ITAT Mumbai Judgments — May 2017

The Tribunal found that the CIT(A) misunderstood the AO's calculation, which appeared to be based on net profit, not gross profit. The Tribunal set aside the CIT(A)'s order and remanded the issue back for fresh examination.

The Tribunal found no infirmity in the CIT(A)'s order regarding the application of a profit rate to bogus purchases. However, it directed the AO to allow credit for the profit already disclosed by the assessee in their sales corresponding to these purchases.

The Tribunal held that transfer pricing adjustments should be made only in respect of international transactions with associated enterprises, not at the entity level. It also directed limited verification for a disallowance related to reimbursements and allowed a claim for bad debts by adding it back to the block of assets.

The Tribunal upheld the CIT(A)'s decision, stating that since the assessee executed contract work, materials must have been procured. Therefore, only the profit element embedded in the purchases, not the entire amount, could be treated as income.

The Tribunal allowed the assessee's request to withdraw the appeal. Since there was no objection from the Revenue, the appeal was dismissed in limine.

The Tribunal held that bank guarantee commission/charges paid to banks are not covered under Section 194H of the Income Tax Act, and therefore, the assessee is not liable to deduct tax at source on such payments.

The Tribunal held that the assessee is not required to deduct tax at source under section 194H of the Act on bank guarantee commission paid to banks. This decision was based on previous judgments of coordinate benches in the assessee's own case and other similar cases.

The Tribunal restored the issue back to the Assessing Officer for fresh adjudication. This was to be done after the outcome of the order passed by the Excise Department, following a similar precedent.

The Tribunal held that the addition for bogus purchases was not fully warranted as the revenue did not conclusively establish the non-genuineness of purchases, and the assessee failed to provide complete evidence of actual delivery. Regarding service tax, the Tribunal ruled that Section 43B would not apply if the service tax liability did not arise as per Service Tax Rules, even if shown as outstanding.

The Tribunal held that the addition for bogus purchases was not fully warranted as the revenue did not conclusively establish the non-genuineness of purchases, and the assessee failed to provide complete evidence of actual delivery. Regarding service tax, the Tribunal ruled that Section 43B would not apply if the service tax liability did not arise as per Service Tax Rules, even if shown as outstanding.

The Tribunal held that the addition for bogus purchases was not fully warranted as the revenue did not conclusively establish the non-genuineness of purchases, and the assessee failed to provide complete evidence of actual delivery. Regarding service tax, the Tribunal ruled that Section 43B would not apply if the service tax liability did not arise as per Service Tax Rules, even if shown as outstanding.

The Tribunal held that the penalty was not leviable as there was no furnishing of inaccurate particulars of income. The defect in the notice under Section 274 was not considered fatal, but the merits of the disallowances led to the deletion of the penalty.

The Tribunal held that since the assessee's claim for deduction was found to be bona fide and legally valid to a major extent, imposing a penalty was not justified. The assessee had derived benefit only to the extent of 30% of the impugned items as deduction.

The Tribunal held that while the penalty proceedings were not vitiated by a defect in the show cause notice, the penalty itself was not sustainable on merits. The Tribunal found that Section 69C was wrongly applied as payments were made through banking channels and documentary evidence existed for the purchases.

The Tribunal confirmed the order of the CIT(A) who had deleted the addition. It was held that for non-abated assessments, additions must be based on incriminating material found during search, and in this case, no such material pertaining to the assessee was found.

The Tribunal held that the addition for bogus purchases was not fully warranted as the revenue did not conclusively establish the non-genuineness of purchases, and the assessee failed to provide complete evidence of actual delivery. Regarding service tax, the Tribunal ruled that Section 43B would not apply if the service tax liability did not arise as per Service Tax Rules, even if shown as outstanding.

The Tribunal held that since the assessee maintained stock, made payments by account payee cheques, and consumed the materials in contract work, the CIT(A) was justified in restricting the addition to the profit element embedded in the bogus purchases at 12.5%.

The Tribunal restored the matter to the Assessing Officer for fresh adjudication, directing the assessee to substantiate its claim regarding the services rendered by the payees. The levy of interest under Section 234 was dismissed.

The Tribunal held that the addition was based purely on suspicion and the statements of employees without corroborative evidence. Since both the assessee and the alleged recipients denied the transaction, the addition could not be sustained.

The Tribunal held that since the assessee maintained stock, made payments by account payee cheques, and consumed the materials in contract work, the CIT(A) was justified in restricting the addition to the profit element embedded in the bogus purchases at 12.5%.

The Tribunal set aside the ex-parte orders of the CIT(A) and restored the appeals to his file. The assessee was granted liberty to raise all legal issues, and the CIT(A) was directed to dispose of the appeals expeditiously.

The Tribunal upheld the CIT(A)'s decision to confirm additions to the extent of 5% for VAT, 1% for commission, and peak purchases, aggregating to Rs. 28,38,922/-. The Tribunal reasoned that when sales are not disputed, additions should account for the profit element, not the entire purchase amount, especially when payments were through banking channels and purchase documents were available.

The Tribunal found lapses on both sides, as the assessee couldn't produce suppliers and the revenue couldn't disprove quantitative details. It held that additions should account for the profit element in disputed purchases, not the entire amount.

The Tribunal held that since the assessee maintained stock, made payments by account payee cheques, and consumed the materials in contract work, the CIT(A) was justified in restricting the addition to the profit element embedded in the bogus purchases at 12.5%.

The Tribunal upheld the CIT(A)'s decision to confirm additions to the extent of 5% for VAT, 1% for commission, and peak purchases, aggregating to Rs. 28,38,922/-. The Tribunal reasoned that when sales are not disputed, additions should account for the profit element, not the entire purchase amount, especially when payments were through banking channels and purchase documents were available.

The Tribunal held that since the quantum appeal was set aside and restored to the AO, the penalty order also needed to be set aside. The matter was restored to the AO to decide the issue afresh after the quantum appeal is decided.

The Tribunal restored the matter to the AO to verify debit/credit notes and reconcile the difference in gross receipts. The penalty levied under Section 271(1)(c) was deleted, with liberty to the AO to initiate fresh proceedings if concealment is found.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 15% of the purchases. It reasoned that since the purchases were related to construction work, supported by documents and banking transactions, a full disallowance was not warranted, and the addition should only account for the profit element.

The Tribunal held that the difference in Form 26AS was partly attributable to VAT charges correctly accounted for, but restored a portion of the addition to the AO for fresh examination. The disallowance of 5% for personal use of expenses was upheld. The deletion of commission disallowance was also upheld, as the commission was paid to non-residents for services rendered outside India and was not taxable in India.

The Tribunal found that while the assessee did not conclusively prove the genuineness of purchases due to lack of stock register and transportation proof, the AO's reliance solely on general information was also questionable. Therefore, the addition was restricted to estimate the profit on such purchases.

The Tribunal noted that while the assessee did not fully prove the lender's creditworthiness, the AO failed to confront the lender's statement with the assessee and provide an opportunity for cross-examination. Therefore, the matter was set aside and restored to the AO for fresh examination.

The Tribunal restored the matter to the AO to verify debit/credit notes and reconcile the difference in gross receipts. The penalty levied under Section 271(1)(c) was deleted, with liberty to the AO to initiate fresh proceedings if concealment is found.