ITAT Mumbai Judgments — July 2016

The Tribunal held that the liability had not ceased to exist as there was an ongoing dispute with the Government. Therefore, Section 41(1) was not applicable.

The Tribunal held that the expenditure is not allowable as the assessee had stopped its business completely since AY 2001-02, and this cannot be considered a temporary lull. Therefore, the decision of the lower authorities was confirmed.

The Tribunal upheld the CIT(A)'s decision, agreeing that the gains should be treated as short-term capital gains. They found no reason to interfere with the CIT(A)'s analysis and the principle of consistency applied.

The Tribunal found that the CIT(A) passed a cryptic order without dealing with the assessee's submissions. Therefore, the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal dismissed the appeal filed by the Revenue. This was based on the CBDT's circular which stipulated monetary limits for filing appeals. The tax effect in this case was below the prescribed limit.

The Tribunal held that the deduction under Section 54EC is available on the transfer of a long-term capital asset, even if the gain is deemed short-term due to depreciation. The legal fiction under Section 50 is limited to the computation of capital gains and does not convert a long-term asset into a short-term asset for exemption purposes.

The Tribunal held that the assessee had provided all necessary details regarding the purchase and sale of shares, including contract notes and bank statements. The AO failed to establish the transactions as bogus, and therefore, the profit should be treated as long-term capital gain.

The Tribunal found that the statement of a third party (M/s Milestone Corporation) was relied upon without confronting it to the assessee, and cross-examination was not offered. The Tribunal also noted that the assessee claimed to have provided reconciliation details. Therefore, the matter was set aside for de novo determination.

The Tribunal held that the lease was an operating lease, allowing the assessee to claim depreciation. Regarding fleet management charges, the Tribunal approved the accounting treatment in principle, subject to verification by the AO, allowing income to be recognized over the contract period based on incurred costs.

The Tribunal found that the matter needed to be set aside to the Assessing Officer for de-novo determination. The AO was directed to verify the assessee's contentions regarding the use of the bank account by Mr. Pokharana for his business transactions.

The Tribunal held that the lease was an operating lease, allowing the assessee to claim depreciation. Regarding fleet management charges, the Tribunal approved the accounting treatment in principle, subject to verification by the AO, allowing income to be recognized over the contract period based on incurred costs.

The Tribunal partly allowed the appeal, holding that the income from these transactions should be computed as 5% commission for facilitating bogus transactions, following a similar ruling for a sister concern.

The Tribunal held that the assessee was entitled to depreciation on goodwill as an intangible asset. The decision was based on a prior ruling by the CIT(A) for the assessment year 2008-09, which was in favor of the assessee.

The Tribunal allowed the assessee's appeal, deleting the addition on lease rent by following a coordinate bench decision. The Tribunal also dismissed the revenue's appeal regarding the Section 80IB(10) deduction, upholding the CIT(A)'s order based on a similar precedent.

The assessee requested to withdraw the appeal due to a mistake in filing it before the ITAT instead of the CIT(A). The Tribunal allowed the withdrawal.

The Tribunal dismissed the appeal as not maintainable because the tax effect was below the prescribed monetary limit. Therefore, the appeal filed by the Assessing Officer was dismissed.

The Tribunal rejected the adjournment request and remanded the issue back to the CIT(A). The CIT(A) was directed to provide a reasonable opportunity of being heard to the assessee and decide the issue on merits.

The Tribunal noted that the tax effect was below the monetary limit prescribed by the CBDT circular for filing appeals. Therefore, the appeal was not maintainable and was dismissed.

The Tribunal found merit in the assessee's contention that the additional evidence was not admitted and considered by the CIT(A). Therefore, the matter was restored to the CIT(A) to decide afresh after considering the additional evidence.

The Tribunal held that if an assessee has sufficient interest-free funds, any investment or advance made can be presumed to be out of such interest-free funds, even if there are also interest-bearing funds available. The Tribunal followed its earlier decision in the assessee's own case.

The Tribunal held that if an assessee has sufficient interest-free funds, any investment or advance made can be presumed to be out of such interest-free funds, even if there are also interest-bearing funds available. The Tribunal followed its earlier decision in the assessee's own case.

The Tribunal found that the CIT(A) passed a reasoned order addressing the assessee's arguments. As the assessee provided no contradictory material, the Tribunal found no reason to interfere with the lower authority's order.

The Tribunal allowed the assessee's appeal, deleting the addition on lease rent by following a coordinate bench decision. The Tribunal also dismissed the revenue's appeal regarding the Section 80IB(10) deduction, upholding the CIT(A)'s order based on a similar precedent.

The Tribunal dismissed the appeal based on CBDT's circular regarding monetary limits for filing appeals. The total demand in the case was below the prescribed limit.

The Tribunal allowed the assessee's appeal, deleting the addition on lease rent by following a coordinate bench decision. The Tribunal also dismissed the revenue's appeal regarding the Section 80IB(10) deduction, upholding the CIT(A)'s order based on a similar precedent.

The Tribunal held that no disallowance under Section 14A for interest is to be made as the assessee had sufficient interest-free funds. It also directed the exclusion of strategic investments from the disallowance calculation. The Tribunal further ruled that foreign exchange losses incurred for hedging export business are to be treated as business losses, not speculation losses.

The tribunal confirmed the disallowance of interest as the assessee had agreed to it before the AO. For Section 14A, the disallowance was set aside and restored to the AO for recalculation as Rule 8D was not applicable for the assessment year. The rejection of loss set off was also set aside for fresh examination by the AO.

The Tribunal held that no disallowance under Section 14A for interest is to be made as the assessee had sufficient interest-free funds. It also directed the exclusion of strategic investments from the disallowance calculation. The Tribunal further ruled that foreign exchange losses incurred for hedging export business are to be treated as business losses, not speculation losses.

The Tribunal noted that a previous quantum appeal for the same assessment year and assessee was remanded to the CIT(A) for a speaking order. Therefore, the present penalty appeal, being related to the quantum appeal, was also remanded to the CIT(A) with identical directions.

The Tribunal held that since the assessment order giving rise to the penalty was quashed by a previous ITAT order, the deletion of the penalty by the CIT(A) was correct. The penalty cannot survive if the underlying assessment order is invalid.

The Tribunal affirmed the CIT(A)'s decision to delete the penalty. It held that since the original addition on which the penalty was based no longer survived, the penalty also could not be sustained.

The Tribunal held that disallowing an expenditure does not automatically imply concealment or furnishing of inaccurate particulars. The assessee had a bonafide belief and provided justification for the expenses.

The Tribunal upheld the penalty on the undisclosed income, finding the assessee's explanation for not including it in the original return insufficient. However, it agreed with the CIT(A) that the disallowance for cash payments under Section 40A(3) did not automatically warrant a penalty under Section 271(1)(c).

The Tribunal held that the CIT(A) passed the impugned order in contradiction to a previous Tribunal order which had held the assigned part of the building as a business asset and depreciable. Therefore, the CIT(A)'s order was set aside.

The Tribunal upheld the CIT(A)'s decision to delete the penalty. This was because the addition made by the Assessing Officer, which formed the basis for the penalty, had itself been deleted by a prior Tribunal order.

The Tribunal held that interest under Section 234B of the Income Tax Act cannot be charged when the addition to income arises from a retrospective amendment, as the assessee could not have foreseen such a change. The levy of interest was therefore set aside.

The Tribunal held that the DRP's direction to allow DTAA benefits on feeder vessel income was correct, as it was based on a subsisting order of the Tribunal in the assessee's own case. The mere filing of an appeal by the Revenue against the prior order did not negate its validity.

The Tribunal held that the transactions of sale and purchase of shares in M/s. Buniyad Chemicals Ltd. could not be considered bogus, relying on previous judgments where similar transactions were held to be genuine. Therefore, the long-term capital gain could not be treated as an unexplained cash credit.

The Tribunal dismissed the appeal in limine. This was because the tax effect was below Rs. 10,00,000/- and did not fall under any exceptions specified in the relevant CBDT Circular.

The Tribunal held that the DRP's direction to allow DTAA benefits on feeder vessel income was correct, as it was based on a subsisting order of the Tribunal in the assessee's own case. The mere filing of an appeal by the Revenue against the prior order did not negate its validity.

The Tribunal held that the penalty was not leviable as the assessee's claim of losses was due to an inadvertent error and not a deliberate intention to conceal income. The Supreme Court's decision in Price Waterhouse Coopers Pvt. Ltd. was cited.

The Tribunal upheld the CIT(A)'s decision, stating that in the absence of any exempt income earned by the assessee, no disallowance under Section 14A is merited. The Tribunal also affirmed the deletion of the addition made by the AO while computing book profits under Section 115JB.

The Tribunal held that the DRP's direction to allow DTAA benefits on feeder vessel income was correct, as it was based on a subsisting order of the Tribunal in the assessee's own case. The mere filing of an appeal by the Revenue against the prior order did not negate its validity.

The tribunal upheld the CIT(A)'s decision to delete the majority of the interest disallowance. It found that the assessee had sufficient interest-free funds available to make the advances and that the AO had not established a nexus between borrowed funds and the advances.

The Tribunal upheld the penalty on the undisclosed income, finding the assessee's explanation for not including it in the original return insufficient. However, it agreed with the CIT(A) that the disallowance for cash payments under Section 40A(3) did not automatically warrant a penalty under Section 271(1)(c).

The Tribunal held that the DRP's direction to allow DTAA benefits on feeder vessel income was correct, as it was based on a subsisting order of the Tribunal in the assessee's own case. The mere filing of an appeal by the Revenue against the prior order did not negate its validity.

The Tribunal held that the interest portion of a refund previously issued should not be ignored when calculating further interest payable under Section 244A. This decision followed a precedent set in the assessee's own case by the Tribunal.

The Tribunal held that interest under Section 234B of the Income Tax Act cannot be charged when the addition to income arises from a retrospective amendment, as the assessee could not have foreseen such a change. The levy of interest was therefore set aside.