ITAT Mumbai Judgments — September 2017

The Tribunal held that the income earned from the department store activities, including commission, foreign exchange differences, and money transfer income, should be treated as 'business income' and not 'income from house property'. Certain other grounds were remanded for fresh adjudication.

The Tribunal held that the income earned from the department store activities, which involved commission on sales, packaging, and foreign exchange differences, should be treated as 'business income' and not 'income from house property'. Certain other issues were remanded for fresh adjudication.

The Tribunal held that the income earned from the department store activities, including commission, foreign exchange differences, and money transfer income, should be treated as 'business income' and not 'income from house property'. Certain other grounds were remanded for fresh adjudication.

The Tribunal noted that the assessee's appeals for the same assessment years had already been decided by a co-ordinate bench, confirming the CIT(A)'s order. Therefore, the revenue's appeals were rendered infructuous.

The Tribunal noted that the assessee's appeals for the same assessment years had already been decided by a co-ordinate bench, confirming the CIT(A)'s order. Therefore, the revenue's appeals were rendered infructuous.

The Tribunal held that the assessee had discharged its primary onus by providing details of identity, creditworthiness, and genuineness of transactions. The AO's addition was based on suspicion and an investigation report not forming part of the assessment proceedings, and the assessee was not given a proper opportunity for cross-examination.

The Tribunal held that the income earned from the department store activities, including commission, foreign exchange differences, and money transfer income, should be treated as business income. Certain other issues were remanded to the Assessing Officer for fresh adjudication.

The Tribunal held that since the assessments were not pending on the date of search and no incriminating material was found, additions made under Section 153A/153C are not sustainable. The legal issue was decided in favor of the assessee.

The Tribunal found that the sale agreement for the property was entered into on 07.10.2008, and the assessee claimed exemption under Section 54 by purchasing other properties. The CIT's observation that the purchase deed was signed on 17.09.2007 and sale took place on 17.10.2008 was contested.

The Tribunal deleted the addition sustained by the CIT(A) regarding unexplained expenditure on purchases. It was found that the purchases were not substantiated, but the profit margin on these transactions was deemed justified.

The Tribunal held that the assessee's transactions were genuine, supported by documentary evidence like broker notes, bank statements, and demat statements. Reliance solely on the statement of a third party admitting to providing accommodation entries was deemed insufficient to disprove the assessee's evidence.

The Tribunal upheld the CIT(A)'s decision to restrict the disallowance to 25% of the bogus purchases, considering the profit element embedded in such transactions. The Tribunal relied on High Court judgments that suggest not the entire purchase amount should be taxed but only the profit element.

The Tribunal upheld the CIT(A)'s decision to restrict the disallowance to 25% of the bogus purchases, considering the profit element embedded in such transactions. The Tribunal relied on High Court judgments that suggest not the entire purchase amount should be taxed but only the profit element.

The Tribunal held that while the purchases were bogus, the assessee's sales were not doubted. Therefore, a profit element needed to be estimated. The Tribunal increased the profit rate from 2.52% to 10% on the bogus purchases.

The Tribunal found that the CIT(A) was too liberal in allowing only the profit margin. It held that a reasonable disallowance should be made on account of bogus purchases, and directed the AO to add 5% of the alleged bogus purchases to the income.

The Tribunal held that the surplus on buy-back of bonds was a capital receipt and not taxable. It also held that the deduction under Section 35DDA for employee separation scheme expenses was allowable based on the mercantile system of accounting, where 'incurred' is equivalent to 'paid'.

The Tribunal held that income from the shareholders' account is part of the life insurance business and that dividend income is exempt under Section 10(34). It also held that Section 14A disallowance does not apply to insurance companies covered by Section 44.

The Tribunal allowed the assessee's appeal for AY 2003-04, finding that the share trading activity was not speculative business. For AY 2004-05, the assessee's appeal was dismissed as not pressed, and the Revenue's appeal was dismissed.

The Tribunal deleted the additions, following a previous order in a co-partner's case. The Tribunal held that loose papers without corroborative evidence or inquiries from the seller are insufficient to make additions, especially when not found in the assessee's possession.

The Tribunal upheld the CIT(A)'s decision, agreeing that the assessee was a co-operative society and not a co-operative bank. The Tribunal relied on High Court and Tribunal precedents that held similar co-operative societies eligible for Section 80P deduction.

The Tribunal held that strategic investments yielding exempt income cannot be excluded when computing disallowance under Section 14A. The matter was restored to the AO for fresh assessment.

The Tribunal found that the CIT(A) had passed a cryptic and non-speaking order by merely copying the AO's order. Therefore, the matter was remanded back to the CIT(A) to pass a reasoned and speaking order.

The Tribunal held that the assessee was denied a fair opportunity to cross-examine a key witness whose statement was used against them. The matter was restored to the AO to provide this opportunity and re-evaluate the addition.

The Tribunal upheld the CIT(A)'s decision to reopen the assessment and agreed with the reduced profit estimation on bogus purchases. The Tribunal also found that interest under sections 234B and 234C was mandatory and the penalty issue was premature.

The Tribunal held that since the assessments were not pending on the date of search and no incriminating material was found, additions made under Section 153A/153C are not sustainable. The legal issue was decided in favor of the assessee.

The Tribunal held that the Principal CIT erred in revising the assessment order without putting the assessee to notice on the specific issue of depreciation on fixed assets. It also found that for certain assessment years, proceedings were not pending at the time of search, thus limiting the scope of additions.

The Tribunal followed its previous decisions in similar cases, holding that the rental income should be treated as 'income from house property'. The Assessing Officer was directed to assess the rental income accordingly.

The Tribunal directed the AO to restrict the addition to 20% of the gross profit, following its own previous decision in similar cases. For the disallowance of set-off of brought-forward short-term capital loss, the Tribunal admitted additional evidence and restored the issue to the AO for fresh verification.

The Tribunal held that the Principal CIT erred in revising the assessment order without putting the assessee to notice on the specific issue of depreciation on fixed assets. It also found that for certain assessment years, proceedings were not pending at the time of search, thus limiting the scope of additions.

The Tribunal held that due to the assessee's inability to present his case and adduce evidence because of his arrest and asset attachment, the estimated capital gain was not justifiable. The matter was restored to the AO for fresh adjudication.

The Tribunal held that disallowing the entire claim was unfair given the employer's practice of granting allowances based on self-declaration. It decided to allow deductions on an estimated basis for most allowances.

The Tribunal held that only the profit element involved in bogus purchases can be added to the income. Consistent with its earlier decisions, the Tribunal directed the AO to estimate a profit of 12.5% on the alleged bogus purchases for addition.

The Tribunal found that sustaining 25% of bogus purchases was excessive, especially considering the VAT credit denied to the assessee. The addition was restricted to 11.50% of bogus purchases minus the denied VAT credit.

The Tribunal held that the assessee voluntarily offered the Long Term Capital Gain to avoid litigation and buy peace, and had provided necessary information. Therefore, the assessee had neither concealed nor filed inaccurate particulars of income.

The Tribunal held that since the assessee had made actual payments to LIC under a scheme and had applied for approval, the disallowance was not justified, following precedents where actual payments to funds were allowed even if approval was pending.

The Tribunal held that the foreign exchange loss arose on account of fixed capital (acquisition of plant and machinery) and not on revenue or trading account. Therefore, it is not an allowable expenditure.

The Tribunal held that the Principal CIT erred in revising the assessment order without putting the assessee to notice on the specific issue of depreciation on fixed assets. It also found that for certain assessment years, proceedings were not pending at the time of search, thus limiting the scope of additions.

The Tribunal upheld the CIT(A)'s decision, finding that the services rendered by the agents did not involve specialized technical know-how or intellectual skill as contemplated under Section 194J. The payments were thus correctly treated as contractual payments under Section 194C.

The Tribunal held that while the purchases were bogus, the addition should be restricted to a 10% Gross Profit (GP) on the bogus purchases, rather than the full amount. This was to achieve the interest of justice.

The Tribunal held that the income earned from the department store activities, including commission, foreign exchange differences, and money transfer income, should be treated as 'business income' and not 'income from house property'. Certain other grounds were remanded for fresh adjudication.

The Tribunal, following its own decision in the assessee's own case for the preceding year, set aside the orders of the lower authorities. The matter was remanded back to the Assessing Officer for fresh adjudication.

The Tribunal held that the assessee's activity of slitting jumbo rolls constitutes manufacturing. However, it found the TPO's method of benchmarking and determining the adjustment to be unrealistic and not substantiated.

The Tribunal deleted the addition sustained by the CIT(A) regarding unexplained expenditure on purchases. It was found that the purchases were not substantiated, but the profit margin on these transactions was deemed justified.

The Tribunal held that while the assessee failed to conclusively prove the genuineness of purchases, the disallowance of 12.50% was excessive. The addition was sustained to the extent of 6% of the alleged bogus purchases.

The Tribunal held that the Principal CIT erred in revising the assessment order without putting the assessee to notice on the specific issue of depreciation on fixed assets. It also found that for certain assessment years, proceedings were not pending at the time of search, thus limiting the scope of additions.

The Tribunal held that since the borrowed funds were used to earn interest income, the interest expenditure incurred wholly and exclusively for earning such income is allowable as a deduction under Section 57(iii). Therefore, the disallowance of interest expenditure was not justified.

The Tribunal found that the CIT(A) did not examine the issue in light of the Bombay High Court's decision in Amritaben R. Shah. For AY 2013-14, it was noted that the interest expenses were claimed under 'Business Income', which was not examined by lower authorities.

The Tribunal upheld the CIT(A)'s decision to estimate the profit element at 12.5% of the bogus purchases, considering it to be a judicious approach based on judicial precedents. The consequential interest under sections 234B and 234C was also held to be leviable.

The Tribunal held that while the AO's disallowance under Section 14A was partly justified, certain investments like capital introduced in partnership firms and PPF should not be included in the computation of average investments. The disallowance was restricted to Rs. 1,00,000/-.

The Tribunal held that since the assessments were not pending on the date of search and no incriminating material was found, additions made under Section 153A/153C are not sustainable. The legal issue was decided in favor of the assessee.