ITAT Mumbai Judgments — September 2016

The Tribunal found that the CIT(A) did not follow proper procedure and that there was confusion regarding the assessee's address. Therefore, the Tribunal decided to give the assessee another opportunity to present their case.

The Tribunal held that the additions made by the AO treating the loans as unexplained credits under Section 68 were not justified and ordered their deletion. The Tribunal noted that the assessee had provided bank statements, confirmations, ITRs, PANs, and other financial documents, including those of the source of funds. The loans were received through banking channels, and the creditors were assessed to income tax, with their assessments completed under scrutiny. The Tribunal found that the AO could not establish a link that the money had actually travelled from the assessee to the creditors or their source companies. The creditworthiness of the creditors was established. The Tribunal relied on the principle that once the assessee discharges the burden of proving the identity, creditworthiness, and genuineness of the transaction, the onus shifts to the AO to prove otherwise. The Tribunal cited the Rajasthan High Court in 'Aravali Trading Company' and 'Jai Kumar Bakliwal', the Gujarat High Court in 'Dharmadevi Finance Pvt. Ltd.', and the Supreme Court in 'Lovely Exports Pvt. Ltd.' to support its view that the assessee is not required to prove the source of source if the identity and creditworthiness of the creditors are established and transactions are through banking channels. The Tribunal distinguished the facts from the Calcutta High Court's decision in 'Raj Mandir Estates Pvt. Ltd.'. The Tribunal also referred to the jurisdictional Bombay High Court's decision in 'CIT vs. Tania Pvt. Ltd.'.

The Tribunal held that the AO's failure to apply Section 50C, a mandatory provision, rendered the assessment order erroneous and prejudicial to the revenue. However, it allowed the assessee to raise objections regarding the application of Section 50C before the CIT(A) or AO.

The Tribunal held that assessments framed under Section 153A without issuing a notice under Section 143(2) were illegal for assessment years where the assessment had already been completed before the search. For assessment years where proceedings abated, the Tribunal found that the lower authorities had not properly appreciated the assessee's contentions regarding the gifts and bank deposits.

The Tribunal dismissed the first appeal as time-barred. For the second appeal, the Tribunal found the CIT(A)'s order lacking in discussion regarding TDS provisions and genuineness of payment, hence it was set aside.

The Tribunal dismissed the first appeal as time-barred. For the second appeal, the Tribunal found the CIT(A)'s order lacking in discussion regarding TDS provisions and genuineness of payment, hence it was set aside.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 15% of the alleged bogus purchases, considering that the assessee had accounted for sales and made payments through banking channels. The Tribunal found no infirmity in the CIT(A)'s order.

The Tribunal held that since the additions made by the AO in pursuance to the CIT's direction stood deleted, the issue raised in the assessee's appeal had become academic and infructuous.

The Tribunal held that since the underlying disallowances or additions were either deleted by the Tribunal in quantum appeals, rectified by the Assessing Officer, or found to lack the element of concealment or inaccurate particulars, the penalties levied were rightly deleted by the CIT(A).

The Tribunal held that the AO erred in invoking Section 40A(2) without establishing that the payments were excessive compared to the market value. Regarding Section 80IA(4), the Tribunal held that the assessee qualified as a developer of infrastructure facilities, and the deduction could not be denied solely because TDS was deducted under Section 194-C.

The Tribunal held that assessments framed under Section 153A without issuing a notice under Section 143(2) were illegal for assessment years where the assessment had already been completed before the search. For assessment years where proceedings abated, the Tribunal found that the lower authorities had not properly appreciated the assessee's contentions regarding the gifts and bank deposits.

The Tribunal dismissed the assessee's appeal, following its own co-ordinate bench's decisions in the assessee's own cases for earlier assessment years. The principle of consistency was applied.

The tribunal held that the business was in temporary existence and the assessee exploited its commercial assets. Therefore, disallowing expenses solely due to a market lull and lack of immediate receipts was unjustified.

The Tribunal followed its co-ordinate bench's decision in preceding years. It restricted the disallowance on vehicle and telephone expenses to 5% and deleted the disallowances on costume and sales promotion expenses.

The Tribunal held that assessments framed under Section 153A without issuing a notice under Section 143(2) were illegal for assessment years where the assessment had already been completed before the search. For assessment years where proceedings abated, the Tribunal found that the lower authorities had not properly appreciated the assessee's contentions regarding the gifts and bank deposits.

The Tribunal held that the Assessing Officer had conducted inquiries and was satisfied with the assessee's explanations, making the order not erroneous. Therefore, the CIT wrongly assumed jurisdiction under Section 263.

The Tribunal held that interest under Section 234B cannot be charged from a non-resident payee when the payer failed to deduct tax at source. It also held that Section 44C is not applicable to expenses incurred in India by head office employees for services rendered in India.

The Tribunal held that the AO's failure to apply Section 50C, a mandatory provision, rendered the assessment order erroneous and prejudicial to the revenue. However, it allowed the assessee to raise objections regarding the application of Section 50C before the CIT(A) or AO.

The Tribunal held that since the quantum appeal was decided in favour of the assessee, the penalty order does not survive. Consequently, the grounds of appeal raised by the Revenue were dismissed.

The Tribunal noted that the quantum appeal for AY 2005-06 had been decided in favour of the assessee. Consequently, the penalty order did not survive, and the Revenue's grounds of appeal were dismissed.

The Tribunal held that since the quantum appeal related to the assessment had been restored to the AO for fresh adjudication, the basis for the penalty no longer existed. Therefore, the penalty order could not survive.

The Tribunal noted that the assessee had filed two appeals against the same order of the CIT(A). Consequently, the present appeal was dismissed as withdrawn.

Following the decision in the quantum appeal, the Tribunal set aside the penalty order and restored the matter to the Assessing Officer for fresh adjudication.

The Tribunal upheld the CIT(A)'s decision to delete the interest disallowance. It found that the assessee's interest-free funds were indeed in excess of its investments, aligning with the Bombay High Court's rulings.

The Tribunal held that the agreements were self-serving and the assessee arranged its affairs to avoid bringing the Rs. 14 lakhs to tax. The claim of reimbursement was not proper as the expenditure on painting the entire building was disproportionate to the lease period and the nature of the arrangement.

The Tribunal held that the advance membership fee should be spread over the period of membership, considering the services to be rendered over time. It also addressed the taxability of entrance fees and the admission of additional evidence.

The Tribunal held that the advance membership fee should be spread over the period of membership, considering the services to be rendered over time. It also addressed the taxability of entrance fees and the admission of additional evidence.

The Tribunal held that the advance membership fee should be spread over the period of membership, considering the services to be rendered over time. It also addressed the taxability of entrance fees and the admission of additional evidence.

The Tribunal held that the advance membership fee should be spread over the period of membership, considering the services to be rendered over time. It also addressed the taxability of entrance fees and the admission of additional evidence.

The Tribunal held that the advance membership fee should be spread over the period of membership, considering the services to be rendered over time. It also addressed the taxability of entrance fees and the admission of additional evidence.

The Tribunal held that the advance membership fee should be spread over the period of membership, considering the services to be rendered over time. It also addressed the taxability of entrance fees and the admission of additional evidence.

The Tribunal upheld the CIT(A)'s decision to delete the penalty. It noted that the AO had dropped penalty proceedings for a subsequent year on identical facts and that the assessee, being a government undertaking, had no personal interest in concealing income. Therefore, it was not a case of furnishing inaccurate particulars or concealment of income.

The Tribunal held that the amounts deposited into the joint account could not be considered loans to the assessee, as the account was jointly held. The penalty under Section 271D was deleted. For the other appeal, the Tribunal found that while the assessee lacked evidence for agricultural operations, the ownership of land was undisputed and the claim was not proven false, thus deleting the penalty under Section 271(1)(c).

The Tribunal held that as per CBDT's Circular No. 21 of 2015, the monetary limit for appeals to the Tribunal is Rs. 10 lakhs, and this applies retrospectively. Therefore, the Revenue's appeal was not maintainable.

The Tribunal found that the details submitted by the assessee regarding write-offs of sundry advances and the claim related to the demerger of the Chakan Plant required further verification. Therefore, both issues were restored to the Assessing Officer for de novo determination.

The Tribunal held that the sale consideration of the two flats sold later was higher than the stamp duty valuation. Without contrary material from the AO, the sale consideration shown by the assessee should be accepted, and the addition made by the AO is deleted.

The Tribunal held that the cash payments were necessitated by business exigencies and were genuine, supported by vendor confirmations and the fact that payments were made on weekends. Therefore, the disallowance under Section 40A(3) was not justified.

The Tribunal held that the sale consideration of the two disputed flats was higher than the stamp duty valuation. Therefore, the addition made by the AO on account of short-term capital gain was deleted.

The Tribunal noted that while the CIT(A)'s decision was not inherently flawed, the details of TDS deduction and payment were not properly on record. Therefore, the matter was set aside to the Assessing Officer for verification.

The Tribunal held that the amounts deposited into the joint account could not be considered loans to the assessee, as the account was jointly held. The penalty under Section 271D was deleted. For the other appeal, the Tribunal found that while the assessee lacked evidence for agricultural operations, the ownership of land was undisputed and the claim was not proven false, thus deleting the penalty under Section 271(1)(c).

The Tribunal concurred with the CIT(A)'s decision to delete the addition on account of low GP. The AO was not justified in disturbing the declared profits without rejecting the assessee's audited books of account.

The Tribunal restored both issues to the Assessing Officer. For the Section 14A disallowance, the AO needs to verify if the investments were strategic. For the interest write-off, the AO must verify if it was indeed written off twice.

The Tribunal held that the FOB value of export turnover needs to be examined in light of the definition under Section 80HHC(4C) and restored the issue to the AO for fresh consideration. Similarly, the computation of indirect costs was also restored to the AO for fresh examination.

The Tribunal held that the assessee was not the owner of the tenements occupied by its members and thus could not be assessed for notional rental income. It also held that transfer fees collected for major building repairs constituted a capital receipt and were not taxable income.

The Tribunal held that the disallowance of salary, commission, staff welfare expenses, sales promotion expenses, travelling expenses, telephone expenses, conveyance expenses, office expenses, and HMV Enterprises expenses to the extent of 50% by the CIT(A) was on the higher side. The Tribunal restricted the disallowance to 25% for these expenses.

The Tribunal held that the purchases were genuine, as payments were made by account payee cheques, confirmations were on record, and the sales of the paintings were not disputed. The Tribunal relied on a previous decision where similar additions were deleted.

The Tribunal held that the Assessing Officer exceeded his jurisdiction by levying the fee under Section 234E while processing the intimation under Section 200A for a period prior to June 1, 2015. However, it clarified that the Assessing Officer could pass a separate order levying the fee if the limitation period had not expired.

The Tribunal found that the AO wrongly assessed the gross profit of the Goa unit by comparing it with the Murud unit without sufficient justification. While the AO's addition was not entirely set aside, the Tribunal reduced the disallowance by 50%, allowing the appeal partly.

The Tribunal held that the income derived from running and maintaining the shopping mall should be assessed as business income, considering the company's objects and extensive commercial activities. The disallowance under Section 14A and Section 43B were restored to the AO for factual verification.

The Tribunal held that no TDS was deductible on the service charges retained by banks/credit card agencies. This was based on previous Tribunal decisions which found no principal-agent relationship requiring TDS under Section 194H.