ITAT Mumbai Judgments — November 2017

The CIT(A) partly allowed the appeal, directing the AO to give credit only to the extent of reconciled amounts and disallow the balance, subject to verification. The ITAT dismissed the assessee's appeal, finding no infirmity in the CIT(A)'s order.

The Tribunal held that the assessee obtained domain over the new residential property either on the date of registration of the declaration under the Maharashtra Apartment Ownership Act, 1970, or on the date of final conveyance of the land. Both these dates fell within the exemption period prescribed by Section 54.

The Tribunal directed the AO to recompute the disallowance of interest by considering daily fluctuating balances and partner's capital, and to deduct interest on those balances. The deduction under Section 10AA was confirmed based on previous tribunal decisions.

The Tribunal held that merely making a claim which is not accepted by the Revenue does not amount to furnishing inaccurate particulars of income. The assessee genuinely believed it was entitled to the benefit as it had become a sick industrial company.

The Tribunal held that the Assessing Officer must be clear about the specific limb under Section 271(1)(c) for which penalty is being initiated, whether it's for concealment of income or furnishing inaccurate particulars. Since the notice was not specific and the penalty was levied without clear application of mind, the penalty was deleted.

The Tribunal held that the AO did not record satisfaction for disallowing expenses beyond the assessee's suo motu disallowance under Section 14A. For MAT provisions, the Tribunal followed a Special Bench decision that no disallowance under Section 14A can be made while computing book profit under Section 115JB.

The Tribunal held that the payments received by the assessee were not in the nature of royalty. It was found that the 'make available' clause in the DTAA was not satisfied, and the payments were for software access fees, not for the use of copyright.

The Tribunal held that stock-in-trade, being shares and securities held for trading purposes, cannot be included for disallowance under Section 14A. It also directed that only investments yielding exempt income should be considered for computing the average value of investments.

The Tribunal upheld the CIT(A)'s decision to confirm a part of the disallowance. The assessee failed to provide satisfactory evidence for the remaining unsubstantiated expenses, and the Tribunal found no reason to interfere with the CIT(A)'s findings.

The Tribunal held that advertisement expenses for brand promotion, especially those related to recurring events like budget analysis, are revenue in nature and not capital. The Tribunal also noted that the AO's satisfaction for disallowance under Section 14A was missing.

The Tribunal held that the AO could not make additions on grounds different from those used to reopen the assessment, following the jurisdictional High Court's decision in Jet Airways (I) Ltd. The reassessment proceedings were quashed.

The Tribunal held that the society's aims and objectives, including research, development, and dissemination of knowledge in anesthesiology, fall under the 'education' limb of Section 2(15). The Tribunal found no indication that the trust was not for the general public or for a special community, and that the proviso to Section 2(15) was not violated.

The Tribunal held that the issue was covered by its previous decision for AY 2001-02, which upheld the principle of mutuality. Therefore, no tax was required to be deducted at source on payments not chargeable to tax in India.

The Tribunal held that since the assessee had sufficient own funds exceeding the advances given to subsidiaries, and considering the commercial expediency supported by Supreme Court decisions, the disallowance of interest was not justified. The disallowance under Rule 8D(2)(ii) was also deleted, but the disallowance under Rule 8D(2)(iii) was confirmed.

The Tribunal held that the commission payment at the enhanced rate was justified due to expanded business scope and was approved by the RBI. Therefore, the disallowance made by the Assessing Officer was incorrect.

The Tribunal found that the assessee did not provide sufficient details regarding capital, reserves, or surplus funds for investment. Therefore, the matter was remanded back to the AO for fresh adjudication.

The Tribunal held that the PCIT's order under Section 263 was not sustainable as the AO had conducted proper inquiry and made an addition. The assessee followed the project completion method for revenue recognition, and the unsold units were part of current assets.

The Tribunal found the CIT(A)'s 12.5% profit rate unreasonable given the nature of the steel trade. They reduced the profit rate to 8% and partly allowed the assessee's appeal while dismissing the Revenue's appeal.

The Tribunal held that stock-in-trade, being shares and securities held for trading purposes, cannot be included for disallowance under Section 14A. It also directed that only investments yielding exempt income should be considered for computing the average value of investments.

The Tribunal held that since the assessee had sufficient own funds exceeding the advances given to subsidiaries, and considering the commercial expediency supported by Supreme Court decisions, the disallowance of interest was not justified. The disallowance under Rule 8D(2)(ii) was also deleted, but the disallowance under Rule 8D(2)(iii) was confirmed.

The Tribunal found that a disallowance of Rs. 1,82,000 offered by the assessee was reasonable, considering the expenses directly linked to exempt income were Rs. 2,17,803. Therefore, the disallowance was restricted to Rs. 1,82,000.

The Tribunal held that the issue was covered by its previous decision for AY 2001-02, which upheld the principle of mutuality. Therefore, no tax was required to be deducted at source on payments not chargeable to tax in India.

The Tribunal held that advertisement expenses for brand promotion, especially those related to recurring events like budget analysis, are revenue in nature and not capital. The Tribunal also noted that the AO's satisfaction for disallowance under Section 14A was missing.

The Tribunal held that advertisement expenses for brand promotion, especially those related to recurring events like budget analysis, are revenue in nature and not capital. The Tribunal also noted that the AO's satisfaction for disallowance under Section 14A was missing.

The Tribunal found that the property was indeed ancestral and co-owned, with the sale proceeds being distributed equally among the co-owners. The AO was not justified in adding the entire LTCG to the assessee's income.

The Tribunal held that the payments received by the assessee were not in the nature of royalty. It was found that the 'make available' clause in the DTAA was not satisfied, and the payments were for software access fees, not for the use of copyright.

The Tribunal upheld the CIT(A)'s decision, finding that the expenses were appropriately accounted for by the assessee following the mercantile system and the matching concept, allowing them to be claimed in the year revenue accrues.

The Tribunal held that the issue of whether brought forward losses and depreciation should be set off before claiming deduction under Section 80HHC is a debatable issue. Rectification proceedings under Section 154 are not permissible for debatable issues.

The Tribunal held that Section 14A is applicable only when there is an actual receipt of income which is not includible in the total income. Since the assessee had not earned any exempt income, the disallowance was deleted.

The Tribunal found that the assessee had properly explained the relation of exempt income and expenses incurred, and had rightly disallowed ₹2,61,727/-. The disallowance confirmed by the CIT(A) was deleted.

The Tribunal found that the bonus payments were actually made before the due date of filing the return of income. Therefore, the assessee had complied with the provisions of Section 43B, and no disallowance could be made.

The Tribunal noted the assessee's failure to provide time-stamped contract notes for gold trading. Consequently, the order of the CIT(A) was set aside, and the matter was restored to the AO for fresh assessment.

The Tribunal held that the sale of unquoted shares, even at a significant loss, was genuine due to urgent financial needs and differences with majority shareholders. The purchasers were unrelated, and the AO did not prove the transaction was engineered to defraud revenue.

The Tribunal held that since payments were made by account payee cheques and the purchases/sales were accounted for and not doubted, Section 40A(3) was not applicable. Instead, it directed the AO to assess only a profit rate of 5% on the total bogus purchases.

The Tribunal decided the appeal ex-parte after hearing the Revenue's representative. The Tribunal found the CIT(A)'s order to be in accordance with law and facts, and upheld it.

The Tribunal allowed the assessee's appeal, finding that the issue was squarely covered by previous decisions of the Tribunal and the Bombay High Court concerning the same seized material used for similar additions in other group cases.

The Tribunal directed the AO to examine documents for 13 ships. For the remaining 12 ships, the AO was directed to apply Section 44AB of the Act. The issue of Permanent Establishment was deemed academic.

The Tribunal held that advertisement expenses for brand promotion, especially those related to recurring events like budget analysis, are revenue in nature and not capital. The Tribunal also noted that the AO's satisfaction for disallowance under Section 14A was missing.

The Tribunal found the CIT(A)'s 12.5% profit rate unreasonable given the nature of the steel trade. They reduced the profit rate to 8% and partly allowed the assessee's appeal while dismissing the Revenue's appeal.

The Tribunal held that since payments were made by account payee cheques and the purchases/sales were accounted for and not doubted, Section 40A(3) was not applicable. Instead, it directed the AO to assess only a profit rate of 5% on the total bogus purchases.

The Tribunal held that the CIT(A)'s order was in line with the Delhi High Court's decision in Cheminvest Ltd. Therefore, the Revenue's appeal was dismissed.

The Tribunal held that since no incriminating material was found during the search proceedings, the additions/disallowances made under Section 153A were not sustainable. The assessment orders were quashed following the jurisdictional High Court's decision.

The Tribunal held that since no incriminating material was found during the search proceedings, the additions/disallowances made under Section 153A were not sustainable. The assessment orders were quashed following the jurisdictional High Court's decision.

The Tribunal restored the issue of sale proceeds and unsecured loans to the AO for fresh adjudication, directing proper opportunity for both parties. The CIT(A)'s deletion of additions related to project profits and interest debited was confirmed.

The Tribunal held that no disallowance was merited out of interest expenditure as it was not relatable to exempt income. However, it directed the AO to recompute the disallowance of overheads/administrative expenses under Section 14A by excluding investments not yielding exempt income.

The Tribunal held that since no incriminating material was found during the search proceedings, the additions/disallowances made under Section 153A were not sustainable. The assessment orders were quashed following the jurisdictional High Court's decision.

The Tribunal held that when acquiring a going concern, the purchaser must assign value to acquired assets, including goodwill. Entries in the transferor's books are irrelevant for the purchaser's valuation. The CIT(A)'s order allowing depreciation on goodwill was upheld.

The Tribunal held that denying the assessee an opportunity to cross-examine the lender, whose statement was the basis for the addition, violated the principles of natural justice. This flaw rendered the assessment order a nullity.

The ITAT set aside the CIT(A)'s order, condoned the delay, and restored the matters to the CIT(A)'s file. The tribunal directed the CIT(A) to grant the assessee a reasonable opportunity of being heard.

The Tribunal set aside the ex-parte order of the CIT(A) and restored the matter back to the CIT(A) for deciding on merits. The CIT(A) was directed to give the assessee a due opportunity to present their case.