ITAT Mumbai Judgments — May 2016

The tribunal found that justice was not granted as the appeals were dismissed 'in limini' without any discussion on merits. Therefore, the appeals were sent back to the CIT(A) for adjudication on merits after providing adequate opportunity of hearing.

The Tribunal held that the CIT(A)'s reasons for dismissing the restoration application (limitation and appeals being dismissed, not withdrawn) were misconceived. The Tribunal found a mistake apparent on record and restored the appeals to the CIT(A) for a decision on merits.

The Tribunal restored the issue of interest expenditure disallowance to the CIT(A) for fresh adjudication. It restricted the addition on account of personal drawings to 50% of the CIT(A)'s sustained addition. The levy of interest under sections 234A, 234B, and 234C was dismissed but directed for re-computation after considering TDS.

The tribunal found that justice was not granted as the appeals were dismissed 'in limini' without any discussion on merits. Therefore, the appeals were sent back to the CIT(A) for adjudication on merits after providing adequate opportunity of hearing.

The Tribunal held that government securities held by the bank should be treated as stock-in-trade and broken period interest paid should be allowed as a deduction from business income. It also deleted the addition of notional interest on advances made to brokers.

The Tribunal held that government securities held by the bank should be treated as stock-in-trade and broken period interest paid should be allowed as a deduction from business income. It also deleted the addition of notional interest on advances made to brokers.

The Tribunal upheld the CIT(A)'s decision, finding that the payments were indeed in the nature of salary to employees. Consequently, the provisions of Section 195 were not applicable, and the disallowance under Section 40(a)(ia) was directed to be deleted.

The Tribunal held that Section 115BBE, which disallows set-off of expenses/allowances against deemed income, is not applicable as the income declared was in the nature of business income. It also noted that Section 115BBE was applicable prospectively from AY 2013-14 and that business loss is distinct from expenses/allowances.

The Tribunal held that the CIT(Appeals) was correct in allowing the deduction under Section 80-IC, as the assessee's activities were considered manufacturing. The revenue's appeal was dismissed.

The tribunal found that justice was not granted as the appeals were dismissed 'in limini' without any discussion on merits. Therefore, the appeals were sent back to the CIT(A) for adjudication on merits after providing adequate opportunity of hearing.

The Tribunal upheld the CIT(A)'s decision to delete the penalties. It found that the assessee's claim for interest expenditure, though disallowed, did not constitute concealment of income or furnishing of inaccurate particulars, especially given the peculiar circumstances and bonafide claim.

The Tribunal held that government securities held by the bank should be treated as stock-in-trade and broken period interest paid should be allowed as a deduction from business income. It also deleted the addition of notional interest on advances made to brokers.

The Tribunal upheld the CIT(A)'s decision to delete the penalties. It found that the assessee's claim for interest expenditure, though disallowed, did not constitute concealment of income or furnishing of inaccurate particulars, especially given the peculiar circumstances and bonafide claim.

The Tribunal held that certification expenses are revenue in nature as they do not create an asset of enduring benefit, and allowed the deduction. Regarding gifts, the Tribunal noted that Section 194J applies to monetary payments, and directed the AO to verify if the gifts were indeed payments in kind for services.

The Tribunal partly allowed the assessee's appeal by restricting the addition on personal drawings to 50% and restored the issue of interest expenses to the CIT(A) for fresh adjudication. The revenue's appeal regarding interest under sections 234A, 234B, and 234C was allowed for statistical purposes, directing re-computation.

The Tribunal held that the variance between the reasons recorded for reopening and the assessment order demonstrated a lack of application of mind by the Assessing Officer. This violation of natural justice rendered the reopening proceedings invalid.

The Tribunal held that Section 115BBE, which disallows set-off of expenses/allowances against deemed income, is not applicable as the income declared was in the nature of business income. It also noted that Section 115BBE was applicable prospectively from AY 2013-14 and that business loss is distinct from expenses/allowances.

The Tribunal restored the issue of interest expenditure disallowance to the CIT(A) for fresh adjudication. It also restricted the addition on account of personal drawings to Rs. 1,50,000/-. The grounds related to interest under sections 234A, 234B, and 234C were dismissed, but with a direction to re-compute the interest liability.

The Tribunal held that service tax paid as part of miscellaneous expenses is indeed for business purposes. Therefore, the ad-hoc disallowance on this portion was incorrect.

The Tribunal held that the transfer of development rights constitutes a transfer of a capital asset, and the consideration received is taxable as long-term capital gains. It also held that the value declared in the development agreement was higher than the stamp duty valuation, thus disallowing the application of Section 50C.

The Tribunal held that since the basis for levying the penalty (the disallowance) no longer survived, there was no justification to continue with the penalty. Therefore, the penalty was directed to be deleted.

The Tribunal partly allowed the assessee's appeal by restricting the addition on account of personal drawings to 50% of the amount sustained by the CIT(A). The issue of interest expense was restored to the CIT(A) for fresh adjudication. The revenue's appeal regarding interest under sections 234A, 234B, and 234C was allowed for statistical purposes, directing recomputation.

The Tribunal noted that the penalty was levied on an identical issue as in the case of a co-owner, where the penalty was deleted by the Tribunal. The Tribunal found no distinction in the facts and thus deleted the impugned penalty.

The Tribunal partly allowed the assessee's appeal by restricting the addition on personal drawings to 50% and restored the issue of interest expenses to the CIT(A) for fresh adjudication. The revenue's appeal regarding interest under sections 234A, 234B, and 234C was allowed for statistical purposes, directing re-computation.

The Tribunal held that government securities held by the bank should be treated as stock-in-trade and broken period interest paid should be allowed as a deduction from business income. It also deleted the addition of notional interest on advances made to brokers.

The Tribunal partly allowed the assessee's appeal by restricting the addition on account of personal drawings to 50% of the amount sustained by the CIT(A). For the addition on account of interest expenses, the issue was restored to the CIT(A) for fresh adjudication.

The Tribunal accepted the assessee's application for withdrawal of the appeal. No prejudice was caused to either party by the withdrawal.

The Tribunal held that the advance to the subsidiary was for business purposes and commercial expediency, as it was in line with the assessee's business objectives. Therefore, the disallowance of interest and upfront fee was unwarranted.

The tribunal upheld the CIT(A)'s direction to re-compute Modvat credit adjustment, emphasizing the assessee's duty to provide particulars. The issue of repairs expenditure was restored to the Assessing Officer for fresh adjudication based on the nature of the work.

The Tribunal held that the reopening of assessment under Section 147 was bad in law as no new tangible material was available with the AO, and the assessee had disclosed all material facts. The reassessment order was quashed.

The Tribunal held that a penalty under Section 271(1)(c) cannot be levied merely because a legal claim for relief is not allowed by the AO. Making an incorrect claim in law does not amount to furnishing inaccurate particulars of income.

The Tribunal held that the assessee failed to prove the genuineness of purchases to a certain extent. However, it found the profit rate of 20% adopted by the Commissioner (Appeals) to be high and reduced it to 12.5%. The Department's appeal regarding the deletion of ₹26,08,381 was dismissed.

The Tribunal held that the AO did not sufficiently examine the allocation of expenses between the DTA and EOU periods, which was crucial for determining the Section 10B deduction. The CIT's action under Section 263 was therefore justified.

The Tribunal held that the rejection of the insurance claim on technical grounds cannot be held against the assessee. The assessee's explanations and evidence were not found to be false or erroneous, and the primary onus of the claim was discharged. Therefore, it could not be held that the assessee furnished inaccurate particulars or concealed income.

The Tribunal confirmed the disallowance of gift expenses as sustained by the CIT(A). Regarding the volume discount, the Tribunal directed the AO to allow the claim in Assessment Year 2011-12, as the liability crystallized in that year.

The Tribunal condoned the delay in filing the appeal. It held that Section 271E, as it stood prior to 01.06.2003, did not include 'loan' and only covered 'deposit', thus no penalty was leviable for loan repayment in cash for AY 1995-96.

The Tribunal set aside the addition on account of purchases to the AO for fresh decision. It directed the deletion of disallowance for personal use of a car by a director, holding it not applicable to corporate entities. The issue of short-term capital gains was remitted to the AO for rectification, and the set-off of carry-forward losses was restored to the CIT(A) for adjudication.

The Tribunal restored the disallowance under Section 40(a)(ia) to the AO for re-adjudication based on amended law. It confirmed disallowances for travel and telephone expenses, and Section 14A. The disallowance of car loan interest and depreciation was restored to the AO for fresh consideration, and the claim regarding LTCG was allowed in principle, subject to substantiation by the assessee.

The Tribunal condoned the delay in filing the appeal, subject to the assessee paying a cost of Rs. 10,000/- to the Prime Minister National Relief Fund. The case was restored to the file of the CIT(A) for a fresh decision on merits.

The Tribunal set aside the addition on account of purchases to the AO for fresh decision. It directed the deletion of disallowance for personal use of a car by a director, holding it not applicable to corporate entities. The issue of short-term capital gains was remitted to the AO for rectification, and the set-off of carry-forward losses was restored to the CIT(A) for adjudication.

The Tribunal set aside the addition on account of purchases to the AO for fresh decision. It directed the deletion of disallowance for personal use of a car by a director, holding it not applicable to corporate entities. The issue of short-term capital gains was remitted to the AO for rectification, and the set-off of carry-forward losses was restored to the CIT(A) for adjudication.

The Tribunal held that service tax paid as part of miscellaneous expenses is indeed for business purposes. Therefore, the ad-hoc disallowance on this portion was incorrect.

The Tribunal held that the reopening of assessment under Section 147 was bad in law as no new tangible material was available with the AO, and the assessee had disclosed all material facts. The reassessment order was quashed.

The Tribunal held that the matter of disallowance under Section 14A read with Rule 8D should be restored to the Assessing Officer for fresh adjudication, considering the principle of excluding strategic investments. The appeal regarding the Jodhpur property was decided against the assessee.

The Tribunal held that the expenditure incurred on setting up wind mills was for vertical expansion of the existing business, not a new independent business. Therefore, the write-off of such expenditure was allowed as a deduction.

The Tribunal held that reopening an assessment under section 147 after 4 years, based on a retrospective legislative amendment, is not permissible unless there was a failure by the assessee to disclose material facts. Since no such failure was attributed to the assessee and the reopening was beyond the time limit, the reassessment proceedings were quashed.

The Tribunal held that a penalty under Section 271(1)(c) cannot be levied merely because a legal claim for relief is not allowed by the AO. Making an incorrect claim in law does not amount to furnishing inaccurate particulars of income.

The Tribunal partly allowed the assessee's appeal by restricting the addition on personal drawings to 50% and restored the issue of interest expenses to the CIT(A) for fresh adjudication. The revenue's appeal regarding interest under sections 234A, 234B, and 234C was allowed for statistical purposes, directing re-computation.

The Tribunal held that additional depreciation, when an asset is used for less than 180 days, is restricted to 50% in the first year, and the balance 50% is allowable in the subsequent year. The Tribunal also dismissed the ground related to TUF subsidy as not maintainable at that stage.