ITA No. 4252/Mum/2025

Parties Involved

Facts Summary

The assessee, ARCIL RETAIL LOAN PORTFOLIO- 001- A TRUST, filed its return of income for A.Y. 2016–17 declaring total income at Rs. NIL and claimed exempt income of Rs. 27,63,75,223/- under section 61 read with section 63 of the Income-tax Act, 1961. The Assessing Officer (AO) rejected the assessee's contentions, holding that the assessee could not be regarded as a trust for the purposes of sections 61 to 63 of the Act and that it constituted an Association of Persons (AOP) within the meaning of section 2(31) of the Act. The AO assessed the total income of the assessee at Rs. 30,33,45,950/- and initiated penalty proceedings. Aggrieved, the assessee appealed before the Commissioner of Income-tax (Appeals), who allowed the appeal in full, deleting the entire addition made by the AO. The Revenue is now in appeal before the Tribunal.…

Legal Issues

• 1. Whether the assessee trust is liable to be assessed as an Association of Persons.
• 2. Whether the trust is revocable or irrevocable for the purposes of sections 61 to 63 of the Income-tax Act, 1961.
• 3. Consequently, whether the income can be brought to tax in the hands of the trust by invoking section 164 of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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