ITAT Mumbai Judgments — April 2017

The Tribunal restored the issue of foreign currency to the Assessing Officer for fresh examination. It upheld the addition for deemed dividend but restricted it to accumulated profits, also remanding it for quantification. The addition for jewellery was sustained as confirmed by the CIT(A).

The Tribunal held that the transactions were regular purchase and sale of shares, supported by ledger accounts, contract notes, and vouchers, and were carried out through bank channels. Therefore, the addition under Section 68 was deleted.

The Tribunal upheld the CIT(A)'s decision, following the jurisdictional High Court's precedent. It was held that if both interest-free and interest-bearing funds are available, a presumption arises that investments are made from interest-free funds if they are sufficient.

The Tribunal held that the disallowance under Section 14A cannot exceed the total expenses in the Profit & Loss account. The AO was directed to re-compute the disallowance after considering existing decisions and providing an opportunity of being heard to the assessee.

The Tribunal, considering the binding judgments of the jurisdictional High Court, decided to remand the issue back to the AO. The AO is to re-adjudicate the matter after providing the assessee with a reasonable opportunity to be heard.

The Tribunal admitted additional evidence filed by the assessee, which included details of commission recipients and comparative financial data. The matter was restored to the AO for fresh adjudication considering this new evidence.

The Tribunal held that the assessment order passed on a dissolved firm was void ab initio as the search warrant was issued in the name of a non-existent entity. The Tribunal also addressed the issue of deduction under Section 80IB(10), finding that the reliance on the DVO's valuation report was questionable and that the definition of 'built-up area' needed further examination.

The Tribunal held that the assessment order passed on a dissolved firm was void ab initio as the search warrant was issued in the name of a non-existent entity. The Tribunal also addressed the issue of deduction under Section 80IB(10), finding that the reliance on the DVO's valuation report was questionable and that the definition of 'built-up area' needed further examination.

The Tribunal held that foreign exchange variation loss on an EEFC account, following the cash system of accounting, is notional and not allowable. However, to maintain consistency, the matter was remanded to the Assessing Officer to consider the claim on an actual realization basis. Depreciation on the audio system was allowed as it was part of a larger professional system.

The Tribunal held that the assessment order passed on a dissolved firm was void ab initio as the search warrant was issued in the name of a non-existent entity. The Tribunal also addressed the issue of deduction under Section 80IB(10), finding that the reliance on the DVO's valuation report was questionable and that the definition of 'built-up area' needed further examination.

The Tribunal directed the AO to follow the previous decision for disallowance under Rule 8D(2)(ii). For disallowance under Rule 8D(2)(iii), the AO was directed to revisit the issue and decide afresh.

The Tribunal held that a subsequent order of the Special Bench cannot be the basis for rectifying an earlier order passed by the CIT(A) when the Special Bench order was not in existence at that time. Rectification powers under Section 154 are limited to mistakes apparent from the record.

The Tribunal held that for non-abated assessments under Section 153A, additions can only be made based on incriminating material found during search. The assessee's appeals for electricity charges were dismissed as they were new claims made without seized material.

The Tribunal directed the AO to re-examine the cash deposit and withdrawal position for the Rs. 35,18,669/- addition, considering all bank accounts. For the Rs. 2 lakhs loan addition, the Tribunal also remanded the matter to the AO for fresh adjudication, noting the loan creditors had filed their returns.

The Tribunal held that the payments made by the assessee to KPMG International fall within the ambit of the 'Principle of Mutuality'. Therefore, these receipts do not constitute income chargeable to tax in India, and the assessee was not obliged to withhold any tax.

The Tribunal held that foreign exchange variation loss on an EEFC account, following the cash system of accounting, is notional and not allowable. However, to maintain consistency, the matter was remanded to the Assessing Officer to consider the claim on an actual realization basis. Depreciation on the audio system was allowed as it was part of a larger professional system.

The Tribunal held that for non-abated assessments under Section 153A, additions can only be made based on incriminating material found during search. The assessee's appeals for electricity charges were dismissed as they were new claims made without seized material.

For AYs 2005-08, the Tribunal directed the AO to re-compute disallowance at 1% of exempt income. For AYs 2008-10, the Tribunal restricted disallowance due to lack of AO satisfaction. The software upgradation expenses were allowed as revenue expenditure.

For AYs 2005-08, the Tribunal directed the AO to re-compute disallowance at 1% of exempt income. For AYs 2008-10, the Tribunal restricted disallowance due to lack of AO satisfaction. The software upgradation expenses were allowed as revenue expenditure.

The Tribunal found that the Assessing Officer made disallowances under Rule 8D(2)(ii) and (iii) read with Section 14A. The matter was remanded to the AO for fresh adjudication in light of relevant judicial precedents.

The Tribunal found that the AO had indeed examined the share capital and premium details provided by the assessee and Janki Textiles and Industries Ltd. The Tribunal concluded that the AO formed a definite opinion after considering the material, and a different view alone does not justify revision under Section 263.

The Tribunal upheld the CIT(A)'s decision to dismiss the appeals. The Tribunal found that the assessee's conscious decision not to appeal earlier and the subsequent initiation of prosecution proceedings did not constitute sufficient cause for condoning the delay.

The Tribunal held that travelling expenses for non-employees are not liable to fringe benefit tax, following a Bombay High Court decision. It also held that medical reimbursements below Rs. 15,000 per employee are not chargeable fringe benefits, following a coordinate bench ruling.

The Tribunal held that if the quantum additions are deleted, the penalty levied on those additions will not survive. For other grounds, the Tribunal followed its co-ordinate bench's decisions in similar cases for earlier assessment years, upholding the deletion of penalties.

The Tribunal held that a bank passbook or bank statement cannot be considered a 'book' maintained by the assessee for the purposes of Section 68 of the Income-tax Act. Therefore, the addition made under Section 68 was unsustainable.

The Tribunal held that the AO's jurisdiction to initiate proceedings under Section 153C for AY 2004-05 was questionable, as the seized material relatable to the assessee might have been handed over in a later financial year. The matter was remanded to the AO for verification.

The Tribunal held that the transactions were regular purchase and sale of shares, supported by ledger accounts, contract notes, and vouchers. Since the transactions were carried out through bank channels and payments were made from own funds, the addition under Section 68 was deleted.

The Tribunal held that the AO should grant credit for TDS after verifying its deposit and the assessee's entitlement. Regarding the interest on FCCBs from Dolphin Offshore, the AO was directed to consider only the actual interest pertaining to the assessee.

The tribunal held that the disallowance under Section 14A should be restricted to the extent of exempt income earned, citing various High Court decisions. The addition of unexplained bank credits was upheld as no evidence was provided by the assessee.

The Tribunal held that for non-abated assessments under Section 153A, additions can only be made based on incriminating material found during search. The assessee's appeals for electricity charges were dismissed as they were new claims made without seized material.

The Tribunal held that while Explanation 5A to Section 271(1)(c) applies to revised returns filed post-search, the penalty proceedings were vitiated. This was due to the penalty being initiated for one limb (concealment) but levied for another (inaccurate particulars) without proper specification in the show-cause notice.

The Tribunal held that while Explanation 5A to Section 271(1)(c) applies to revised returns filed post-search, the penalty proceedings were vitiated. This was due to the penalty being initiated for one limb (concealment) but levied for another (inaccurate particulars) without proper specification in the show-cause notice.

The Tribunal dismissed the appeals filed by the Assessing Officers as not maintainable due to the low tax amount. Consequently, the cross-objection filed by the assessee was rendered infructuous.

The Tribunal held that the DIT(E) could not revise the assessment order under Section 263 because the subject matter of the revision had merged with the appellate orders of the CIT(A) and the Tribunal. Furthermore, there was no prejudice to the revenue as the tax effect remained the same.

The Tribunal held that for processing done prior to June 1, 2015, the Assessing Officer exceeded jurisdiction by levying the fee under Section 234E while processing under Section 200A. A separate order for levying the fee was permissible if the limitation period had not expired.

The Tribunal upheld the order of the CIT(A) which restricted the addition to 7.71% of the purchases, considering that the AO did not doubt the assessee's sales and quantitative details. The Tribunal found no legal infirmity in the CIT(A)'s estimation of embedded income.

The Tribunal held that while Explanation 5A to Section 271(1)(c) applies to revised returns filed post-search, the penalty proceedings were vitiated. This was due to the penalty being initiated for one limb (concealment) but levied for another (inaccurate particulars) without proper specification in the show-cause notice.

The Tribunal noted that the tax effect in each appeal was below the Rs. 10 lakh limit as per CBDT instruction. Therefore, the appeals filed by the Revenue were not maintainable.

The Tribunal noted that the tax effect in each appeal was below the Rs. 10 lakh limit as per CBDT instruction. Therefore, the appeals filed by the Revenue were not maintainable.

The Tribunal held that while Explanation 5A to Section 271(1)(c) applies to income declared post-search, the penalty proceedings were vitiated. This was due to the penalty being initiated for one limb (concealment) but levied for another (inaccurate particulars) without proper specification in the show-cause notice.

The Tribunal noted the assessee's application to withdraw the appeal and the Department's lack of objection. Consequently, the appeal was dismissed as withdrawn.

The Tribunal noted that the tax effect in each appeal was below the Rs. 10 lakh limit as per CBDT instruction. Therefore, the appeals filed by the Revenue were not maintainable.

The Tribunal upheld the CIT(A)'s decision, finding that the payments to directors were commercially justified and not hit by Section 40A(2)(b). It also found that the sale of the additional area was disclosed in the assessee's books.

The Tribunal held that the provision for slow-moving/obsolete stock added to book profit under Section 115JB needs to be examined on merits. Regarding CSR expenses, the Tribunal directed the AO to re-examine the business promotion expenses and CSR expenses, allowing the assessee to produce evidence.

The Tribunal held that while Explanation 5A to Section 271(1)(c) applies to revised returns filed post-search, the penalty proceedings were vitiated. This was due to the penalty being initiated for one limb (concealment) but levied for another (inaccurate particulars) without proper specification in the show-cause notice.

The Tribunal held that while Explanation 5A to Section 271(1)(c) applies to revised returns filed post-search, the penalty proceedings were vitiated. This was due to the penalty being initiated for one limb (concealment) but levied for another (inaccurate particulars) without proper specification in the show-cause notice.

The Tribunal held that while Explanation 5A to Section 271(1)(c) applies to revised returns filed post-search, the penalty proceedings were vitiated. This was due to the penalty being initiated for one limb (concealment) but levied for another (inaccurate particulars) without proper specification in the show-cause notice.

The Tribunal restored the penalty order to the AO for fresh adjudication. This was done because the quantum addition, which formed the basis for the penalty, had been set aside and restored to the AO for reconsideration.

The Tribunal held that while Explanation 5A to Section 271(1)(c) applies to revised returns filed post-search, the penalty proceedings were vitiated. This was due to the penalty being initiated for one limb (concealment) but levied for another (inaccurate particulars) without proper specification in the show-cause notice.