ITAT Mumbai Judgments — November 2015

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 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 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 commission paid to non-resident agents for services rendered outside India, where the agents have no permanent establishment in India, is not chargeable to tax in India. Therefore, the assessee was not obligated to deduct TDS.

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 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 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 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 CIT(A) directed the Assessing Officer to adopt the total income as per the audited accounts, not the provisional ones. The CIT(A) also allowed set off of brought forward losses as per the IT Act.

The Tribunal allowed the appeal on the issue of disallowance under Section 14A r.w. Rule 8D, directing the Assessing Officer to delete the addition as satisfaction was not recorded. The Tribunal also allowed the deletion of addition on account of guarantee commission and restored the issue of royalty income exemption to the Assessing Officer for decision in light of the DTAA.

The Tribunal held that brokerage paid for arranging leases is not deductible while computing income from house property. The annual value is determined based on rent received or receivable, and deductions are specifically provided under Section 24 of the Act.

The Tribunal found that the TPO's computation of ALP was flawed, particularly regarding the inclusion of closing stock and the consideration of all expenses. The Tribunal noted that the assessee's method was consistent and accepted in a subsequent assessment year.

The Tribunal held that the reassessment proceedings were valid as the Assessing Officer had a reason to believe income had escaped assessment based on recurring facts found in a subsequent year. The Tribunal also dismissed grounds related to non-issuance of notice and disallowed expenditure on ice-cream purchases due to lack of substantiation.

The Tribunal held that the discrepancies were clarified, and the purchasers confirmed the transactions. The acquisition of jewellery by way of gift at the time of marriage was not doubted by the AO.

The Tribunal found that the DRP had not properly dealt with the assessee's detailed submissions and had not given proper reasoning for its conclusions. Therefore, several grounds were remanded back to the DRP or AO for re-adjudication with proper opportunity to the assessee.

The Tribunal held that a bonafide mistake in tax computation, where all relevant details were provided and the income itself was not disputed, does not constitute concealment or furnishing of inaccurate particulars of income. Therefore, penalty under Section 271(1)(c) is not warranted.

The Tribunal held that the assessee was eligible for deduction under section 80IA(4) as a 'developer' for certain projects, overturning the Assessing Officer's view that the assessee was only a contractor. The Tribunal also ruled that ownership of the infrastructure facility is not a prerequisite for claiming the deduction.

The Tribunal allowed the deduction for the additional amount paid to Bedmutha Wire Co. Ltd. as it was a judgment debt. It also directed the deletion of disallowances on professional fees and restricted the disallowance under Section 14A to administrative expenses.

The Tribunal held that expenses for maintaining corporate status (electricity, taxes, ROC fees) are allowable. However, the issue of interest on OD required further factual determination by the AO.

The Tribunal held that foreign exchange gain should be treated as operating in nature for PLI computation and that Infosys Technologies Ltd. was not a comparable company due to functional differences. The Tribunal also allowed the claim of deduction u/s 10A on profit increased by foreign exchange loss, following previous rulings.

The Tribunal, following a Special Bench decision, held that non-compete fees are chargeable to tax as business income. Consequently, the order of the CIT(A) was set aside, and the Assessing Officer's order was restored.

The Tribunal held that the assessee was entitled to the indexed cost of acquisition as on 01.04.1981, following the Bombay High Court's decision. It also held that the investment in bonds was made within the six-month period from the receipt of sale proceeds, allowing the Section 54EC exemption.

The Tribunal held that the income from hoardings should be treated as business income, as it was an integral part of the assessee's overall business activities. The AO's action of treating it as 'income from other sources' without proper justification was not upheld.

The Tribunal upheld the CIT(A)'s decision to estimate 25% of gross receipts as net profit from the undisclosed bank account activities. The Tribunal found the CIT(A)'s estimate to be judicious and justified, considering the assessee's business and the inability to fully corroborate all transactions.

The Tribunal held that the AO's assessment order was indeed erroneous and prejudicial to the interest of revenue as it lacked proper investigation into the sale consideration and the valuation of the property. Therefore, the PCIT was justified in invoking Section 263.

The Tribunal held that the penalty was not leviable as the revised computation was filed after receiving notices and the assessee voluntarily offered the additional income. The initial return was based on provisional accounts, and the revised figures were offered without detection by the AO.

The Tribunal held that gifts from unrelated third parties without establishing the relationship, occasion, or genuineness are taxable. However, a specific claim regarding gifts received in earlier years was restored to the AO for verification. The Tribunal also restored issues related to capital gains on property and interest income to the AO for fresh examination.

The Tribunal, following a co-ordinate bench's decision, allowed the depreciation claim on the jetties. The Tribunal found that the assessee had acquired a commercial right or license, which qualified as an intangible asset for depreciation purposes.

The assessee requested to withdraw the appeal due to the small amount involved. The Tribunal allowed the withdrawal request.

The Tribunal held that the AO should have examined the assessee's books of accounts and records before making the addition, and not solely relied on supplier statements. The low profit declared on sales from these purchases also requires further examination.

The Tribunal held that the assessee failed to substantiate his claim with documentary evidence that the loan was for commercial consideration. The Tribunal found the explanations to be obscure and self-serving, and distinguished the relied-upon case laws.

The Tribunal held that the disallowance under Section 14A required fresh examination by the AO as the AO had not considered the assessee's contentions regarding investments held as stock-in-trade. For Section 36(1)(viia), the Tribunal followed a later decision and restored the AO's order.

The Tribunal held that a calculation mistake in capital gains does not amount to willful miscarriage or concealment of facts. Following the Supreme Court's decision in Reliance Petroproducts Pvt. Ltd., the Tribunal decided that penalty could not be levied for a wrongful claim of allowance.

The Tribunal upheld the Ld CIT(A)'s decision, finding no reason to disturb the fair market value determined by the approved valuer. It also allowed indexation benefit from 1981-82, following a jurisdictional High Court decision.

The Tribunal upheld the fair market value determined by the approved valuer, finding no error in it. It also allowed indexation benefit from 1981-82 as the property was inherited.

The Tribunal found merit in the assessee's plea to restore the matter. It set aside the DIT(E)'s order and remanded the case for fresh consideration, allowing the assessee an opportunity to furnish the required details and be heard.

The Tribunal partly allowed the assessee's appeal and dismissed the Revenue's appeal. It directed the Assessing Officer to verify a prior year's disallowance to avoid double addition and upheld the DRP's decision regarding the comparability of manufacturing units for deduction claims.

The Tribunal held that the AO should have examined the assessee's books of accounts and records before making the addition, and not solely relied on supplier statements. The low profit declared on sales from these purchases also requires further examination.

The Tribunal held that foreign exchange gain should be treated as operating in nature for PLI computation and that Infosys Technologies Ltd. was not a comparable company due to functional differences. The Tribunal also allowed the claim of deduction u/s 10A on profit increased by foreign exchange loss, following previous rulings.

The Tribunal held that foreign exchange gain should be treated as operating in nature for PLI computation and that Infosys Technologies Ltd. was not a comparable company due to functional differences. The Tribunal also allowed the claim of deduction u/s 10A on profit increased by foreign exchange loss, following previous rulings.

The Tribunal allowed the deduction for the additional amount paid to Bedmutha Wire Co. Ltd. as it was a judgment debt. It also directed the deletion of disallowances on professional fees and restricted the disallowance under Section 14A to administrative expenses.

The Tribunal found that the DRP had not properly adjudicated the assessee's grounds regarding transfer pricing adjustments, having relied on previous years' orders without proper consideration of the facts for the current year. The Tribunal also noted that there had been significant judicial development concerning Section 14A disallowances.

The Tribunal held that the AO should give effect to the rectification order, irrespective of whether the assessee produced a copy. The AO was directed to recompute the assessee's income considering the rectification.

The Tribunal upheld the validity of the reopening of the assessment. However, it found that the disallowance computation under Section 14A was not properly examined and referred the matter back to the Assessing Officer for fresh consideration.

The Tribunal followed its own earlier decision in the assessee's case, which deleted similar additions due to lack of incriminating evidence. The addition of undisclosed brokerage was deleted.

The Tribunal held that gifts from unrelated third parties without establishing the relationship, occasion, or genuineness are taxable. However, a specific claim regarding gifts received in earlier years was restored to the AO for verification. The Tribunal also restored issues related to capital gains on property and interest income to the AO for fresh examination.

The assessee's authorized representative requested the withdrawal of the appeal. The Departmental Representative had no objection to the withdrawal.

The Tribunal held that foreign exchange gain should be treated as operating in nature for PLI computation and that Infosys Technologies Ltd. was not a comparable company due to functional differences. The Tribunal also allowed the claim of deduction u/s 10A on profit increased by foreign exchange loss, following previous rulings.