ITAT Mumbai Judgments — September 2017

The Tribunal condoned the delay in filing the Revenue's appeals. The appeals of the Revenue were dismissed, while the appeals of the assessee were partly allowed for statistical purposes.

The Tribunal condoned the delay in filing the Revenue's appeals. The appeals of the Revenue were dismissed, while the appeals of the assessee were partly allowed for statistical purposes.

The Tribunal held that the issue of ESOP expenses needed to be re-examined in light of a Special Bench decision. The transfer pricing adjustment was also contested based on the classification of services and the tested party.

The Tribunal, following a previous decision on identical issues, restored the matter to the CIT(A). The CIT(A) was directed to re-examine whether the assessment was unabated and if incriminating material was found during the search, considering the Bombay High Court's decision in Continental Warehousing Corporation.

The Tribunal condoned the delay in filing the Revenue's appeals. The appeals of the Revenue were dismissed, while the appeals of the assessee were partly allowed for statistical purposes.

The Tribunal condoned the delay in the Revenue's appeals. The majority of the grounds raised by both the Revenue and the assessee were decided based on previous rulings or were dismissed. One specific ground concerning a donation was allowed for statistical purposes pending a High Court decision.

The Tribunal held that Section 50C is not applicable when the asset is treated as stock-in-trade and not a capital asset. Since the assessee was a leaseholder and the land was considered a business asset, the provisions of Section 50C were not attracted.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 8% of the bogus purchases. The CIT(A) had considered the profitability embedded in the alleged bogus purchases and the impact on sales.

The Tribunal condoned the delay in filing the Revenue's appeals. The appeals of the Revenue were dismissed, while the appeals of the assessee were partly allowed for statistical purposes.

The Tribunal condoned the delay in filing the Revenue's appeals. The appeals of the Revenue were dismissed, while the appeals of the assessee were partly allowed for statistical purposes.

The Tribunal held that the AO could not treat the entire purchases as bogus solely based on the non-production of the party and information from the Sales Tax Department, especially when sales were accepted. It was also noted that the AO did not reject the assessee's books of account or examine the gross profit ratio.

The Tribunal held that the CIT(A) was justified in confirming the addition only to the extent of the gross profit embedded in the purchases, as the assessee had correlated purchases with sales and demonstrated direct transportation. The Supreme Court's decision in NK Proteins Ltd. was distinguished based on differing facts.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal found that the assessee had already disallowed PMS expenses while computing business income and claimed them as part of the cost of acquisition for capital gains. Therefore, disallowing them again under Section 14A was incorrect. For indirect expenses, the AO was directed to re-examine the disallowance, excluding expenses unrelated to investment activities, and ensure it does not exceed exempt income.

The Tribunal held that while the assessee proved purchases with sales, the suppliers being 'hawala dealers' and the lack of supplier confirmations meant purchases were not beyond doubt. The AO was justified in estimating profit.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal held that in view of CBDT Circular No. 21/2015, appeals with a tax effect of Rs. 10 lakhs or less should not be filed by the Revenue and this circular is applicable retrospectively to pending appeals.

The Tribunal held that travelling expenses for players' family members were not business-related as there was no contractual obligation. However, it allowed the appeal regarding the disallowance of hospitality expenses, following a co-ordinate bench ruling that a company, being an artificial person, cannot have personal expenses, and disallowances should not be made in its hands.

The Tribunal upheld the CIT(A)'s decision to restrict the disallowance, finding no valid reasons to interfere. They agreed that not all purchases could be treated as bogus.

The Tribunal upheld the CIT(A)'s decision to apportion indirect expenses based on work-in-progress, following its own precedent. It also agreed with the CIT(A) regarding the eligibility of certain other incomes for deduction under Section 80IB.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal held that two adjacent duplex flats used by the assessee could be considered as one house, directing deletion of additions for one of them. For another property, the issue was restored to the AO for verification, and for a third property, the addition was confirmed.

The Tribunal held that no disallowance under Section 14A can be made if no expenditure is claimed against exempt income. For electricity expenses, the matter was restored to the AO for fresh adjudication due to vital information not being considered. Ad hoc disallowances were not justified when books of accounts were accepted.

The Tribunal found that the AO made additions without proper examination of the assessee's explanations and supporting documents. The Tribunal set aside the issues to the AO for re-examination, directing him to consider the assessee's explanations and afford an opportunity of hearing.

The Tribunal upheld the CIT(A)'s decision, stating that the assessee provided party-wise details and made payments after deducting TDS. Grading and certification are essential business activities, and the extent of expenditure is a business decision. The AO's ad-hoc disallowance without establishing sham transactions or non-business purposes was not justified.

The Tribunal held that while the purchases might be questionable, treating the entire peak credit as unexplained expenditure was incorrect, especially when sales were accepted. The addition should be restricted to the profit element embedded in such purchases.

The Tribunal modified the orders of the lower authorities and directed the AO to restrict the addition to 10% of the alleged bogus purchases. This was done considering the totality of facts, including the fact that the AO did not find inflation in prices or consumption, and the assessee showed good GP rates.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal held that the CIT cannot direct the AO to initiate penalty proceedings under Section 271(1)(c) while exercising revisional powers under Section 263. The failure to initiate penalty proceedings does not render the assessment order erroneous or prejudicial to the revenue in a manner that warrants revision.

The Tribunal upheld the CIT(A)'s decision to delete the disallowance. The CIT(A) had verified the profit and loss account, audit report, bank account, and TDS, finding the payment to be duly explained.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal held that not providing the assessee an opportunity of being heard before referring the matter to the TPO, especially after amendments to Section 92CA(4), constituted a jurisdictional issue and a violation of natural justice. Consequently, the orders passed by the Assessing Officer were deemed void.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal held that the activity of cutting and polishing of diamonds amounts to manufacture. Therefore, the assessee is eligible for additional depreciation on new plant and machinery used for this purpose.

The Tribunal upheld the validity of the reopening of assessment. However, it remanded the issues of the difference in receipts and the unexplained cash credit back to the AO for fresh examination.

The Tribunal upheld the CIT(A)'s decision to delete the addition, finding that the assessee had provided sufficient documentary evidence to prove the genuineness of the purchases. The AO's reliance on a retracted statement was deemed insufficient.

The Tribunal held that the appeal was not pressed due to the low tax effect, as per CBDT Circular No. 21/2015. Consequently, the departmental appeal was dismissed, and the assessee's cross-objection was also dismissed as not pressed.

The Tribunal held that only real income is taxable and that even if transactions are not verifiable, only the taxable income component, not the entire transaction, is subject to tax. The Tribunal upheld the CIT(A)'s decision to restrict the addition.

The Tribunal held that only real income is taxable and that even if transactions are not verifiable, only the taxable income component, not the entire transaction, is subject to tax. The Tribunal upheld the CIT(A)'s decision to restrict the addition.

The Tribunal held that the AO failed to record proper satisfaction before applying Rule 8D and that the facts were identical to previous years where the assessee's claim was allowed. Therefore, the disallowance made by the AO was deleted.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 12.5% of the alleged bogus purchases. The revenue failed to provide any grounds to deviate from the CIT(A)'s findings.

The Tribunal upheld the addition of Gross Profit on the disputed purchases but reduced the estimated initial investment capital from 20% to 10%. The Tribunal found that the assessee failed to prove actual delivery of goods, unlike in a previous assessment year.

The Tribunal held that assessments that had attained finality prior to the search proceedings could not be disturbed under Section 153A unless new material from the search directly contradicted the finalized assessment. It also directed adjustments to the pooled cash account based on actual cash found and deleted additions related to presumed expenditure.

The Tribunal upheld the addition of Gross Profit on the disputed purchases but reduced the estimated initial investment capital from 20% to 10%. The Tribunal found that the assessee failed to prove actual delivery of goods, unlike in a previous assessment year.

The Tribunal held that the CIT cannot direct the AO to initiate penalty proceedings under Section 271(1)(c) while exercising revisional powers under Section 263. The failure to initiate penalty proceedings does not render the assessment order erroneous or prejudicial to the revenue in a manner that warrants revision.

The Tribunal confirmed the order of the CIT(A) on both issues, finding that the assessee did not provide any material to contradict the findings. The assessee failed to offer income from the project and interest income to taxation.

The Tribunal upheld the addition of Gross Profit on the disputed purchases but reduced the estimated initial investment capital from 20% to 10%. The Tribunal found that the assessee failed to prove actual delivery of goods, unlike in a previous assessment year.