ITAT Mumbai Judgments — July 2016

The Tribunal held that the cash deposits belonged solely to Shri Ashish Sarkar, as evidenced by his affidavit and the AO's remand report. Therefore, the addition in the hands of Mrs. Reena Roy was deleted, and the matter of deposits in Shri Ashish Sarkar's account was remitted to the AO for fresh adjudication.

The Tribunal held that the assessee had paid taxes by way of TDS and advance tax before the due date of filing returns and before the search, indicating no intention to conceal income. The appeal was allowed for statistical purposes.

The Tribunal held that the reopening of assessment was based on a mere change of opinion by the AO, as the same issue was considered and allowed during the original assessment. Reopening based on a change of opinion is not permissible.

The Tribunal held that the assessee had paid taxes by way of TDS and advance tax before the due date of filing returns and before the search, indicating no intention to conceal income. The appeal was allowed for statistical purposes.

The Tribunal held that the Assessing Officer's decision was influenced by the insurance company's rejection and that the CIT(A) failed to provide a finding on the substantiation of the claim. The matter was restored to the AO for fresh consideration.

The Tribunal held that the CRO activities were eligible for deduction under Section 10B, and the late approval could be considered retrospective. Regarding expenses on repairs, the Tribunal allowed 50% of the claimed expenses. The penalty appeal was allowed as the quantum addition was deleted.

The Tribunal found that the amounts in question were loans from a specific individual and were duly accounted for in the assessee's books. Therefore, additions under Section 69A could not be made. The matter was restored to the AO for fresh examination.

The Tribunal quashed the reopening of the assessment, finding that the AO had not applied his mind and had mechanically issued the notice. Since the reopening was bad in law, the subsequent additions were not adjudicated.

The Tribunal found that the assessee had provided complete supporting documents for the purchases, including stock details, payments by cheque, and subsequent sales. The Tribunal noted that the proprietor's statement did not specifically name the assessee and that a co-ordinate bench had allowed similar purchases.

The Tribunal upheld the penalty levied under Section 271(1)(c) for concealment of income. The assessee's failure to disclose the cash receipt and misrepresentation of capital gains were considered deliberate acts of furnishing inaccurate particulars.

The Tribunal held that the disallowance under Section 14A required the AO to record specific reasons for not being satisfied with the assessee's suo moto disallowance before invoking Rule 8D. Regarding Section 43B, the Tribunal held that employee contributions to ESIC deposited before the due date of filing the return of income are allowable deductions.

The Tribunal held that the basis for reopening the assessments was unsustainable as a coordinate bench had upheld the assessee's Section 10A claim for AY 2009-10 on merits. Consequently, the reassessment orders were quashed, and the CIT(A)'s decision to allow the deduction was upheld.

The Tribunal held that penalty under Section 271(1)(c) is not attracted when the tax payable under normal provisions is less than the tax payable under Section 115JB, as the concealment did not lead to tax evasion. This is supported by a Supreme Court judgment and a CBDT circular.

The Tribunal found that the amounts in question were loans from a specific individual and were duly accounted for in the assessee's books. Therefore, additions under Section 69A could not be made. The matter was restored to the AO for fresh examination.

The Tribunal held that the disallowance of interest on loans to subsidiaries was partly confirmed. It also directed the Assessing Officer to allow deduction for sales tax liability if paid within the stipulated period under Section 43B. The disallowance of consultation fees was confirmed.

The Tribunal restored the issue of depreciation on plant and machinery to the AO for re-examination, following a previous order. Regarding AMP expenditure, the Tribunal directed that adjustments should be restricted to international transactions with Associated Enterprises (AEs) and upheld the deduction of sub-license fees received from third parties.

The Tribunal restored the matter to the file of the CIT(A) to decide the appeal afresh. The CIT(A) was directed to provide a reasonable opportunity of being heard to the assessee.

The Tribunal found that the CIT(A)'s averaging of reports was not justified. It directed the AO to assess the property's valuation based on the average of sale deeds relied upon by the VO, which was Rs. 8743/- per sq. mtr.

The Tribunal held that the payments made to non-resident entities for professional services rendered outside India were not exigible to tax in India. Therefore, the assessee was not liable to deduct tax at source, and the disallowance under Section 40(a)(i) was not sustainable.

The Tribunal found that the CIT(A)'s averaging of reports was not justified. It directed the AO to assess the property's valuation based on the average of sale deeds relied upon by the VO, which was Rs. 8743/- per sq. mtr.

The Tribunal held that the basis for reopening the assessments was unsustainable as a coordinate bench had upheld the assessee's Section 10A claim for AY 2009-10 on merits. Consequently, the reassessment orders were quashed, and the CIT(A)'s decision to allow the deduction was upheld.

The Tribunal held that the reopening of assessment was based on a change of opinion, as the information regarding the share transactions and the claim of loss was already available to the AO during the original assessment. Therefore, the reopening was bad in law.

The Tribunal found that the amounts in question were loans from a specific individual and were duly accounted for in the assessee's books. Therefore, additions under Section 69A could not be made. The matter was restored to the AO for fresh examination.

The Tribunal held that the disallowance made by the Assessing Officer was incorrect as it exceeded the dividend income earned. The assessee had sufficient reserves and surplus, and no expenditure was claimed for earning exempt income.

The Tribunal upheld the CIT(A)'s decision regarding the disallowance of expenses for tax due diligence as Fees for Technical Services (FTS) under Section 9(1)(vii), but directed to consider the India-Indonesia DTAA. The Tribunal also allowed the assessee's claim for short-term capital loss on the assignment of a loan.

The Tribunal held that the assessee is entitled to the deduction under Section 54F as they invested the sale consideration in a residential property under construction within the stipulated time. The inability to complete registration or possession due to the builder's fault does not disentitle the assessee.

The Tribunal found that the Assessing Officer incorrectly recorded that the assessee did not provide an explanation. The disallowance was computed as per Rule 8D without considering the assessee's claim of no expenditure.

The Tribunal held that the AO's order passed in pursuance of the Tribunal's earlier order was not barred by limitation. It also addressed the disallowance of interest and administrative expenses, making specific adjustments.

The Tribunal directed the deletion of Rs. 2,31,500/- representing Karate fees. The issue of Rs. 2,15,000/- from FDR maturity was remanded to the AO for verification. Rs. 3 lakh out of Rs. 5,37,488/- from agricultural income was accepted as savings, and the balance was treated as unexplained.

The Tribunal held that the penalty proceedings were invalid because the Assessing Officer did not specify the grounds for penalty initiation in the notice, leaving the relevant column blank. The Tribunal also noted that mere disallowance of a claim does not automatically attract penalty without evidence of concealment or inaccurate particulars with mala fide intention.

The Tribunal held that the assessee had disclosed all material facts and acted under a bona fide belief regarding the project completion method due to ongoing litigation. The addition was based on facts disclosed by the assessee, and the issue was debatable, thus penalty was not leviable.

The Tribunal found that the AO made the disallowance solely based on sales tax department information without independent inquiry. Considering the assessee's net profit rate, the disallowance was restricted.

The Tribunal held that the AO erred by not providing the assessee an opportunity to cross-examine the third party whose statement formed the basis of the additions. This violated principles of natural justice.

The Tribunal upheld the CIT(A)'s decision regarding the disallowance of expenses for tax due diligence as Fees for Technical Services (FTS) under Section 9(1)(vii), but directed to consider the India-Indonesia DTAA. The Tribunal also allowed the assessee's claim for short-term capital loss on the assignment of a loan.

The Tribunal held that the AO erred by not providing the assessee an opportunity to cross-examine the third party whose statement formed the basis of the additions. This violated principles of natural justice.

The Tribunal held that the profit arising from the assessee's share transactions should be treated as capital gains, not business income. This was based on the assessee taking physical delivery of shares, holding them in a demat account, and classifying them as investments in the balance sheet.

The Tribunal held that the basis for reopening the assessments was unsustainable as a coordinate bench had upheld the assessee's Section 10A claim for AY 2009-10 on merits. Consequently, the reassessment orders were quashed, and the CIT(A)'s decision to allow the deduction was upheld.

The Tribunal held that interest under sections 234B and 234C cannot be levied when tax is computed under section 115JB. It also found that the addition for provision for bad debts was based on a misunderstanding of 'writing back' versus 'writing off'. The Tribunal restored issues regarding foreign exchange loss and software expenses to the AO for fresh adjudication, and allowed the set off of brought forward losses.

The Tribunal upheld the CIT(A)'s decision to quash the reassessment proceedings. It found that the AO had all the material facts during the original assessment and reopened the case based on a change of opinion, which is not permissible after four years without evidence of failure to disclose material facts.

The Tribunal held that the AO and CIT(A) failed to establish that the assessee concealed income or that the assessee carried out demolition work. The penalty was levied on mere estimation without basis.

The Tribunal found that the amounts in question were loans from a specific individual and were duly accounted for in the assessee's books. Therefore, additions under Section 69A could not be made. The matter was restored to the AO for fresh examination.

The Tribunal found that the amounts in question were loans from a specific individual and were duly accounted for in the assessee's books. Therefore, additions under Section 69A could not be made. The matter was restored to the AO for fresh examination.

The Tribunal held that Section 115JB(6) prevails over the amended Explanation 1 to Section 115JB, thus excluding SEZ unit income from book profit tax. This decision followed previous Tribunal rulings on the matter.

The Tribunal held that service tax collected by the assessee is not includible in the gross receipts for the purpose of computing income under Section 44BB(1). This decision followed precedents from the Delhi High Court and ITAT Mumbai.

The Tribunal allowed the assessee's request to withdraw the appeal. The Departmental Representative had no objection to the withdrawal.

The Tribunal found that the claimed expenses were abnormally high and lacked justification, affirming the disallowance of 50% of the expenses. Regarding Section 14A, the Tribunal reduced the disallowance to 50% of the amount sustained by the CIT(A).

The Tribunal held that Section 14A allows disallowance only to the extent of expenditure incurred by the assessee in relation to tax-exempt income. Since the assessee had not claimed any expenditure for earning the exempt dividend income, the disallowance made by the Assessing Officer was not justified.

The Tribunal held that the proviso to Section 40(a)(ia) is curative and retrospective from April 1, 2005. Since the deductee had paid taxes on the income, no action could be taken against the deductor.

The Tribunal held that since the quantum addition, which formed the basis for the penalty, was deleted by a Co-ordinate Bench, the penalty proceedings could not survive. The Revenue did not dispute this fact.