PCIT Vs Aurum Ventures Private Limited (Bombay High Court)
The Bombay High Court considered two appeals filed by the Revenue challenging a common order dated 20 June 2023 passed by the Income Tax Appellate Tribunal (ITAT), Mumbai Bench, which had dismissed the Revenue’s appeals against the orders of the Commissioner of Income Tax (Appeals) dated 30 August 2021. The appeals related to Assessment Years 2015-16 and 2016-17, with the issues being common except for the figures involved.
The Revenue proposed several substantial questions of law. These primarily related to whether the Tribunal erred in holding that various documents seized during search proceedings were not incriminating, despite the Revenue’s contention that they demonstrated the assessee’s intention to carry on the business of selling flats rather than renting or leasing them. The Revenue also challenged the Tribunal’s conclusion that the Assessing Officer’s treatment of income from sale of apartments as business income and the disallowance under Section 36(1)(iii) were not based on incriminating material found during the search. Further, the Revenue contended that the Tribunal wrongly deleted the disallowance under Section 36(1)(iii), particularly when similar disallowances had been confirmed by the Commissioner (Appeals) in the assessee’s own case for subsequent assessment years.
