ITAT Mumbai Judgments — August 2016

The Tribunal held that a significant portion of the expenses claimed by the assessee, particularly professional charges and legal fees, were purely for the real estate business and not related to earning exempt dividend income. However, a portion of auditor's fees and miscellaneous expenses were considered attributable to investment activities.

The Tribunal held that the liability for lease termination was crystallized and not contingent, allowing the deduction. It also admitted an additional ground regarding book profit additions for gratuity and leave encashment provisions.

The Tribunal, while noting that the assessee had not availed opportunities before the CIT(A), restored the matter back to the CIT(A) for re-adjudication based on the principle of natural justice and the additional ground raised by the assessee.

The Tribunal, while noting that the assessee had not availed opportunities before the CIT(A), restored the matter back to the CIT(A) for re-adjudication based on the principle of natural justice and the additional ground raised by the assessee.

The Tribunal partly allowed the assessee's appeal by deleting the disallowance of interest on borrowings. It also partly allowed the revenue's appeal by upholding the AO's order on re-computation of book profits and allowing interest u/s 234D.

The Tribunal upheld the CIT(A)'s decision, quashing the reassessment proceedings. It was held that the AO's belief about escapement of income was based on a misinterpretation of Section 115JB and Section 88E, and that STT rebate is available against tax payable under Section 115JB.

The Tribunal held that merely making a claim not sustainable in law, when complete particulars are filed, does not amount to furnishing inaccurate particulars. The assessee relied on expert advice and filed all relevant information.

The Tribunal held that the statement made by the assessee during the survey referred to the estimated net income before partner's remuneration and interest, not additional income. The actual P&L account results were close to this estimate, and no discrepancies were found.

The Tribunal held that disallowance under Section 14A should be deleted in total for both investment and business portfolios, following its own earlier decisions and High Court judgments. The voluntary disallowance made by the assessee was not a basis for making additions.

The Tribunal held that the notice for penalty initiation was invalid as it did not clearly specify whether it was for concealment of income or furnishing inaccurate particulars. Consequently, the penalty proceedings were also deemed invalid.

The Tribunal partly allowed the assessee's appeal by deleting the disallowance of interest on borrowings. It also partly allowed the revenue's appeal by upholding the AO's order on re-computation of book profits and allowing interest u/s 234D.

The Tribunal deleted the disallowance under Section 14A for both assessment years, stating it was not called for as no incriminating material was found and the exempt income arose from personal investments without claimed expenses. The issue of treating seized cash as advance tax was remanded to the CIT(A).

The Tribunal deleted the disallowance under Section 14A for both assessment years, stating it was not called for as no incriminating material was found and the exempt income arose from personal investments without claimed expenses. The issue of treating seized cash as advance tax was remanded to the CIT(A).

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient evidence for purchases and investments, and the Assessing Officer had not discharged the burden of proving otherwise. The conditions for invoking Section 41(1) were also not met.

The Tribunal held that the appeal of the revenue deserved to be dismissed in limine due to low tax effect, as per CBDT Circular No. 21/2015. The Tribunal found no exceptions to the circular applicable in this case.

The Tribunal affirmed the CIT(A)'s decision, holding that Section 194H is not applicable to commission payments made to credit card companies and banks. Therefore, the disallowance under Section 40(a)(ia) was not justified.

The ITAT held that the appeal was not maintainable due to low tax effect, as per CBDT Circular No. 21/2015. The revenue was bound by this circular and could not plead its invalidity.

The Tribunal upheld the CIT(A)'s decision, finding that the training expenses did not fall under 'services made available' as per the DTAA, and the mobilization expenses were in the nature of reimbursement without embedded income, thus not requiring TDS.

The Tribunal held that the reassessment proceedings under Section 147 were not sustainable. It found that there was no failure on the part of the assessee to disclose material facts during the original assessment, and no new material was available to the AO.

The Tribunal held that Section 14A applies only when there is actual receipt of income not includible in total income. Since the assessee earned no exempt dividend income, no disallowance under Section 14A was warranted. Furthermore, strategic investments in group companies for control are not for earning dividend income.

The Tribunal held that the appeal of the revenue deserved to be dismissed due to low tax effect, as per CBDT Circular No. 21/2015. The circular is binding on tax authorities and applies retrospectively to pending appeals.

The Tribunal held that the appeal was not pressed/withdrawn as it contravened the CBDT circular regarding monetary limits for filing appeals. The appeal was dismissed on this procedural ground.

For AY 2001-02, the Tribunal reduced the disallowance to Rs. 70,000, considering Rule 8D inapplicable and the original disallowance excessive. For AY 2008-09, the Tribunal directed the AO to delete disallowances under Rule 8D(2)(ii) if own funds exceeded investments, and to delete them entirely if investments were strategic.

The Tribunal held that the non-issuance of a notice under Section 143(2) before completing reassessment proceedings under Section 148 renders the reassessment invalid. The provisions of Section 292BB of the Act were found not applicable in this case.

The Tribunal held that additions based on a third party's statement without cross-examination are not justifiable. Similarly, disallowances based solely on returned notices without considering the assessee's evidence, especially when payments were through banking channels, are not sustainable.

The Tribunal held that the AO had not applied his mind to the facts and had failed to conduct necessary inquiries regarding the compensation payments and travel expenses. Therefore, the assessment order was indeed erroneous and prejudicial to the interest of revenue.

The Tribunal held that the cost of an abandoned feature film is allowable as revenue expenditure, and Rule 9A of the IT Rules, 1962 is not applicable in such cases. This decision followed the Bombay High Court's ruling in Venus Records and Tapes P. Ltd. and a CBDT circular.

The Tribunal found that the Assessing Officer did not record findings on the commencement of the assessee's business. Therefore, the CIT(A)'s order was set aside, and the AO was directed to record reasons and dispose of the appeal.

The Tribunal held that the assessee's explanation for not including the income was bona fide and due to inadvertent mistake, not an intention to conceal. Since the explanation was not found to be false, the penalty could not be levied.

The Tribunal held that the AO could not have referred the matter to the DVO under Section 55A as it existed prior to the 2012 amendment, because the value adopted by the assessee was not less than the FMV. Therefore, the reference and subsequent additions were unjustified.

The Tribunal held that merely claiming income under the wrong head (long-term vs. short-term capital gains) does not automatically constitute concealment or furnishing of inaccurate particulars. Therefore, penalty under Section 271(1)(c) is not warranted.

The Tribunal held that the assessee had fulfilled the conditions of Section 54F by investing the entire capital gains in the purchase of the property, even though it was under construction and possession was not yet received. The AO's denial was therefore incorrect.

The Tribunal restored the matter to the Assessing Officer to evaluate additional evidence and determine the true nature of the cash deposits. This was done to provide a final opportunity to the assessee to substantiate their claim.

The Tribunal held that the AO could not have referred the matter to the DVO under Section 55A as it existed prior to the 2012 amendment, because the value adopted by the assessee was not less than the FMV. Therefore, the reference and subsequent additions were unjustified.

The Tribunal held that the AO could not have referred the matter to the DVO under Section 55A as it existed prior to the 2012 amendment, because the value adopted by the assessee was not less than the FMV. Therefore, the reference and subsequent additions were unjustified.

The Tribunal found that the CIT(A)'s order deleting the penalty was not speaking as it failed to specify the 'favourable decisions' that led the assessee to believe TDS was not applicable. Therefore, the matter was remanded back to the CIT(A) for a fresh, speaking order.

The Tribunal upheld the CIT(A)'s decision to delete the additions. The disallowance under Section 14A was deleted as interest-free funds exceeded investments, and the adjustment under Section 145A was deemed unjustified based on prior affirmations.

The Tribunal held that the AO could not have referred the matter to the DVO under Section 55A as it existed prior to the 2012 amendment, because the value adopted by the assessee was not less than the FMV. Therefore, the reference and subsequent additions were unjustified.

The Tribunal held that the AO could not have referred the matter to the DVO under Section 55A as it existed prior to the 2012 amendment, because the value adopted by the assessee was not less than the FMV. Therefore, the reference and subsequent additions were unjustified.

The Tribunal held that the AO could not have referred the matter to the DVO under Section 55A as it existed prior to the 2012 amendment, because the value adopted by the assessee was not less than the FMV. Therefore, the reference and subsequent additions were unjustified.

The Tribunal held that Section 69C was wrongly invoked as the source of expenditure (purchases) was not disputed and was made through banking channels. The mere fact that suppliers were declared suspicious did not automatically render the purchases non-genuine.

The Tribunal noted contradictions in the facts recorded by the AO and CIT(A) regarding the value and seizure of jewellery. It also observed that additional evidence filed by the assessee was not considered.

The Tribunal held that the AO could not have referred the matter to the DVO under Section 55A as it existed prior to the 2012 amendment, because the value adopted by the assessee was not less than the FMV. Therefore, the reference and subsequent additions were unjustified.

The Tribunal found that the assessee was not given an opportunity of being heard by either the Assessing Officer or the CIT(A). Therefore, the orders were set aside.

The Tribunal held that the penalty notice issued by the AO was vague as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following the Karnataka High Court's decision in CIT vs. Manjunatha Cotton and Ginning Factory, the Tribunal found the penalty unsustainable.

The Tribunal held that the assessees had already made sufficient voluntary disallowances and had enough interest-free funds to cover their investments. Therefore, no further disallowance under Section 14A was warranted.

The Tribunal admitted additional evidence submitted by the assessee, including a confirmation letter from the buyer and an affidavit. It found these evidences vital for adjudication and decided to set aside the issue to the Assessing Officer for fresh examination.

The Tribunal held that the genuineness of the trade creditors and the credits remained unproved. The payment by account payee cheques, while indicative of a liability, did not sufficiently establish the genuineness of the transaction.

The Tribunal held that the assessees had already made sufficient voluntary disallowances and had enough interest-free funds to cover their investments. Therefore, no further disallowance under Section 14A was warranted.

The Tribunal held that the assessees had already made sufficient voluntary disallowances and had enough interest-free funds to cover their investments. Therefore, no further disallowance under Section 14A was warranted.