ITAT Mumbai Judgments — November 2015

The Tribunal upheld the penalty, noting the assessee's habitual involvement in similar clandestine activities in previous assessment years. The Tribunal found no reason to interfere with the CIT(A)'s order.

The Tribunal affirmed the decision of the CIT(A) in deleting the penalty. It noted that the assessment order did not find the expenses to be bogus, and the disallowance was based on the lack of active business, not on evidence of fake expenses.

The Tribunal held that the interest component of the arbitration award is an accretion to the business receipts and is incidental to the assessee's business. Therefore, it should be treated as business income.

The Tribunal upheld the order of the CIT(A) who deleted the AO's disallowance. The Tribunal found that the assessee's Profit & Loss account did not contain any common expenses that needed apportionment between exempt and non-exempt income, and the AO failed to establish how the assessee's claimed expenses related to exempt income.

The Tribunal allowed the Revenue's appeal for statistical purposes and remanded the case back to the Assessing Officer. This was to allow the assessee to present additional evidence regarding the reconciliation of entries, which was not considered by the lower authorities.

The Tribunal upheld the deletion of disallowance under Section 40(a)(iii) and allowed relief under Section 91, following previous Tribunal and High Court decisions. It also confirmed treating interest income as business income. However, issues regarding foreign exchange fluctuation, and deductions under Sections 80HHC, 80HHE, and 80HHB were remanded to the AO for fresh consideration.

The Tribunal upheld the deletion of disallowance under Section 40(a)(iii) and allowed relief under Section 91, following previous Tribunal and High Court decisions. It also confirmed treating interest income as business income. However, issues regarding foreign exchange fluctuation, and deductions under Sections 80HHC, 80HHE, and 80HHB were remanded to the AO for fresh consideration.

The Tribunal upheld the deletion of disallowance under Section 40(a)(iii) and allowed relief under Section 91, following previous Tribunal and High Court decisions. It also confirmed treating interest income as business income. However, issues regarding foreign exchange fluctuation, and deductions under Sections 80HHC, 80HHE, and 80HHB were remanded to the AO for fresh consideration.

The Tribunal upheld the CIT(A)'s decision that the loss on stock was not speculative and could be set off against other income. It also agreed that the Keyman Insurance premium was a deductible business expenditure, even after the policy was assigned, as it was for the benefit of the firm.

The Tribunal held that freight payments to non-resident shipping companies are covered by Section 40(a)(i) if tax is not deducted, as per jurisdictional High Court decisions. For commission payments, the matter was restored to the Assessing Officer for detailed factual determination regarding services utilized in India.

The Tribunal upheld the deletion of disallowance under Section 40(a)(iii) and allowed relief under Section 91, following previous Tribunal and High Court decisions. It also confirmed treating interest income as business income. However, issues regarding foreign exchange fluctuation, and deductions under Sections 80HHC, 80HHE, and 80HHB were remanded to the AO for fresh consideration.

The Tribunal upheld the Dispute Resolution Panel's (DRP) decision to exclude Asian Business Exhibition and Conferences Limited as a comparable, finding it functionally different due to its event management business. Consequently, the department's appeal was dismissed.

The Tribunal held that entrance fees received for a specified period of membership (25 years) should be spread over that period, rather than being taxed entirely in the year of receipt. The addition of Rs. 50 lakhs by the AO was deleted as it was part of the total consideration for share buyback.

The Tribunal held that the profit on sale of shares should be treated as capital gains, considering the limited number of transactions, the holding period, and the consistency in treating similar gains as capital gains in previous assessment years. The Tribunal allowed the appeal of the assessee.

The Tribunal held that entrance fees received for a specified period of membership (25 years) should be spread over that period, rather than being taxed entirely in the year of receipt. The addition of Rs. 50 lakhs by the AO was deleted as it was part of the total consideration for share buyback.

The Tribunal held that the determination of arm's length price is a matter of estimate and differing estimates do not automatically imply inaccurate particulars. Explanation-7 to Section 271(1)(c) applies, and no penalty can be levied if pricing is done in good faith and with due diligence.

The Tribunal held that entrance fees received for a specified period of membership (25 years) should be spread over that period, rather than being taxed entirely in the year of receipt. The addition of Rs. 50 lakhs by the AO was deleted as it was part of the total consideration for share buyback.

The Tribunal held that the compensation received for surrendering property allotment rights was a capital receipt and not business income. It further held that Explanation to Section 73 of the Act was not applicable in this case.

The Tribunal held that the financial crisis faced by the assessee, evidenced by increased debtors and significant disallowances under Section 40(a)(i)/43B, constituted sufficient reason for the delay in tax payment. Therefore, no penalty was leviable under Section 221(1) read with Section 140A(3).

The Tribunal upheld the action of the lower authorities in treating the assessee as an agent of NCWS. This decision was based on the precedent set by the Hon'ble Bombay High Court in a similar case involving the same assessee.

The Tribunal held that the CIT(A) was correct in deleting the addition as the non-monetary consideration was not part of the sale. The Tribunal also upheld the CIT(A)'s decision regarding the deduction under Section 54, finding that the partition deed was effective from January 29, 2005, and the assessee's claim for deduction was admissible.

The Tribunal held that the assessee failed to provide any evidence to substantiate the claim that the expenditure belonged to the director. The expenditure was incurred through the company's vouchers and not reflected in its books, indicating concealment.

The Tribunal held that freight payments to non-resident shipping companies are covered by Section 40(a)(i) if tax is not deducted, as per jurisdictional High Court decisions. For commission payments, the matter was restored to the Assessing Officer for detailed factual determination regarding services utilized in India.

The Tribunal held that the reopening of assessment was not valid as it was based on a change of opinion, with all material facts already disclosed during the original assessment. The Tribunal also upheld the deletion of the addition, agreeing that there was no cessation or remission of liability as per judicial precedents.

The Tribunal held that the CIT(A) should have granted the assessee an opportunity to rectify the defect in the appeal memo. The Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A)'s file for deciding on merits after allowing the assessee to rectify the defect.

The Tribunal held that amortization of premium on investments and pre-operative expenses are allowable deductions, following its own previous orders. It also held that co-insurance fees paid were not subject to TDS under Section 194H, as the co-insurers were not acting as agents.

The Tribunal upheld the deletion of disallowance under Section 40(a)(iii) and allowed relief under Section 91, following previous Tribunal and High Court decisions. It also confirmed treating interest income as business income. However, issues regarding foreign exchange fluctuation, and deductions under Sections 80HHC, 80HHE, and 80HHB were remanded to the AO for fresh consideration.

The Tribunal held that amortization of premium on investments and pre-operative expenses are allowable deductions, following its own previous orders. It also held that co-insurance fees paid were not subject to TDS under Section 194H, as the co-insurers were not acting as agents.

The Tribunal found that the CIT(A) had dealt with the issue in a generalized manner and had not evaluated the assessee's specific pleas for exclusion. Therefore, the matter was restored to the Assessing Officer for a fresh assessment.

The Tribunal upheld the deletion of disallowance under Section 40(a)(iii) and allowed relief under Section 91, following previous Tribunal and High Court decisions. It also confirmed treating interest income as business income. However, issues regarding foreign exchange fluctuation, and deductions under Sections 80HHC, 80HHE, and 80HHB were remanded to the AO for fresh consideration.

The Tribunal held that freight payments to non-resident shipping companies are covered by Section 40(a)(i) if tax is not deducted, as per jurisdictional High Court decisions. For commission payments, the matter was restored to the Assessing Officer for detailed factual determination regarding services utilized in India.

The tribunal held that the expenditure was not incurred for the purpose of earning income, but rather to contain the losses of the borrower company. The claim for deduction of excess expenditure was therefore not allowed.

The Tribunal held that amortization of premium on investments and pre-operative expenses are allowable deductions, following its own previous orders. It also held that co-insurance fees paid were not subject to TDS under Section 194H, as the co-insurers were not acting as agents.

The Tribunal confirmed the addition for unexplained cash credits as the assessee failed to provide adequate evidence. The disallowance of interest expenditure and consultation fees were also upheld due to lack of substantiation and non-compliance with TDS provisions.

The Tribunal, following its previous decisions for the Assessment Year 2008-09, restored the issue of transfer pricing adjustment to the file of the AO. The AO was directed to decide the matter afresh, considering the assessee's contentions on capacity utilization, accelerated depreciation, and the perpetual loss-making nature of comparables.

The Tribunal held that since the reassessment was initiated after four years from the end of the assessment year, the notice under Section 148 required sanction from the Joint Commissioner as per Section 151(2) of the Income Tax Act. The sanction obtained from the CIT under Section 151(1) was incorrect, rendering the reassessment proceedings invalid.

The Tribunal held that COD sales to Non-AEs should be excluded as they do not involve credit, and after exclusion, the average realization period for Non-AEs becomes 165 days, which is comparable to the 177 days for AEs. The Tribunal also noted that the normal credit period is around 180 days.

The Tribunal held that amortization of premium on investments and pre-operative expenses are allowable deductions, following its own previous orders. It also held that co-insurance fees paid were not subject to TDS under Section 194H, as the co-insurers were not acting as agents.

The Tribunal upheld the CIT(A)'s decision to delete the AO's estimation of income based on advance tax payments. It also agreed that the AO had not properly examined the claim for carry forward of losses and depreciation.

The Tribunal upheld the CIT(A)'s decision to delete the addition. It found that money lending constituted a substantial part of the company's business, and the loan was advanced in the ordinary course of business, thus not falling under the purview of Section 2(22)(e).

The Tribunal held that the CIT(A) rightly deleted the addition as the sundry creditors were genuinely paid off later, and the movement of entries was for banking purposes. The AO did not doubt the original incurrence of these liabilities.

The Tribunal held that broken period interest is a permissible deduction, following jurisdictional High Court decisions. It also allowed the deduction for salaries paid to expatriate employees, considering services rendered in India.

The Tribunal held that the mere confirmation of an addition under Section 68 does not automatically justify a penalty under Section 271(1)(c). Following High Court precedents, it was decided that since the loans were repaid by cheques and the assessee did not admit to concealed income, the penalty was not warranted.

The Tribunal held that amortization of premium on investments and pre-operative expenses are allowable deductions, following its own previous orders. It also held that co-insurance fees paid were not subject to TDS under Section 194H, as the co-insurers were not acting as agents.

The Tribunal held that the issue raised by the Revenue was squarely covered by a previous order of a Co-ordinate Bench, which was also upheld by the jurisdictional High Court. Therefore, the Tribunal found no illegality in the CIT(A)'s order.

The Tribunal held that the AO was justified in adopting the value of land as per the approved valuer's report, following its earlier decision for AY 2001-02. The assessee's capital gain computation based on the DVO's report was therefore incorrect.

The Tribunal acknowledged the assessee's failure to substantiate purchases but found no specific basis for the Assessing Officer's disallowance percentage. Following a previous year's precedent, the disallowance was restricted to a flat sum of Rs. 2 lacs.

The Tribunal held that amortization of premium on investments and pre-operative expenses are allowable deductions, following its own previous orders. It also held that co-insurance fees paid were not subject to TDS under Section 194H, as the co-insurers were not acting as agents.

The Tribunal upheld the CIT(A)'s decision, finding that the disallowance of sampling expenses was ad hoc and lacked factual support. Similarly, the disallowance of interest expenditure was deleted as the advances to sister concerns were considered trade advances for commercial expediency, and the assessee had sufficient own funds.

The Tribunal held that the deduction under Section 54EC is available even if the capital gain is deemed short-term due to Section 50, as the asset itself is not converted into a short-term asset. The CIT(A)'s order was upheld.