ITAT Mumbai Judgments — May 2017

The Tribunal, following the Supreme Court's decision in CIT Vs. Kotak Securities Ltd, held that transaction charges paid to the Stock Exchange are for facilities provided and not for technical services. Therefore, no TDS was deductible under Section 194J, and the disallowance under Section 40(a)(ia) was incorrect.

The Tribunal set aside the matter to the AO for fresh adjudication, considering the assessee's method of disallowance and providing an opportunity for substantiation.

The Tribunal held that the assessee had satisfied all conditions for deduction under Section 80IB(10) as a developer. The Tribunal followed a precedent stating that the deduction is project-centric and not assessee-centric, and the ownership of the land is not a prerequisite for claiming the deduction.

The Tribunal held that the CIT(A) erred in enhancing the income under Section 41(1) as the assessee had itself shown the liabilities as existing on the balance sheet date and had subsequently written them back. The Tribunal followed a jurisdictional High Court decision in favor of the assessee on this point.

The Tribunal held that the additional ground regarding the validity of the Section 148 notice and the consequent assessment was a legal ground going to the root of the jurisdiction. Therefore, it should be decided by the CIT(Appeals) after calling for records.

The Tribunal upheld the CIT(A)'s decision to tax the commission income at 1% of the transaction value. The assessee failed to provide sufficient evidence to prove that the entire income reflected in the seized document was accounted for or taxed elsewhere.

The Tribunal upheld the CIT(A)'s decision to tax the commission income at 1% of the transaction value. The assessee failed to provide sufficient evidence to prove that the entire income reflected in the seized document was accounted for or taxed elsewhere.

The Tribunal upheld the CIT(A)'s decision to tax the commission income at 1% of the transaction value. The assessee failed to provide sufficient evidence to prove that the entire income reflected in the seized document was accounted for or taxed elsewhere.

The Tribunal held that CBDT circulars are binding on departmental officers. Therefore, the appeal filed by the Revenue, having a tax effect below the prescribed limit, should not be pressed.

The Tribunal found that the facts were materially the same as in a previous case involving the assessee. Therefore, the Tribunal set aside the order of the CIT(A) and restored the issue to the file of the FAA (CIT(A)) to decide it on similar lines as directed by the Tribunal in the earlier year.

The Tribunal deleted the penalty levied under Section 271(1)(c). This decision was based on a previous order of a coordinate bench that had deleted a similar penalty for an earlier assessment year when the quantum appeal regarding Section 10A deduction was decided in favor of the assessee.

The Tribunal held that Section 28(iv) was not applicable as the transactions were loan-related and not appropriated to the profit and loss account. The Tribunal also noted that similar issues for earlier years had been accepted by the department, and there was no new development warranting a different view.

The Tribunal held that the penalty proceedings were initiated when the Assessing Officer first took cognizance and issued a notice, not when the competent authority (Addl. CIT) issued a subsequent notice. Therefore, the penalty order was barred by limitation.

The Tribunal found no infirmity in the CIT(A)'s order upholding the assessment under Section 153A and the estimation of commission income. The levy of interest under Section 234B was also deemed mandatory.

The Tribunal held that the reopening of assessment was invalid because the AO lacked tangible material at the time of recording reasons to believe that income had escaped assessment. The assessment orders passed pursuant to the invalid reopening were quashed.

The Tribunal held that the amendment to Section 80IB(10) by the Finance Act, 2004, introducing clause (d), applies prospectively from April 1, 2005, and does not affect projects approved prior to that date. Therefore, the assessee was eligible for the deduction.

The Tribunal held that the reimbursed expenses, which were on a cost-to-cost basis and did not include any profit element, could not be treated as part of Fees for Technical Services (FTS). The Tribunal relied on the Supreme Court judgment in DIT vs. A.P. Moller Maersk.

The Tribunal held that the assessee's intention was to hold shares as investments, not for trading. Factors like using own funds, limited scrips, reasonable holding periods, and acceptance of similar gains in prior years supported this view.

The Tribunal held that the reopening of assessment was invalid because the AO lacked tangible material at the time of recording reasons to believe that income had escaped assessment. The assessment orders passed pursuant to the invalid reopening were quashed.

The Tribunal restored the matter back to the Assessing Officer for fresh verification. This was based on the assessee producing the bank statement for the first time during the appeal proceedings.

The Tribunal held that assessments made on a non-existent entity are void ab initio and go to the root of the Assessing Officer's jurisdiction. Therefore, the assessment orders passed in this case were invalid.

The Tribunal upheld the decision of the First Appellate Authority, agreeing that advances received from customers cannot be treated as deposits for the purposes of Section 269T. The penalty was deleted as there was no infirmity in the lower appellate authority's conclusion.

The Tribunal upheld the CIT(A)'s decision to reduce the penalty to 2% of the unpaid self-assessment tax, finding the AO's Rs. 1 crore penalty arbitrary and excessive, especially after the assessee paid the tax and interest.

The Tribunal upheld the CIT(A)'s decision to reduce the penalty to 2% of the unpaid self-assessment tax, finding the AO's Rs. 1 crore penalty arbitrary and excessive, especially after the assessee paid the tax and interest.

The Tribunal held that assessments made on a non-existent entity are void ab initio and go to the root of the Assessing Officer's jurisdiction. Therefore, the assessment orders passed in this case were invalid.

The Tribunal held that assessments made on a non-existent entity are void ab initio and go to the root of the Assessing Officer's jurisdiction. Therefore, the assessment orders passed in this case were invalid.

The Tribunal deleted the penalty, following the Bombay High Court's decision in CIT vs. Shri Samson Perinchery. The penalty was invalid because the AO did not specify whether it was for furnishing inaccurate particulars or concealment of income.

The Tribunal noted that the tax effect in the appeal was below the Rs. 10 lakhs limit prescribed by CBDT Circular No. 21/2015. Therefore, the appeal was not maintainable.

The Tribunal upheld the CIT(A)'s decision, finding that the disallowance under Section 14A was not warranted as the assessee's own funds were sufficient to cover investments. It also agreed that the repair expenses were revenue in nature as they were incurred on existing structures without creating enduring benefit.

The Tribunal held that the AO failed to conduct further inquiries to conclusively prove the purchases were bogus. Mere reliance on Sales Tax Department information or third-party statements without cross-examination was insufficient, especially when the assessee provided documentary evidence and made payments through banking channels.

The Tribunal held that the AO violated principles of natural justice by not allowing the assessee to cross-examine the witness. The matter was restored to the AO for fresh adjudication.

The Tribunal held that the AO failed to conduct further inquiries to conclusively prove the purchases were bogus. Mere reliance on Sales Tax Department information or third-party statements without cross-examination was insufficient, especially when the assessee provided documentary evidence and made payments through banking channels.

The Tribunal upheld the CIT(A)'s decision to disallow the set-off of the claimed losses. The assessee failed to discharge the onus of proving the eligibility of these losses by providing adequate supporting documents.

The Tribunal held that the AO failed to conduct further inquiries to conclusively prove the purchases were bogus. Mere reliance on Sales Tax Department information or third-party statements without cross-examination was insufficient, especially when the assessee provided documentary evidence and made payments through banking channels.

The Tribunal held that the AO failed to conduct further inquiries to conclusively prove the purchases were bogus. Mere reliance on Sales Tax Department information or third-party statements without cross-examination was insufficient, especially when the assessee provided documentary evidence and made payments through banking channels.

Since the revision order passed under Section 263 was quashed by the Tribunal, the consequential assessment order passed under Section 143(3) read with Section 263 would not survive. Therefore, the present appeals arising from this consequential order would also not survive.

The Tribunal held that the assessee is a cooperative society providing credit facilities only to its members and not a cooperative bank engaged in banking business. Therefore, it is eligible for deduction under Section 80P.

The Tribunal held that the AO failed to conduct further inquiries to conclusively prove the purchases were bogus. Mere reliance on Sales Tax Department information or third-party statements without cross-examination was insufficient, especially when the assessee provided documentary evidence and made payments through banking channels.

The Tribunal upheld the CIT(A)'s decision to disallow the set-off of the claimed losses. The assessee failed to discharge the onus of proving the eligibility of these losses by providing adequate supporting documents.

Since the revision order passed under Section 263 was quashed by the Tribunal, the consequential assessment order passed under Section 143(3) read with Section 263 would not survive. Therefore, the present appeals arising from this consequential order would also not survive.

The Tribunal held that an identical issue for assessment year 2008-09 had attained finality in favour of the assessee as the revenue did not appeal further. Following this precedent, the deduction under Section 80IB(10) was allowed.

The Tribunal held that while the existence of a PE was not pressed, the attribution of the entire management fee to the PE and the estimation of expenses were not properly examined. The matter was remitted to the AO for fresh adjudication.

The Tribunal set aside the issue of addition on account of purchases from 'The Best' to the AO for fresh adjudication, considering the assessee's contentions about unhonored cheques and accounting errors. The revenue's appeal was dismissed due to low tax effect.

The Tribunal dismissed the Revenue's appeal in limine. This was based on CBDT Circular No. 21 of 2015, which precludes the Revenue from pursuing appeals with a tax effect below ₹10 lakhs.

The Tribunal, following its own order in the assessee's own case for a prior assessment year with identical facts, restricted the addition to 5% of the alleged bogus purchases.

The Tribunal held that the manually filed return, submitted within the due date, is a valid return. The assessee's claim for set-off and carry forward of losses cannot be denied on technical grounds of belated electronic filing when a timely manual return was filed.