ITAT Mumbai Judgments — August 2016

The Tribunal held that the disallowance of survey fees was uncalled for as payments were supported by bills, TDS was deducted, and service tax was paid. However, the disallowance of cargo handling expenses was upheld.

The Tribunal held that the director's statement was overemphasized and that the services rendered by the director, even if consultative, were for the business. The Tribunal noted that similar salary payments were allowed in subsequent assessment years and that it is for the assessee to decide on business expenditures.

The Tribunal allowed the VRS expenditure by following its own prior decisions. Regarding the conversion of capital asset to stock-in-trade, the Tribunal confirmed the AO's addition, stating it should be part of closing stock and capital gains are taxable on sale. The Tribunal allowed the Revenue's appeal on the exclusion of proportionate profit, reversing the CIT(A)'s decision.

The Tribunal held that Section 14A of the Act is not applicable to insurance businesses assessed under Section 44 read with the First Schedule. Therefore, exemptions claimed under Section 10 for gains on investments, interest, and dividends are allowable.

The Tribunal dismissed the Revenue's appeal for AY 2002-03 as the tax effect was below the prescribed limit. For AY 2003-04, the Tribunal deleted the addition on account of advances from customers, household expenses, and deemed dividend, finding the CIT(A)'s deletion of additions related to sundry creditors justified. The Tribunal allowed the assessee's appeal for AY 2006-07, deleting additions related to trading results and unaccounted receipts.

The Tribunal held that the director's statement was overemphasized and that the services rendered by the director, even if consultative, were for the business. The Tribunal noted that similar salary payments were allowed in subsequent assessment years and that it is for the assessee to decide on business expenditures.

The Tribunal restored the issue of delayed employee contributions to the AO for verification against the Supreme Court ruling in Alom Extrusions Ltd. The Tribunal allowed the foreign exchange fluctuation gain as a capital receipt, holding it as a shift in loan liability for capital assets.

The Tribunal held that the assessee was engaged in an infrastructure project and not merely acting as a contractor, following its own previous decisions and High Court rulings. The CIT(A)'s decision to allow the deduction was deemed fair and reasonable.

The Tribunal upheld the CIT(A)'s decision to delete the additions. The Tribunal found that the assessee had provided sufficient explanations for the fall in profit ratios and that the disallowances related to discounts and wages were not justified based on the facts.

The Tribunal restored the issue of delayed employee contributions to the AO for verification against the Supreme Court ruling in Alom Extrusions Ltd. The Tribunal allowed the foreign exchange fluctuation gain as a capital receipt, holding it as a shift in loan liability for capital assets.

The Tribunal held that Section 14A of the Act is not applicable to insurance businesses assessed under Section 44 read with the First Schedule. Therefore, exemptions claimed under Section 10 for gains on investments, interest, and dividends are allowable.

The Tribunal held that the director's statement was overemphasized and that the services rendered by the director, even if consultative, were for the business. The Tribunal noted that similar salary payments were allowed in subsequent assessment years and that it is for the assessee to decide on business expenditures.

The Tribunal held that the director's statement was overemphasized and that the services rendered by the director, even if consultative, were for the business. The Tribunal noted that similar salary payments were allowed in subsequent assessment years and that it is for the assessee to decide on business expenditures.

The Tribunal held that the disallowance of survey fees was uncalled for as payments were supported by bills, TDS was deducted, and service tax was paid. However, the disallowance of cargo handling expenses was upheld.

The Tribunal noted that the tax effect was below the monetary limit of Rs. 10 lakh as per CBDT instructions. Therefore, the appeal filed by the Revenue was not maintainable.

The Tribunal held that the Assessing Officer and CIT(A) did not properly examine the evidence and submissions. Crucially, the department failed to investigate whether the buyer actually possessed the cash claimed to have been paid. Therefore, the issue was restored to the Assessing Officer for a thorough re-examination.

The Tribunal dismissed the Revenue's appeal for AY 2010-11 as the tax effect was below the threshold specified in CBDT Circular No. 21/2015. For AY 2009-10, the Tribunal upheld the CIT(A)'s decision to estimate profit on bogus purchases at 12.5%.

The Tribunal restored the issue of delayed employee contributions to the AO for verification against the Supreme Court ruling in Alom Extrusions Ltd. The Tribunal allowed the foreign exchange fluctuation gain as a capital receipt, holding it as a shift in loan liability for capital assets.

The Tribunal restored the issue of delayed employee contributions to the AO for verification against the Supreme Court ruling in Alom Extrusions Ltd. The Tribunal allowed the foreign exchange fluctuation gain as a capital receipt, holding it as a shift in loan liability for capital assets.

The Tribunal dismissed the Revenue's appeal for AY 2002-03 as the tax effect was below the prescribed limit. For AY 2003-04, the Tribunal deleted the addition on account of advances from customers, household expenses, and deemed dividend, finding the CIT(A)'s deletion of additions related to sundry creditors justified. The Tribunal allowed the assessee's appeal for AY 2006-07, deleting additions related to trading results and unaccounted receipts.

The Tribunal held that the transfer of shares by the firm to NCPL was a valid gift and not taxable under Section 45(4) or Section 28(iv). It also ruled that maintenance charges are allowable for computing the annual letting value of a property.

The Tribunal dismissed the Revenue's appeal for AY 2010-11 as the tax effect was below the threshold specified in CBDT Circular No. 21/2015. For AY 2009-10, the Tribunal upheld the CIT(A)'s decision to estimate profit on bogus purchases at 12.5%.

The Tribunal held that the director's statement was overemphasized and that the services rendered by the director, even if consultative, were for the business. The Tribunal noted that similar salary payments were allowed in subsequent assessment years and that it is for the assessee to decide on business expenditures.

The Tribunal held that the director's statement was overemphasized and that the services rendered by the director, even if consultative, were for the business. The Tribunal noted that similar salary payments were allowed in subsequent assessment years and that it is for the assessee to decide on business expenditures.

The Tribunal held that the director's statement was overemphasized and that the services rendered by the director, even if consultative, were for the business. The Tribunal noted that similar salary payments were allowed in subsequent assessment years and that it is for the assessee to decide on business expenditures.

The Tribunal held that the director's statement was overemphasized and that the services rendered by the director, even if consultative, were for the business. The Tribunal noted that similar salary payments were allowed in subsequent assessment years and that it is for the assessee to decide on business expenditures.

The Tribunal held that in view of CBDT Circular No. 21/2015, appeals with a tax effect of Rs. 10 lacs or less should not be filed by the Revenue. This circular is applicable retrospectively to pending appeals.

The Tribunal found a violation of the principles of natural justice. Therefore, the order of the CIT(A) was set aside and the matter was remanded for fresh adjudication.

The Tribunal held that the provisions of Section 68 of the Income Tax Act are not applicable as the assessee does not maintain books of account. The bank passbook cannot be considered as books of account, and the deposits were explained as business receipts.

The Tribunal held that the cash credit introduction was explained by past savings and withdrawals, and the Revenue could not negate this explanation. Regarding the disallowance, the Tribunal followed a co-ordinate bench ruling that failure to deduct TDS leading to disallowance does not constitute furnishing inaccurate particulars or concealment of income.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied solely on income estimated based on a profit rate, especially when the additions were not directly on account of the discovered cash expenditure but on an estimated profit. Therefore, the penalty was deleted.

The Tribunal held that the mere volume or magnitude of transactions does not alter their nature, especially when the assessee consistently held shares as investments and the revenue had accepted this treatment in past and future years. The gains were correctly classifiable as capital gains.

The Tribunal held that the assessee was not given a fair opportunity to cross-examine the partner of Shivam Corporation, whose statement formed the basis of the additions. Therefore, the matter was restored back to the Assessing Officer.

The Tribunal confirmed the addition of unexplained unsecured loans and consequential interest. The assessee failed to prove the genuineness of the transactions, and the depositor's denial, coupled with the assessee's absence for cross-examination, led to this decision.

The Tribunal, following its own order for the previous year, restored the issue back to the AO. The AO was directed to re-examine the matter afresh, considering the assessee's submissions and principles of natural justice.

The Tribunal held that the assessee had a bonafide belief that the activity was capital gain and had not concealed or furnished inaccurate particulars. The penalty was deleted as there was only a change in the head of income.

The Tribunal noted that both lower authorities relied on the assessment for AY 2007-08, which was already decided by the Tribunal. Following the precedent in the assessee's own case, the Tribunal confirmed the CIT(A)'s order deleting the addition.

The Tribunal held that Flamingo Pharmaceutical Ltd. was wrongly excluded by the TPO and DRP. The reasons for exclusion were not substantiated, and the company was functionally comparable and maintained consistent profitability.

The Tribunal held that the lease premium paid by the assessee to MMRDA is not liable for deduction of tax at source under Section 194-I of the Act. Consequently, the demands raised by the Assessing Officer under Section 201(1)/201(1A) are liable to be cancelled.

The Tribunal upheld the CIT(A)'s decision on amalgamation expenses, stating that since it was not debited to the P&L account, disallowance was not justified. For salary and wages, the issue was set aside to the AO for fresh verification.

The Tribunal held that penalty under Section 271(1)(c) is not attracted for disallowances made under Section 40(a)(ia) due to non-deduction of TDS. It also held that ad-hoc disallowances based on presumption do not attract penalty.

The Tribunal dismissed the revenue's appeal as not maintainable due to low tax effect. The assessee's cross-objection was also dismissed as it was supportive of the CIT(A)'s order and the assessee did not wish to pursue it after the revenue's appeal was dismissed.

The Tribunal held that the lower authorities wrongly treated the STCG as business income. It found that the borrowed funds were not used for investment in the specific shares in question and that the assessee consistently held shares as investments, not stock-in-trade.

The CIT(A) deleted the addition, finding that the assessee followed the mercantile system of accounting and that the amount was correctly shown as an advance. The Tribunal confirmed this finding, noting the Revenue did not controvert it.

The Tribunal held that the assessee's involvement was not established due to lack of evidence and the unreliability of the witness's initial statement. Therefore, no addition was warranted in the assessee's hands.

The ITAT held that the CIT(A) erred in dismissing the appeal without deciding on the merits of the grounds raised, which is contrary to the requirements of Section 250(6) of the Act. The tribunal set aside the CIT(A)'s order.

The Tribunal held that the assessee's involvement was not established due to lack of evidence and the unreliability of the witness's initial statement. Therefore, no addition was warranted in the assessee's hands.

The Tribunal found that the CIT(A) did not pass a speaking and reasoned order and failed to consider the consistency in treatment from earlier years. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee's involvement was not established by any material evidence, especially considering the inconsistent and retracted statements of the witness. Therefore, no addition was warranted in the assessee's hands.