nor in line with the statutory framework governing taxation. The Income Tax Act, 1961, provides a clear and structured mech ..... X X X X Extracts X X X X X X X X Extracts X X X X
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