ITAT Mumbai Judgments — July 2017

The Tribunal found that the issue regarding the applicability of Section 50C when the sale was conducted by a Court Receiver, not directly by the assessee, was a significant one that was not properly addressed by the lower authorities. Therefore, this issue was remitted back to the Assessing Officer for fresh consideration.

The Tribunal held that the investment in the company was for commercial expediency, as the company was essentially a supplier to the assessee. Therefore, any loss on such investment is admissible as a business loss.

The Tribunal held that while the purchases were indeed bogus, a 100% disallowance was not justified as the sales were not doubted. The disallowance was restricted to 12.5% of the bogus purchases.

The Tribunal upheld the CIT(A)'s order, acknowledging overwhelming evidence of bogus purchases but respecting the benefit already granted to the assessee. The appeal by the assessee was dismissed.