ITAT Mumbai Judgments — January 2017

The Tribunal held that the assessee's method of creating warranty provisions based on past expenses and a certain percentage of sales turnover was justified. It noted that the provisions were either written back or utilized and offered to tax annually, aligning with the accrual and matching concepts.

The Tribunal allowed credit for an additional Rs. 4,50,000 representing opening cash balance from a property sale advance. The matter was restored to the Assessing Officer for recalculation.

The Tribunal restored the issues of reopening of assessment, classification of leave and license receipts, and disallowance of expenses under Section 14A back to the Assessing Officer for fresh adjudication. This was done based on concessions from the Revenue and in light of Supreme Court decisions.

The Tribunal affirmed the CIT(A)'s decision that purchases could not be treated as bogus, upholding the deletion of additions for AY 2010-11. For AY 2011-12, the Tribunal also agreed with the CIT(A)'s partial addition based on the GP rate.

The Tribunal held that the reopening of assessment was invalid. The AO had already conducted a scrutiny assessment under Section 143(3) and the information received later did not constitute fresh tangible material to justify reopening beyond four years without proving failure to disclose material facts.

The Tribunal held that since the assessments were not pending or abated at the time of the search, and no incriminating material was found during the search, additions under Section 153A were not sustainable. Therefore, all additions and disallowances were deleted.

The Tribunal held that since the assessee voluntarily disclosed the mistake and offered enhanced income before the assessment was completed, it cannot be considered to have furnished inaccurate particulars or concealed income. Therefore, the penalty levied was unsustainable.

The tribunal held that transfer pricing adjustments cannot be made for intangible assets like goodwill and customer lists if they are not claimed as a deduction or depreciation in the P&L account. For trademarks, the TPO's adjustment was deemed ad-hoc and unscientific.

The Tribunal held that the assessee failed to prove that the income was not from a simple case of hiring out property. The services provided were considered normal upkeep services, not altering the character of the income.

The Tribunal held that since the assessments were not pending or abated at the time of the search, and no incriminating material was found during the search, additions under Section 153A were not sustainable. Therefore, all additions and disallowances were deleted.

The Tribunal restored the issues of reopening of assessment, classification of leave and license receipts, and disallowance of expenses under Section 14A back to the Assessing Officer for fresh adjudication. This was done based on concessions from the Revenue and in light of Supreme Court decisions.

The Tribunal restored the issues of reopening of assessment, classification of leave and license receipts, and disallowance of expenses under Section 14A back to the Assessing Officer for fresh adjudication. This was done based on concessions from the Revenue and in light of Supreme Court decisions.

The Tribunal upheld the CIT(A)'s decision, finding that the clearing and forwarding charges were indeed reimbursements and not subject to TDS under Section 194J. Similarly, exhibition charges were considered composite payments not attracting TDS under Section 194I.

The Tribunal upheld the CIT(A)'s decision, finding that the clearing and forwarding charges were indeed reimbursements and not subject to TDS under Section 194J. Similarly, exhibition charges were considered composite payments not attracting TDS under Section 194I.

The Tribunal restored the issues of reopening of assessment, classification of leave and license receipts, and disallowance of expenses under Section 14A back to the Assessing Officer for fresh adjudication. This was done based on concessions from the Revenue and in light of Supreme Court decisions.

The Tribunal found that the CIT(A) had not passed a speaking order and the facts regarding shareholding and the applicability of Section 79 were unclear. Therefore, the matter was remanded back for fresh adjudication.

The Tribunal restored the issues of reopening of assessment, classification of leave and license receipts, and disallowance of expenses under Section 14A back to the Assessing Officer for fresh adjudication. This was done based on concessions from the Revenue and in light of Supreme Court decisions.

The Tribunal decided that the disallowance on account of incremental pension liability was to be restored to the AO for verification. The disallowance of foreign travel expenses was decided in favor of the assessee, following earlier tribunal orders. The issue of entertainment expenses was also decided in favor of the assessee.

The Tribunal held that the assessee's method of creating warranty provisions based on past expenses and a certain percentage of sales turnover was justified. It noted that the provisions were either written back or utilized and offered to tax annually, aligning with the accrual and matching concepts.

The tribunal restored the issue of depreciation on intangible assets to the First Appellate Authority for fresh adjudication. It also partly allowed other grounds related to closing stock valuation and tax credit.

The Tribunal restored the issues of reopening of assessment, classification of leave and license receipts, and disallowance of expenses under Section 14A back to the Assessing Officer for fresh adjudication. This was done based on concessions from the Revenue and in light of Supreme Court decisions.

The Tribunal allowed Ground No. 1, holding that pre-operative expenditure is revenue in nature and the assessee is entitled to deduction. It respectfully followed the judgment of the Delhi High Court in *Shriram Refrigeration Industries Ltd. vs. CIT*, finding that the facts of the case were distinguishable from *Kingfisher Training & Aviation Services Ltd. vs. ACIT* relied upon by the CIT(A). The Tribunal also noted that the claim made in the revised return was permissible. Ground No. 2 was upheld as a consequence of allowing Ground No. 1. For Ground No. 3, concerning premium on reinsurance ceded, the Tribunal observed that the CIT(A) had not given any finding on the assessee's submission and had not adjudicated the ground on merit, merely noting the AO's rectification. Therefore, the Tribunal restored this ground to the file of the CIT(A) for decision on merit, allowing the ground for statistical purposes. The appeal of the assessee was allowed.

The Tribunal affirmed the CIT(A)'s decision that purchases could not be treated as bogus, upholding the deletion of additions for AY 2010-11. For AY 2011-12, the Tribunal also agreed with the CIT(A)'s partial addition based on the GP rate.

The Tribunal held that the difference in valuation of LTCG between the assessee's valuer and the Department's valuer (DVO) was not a sufficient ground for levying penalty under Section 271(1)(c). The Tribunal relied on Supreme Court judgments in similar cases.

The Tribunal upheld the CIT(A)'s deletion of disallowance under Section 14A, finding no illegality. It also upheld the treatment of the Rs. 12.60 crore payment and software license fees as revenue expenditure, relying on previous year's decisions. The cross-objection was dismissed as the issue was decided in favor of the revenue.

The Tribunal held that expenses related to 'stock-in-trade' should not be included in the calculation of disallowance under Section 14A as it is not held for earning exempt income. The matter was restored to the AO for recalculation.

The Tribunal held that based on previous judgments in similar group cases, the net profit rate should be accepted at 0.15%. Consequently, the penalty levied under section 271(1)(c) was deleted as the income was assessed on an estimated basis.

The Tribunal found that the doubts raised by the lower authorities hinged on the conduct of the broker, and the revenue had not made sufficient efforts to verify these with the broker. Therefore, the matter was restored to the AO for fresh adjudication.

The Tribunal partly allowed the assessee's appeal regarding Section 14A by directing the AO to restrict the addition to specific investments. It also restored the issue of deemed dividend to the AO for fresh verification. The revenue's appeal regarding Section 14A was dismissed.

The Tribunal found that the doubts raised by the lower authorities hinged on the conduct of the broker. Since the revenue did not make inquiries from the broker, the matter was restored to the AO for fresh examination.

The Tribunal held that based on previous judgments in similar group cases, the net profit rate should be accepted at 0.15%. Consequently, the penalty levied under section 271(1)(c) was deleted as the income was assessed on an estimated basis.

The Tribunal upheld the deletion of addition on share application money, following its own prior ruling. It also dismissed the revenue's appeal regarding disallowance under section 40(a)(i) after the AO found the reimbursements to be pure and not attracting withholding tax provisions. The issue of foreign exchange fluctuation loss was remanded to the CIT(A) for fresh decision.

The Tribunal held that the CIT(A) erred by admitting additional evidence without confronting it to the AO, violating Rule 46A(3) of the Income Tax Rules. The matter was restored to the CIT(A) for readjudication after confronting the AO with the evidence.

The Tribunal held that based on previous judgments in similar group cases, the net profit rate should be accepted at 0.15%. Consequently, the penalty levied under section 271(1)(c) was deleted as the income was assessed on an estimated basis.

The Tribunal restored the issue of interest disallowance to the CIT(A) for fresh adjudication. For personal household expenses, the addition was restricted to 50% of the amount upheld by the CIT(A). The levy of interest under section 234B was confirmed, while sections 234A and 234C were restored to the AO for re-computation.

The Tribunal held that while purchases were found to be bogus, the entire addition cannot be sustained, especially when sales are not doubted. A reasonable addition of 12.5% of the bogus purchases is justified.

The Tribunal restored the issue of interest disallowance to the CIT(A) for fresh adjudication. For personal expenses, the addition was restricted to 50% of the amount upheld by the CIT(A). The levy of interest under section 234B was confirmed, while sections 234A and 234C were restored to the AO for re-computation.

The Tribunal held that based on previous judgments in similar group cases, the net profit rate should be accepted at 0.15%. Consequently, the penalty levied under section 271(1)(c) was deleted as the income was assessed on an estimated basis.

The Tribunal held that based on previous judgments in similar group cases, the net profit rate should be accepted at 0.15%. Consequently, the penalty levied under section 271(1)(c) was deleted as the income was assessed on an estimated basis.

The Tribunal held that based on previous judgments in similar group cases, the net profit rate should be accepted at 0.15%. Consequently, the penalty levied under section 271(1)(c) was deleted as the income was assessed on an estimated basis.

The Tribunal held that based on previous judgments in similar group cases, the net profit rate should be accepted at 0.15%. Consequently, the penalty levied under section 271(1)(c) was deleted as the income was assessed on an estimated basis.

The Tribunal held that while the assessee failed to fully substantiate the genuineness of the cash credits to the satisfaction of the AO, the material placed on record was sufficient to dispel doubts about the genuineness of the explanation. Therefore, it was not proven that the assessee had furnished inaccurate particulars of income.

The Tribunal held that the appeal was not maintainable as the tax effect involved was less than Rs. 10.00 lac, which was below the revised monetary limit specified by CBDT Circular No. 21/2015.

The CIT(A) allowed the assessee's appeal, noting that identical issues for earlier assessment years had been decided in favor of the assessee by the ITAT. The Tribunal upheld the CIT(A)'s order, dismissing the revenue's appeal.

The Tribunal held that while the facts of cash repayment were not disputed, the assessee's ignorance and the fact that the repayments were recorded in the cash book constituted a reasonable cause. Therefore, the penalty was deleted.

The Tribunal noted that the tax effect involved in the appeal was less than Rs. 10 lakhs. As per CBDT Circular No. 21/2015, appeals with a tax effect below this limit are not maintainable. Therefore, the appeal was dismissed on this ground.

The Tribunal held that based on previous judgments in similar group cases, the net profit rate should be accepted at 0.15%. Consequently, the penalty levied under section 271(1)(c) was deleted as the income was assessed on an estimated basis.

The Tribunal upheld the deletion of addition on share application money, following its own prior ruling. It also dismissed the revenue's appeal regarding disallowance under section 40(a)(i) after the AO found the reimbursements to be pure and not attracting withholding tax provisions. The issue of foreign exchange fluctuation loss was remanded to the CIT(A) for fresh decision.

The Tribunal permitted the assessee to withdraw the appeal. Consequently, the appeal was dismissed as the assessee did not wish to pursue it further.

The Tribunal held that based on previous judgments in similar group cases, the net profit rate should be accepted at 0.15%. Consequently, the penalty levied under section 271(1)(c) was deleted as the income was assessed on an estimated basis.