ITAT Mumbai Judgments — September 2017

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 upheld the order of the CIT(A) which had partly allowed the appeal. The CIT(A) had sustained a disallowance of 15% of the alleged hawala purchases, deleting the balance amount.

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 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 the additions made under Section 69C were not maintainable as the expenditure was recorded in the books of accounts and payments were made by cheques. Furthermore, the Tribunal found a violation of the principles of natural justice by not allowing the assessee to cross-examine the suppliers.

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 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 determination of the fair market value as on 1.4.1981. It allowed deduction for expenses related to drafting the sale agreement but disallowed tax consultation fees. The claim for treating losses as part of the cost of the flat was rejected. The deduction under Section 54EC was allowed.

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 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 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 found that the assessee failed to provide documentary evidence for purchases and did not maintain stock registers. While the CIT(A) restricted additions to 8% of purchases, the Tribunal considered this unreasonable and directed the AO to restrict additions to 12.5% of bogus purchases.

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 found that the additional evidence filed before the CIT(A) was crucial and, considering the ex-parte order and the interest of justice, restored the matter to the AO. The AO was directed to consider the additional evidence and decide the issue afresh.

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 held that the AO failed to record objective satisfaction before invoking Rule 8D and did not find fault with the assessee's suo moto disallowance. Therefore, the disallowance under Section 14A was deleted.

The Tribunal held that the transaction was an intraday transaction of a reputed company's shares and supported by broker notes. Therefore, the profit should not be treated as unexplained cash credit but as short-term capital gains.

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 found that the assessee was not given a reasonable opportunity of being heard during the remand proceedings by the AO. Therefore, the order of the CIT(A) was set aside.

The Tribunal upheld the validity of reopening the assessment. However, it found that disallowing the entire purchase amount was not appropriate as the goods were consumed in business. The disallowance was restricted to 30% of the impugned purchases.

The Tribunal held that since the land was treated as a trading asset and included in Work in Progress, Section 40A(3) is applicable to cash payments made for it, even if not debited to the Profit and Loss account. The CIT(A)'s order was upheld.

The Tribunal dismissed the appeal for AY 2006-07 due to the tax effect being below the threshold. For AY 2007-08 and 2008-09, the matters were restored to the CIT(A) for fresh adjudication on the validity of jurisdiction and the presence of incriminating material, following a High Court decision.

The Tribunal held that since the assessee itself had disallowed the entire expenditure in its computation of income, no further disallowance under Section 14A read with Rule 8D was justified. The disallowance made by the revenue authorities was deleted.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to the GP rate, considering that the assessee would have saved VAT and received discounts on such purchases. The Tribunal found the additions sustained by the CIT(A) to be reasonable.

The Tribunal condoned the delay and set aside the CIT(A)'s order. The matters were restored to the CIT(A)'s file for fresh adjudication after providing the assessee an adequate opportunity of being heard.

The Tribunal upheld the CIT(A)'s order, finding no reason to interfere with the estimation of suppressed profit at 12.5% of purchases from bogus entities. The Tribunal agreed that the CIT(A)'s findings were judicious and well-reasoned.

The Tribunal upheld the CIT(A)'s decision, agreeing that since the assessment year was unabated, the addition could only be made if incriminating material was found during the search. As no such material was found, the addition was invalid.

The Tribunal upheld the CIT(A)'s decision to restrict the disallowance to 12.5% of the bogus purchases, following the ratio of CIT vs. Simit P. Sheth. The reopening of assessment was also held to be valid.

The Tribunal found that the assessee should be given another opportunity to present its case before the CIT(A) with the additional evidence. It also noted that double taxation of the same income is not permitted under the Income Tax Act.

The Tribunal held that the addition of 10% of bogus purchases, as sustained by the CIT(A), is reasonable and fair, considering the assessee's inability to prove the genuineness of the purchases and the common practice of availing accommodation entries.

The Tribunal held that the assessee is not concerned with the activities of the broker, especially when the transactions were conducted on the stock exchange and supported by documentary evidence like purchase bills and sale payments via cheque. The Tribunal found no positive material on record to controvert the CIT(A)'s findings that the transactions were genuine.

The Tribunal confirmed the addition for purchases from the two parties as the assessee's representative had agreed to it and no evidence of genuineness was provided. For the remaining purchases, the addition was reduced from 12.50% to 6% due to the assessee's declared GP rate and the nature of business.

The Tribunal held that the transactions related to the flat purchase and sale occurred in AY 2006-07, not AY 2007-08. Therefore, the addition made in AY 2007-08 was not justified.

The Tribunal held that capital subsidy and VAT reimbursement received under the Bihar Incentive Package are capital receipts and not to be deducted from the WDV of plant and machinery. It also held that these amounts are not to be added to book profits under Section 115JB.

The Tribunal found that the CIT(A)'s order was not based on a true appreciation of facts, as the Rs. 40,00,000/- was part of a larger surrender by a partner. The Tribunal set aside the CIT(A)'s order and restored the AO's order.

The Tribunal held that the addition for bogus purchases should be restricted to 12.5% of the total amount, following jurisdictional High Court decisions. The disallowance of 15% on miscellaneous expenses was deleted as it was made without basis.

The Tribunal upheld the CIT(A)'s decision, finding that the AO had not pointed out specific defects in the books of accounts and had made the addition solely based on a comparison of GP rates. The Tribunal agreed that the mere fall in GP does not automatically warrant rejection of accounts.

The Tribunal found that the CIT(A) had passed a reasoned order and upheld it. Therefore, the appeal filed by the assessee was dismissed.

The Tribunal, noting that ex-parte orders were passed without the assessee's presence, decided to restore the matter to the Assessing Officer for a fresh examination. This was done in the interest of natural justice, subject to the assessee paying a cost.

The Tribunal held that penalty cannot be levied on income assessed purely on estimation. Regarding depreciation on land, it was found that facts were fully disclosed and the mistake occurred due to pending litigation before the Company Law Board, thus the penalty was deleted.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 6.5% of the non-genuine purchases, finding no reason to interfere given the assessee's prior agreement to a similar percentage.

The Tribunal held that the Assessing Officer was not justified in estimating income on a pro-rata basis for the post-search period and earlier years without any contrary evidence. The additions made on estimation basis were deleted, except for a small portion for one assessment year.

The Tribunal condoned the delay in filing the appeal, noting the advocate's failure to represent the assessee before the CIT(A). The order of the CIT(A) was set aside, and the matter was restored to the CIT(A) for a fresh decision after providing an opportunity of being heard.

The Tribunal confirmed the order of the CIT(A) which sustained the addition to the extent of the peak credit of Rs. 17,55,050/-. The assessee failed to provide any material to challenge the peak credit calculation or substantiate the claims of gifts and loans.