ITAT Mumbai Judgments — October 2015

The Tribunal held that the expenses incurred on improvements to rented premises, which do not generate enduring benefits for the assessee after vacating the premises, are revenue in nature. The CIT(A) was justified in allowing these expenses as revenue expenditure.

The Tribunal held that while the purchases from the three parties were not genuine, the entire amount could not be disallowed as the assessee had sold the goods. The addition was restricted to the difference in Gross Profit (GP) between the disputed purchases and undisputed purchases.

The Tribunal held that the AO had not made a strong case to treat the gains as business income. The consistent acceptance of STCG in past and future assessment years, along with the average holding period of five months, supported the assessee's claim of being an investor.

The Tribunal found the assessee's conduct questionable, especially the timing of the offer post-search, and confirmed the levy of penalty. However, it deemed the penalty rate of over 200% excessive.

The Tribunal held that for assessment years 2007-08, 2008-09, and 2009-10, a 10% disallowance of foreign travel expenses was justified, dismissing the Revenue's appeals. For assessment year 2006-07, the Tribunal directed a 20% disallowance of foreign travel expenses, partly allowing the assessee's appeal.

The Tribunal held that while the purchases from the three parties were not genuine, the entire amount could not be disallowed as the assessee had sold the goods. The addition was restricted to the difference in Gross Profit (GP) between the disputed purchases and undisputed purchases.

The Tribunal held that the assessee acquired rights over the capital asset on the date of the allotment letter. Subsequent registration of the sale agreement was considered a mere assignment of these rights, not the primary acquisition date.

The Tribunal found that the lower authorities had not properly examined the assessee's contentions regarding cash in hand. It held that additional evidence like cash books and reconciliation statements were necessary for a just decision.

The Tribunal held that while the purchases from the three parties were not genuine, the entire amount could not be disallowed as the assessee had sold the goods. The addition was restricted to the difference in Gross Profit (GP) between the disputed purchases and undisputed purchases.

The tribunal accepted the assessee's application under Section 158A, agreeing to apply the final decision from the pending High Court case regarding the sales tax benefit. The CIT(A)'s direction for recomputing the Section 14A disallowance on a reasonable basis, excluding interest, was upheld.

The Tribunal held that transfer pricing adjustments should be restricted to international transactions with Associated Enterprises (AEs) and not at the entity level. It also found that additional evidence could be admitted before the Dispute Resolution Panel (DRP).

The Tribunal held that transfer pricing adjustments should be restricted to international transactions with Associated Enterprises (AEs) and not at the entity level. It also found that additional evidence could be admitted before the Dispute Resolution Panel (DRP).

The Tribunal held that the interest paid on borrowed funds for making a security deposit towards a development agreement constitutes a business expense. Following the Delhi High Court's decision, the Tribunal ruled that the business was set up, making the interest allowable.

The Tribunal held that transfer pricing adjustments should be restricted to international transactions with Associated Enterprises (AEs) and not at the entity level. It also found that additional evidence could be admitted before the Dispute Resolution Panel (DRP).

The Tribunal restored the issue to the AO, directing the assessee to demonstrate the availability of surplus investible funds on the date of investment. The AO is to decide the issue afresh based on these details.

The Tribunal held that the assessee had sufficient material to prepare financial statements and get them audited, even if for banking purposes. Therefore, there was no justification for not submitting the audit report as required by law.

The Tribunal held that the assessee's conduct, including high volume of share transactions, use of borrowed funds, and declaration of short-term capital gains, indicated an intention to trade in shares rather than hold them as investments. The claim to value closing stock at lower of cost or market value was rejected as the assessee consistently valued it at cost.

The Tribunal held that the assessee's conduct, including high volume of share transactions, use of borrowed funds, and declaration of short-term capital gains, indicated an intention to trade in shares rather than hold them as investments. The claim to value closing stock at lower of cost or market value was rejected as the assessee consistently valued it at cost.

The Tribunal held that the assessee had a plausible view for treating share trading as business income, especially given a prior assessment year where this was accepted. Therefore, it did not constitute furnishing inaccurate particulars.

The Tribunal held that the disallowance of interest expenditure was not justified as the assessee had sufficient interest-free funds to cover the interest-free advances. For Section 14A, the Tribunal ruled that disallowance is not applicable to shares held as stock-in-trade.

The Tribunal deleted the disallowance for shortage in transit and quality rebate, following its own previous orders. It also directed further relief for the MODVAT credit issue, correcting the CIT(A)'s partial relief.

The Tribunal held that the assessee had a plausible view for treating share trading as business income, especially given a prior assessment year where this was accepted. Therefore, it did not constitute furnishing inaccurate particulars.

The Tribunal held that interest disallowance was not justified as the assessee had sufficient interest-free funds to cover interest-free advances. For Section 14A, it was held that disallowance is not applicable to shares held as stock-in-trade, following various High Court and Tribunal decisions.

The Tribunal found reasonable cause for the assessee's non-appearance before the FAA. Therefore, in the interest of justice, the matter was restored to the FAA for fresh adjudication.

The Tribunal held that the disallowance of interest expenditure was not justified as the assessee had sufficient interest-free funds to cover the interest-free advances. For Section 14A, it was held that disallowance is not applicable to shares held as stock-in-trade.

The Tribunal held that since sales and consumption of material were accepted, purchases should also be accepted. The AO was directed to restrict the addition to 3% of purchases from alleged suppliers to cover potential revenue leakage.

The Tribunal held that for assessment years 2007-08, 2008-09, and 2009-10, a 10% disallowance of foreign travel expenses was justified, dismissing the Revenue's appeals. For assessment year 2006-07, the Tribunal directed a 20% disallowance of foreign travel expenses, partly allowing the assessee's appeal.

The Tribunal held that the CIT(A) was justified in deleting the addition made under Section 68. The assessee had explained the nature of the credit, the identity of the broker was established, and the genuineness of the transaction was supported by evidence like contract notes and demat statements.

The Tribunal noted that Section 94(7) was introduced on 01/04/2002, and the sale of units occurred after the stipulated period under the relevant sub-clauses. Consequently, the disallowance made under Section 94(7) was not sustained.

The Tribunal held that the original plan approved in 2000 was for buildings A & B, which were completed before March 31, 2008. Building C, added later, had a commencement certificate issued after the deadline, and no deduction was claimed for it, indicating it was a separate project. The Tribunal found no infirmity in the CIT(A)'s decision.

The Tribunal found that while the AO relied on statements of certain individuals, the assessee had provided documentary evidence. Due to gaps and contradictions, the matter was remanded back to the AO for further inquiry and verification of evidence.

The Tribunal noted that Section 94(7) was introduced on 01/04/2002, and the sale of units occurred after the stipulated period under the relevant sub-clauses. Consequently, the disallowance made under Section 94(7) was not sustained.

The Tribunal noted that Section 94(7) was introduced on 01/04/2002, and the sale of units occurred after the stipulated period under the relevant sub-clauses. Consequently, the disallowance made under Section 94(7) was not sustained.

The Tribunal held that the issuance of shares at a premium is a capital transaction and does not give rise to income. Therefore, transfer pricing provisions are not applicable to such transactions.

The Tribunal restored the issue of capital gains to the Assessing Officer for fresh decision due to lack of Valuation Officer's report. For business expenditure, the Tribunal followed a previous order and restored the issue to the CIT(A) for re-adjudication.

The Tribunal held that the assessee's view was supported by a Supreme Court decision at the time of filing the return. The subsequent retrospective amendment to Section 115JA did not imply concealment or furnishing of inaccurate particulars of income.

The Tribunal held that while the addition to income might be justified, the penalty under Section 271(1)(c) was not automatic. The assessee had provided explanations, and even if not accepted, it did not amount to no explanation, thus the penalty was not justified.

The Tribunal dismissed the assessee's appeal as withdrawn. The Assessing Officer's appeal was partly allowed, and the assessee's appeal concerning Section 80IB(10) deduction was dismissed.

The Tribunal held that the CIT's revision under Section 263 was not justified. It found that the AO had applied his mind to the issue and made an inquiry, even if the appreciation of facts might have been different. Improper appreciation of facts by the AO is not a sufficient ground for revision under Section 263.

The Tribunal held that the assessee, being a credit co-operative society and not a co-operative bank carrying on exclusively banking business, is eligible for deduction under Section 80P. The amendments did not intend to exclude such societies.

The Tribunal held that since a substantial question of law regarding the classification of income was admitted by the High Court, the issue was debatable. Therefore, penalty under Section 271(1)(c) was not justified.

The Tribunal found that the DIT(E)'s order was brief and did not discuss the assessee's objects or its plea to be registered as an educational institution. The matter was restored to the DIT(E) for re-examination.

The tribunal decided to follow previous coordinate bench decisions. For additions on account of suspense and interest expenses, the matters were restored to the CIT(A) for fresh adjudication. For personal household expenses, the addition was restricted to Rs. 1,50,000.

The Tribunal found that the lender, M/s Pushpak Exports, was a defunct firm that had not filed income tax returns for several years. The Tribunal held that the evidence submitted by the assessee to prove the genuineness of the loan remained unverified and un-authenticated. Therefore, the matter was restored to the AO for de-novo determination.

The Tribunal found that the assessee had provided sufficient documentary evidence, including confirmations from suppliers and bank statements, to justify the purchases. The higher Gross Profit rate also supported the genuineness of the transactions.

The Tribunal held that the assessee had sufficient non-interest bearing funds to cover the advances, negating the diversion of interest-bearing funds. It also allowed the bad debt write-off, following a previous decision in the assessee's own case and a relevant CBDT circular.

The Tribunal found that certain amounts were credited to the P&L account in earlier years and were verifiable. It also noted that amounts not received by the assessee and differences due to foreign exchange fluctuation were incorrectly added.

The Tribunal held that expenses incurred for providing infrastructure facilities were legitimate business expenditures and should be allowed. Consequently, the appeal regarding the income from amenities was decided in favor of the assessee.

The tribunal decided to follow previous coordinate bench decisions. For additions on account of suspense and interest expenses, the matters were restored to the CIT(A) for fresh adjudication. For personal household expenses, the addition was restricted to Rs. 1,50,000.

The tribunal decided to follow previous coordinate bench decisions. For additions on account of suspense and interest expenses, the matters were restored to the CIT(A) for fresh adjudication. For personal household expenses, the addition was restricted to Rs. 1,50,000.