LIGHT RAY ADVISORS LLP,BANGALORE, KARNATAKA V. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BANGALORE, BMTC BUILDING, KORAMANGALA

ITA 2440/BANG/2024

AI Insights

The case involves Light Ray Advisors LLP, which appealed against the orders of the CIT(A) for the assessment years 2018-19 and 2019-20. The primary issue was the disallowance of dividend income claimed as exempt under section 10(35) of the Income Tax Act, 1961, received from mutual funds. The Central Processing Centre (CPC) had initially proposed adjustments to the assessee's declared income, which were upheld by the CIT(A). The Tribunal found that the lower authorities had not adequately considered the evidence provided by the assessee and thus restored the matter to the JAO for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 34179 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEHA SAHAY
• Assessee Lawyers: ALIASGAR RAMPURWALA
• Section: 143(1)

Judgement Text

"ITA No.2440&2441/Bang/2024 Light Ray Advisors LLP, Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI PRAKASH CHAND YADAV, JUDICIAL MEMBER ITA No.2440 & 2441/Bang/2024 Assessment Years: 2018-19 & 2019-20 Light Ray Advisors LLP Unit No.902 & 903, Campus 31, RMZ Ecoworld, Sarjapur, Outer Ring Road, Bhoganahalli Village, Varthur Hobli Bengaluru East Taluk, Panathur BO Balagere Karnataka 560 103 PAN NO : AAGFL2045L Vs. DCIT Circle-4(1)(1) Bangalore APPELLANT RESPONDENT Appellant by : Sri Aliasgar Rampurwala, A.R. Respondent by : Smt. Neha Sahay, D.R. Date of Hearing : 29.01.2025 Date of Pronouncement : 03.02.2025 O R D E R PER PRAKASH CHAND YADAV, JUDICIAL MEMBER: Present appeals of the assessee are arising from different orders of ld. CIT(A) both dated 21.10.2024 having DIN & Order No. ITBA/APL/S/250/2024-25/1069805974(1) for AY 2018-19 & DIN & Order No.ITBA/APL/S/250/2024-25/1069830029(1) for AY 2019- 20. 2. Brief facts of the case leading to the filing of present appeals are that the assessee is a Limited Liability Partnership (“LLP”) engaged in the business of investment advisory services. It has filed its return of income on 17.10.2018 declaring an income of Rs.27,68,74,140/-. The return of income filed by the assessee was processed u/s 143(1) of the Income Tax Act, 1961 (in short “the Act”). ITA No.2440&2441/Bang/2024 Light Ray Advisors LLP, Bangalore Page 2 of 3 Thereafter, the CPC issued a notice to the assessee proposing an adjustment of Rs.51,83,084/- for AY 2018-19 and an amount of Rs.52,61,099/- for AY 2019-20. In response to the notice of CPC, the assessee filed a response. However, the ld. CPC disallowed the claim of the assessee. It is relevant to mention here that in AY 2018- 19, an amount of Rs.51,83,004/- has been received by the assessee as dividend from mutual funds and the same were claimed by the assessee as exempt u/s 10(35) of the Act. For the assessment year 2019-20, the facts are same, there is difference in figure of disallowance. Therefore, we are deciding these two appeals by way of this consolidated order. 3. Aggrieved with the order of CPC, assessee filed an appeal before the ld. CIT(A) and contended various aspects of the matter. However, the ld. CIT(A) could not find any force in the submissions of the assessee and observed that the assessee failed to file any documentary evidences vis-à-vis the dividend income earned from mutual fund and not from companies. The ld. CIT(A) has dismissed the appeal of the assessee. Now the assessee has come up in appeal. 4. At the outset, ld. Counsel for the assessee pointed out that ld. JCIT(A) has erred in observing that the assessee has failed to file any documentary evidence before the lower authorities. Counsel for the assessee drawn the attention of the bench before the voluminous papers filed with the NFC and CPC, Bangalore. 5. The ld. D.R. relied upon the orders of the authorities below. However, the ld. D.R. submitted that the matter may be restored to the file of JAO to decide the matter afresh. 6. We have heard the rival submissions and perused the materials available on record. After considering the facts and ITA No.2440&2441/Bang/2024 Light Ray Advisors LLP, Bangalore Page 3 of 3 circumstances of the case, we are of the view that the lower authorities have not at all considered the papers filed before with them. Therefore, we restore the matter to the file of JAO with a direction that if the assessee is able to establish that the dividend income is earned from mutual funds, which are exempt from taxation, then the claim of the assessee deserves to be allowed. With this direction, we restore this matter to the jurisdictional AO. 7. In the result, both the appeals of the assessee are allowed for statistical purposes. Order pronounced in the open court on 3rd Feb, 2024 Sd/- (Waseem Ahmed) Accountant Member Sd/- (Prakash Chand Yadav) Judicial Member Bangalore, Dated 3rd Feb, 2024. VG/SPS Copy to: 1. The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order Asst. Registrar, ITAT, Bangalore. "