ITAT Mumbai Judgments — November 2016

The Tribunal noted that the assessee's brother, Mr. Ravi Kiran Aggarwal, had in his statement offered the profit from the flat sale for taxation and that the AO had accepted his returned income. The Tribunal held that income cannot be taxed twice.

The Tribunal held that Motilal Oswal Investment Advisors Pvt Ltd, IDFC, and ICRA Online Ltd. were not valid comparables for determining the arm's length price. The AO was directed to exclude these entities from the list of comparables.

The Tribunal held that the outstanding amounts were on account of genuine business transactions of sales and not interest-free advances. Therefore, the disallowance of proportionate interest was not justified.

The Tribunal found that the Assessing Officer's order was cryptic and lacked application of mind, making it erroneous and prejudicial to the revenue. The assessee's AR conceded to mistakes in the computation of income.

The Tribunal held that the penalty should be levied on the self-assessment tax due as per the revised return, not the original return. However, since the assessee did not substantiate their reasons for non-payment or show when the tax was paid, the penalty was modified.

The Tribunal held that no disallowance under Rule 8D for interest expenditure was warranted as the assessee's non-interest bearing funds exceeded its investments. The Tribunal also found no fault with the assessee's revised calculation of direct and indirect expenses.

The Tribunal upheld the CIT(A)'s decision to delete the penalty. It reasoned that a debatable claim, even if disallowed, does not automatically imply concealment of income or furnishing of inaccurate particulars, citing Supreme Court precedent.

The Tribunal held that the assessee successfully proved that the Rs. 9,51,000/- was a gift received in cash from her husband, who had made sufficient cash withdrawals from his bank account. The lower authorities failed to establish that the husband's cash withdrawal was utilized elsewhere.

The Tribunal accepted the assessee's claim that certain machinery were energy-saving devices, allowing 80% depreciation. However, it disallowed this higher rate for refrigerators, allowing only 15% depreciation on them.

The Tribunal held that merely making a claim that is not sustainable in law does not amount to furnishing inaccurate particulars or concealment of income. Since the assessee had provided full details and there was no concealment, the penalty was not leviable.

The Tribunal held that since the original addition, on which the penalty was levied, had been set aside by the Tribunal in favor of the assessee, the penalty order could not stand. Therefore, the CIT(A)'s deletion of the penalty was confirmed.

The Tribunal considered the submissions from both sides and accepted the assessee's request to withdraw the appeal. Therefore, the appeal was dismissed as withdrawn.

The Tribunal held that the notice under Section 148 was not validly served on the assessee, rendering the reassessment proceedings invalid. Consequently, the assessment orders passed were deemed bad in law.

The Tribunal held that the assessment order was invalid as it was based on a time-barred notice under section 143(2). The proviso to section 292BB allows the assessee to raise such objections if made before the completion of assessment.

The Tribunal found that the share certificate and transfer certificate indicated the shares were transferred on 31.05.2003. Therefore, the case was restored to the AO to verify the dates of purchase, transfer, and period of holding.

The Tribunal condoned the delay in filing the appeal, citing bonafide reasons and the principle of substantial justice. It held that the income received for providing services like warehousing and binding constitutes business income, not income from house property, following previous assessments and judicial precedents.

The Tribunal found that the tax effect in the case was below Rs. 10 lakhs. Therefore, the appeal was covered by CBDT Circular No. 21/2015, which mandates dismissal of appeals with such tax effect.

The Tribunal held that the assessee's contention of a bonafide mistake was not substantiated, and the non-disclosure of profit was an active concealment. The assessee also failed to respond to notices during penalty proceedings.

The Tribunal held that reopening the assessment was not permissible as it amounted to a change of opinion, given that the AO had already dealt with the bad debt claim in detail during the original assessment. On merits, the Tribunal found that the claim was for actual bad debts, not just a provision.

The Tribunal held that while the purchases might not be entirely genuine, the material was likely used in execution of government contracts. Therefore, the addition was restricted to bring the profit comparable to the preceding year's profit rate.

The Tribunal held that interest expenditure disallowance was not warranted as the assessee had sufficient own funds, applying the Reliance Utilities & Power Pvt. Ltd. precedent. The issue of housing loan interest deduction was remanded for fresh examination due to contradictory findings.

The Tribunal partly allowed the appeal. It directed adjustments for opening stock related to Section 145A, allowed recomputation of capital gains based on DVO's valuation and deductible legal expenses, restricted disallowance under Section 14A, and restored the managerial remuneration issue to the AO for fresh consideration.

The Tribunal held that lump sum lease premium paid for acquiring long-term leasehold rights over land is not in the nature of rent under Section 194-I of the Act. Therefore, the assessee was not liable to deduct tax at source on such payment.

The Tribunal held that since the quantum additions on the same issue were deleted by the Tribunal in the assessee's own case, the penalty levied under Section 271(1)(c) would not survive. Therefore, the deletion of penalty by the CIT(A) was confirmed.

The Tribunal deleted the penalty, finding that the assessee had a reasonable cause for non-compliance due to the short notice and the voluminous nature of the information requested. The Tribunal also noted that the assessments were ultimately completed under Section 143(3) and not as best judgment assessments, indicating subsequent compliance.

The Tribunal deleted the penalty, finding that the assessee had a reasonable cause for non-compliance due to the short notice and the voluminous nature of the information requested. The Tribunal also noted that the assessments were ultimately completed under Section 143(3) and not as best judgment assessments, indicating subsequent compliance.

The Tribunal deleted the penalty, finding that the assessee had a reasonable cause for non-compliance due to the short notice and the voluminous nature of the information requested. The Tribunal also noted that the assessments were ultimately completed under Section 143(3) and not as best judgment assessments, indicating subsequent compliance.

The Tribunal deleted the penalty, finding that the assessee had a reasonable cause for non-compliance due to the short notice and the voluminous nature of the information requested. The Tribunal also noted that the assessments were ultimately completed under Section 143(3) and not as best judgment assessments, indicating subsequent compliance.

The Tribunal deleted the penalty, finding that the assessee had a reasonable cause for non-compliance due to the short notice and the voluminous nature of the information requested. The Tribunal also noted that the assessments were ultimately completed under Section 143(3) and not as best judgment assessments, indicating subsequent compliance.

The Tribunal deleted the penalty, finding that the assessee had a reasonable cause for non-compliance due to the short notice and the voluminous nature of the information requested. The Tribunal also noted that the assessments were ultimately completed under Section 143(3) and not as best judgment assessments, indicating subsequent compliance.

The Tribunal deleted the penalty, finding that the assessee had a reasonable cause for non-compliance due to the short notice and the voluminous nature of the information requested. The Tribunal also noted that the assessments were ultimately completed under Section 143(3) and not as best judgment assessments, indicating subsequent compliance.

The Tribunal held that the assessee proved the genuineness of share transactions based on documentary evidence, following previous decisions in similar cases. The addition of LTCG was directed to be assessed as declared by the assessee.

The Tribunal upheld the CIT(A)'s decision, agreeing that advances given for business purposes, especially to wholly-owned subsidiaries, do not warrant notional interest additions. The Tribunal also noted that the AO's calculation of average interest rates was flawed.

The Tribunal upheld the CIT(A)'s decision, agreeing that advances given for business purposes, especially to wholly-owned subsidiaries, do not warrant notional interest additions. The Tribunal also noted that the AO's calculation of average interest rates was flawed.

The Tribunal held that the assessment framed under section 153C and the additions made were not justified as the Assessing Officer (AO) failed to record the requisite satisfaction and no incriminating material was found during the search. The Tribunal also noted that the original assessment proceedings had abated without issuing necessary notices.

The Tribunal held that the assessment framed under section 153C and the additions made were not justified as the Assessing Officer (AO) failed to record the requisite satisfaction and no incriminating material was found during the search. The Tribunal also noted that the original assessment proceedings had abated without issuing necessary notices.

The Tribunal noted that a similar issue for a prior assessment year was set aside for fresh examination by the Assessing Officer. The Tribunal directed the CIT(A) to decide the current appeal in light of the directions given for the prior year.

The Tribunal held that the assessee's activities are market research services, not ITES, and restored the matter to the TPO/AO to verify the arm's length price computation as accepted by the DRP in a prior assessment year. The Tribunal also allowed the deduction under Section 80G.

The Tribunal held that the assessee's activities are market research services, not ITES, and restored the matter to the TPO/AO to verify the arm's length price computation as accepted by the DRP in a prior assessment year. The Tribunal also allowed the deduction under Section 80G.

The tribunal restored the matter of director's remuneration of Rs. 1,95,000 to the AO for verification of its reflection in the director's return. The balance remuneration of Rs. 60,000 was confirmed. The other disallowances were dismissed as substantial relief was already granted by the CIT(A).

The Tribunal dismissed the assessee's appeal as it was covered by a previous decision. The Tribunal also dismissed the Revenue's appeal, upholding the CIT(A)'s deletion of the GP addition after considering the AO's remand report and the assessee's explanation regarding price reductions.

The Tribunal held that shares and securities held as stock-in-trade cannot be considered for calculating disallowance under Section 14A. Therefore, the disallowance made by the Assessing Officer was untenable.

The Tribunal, following a coordinate bench's decision on identical facts, set aside the order and restored the issue to the Assessing Officer (AO) for a fresh examination. The AO is directed to verify if the transactions were indeed in the ordinary course of business and not loans/advances falling under Section 2(22)(e).

The Tribunal found that the AO failed to address the assessee's submissions and made the disallowance on factually incorrect assumptions. The AO did not follow the mandatory procedure of recording satisfaction before invoking Rule 8D. Therefore, the matter was restored to the AO for fresh adjudication.

The Tribunal deleted the disallowance of transport/freight expenses, restricted the disallowance on telephone/travelling expenses to 1%, and deleted the addition in respect of purchases made from M/s. Hiten Enterprises and M/s. Ronak Overseas.

The Tribunal held that Section 10B(4) provides a mechanism to compute profits derived from export by apportioning the entire business profits. If these incomes form part of the business of the eligible undertaking, they are eligible for Section 10B deduction.

The Tribunal held that the 'initial assessment year' for claiming deduction under Section 80IA is distinct from the year of commencement of business. Losses already set off against other income in earlier years cannot be notionally brought forward and set off against the profits of the eligible business.

The Tribunal held that additions made by the Assessing Officer in the second round of proceedings, which were deleted by the CIT(A) in the first round and not appealed by the revenue, were not legally permissible. The Tribunal also deleted additions related to cash credits and loans.

The Tribunal held that the ad-hoc disallowance under Section 40A(2)(a) was not justified as the AO failed to provide cogent material to prove the excessiveness of the payments, especially since both entities were in the same tax bracket. The disallowance for other expenses was also deleted as the assessee had provided complete details and the auditor's report contained no adverse comments.

The Tribunal held that the AO's order allowing interest was not erroneous or prejudicial to revenue, as it was based on a possible view. The CIT's order under Section 263 was set aside.