ITAT Mumbai Judgments — March 2016

The Tribunal upheld the CIT(A)'s decision, finding that the AO's reliance on the retracted statement was not sustainable due to lack of corroborative evidence. The Tribunal also confirmed the deletion of additions related to cash purchase discount.

The Tribunal upheld the CIT(A)'s decision, finding that the AO's reliance on the retracted statement was not sustainable due to lack of corroborative evidence. The Tribunal also confirmed the deletion of additions related to cash purchase discount.

The Tribunal held that the loan advanced to the Indian subsidiary constituted a capital asset under Section 2(14) of the Income Tax Act. The sale of this debt to Siemens AG was considered a valid transfer under Section 2(47), resulting in a short-term capital loss.

The Tribunal held that penalty under Section 271(1)(c) was not imposable for the transfer pricing adjustment as the issue was debatable and the assessee acted in good faith. Regarding the Section 40(a)(ia) disallowance, the Tribunal held that penalty could not be initiated in the final assessment order if it was not initiated in the draft assessment order.

The Tribunal upheld the CIT(A)'s decision, finding that the AO's reliance on the retracted statement was not sustainable due to lack of corroborative evidence. The Tribunal also confirmed the deletion of additions related to cash purchase discount.

The Tribunal upheld the CIT(A)'s decision, finding that the AO's reliance on the retracted statement was not sustainable due to lack of corroborative evidence. The Tribunal also confirmed the deletion of additions related to cash purchase discount.

The Tribunal agreed with the assessee's contention that the appeal was not maintainable due to the tax effect being below the prescribed monetary limit. The Tribunal dismissed the appeal based on the CBDT circular.

The Tribunal dismissed the assessee's appeal, finding the addition of undisclosed income to be justified based on the CIT(A)'s order. The Revenue's appeal was dismissed as not maintainable due to the tax effect being below the prescribed limit. The assessee's cross-objection was dismissed due to a significant delay without sufficient cause.

The Tribunal held that Section 43B is applicable only when an expenditure is debited and claimed as a deduction without actual payment. Since the assessee neither debited nor claimed VAT/service tax as an expense, the addition was unjustified.

The Tribunal held that the disallowance of interest on timeshare deposits was not allowable as the liability had not accrued. Regarding dividend income, the disallowance was restricted to 2% of the exempt income. The issue of book profit calculation was remanded to the CIT(A) for fresh adjudication.

The Tribunal held that the conditions of Section 40A(2)(b) were not met as the assessee and Walt Disney India were not 'specified persons' due to lack of shareholding or director control. The Tribunal also confirmed the CIT(A)'s decision to amortize dubbing costs over the license period.

The Tribunal restored both issues to the AO for fresh adjudication. For the property ownership, the AO needs to determine joint ownership and apply relevant sections like 27 and 64. For the capital gains, the AO must consider the documents submitted by the assessee regarding the tenancy.

The Tribunal upheld the CIT(A)'s decision, finding that the AO's reliance on the retracted statement was not sustainable due to lack of corroborative evidence. The Tribunal also confirmed the deletion of additions related to cash purchase discount.

The Tribunal upheld the CIT(A)'s decision, finding that the AO's reliance on the retracted statement was not sustainable due to lack of corroborative evidence. The Tribunal also confirmed the deletion of additions related to cash purchase discount.

The Tribunal held that data processing fees paid by an Indian branch to its overseas branch are not taxable in India as it constitutes a payment to self. The Tribunal also dismissed the ground regarding the applicability of domestic tax rates, following its previous orders.

The Tribunal held that the AO computed the standard rent and did not arrive at the fair rent. The Annual Letting Value (ALV) should be determined on the basis of fair rent, not just standard rent.

The Tribunal dismissed the ground regarding the non-discrimination clause, stating it was covered by previous decisions. However, it allowed the appeal concerning the interest income, holding that income cannot be quantified or accrued before the consideration is finalized.

The Tribunal held that the appeal of the Revenue was not maintainable in view of the CBDT's Circular No. 21 of 2015, which sets a monetary limit of Rs. 10 lakhs for filing appeals before the Tribunal. This circular was also applicable to pending appeals.

The Tribunal held that internal charges between a head office and its permanent establishment (PE) do not constitute taxable income in the hands of the head office. Payments effectively connected with a PE are governed by Article 7 of the DTAA, which taxes only profits attributable to the PE.

The Tribunal held that the property was converted from a capital asset to stock-in-trade on the date of the agreement for sale, not when the sale was completed. Therefore, the gains arising from its sale were to be treated as business income.

The Tribunal held that the amendment to Section 92B of the Income Tax Act, concerning corporate guarantees, was effective from April 1, 2012, and thus not applicable to the assessment year 2009-10. Consequently, the impugned Arm's Length Price (ALP) adjustment made by the TPO was deleted.

The Tribunal held that the property was converted from a capital asset to stock-in-trade on the date of the agreement for sale, not when the sale was completed. Therefore, the gains arising from its sale were to be treated as business income.

The Tribunal upheld the TPO's application of the CUP method but allowed for adjustments for quality differences. It also held that expenses incurred wholly and exclusively for business purposes are deductible, even if voluntarily incurred and not strictly necessary.

The Tribunal held that Section 43B is applicable only when an expenditure is debited and claimed as a deduction without actual payment. Since the assessee neither debited nor claimed VAT/service tax as an expense, the addition was unjustified.

The Tribunal held that Motilal Oswal Investment Advisory Pvt. Ltd. was not functionally comparable to the assessee due to its diversified activities, including merchant banking, which differed from the assessee's pure investment advisory services. Consequently, the adjustment made by the AO was deleted.

The Tribunal held that not charging interest under Section 234D when a refund was granted under Section 143(1) and no refund was due on regular assessment constitutes a mistake apparent from the record, justifying the use of Section 154. However, the interest was directed to be restricted to the date of regular assessment.

The Tribunal held that the revenue received by the assessee was for a service and not for the use of intellectual property or for making technology available. Therefore, it was not taxable as royalty or fees for technical services in India.

The Tribunal upheld the CIT(A)'s decision, finding that the AO's reliance on the retracted statement was not sustainable due to lack of corroborative evidence. The Tribunal also confirmed the deletion of additions related to cash purchase discount.

The Tribunal upheld the TPO's application of the CUP method but allowed for adjustments for quality differences. It also held that expenses incurred wholly and exclusively for business purposes are deductible, even if voluntarily incurred and not strictly necessary.

The Tribunal upheld the CIT(A)'s decision regarding the Rs. 10 lakhs deposit being explained by agricultural savings. However, it confirmed the addition of Rs. 1,01,000/- as the assessee failed to substantiate the source of these funds from agricultural savings.

The Tribunal upheld the CIT(A)'s decision to delete the addition related to royalty payments, finding no reason to interfere. However, for other transfer pricing adjustments concerning imports and exports, the Tribunal remitted the matter back to the TPO for de novo adjudication.

The Tribunal deleted the transfer pricing adjustment and the Section 14A disallowance, holding that no such disallowance can be made without exempt income. The Tribunal also dismissed the Assessing Officer's grounds, upholding the DRP's decision on Section 80IB(8A) and software expenditure.

The Tribunal upheld the CIT(A)'s decision regarding the Rs. 10 lakhs deposit being explained by agricultural savings. However, it confirmed the addition of Rs. 1,01,000/- as the assessee failed to substantiate the source of these funds from agricultural savings.

The Tribunal held that the Keyman Insurance Policy premium is not an allowable deduction while computing capital gains under Section 48 and Section 55 of the Income Tax Act. The AO's failure to conduct proper inquiry rendered the assessment order erroneous and prejudicial to the interest of revenue.

The Tribunal held that the amended provisions of Section 80IB(14) regarding built-up area are prospective and not applicable to projects approved before April 1, 2005. Therefore, the assessee is entitled to the deduction.

The Tribunal held that the amended provisions of Section 80IB(14) regarding built-up area are prospective and not applicable to projects approved before April 1, 2005. Therefore, the assessee is entitled to the deduction.

The Tribunal deleted the transfer pricing adjustment and the Section 14A disallowance, holding that no such disallowance can be made without exempt income. The Tribunal also dismissed the Assessing Officer's grounds, upholding the DRP's decision on Section 80IB(8A) and software expenditure.

The Tribunal held that Section 40(a)(ia) is not applicable when payments are not debited to the assessee's profit and loss account. The assessee merely passed on funds from the insurer to the hospital without claiming any expenditure.

The Tribunal held that if the transactional net margin method (TNMM) is used for benchmarking, a separate adjustment for delayed realization of debts is not permissible as interest income is an integral part of the PBIT. Therefore, the adjustment made by the TPO was deleted.

The Tribunal held that the second proviso to Section 40(a)(ia) is declaratory and curative with retrospective effect. If the payee has offered the income and reduced it from its expenditure, no disallowance should be attracted in the hands of the assessee.

The Tribunal held that the AO could not consider the delayed DVO's report. To ensure justice, the issue was restored to the AO to recompute capital gains considering the DVO's report and allowing indexation.

The Tribunal held that the amendment to Section 92B regarding corporate guarantees was effective from April 1, 2012, and thus not applicable to the assessment year in question. Consequently, the ALP adjustment made by the TPO was deleted. The Tribunal also upheld the CIT(A)'s decision on the Section 80IB(8A) deduction.

The Tribunal dismissed the Revenue's appeal as not pressed due to low tax effect, citing a CBDT circular. The Tribunal partly allowed the assessee's cross-objections by remanding the issues of factory expenses and Section 80IB deduction to the AO for fresh examination.

The Tribunal restored the issue of indemnity payment deduction to the Assessing Officer for fresh examination in light of the Share Purchase Agreement. The disallowance under Section 14A was also restored to the Assessing Officer for re-examination based on recent High Court judgments.

The Tribunal directed the exclusion of Vishal Information Technology Ltd from the list of comparables, following coordinate bench decisions. The Tribunal also upheld the DRP's decision to include CG Vak Software & Exports Ltd, as it had made profits in the subsequent year.

The Tribunal held that the amendment to Section 92B regarding corporate guarantees was effective from April 1, 2012, and thus not applicable to the assessment year in question. Consequently, the ALP adjustment made by the TPO was deleted. The Tribunal also upheld the CIT(A)'s decision on the Section 80IB(8A) deduction.

The Tribunal held that the disallowance of interest on capital work-in-progress was to be deleted, following previous decisions in the assessee's own case. The Tribunal also deleted the arm's length price adjustment for notional interest on delayed export payments, stating that no interest was charged on similar delays from non-AEs.

The Tribunal upheld the TPO's application of the CUP method but allowed for adjustments for quality differences. It also held that expenses incurred wholly and exclusively for business purposes are deductible, even if voluntarily incurred and not strictly necessary.

The Tribunal held that the leasehold improvement expenses were revenue in nature, as they were for repairs and furnishing with limited useful life, and not capital in nature. The Tribunal also allowed the transfer pricing adjustment, following a co-ordinate bench decision.

The Tribunal held that the conditions of Section 40A(2)(b) were not met as the assessee and Walt Disney India were not 'specified persons' due to lack of shareholding or director control. The Tribunal also confirmed the CIT(A)'s decision to amortize dubbing costs over the license period.