ITAT Mumbai Judgments — October 2017

The Tribunal held that while the assessee could not prove actual delivery of materials for the purchases, the nature of business necessitates purchases for sales. Therefore, estimating a profit element on bogus purchases, as done by the CIT(A), was considered fair and reasonable.

The Tribunal held that the date of tender of the cheque is deemed to be the date of payment if the cheque is honored. Therefore, the Revenue was not justified in imposing interest as the assessee fulfilled its obligation within the due date.

The Tribunal restored the matter to the CIT(A) for de novo adjudication, emphasizing the principles of natural justice. The assessee was directed to contest their case properly.

The Tribunal held that the penalty proceedings were vitiated due to lack of proper satisfaction by the AO and a vague show-cause notice. The notice failed to specify the exact charge for which the penalty was being levied, violating principles of natural justice.

The Tribunal held that the foreign exchange gains were business income but not eligible for deduction under Section 80-IA as they were not 'derived from' the eligible business. The issue of interest income was not pressed by the assessee.

The Tribunal deleted the addition for rent as it was below the threshold limit for TDS. The issue of incentive expenses was restored to the AO for re-appreciation of evidence regarding crystallization. The depreciation addition was also restored to the AO to verify the written down value of assets as per the Income Tax Act.

The Tribunal held that the date of tender of the cheque is deemed to be the date of payment if the cheque is honored. Therefore, the Revenue was not justified in imposing interest as the assessee fulfilled its obligation within the due date.

The Tribunal confirmed the disallowance of foreign travelling expenses for AY 2007-08 due to lack of evidence. For AY 2008-09, a portion of foreign travelling expenses was allowed based on documentary evidence, while the rest was confirmed. Ad-hoc disallowances for telephone and motor car expenses were upheld.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 12.5% of the alleged bogus purchases, acknowledging that while the assessee failed to prove actual delivery, the business nature necessitated material consumption and the sales turnover was not disputed.

The Tribunal restored the matter to the Commissioner of Income Tax (Appeals) for re-adjudication. This was based on the fact that similar claims were allowed for other co-owners and the assessee needed to substantiate their claims with evidence.

The Tribunal restored the matter to the Commissioner of Income Tax (Appeals) for re-adjudication. This was based on the fact that similar claims were allowed for other co-owners and the assessee needed to substantiate their claims with evidence.

The Tribunal acknowledged the assessee's failure to appear but emphasized the principle of natural justice. Therefore, the matter was restored to the CIT(A) for a fresh adjudication, granting the assessee another opportunity to present their case.

The Tribunal held that once books of accounts are rejected under Section 145(3), the Assessing Officer can still invoke Section 40A(3) for disallowances, as Section 40A(1) has an overriding effect. The Tribunal upheld the disallowances made by the lower authorities.

The Tribunal held that since no incriminating material was found during the search and the time limit for issuing a regular scrutiny notice had expired before the search, the assessment had not abated. Therefore, additions under Section 153A could only be made based on incriminating material.

The Tribunal held that the AO should have investigated who encashed the bearer cheques and whether the money reached the assessee. Without such inquiry and examination of the broker, the additions were not tenable.

The Tribunal dismissed the assessee's appeals as there was no substance in them. The assessee failed to appear before the lower authorities and the Tribunal, indicating a lack of seriousness in pursuing the appeals.

The Tribunal held that once books of accounts are rejected under Section 145(3), the Assessing Officer can still invoke Section 40A(3) for disallowances, as Section 40A(1) has an overriding effect. The Tribunal upheld the disallowances made by the lower authorities.

The Tribunal held that Section 115JA is not applicable to banking companies as they are not required to prepare their Profit & Loss account as per Schedule VI of the Companies Act. It also held that income from permanent investments held for over a year should be treated as capital gains, following the principle of consistency.

The Tribunal held that the transaction was not a loan but a consolidation of expenses from joint business activities. Documentary evidence of expenses was provided, and there was no evidence of a loan transaction. Therefore, the penalty was not justified.

The Tribunal held that no disallowance under Section 14A is warranted if shares are held as stock-in-trade. However, a disallowance under Rule 8D(2)(iii) is applicable for opening investments, limited to the amount suo-moto disallowed by the assessee.

The Tribunal held that no disallowance under Section 14A was warranted as the assessee did not claim any expenses against exempt income. It also held that the long-term capital gains were not subject to STT, making the disallowance unjustified.

The tribunal held that payments for aircraft maintenance and repairs to a German company did not constitute fees for technical services and were therefore not taxable in India, setting aside the disallowance. The issue of travelling and accommodation charges was remanded for fresh examination.

The Tribunal found the assessee's explanation plausible, considering the documentary evidence of purchases and the time gap between transactions and inquiry. It held that mere acceptance of additions due to inability to provide supplier confirmation does not automatically entail penalty.

The Tribunal, following a previous order for AY 2010-11 where similar additions were restricted to 12.5%, decided to restrict the impugned additions to 12.5% of the alleged bogus purchases.

The Tribunal held that no addition could be made in respect of a concluded assessment unless incriminating material related to that assessment year was found during the search. Since no such material was found, the addition was deleted.

The Tribunal held that no addition could be made in respect of a concluded assessment unless incriminating material related to that assessment year was found during the search. Since no such material was found, the addition was deleted.

The Tribunal condoned the delay due to the bona fide belief of the assessee and the fact that the issues were covered by its own previous decisions. The Tribunal held that reimbursement of bank guarantee charges was not subject to TDS under Section 194C, and payments to Noida Software Technology Park Ltd. were correctly subjected to TDS under Section 194C.

The Tribunal condoned the delay due to the bona fide belief of the assessee and the fact that the issues were covered by its own previous decisions. The Tribunal held that reimbursement of bank guarantee charges was not subject to TDS under Section 194C, and payments to Noida Software Technology Park Ltd. were correctly subjected to TDS under Section 194C.

The Tribunal held that while the assessee failed to fully discharge the onus to prove the genuineness of purchases, the addition made by the lower authorities was on the higher side. The Tribunal restricted the addition to account for the profit element embedded in the alleged bogus purchases.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 15% of the alleged bogus purchases. This was based on the fact that while the purchases were supported by invoices and payments were through banking channels, the assessee failed to produce suppliers for confirmation, and notices to them remained unserved.

The Tribunal dismissed the assessee's grounds regarding disallowance of depreciation and repair expenses, finding no evidence of business use. However, it allowed the revenue's appeal concerning the sale of ACC shares, finding the assessee had substantiated the sale price with documentary evidence.

The Tribunal found the affidavit relied upon by the AO to be unreliable. Considering the assessee had shown corresponding sales and declared GP, the addition was restricted to 12.5% less the GP already declared.

The Tribunal dismissed the assessee's grounds regarding disallowance of depreciation and repair expenses, finding no evidence of business use. However, it allowed the revenue's appeal concerning the sale of ACC shares, finding the assessee had substantiated the sale price with documentary evidence.

The Tribunal held that the Section 263 order for AY 2009-10 was quashed, making the appeal infructuous. For AYs 2011-12 and 2012-13, despite the assessee's failure to appear, the Tribunal restored the matters to the CIT(A) for de-novo adjudication to uphold the principles of natural justice.

The Tribunal held that the Section 263 order for AY 2009-10 was quashed, making the appeal infructuous. For AYs 2011-12 and 2012-13, despite the assessee's failure to appear, the Tribunal restored the matters to the CIT(A) for de-novo adjudication to uphold the principles of natural justice.

The Tribunal held that the Section 263 order for AY 2009-10 was quashed, making the appeal infructuous. For AYs 2011-12 and 2012-13, despite the assessee's failure to appear, the Tribunal restored the matters to the CIT(A) for de-novo adjudication to uphold the principles of natural justice.

The Tribunal held that reassessment proceedings were rightly invoked as per Section 147, considering Explanation 2(c)(iv) to Section 147. However, on merits, depreciation and preliminary expenses were found to be allowable statutory deductions, leading to deletion of disallowances.

The Tribunal restored several issues to the AO for fresh examination, including proportionate expenditure related to royalty income and taxability of catering revenue. It also directed the deletion of an addition related to catering revenue based on previous rulings.

The Tribunal upheld the CIT(A)'s decision to disallow exchange fluctuation loss on forward contracts, considering them speculative transactions. It also confirmed the CIT(A)'s restricted disallowance under Section 14A and the disallowance of interest on borrowed funds used for capital assets.

The tribunal dismissed the assessee's appeals as there was no substance in them. The assessee also failed to appear for multiple hearings, indicating a lack of seriousness in pursuing the appeals.

The Tribunal dismissed the assessee's grounds regarding disallowance of depreciation and repair expenses, finding no evidence of business use. However, it allowed the revenue's appeal concerning the sale of ACC shares, finding the assessee had substantiated the sale price with documentary evidence.

The Tribunal held that the lease rental income should be treated as business income, not income from house property. The matter of allowance of various expenses and interest was restored to the AO for re-appreciation.

The Tribunal held that the AO had missed the issue of capital gains during the assessment, making the order erroneous and prejudicial to the revenue. Therefore, the invocation of revisional jurisdiction by the PCIT was upheld.

The Tribunal held that the lease rental income should be treated as business income, not income from house property. The matter of allowance of various expenses and interest was restored to the AO for re-appreciation.

The Tribunal restored the matter to the AO for verification of the assessee's claim that the interest income was either not theirs or offered in a subsequent year. The assessee was directed to reconcile the differences.