ITAT Mumbai Judgments — March 2018

The Tribunal held that the AO rightly brought to tax the estimated income based on the TDS certificate and the assessee's mercantile system of accounting. The TDS provisions are machinery provisions for tax collection and are linked to the charging section.

The Tribunal, following the Gujarat High Court's decision in Simit P. Sheth, restricted the addition of bogus purchases to 12.5% of the total amount. Additionally, the Tribunal directed the Assessing Officer to examine the claim that certain purchases pertained to the previous assessment year (2009-10) to avoid double addition.

The Tribunal held that the foundation work for wind mills is an integral part of the wind mill unit and therefore, depreciation is allowable at the same rate as applicable to the wind mills.

The Tribunal held that taxing the same income substantively in the hands of both the assessee and her husband amounts to double taxation, which is impermissible. The AO had already accepted the income in the husband's hands.

The Tribunal held that the CIT(A) correctly allowed the interest income as business income by following a previous year's order. The Tribunal also found the CIT(A)'s allowance of expenses to be reasoned and in line with judicial precedents.

The Tribunal held that the reopening under Section 147 was valid as the assessee failed to prove it was based on a mere change of opinion. However, the disallowance under Section 40(a)(ia) was deleted based on a co-ordinate bench's decision that inter-connect charges are not fees for technical services. The depreciation disallowance was left as per the Commissioner (Appeals)'s direction.

The Tribunal held that rental income earned from unsold flats, which are part of the housing project and stock-in-trade, has a direct nexus to the housing project and is therefore eligible for deduction under Section 80IB(10). Proceedings initiated under Section 153C were also held to be invalid.

The Tribunal held that the unsigned loose sheets were 'dumb documents' and deleted the addition made by the lower authorities. However, for other issues concerning unsecured loans and compensation paid, the Tribunal restored the matters to the AO for fresh examination.

The Tribunal held that interest earned by a cooperative society on investments with scheduled/cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act. The exclusion under Section 80P(4) is not applicable to such societies if they are not considered cooperative banks.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 15% of the alleged bogus purchases, following a coordinate bench's decision in a similar case for another assessment year.

The Tribunal held that the addition under section 69B was not sustainable as it was due to buyers failing to take delivery of shares, and following co-ordinate bench decisions, deleted the addition. The Tribunal also dismissed the revenue's grounds on various issues, allowing the assessee's appeal in part.

The Tribunal upheld the deletion of deemed rent addition, following its own previous decisions. The Tribunal also upheld the deletion of the capital gains adjustment. The issue of legal and professional charges was restored to the Assessing Officer for fresh verification.

The Tribunal followed its previous decision in the assessee's own case for an earlier assessment year. It held that since the assessee accounted for purchases net of CENVAT and adjustments to closing stock would be revenue neutral due to corresponding opening stock adjustments, the addition made by the AO was not sustainable.

The Tribunal held that merely claiming a loss as normal business loss, which the AO opines is speculation loss, does not amount to furnishing inaccurate particulars. Furthermore, since the final tax liability was computed under Section 115JB, the penalty based on additions under normal provisions cannot survive.

The Tribunal found that the long holding period of the land and its appearance as investment in the balance sheet supported the assessee's claim. The reasoning of the lower authorities for treating it as business asset was found insufficient.

The tribunal granted the assessee's request to withdraw the appeal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that the assessee demonstrated bona fide by voluntarily withdrawing the claim before being confronted by the Revenue. Therefore, the penalty levied under Section 271(1)(c) was not exigible.

The Tribunal held that the order passed under Section 201(1) and 201(1A) was barred by limitation as it was passed after the expiry of two years from the financial year in which TDS statements were filed. The amendment to Section 201(3) by the Finance Act, 2014, was not applicable retrospectively.

The Tribunal held that the addition for unpaid creditors was not properly considered by the lower authorities and remanded it for fresh adjudication. The ad-hoc disallowance on sub-contract charges to sister concerns was deemed unjustified and deleted.

The Tribunal found the cause for the delay to be reasonable. It held that the Commissioner (Appeals) should have condoned the delay and decided the appeal on its merits. The impugned order was set aside, and the matter was restored to the Commissioner (Appeals).

The Tribunal held that exemption under Section 54 cannot be denied solely on the ground that a registered sale deed was not executed, provided the capital gains have been invested in a new residential property and an allotment letter has been issued. The assessee acquired a right in the flat by virtue of the allotment letter.

The Tribunal held that the trust's objects were of general public utility and charitable in nature, similar to a previous ruling on a related matter. It also noted that issues related to Section 13(3) are not grounds for rejecting registration at this stage.

The Tribunal held that Section 145A is applicable from AY 1999-2000 and that adjustments to closing stock should correspond to adjustments in opening stock to avoid double benefits. The Tribunal also confirmed the deletion of additions related to expenses on cement plants and interest on borrowed funds, following previous decisions in the assessee's own case.

The Tribunal held that while the entire purchase amount was not justifiable for disallowance as sales were not disputed and books of account were not rejected, the profit embedded in the bogus purchase should be considered. The addition was restricted to 12.5% of the bogus purchase amount.

The Tribunal held that while the purchases were not fully genuine, there must be some consumption of material given the assessee's business. Therefore, the addition should be restricted to account for the profit element, not the entire amount.

The Tribunal held that the AO cannot substitute their judgment for that of the businessman in determining the reasonableness of employee expenditure. The genuineness of the payments was not doubted, and the salary was paid to retain talented employees. Therefore, the disallowance was inappropriate.

The Tribunal held that Section 56(2)(viib) was not applicable for the assessment year in question as it was effective from a later date. It also found Section 68 inapplicable as there was no cash inflow, and the identity and creditworthiness of the parties were not in doubt.

The Tribunal held that Section 23(1)(c) of the Income Tax Act applies even if the property was not actually let out in the previous year, as long as it was intended to be let out. Therefore, the Commissioner (Appeals) was justified in allowing the deduction.

The Tribunal held that the claim was as per Form No. 16A filed under Section 203 of the Act. Therefore, the order of the CIT(A) was set aside, and the Assessing Officer was directed to accept the TDS claim.

The Tribunal held that since the assessee furnished full particulars and the addition was based on a different view of the AO, penalty under section 271(1)(c) was not leviable. Furthermore, the quantum appeal on the addition was restored to the AO, making the penalty unsustainable.

The Tribunal held that the AO had incorrectly applied the stamp duty valuation by using the wrong zone rate for computing capital gains. It also found that the AO and CIT(A) had not properly considered the evidence regarding the claimed short-term capital losses on assets.

The Tribunal allowed the appeal partly, deleting the addition of unutilized MODVAT credit and partly allowing the disallowance under Section 14A. However, the disallowance of professional fees was upheld in favor of the revenue.

The Tribunal held that the assessee had taken reasonable steps to recover dues and accepted a settlement proposal. Therefore, the balance amount written off as loss on termination of contract was allowable.

The Tribunal held that the addition under section 69B was not sustainable as it was due to buyers failing to take delivery of shares, and following co-ordinate bench decisions, deleted the addition. The Tribunal also dismissed the revenue's grounds on various issues, allowing the assessee's appeal in part.

The Tribunal held that the income from warehousing facilities, which involved providing storage and other ancillary services, constituted business income. Similarly, income from telecom companies for roof installation was also to be treated as business income based on consistency.

The Tribunal allowed the assessee's application for withdrawal of the appeal. The appeals were accordingly dismissed as withdrawn.

The Tribunal held that a legal ground regarding the specific limb of section 271(1)(c) invoked by the AO was not properly adjudicated. Therefore, the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that a legal ground regarding the specific limb of section 271(1)(c) invoked by the AO was not properly adjudicated. Therefore, the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal affirmed the order of the Commissioner (Appeals), holding that the addition restricted to 20% of the purchases from alleged bogus suppliers was justified and protected the interest of the revenue.

The Tribunal held that the severe financial hardships faced by the assessee, evidenced by fund flow and cash flow statements showing negative balances, constituted a sufficient and reasonable cause for non-payment of tax. The Tribunal also noted that the AO had allowed payment in installments, which were duly cleared.

The Tribunal held that proportionate disallowance of expenses based on the area not let out is incorrect once the business has commenced and the property is available for use. Expenses incurred on maintaining the property should be allowed fully if the business has commenced.

The Tribunal held that proportionate disallowance of expenses based on the area not let out is incorrect once the business has commenced and the property is available for use. Expenses incurred on maintaining the property should be allowed fully if the business has commenced.

The Tribunal held that proportionate disallowance of expenses based on the area not let out is incorrect once the business has commenced and the property is available for use. Expenses incurred on maintaining the property should be allowed fully if the business has commenced.

The Tribunal held that the Commissioner (Appeals) had adequately protected the revenue's interest by sustaining an addition of 15% of bogus purchases over and above the already declared GP, finding no infirmity in the order.

The Tribunal found that the assessee claimed that confirmations for the remaining amount were filed but allegedly ignored. Therefore, the Tribunal decided to remand the appeal back to the Assessing Officer for fresh examination.

The Tribunal restored the matter concerning the penalty to the AO for proper factual determination. For AY 2005-06, the Tribunal allowed the appeal for statistical purposes, implying the accounting method dispute needed further clarification.

The Tribunal held that proportionate disallowance of expenses based on the area not let out is incorrect once the business has commenced and the property is available for use. Expenses incurred on maintaining the property should be allowed fully if the business has commenced.

The Tribunal held that the assessee had made a bona fide payment to the builder for booking space in a building to be constructed, and the payment was debited from its account before the due date. The Tribunal accepted the assessee's contention that the amount was applied.

The Tribunal held that while the Assessing Officer was justified in estimating profit on bogus purchases, the rate should be reduced from 12.5% to 10%. For the undisclosed bank deposits, the assessee failed to discharge the onus under Section 68, and the addition was confirmed.

The Tribunal upheld the validity of the reopening of assessment and confirmed the addition of 12.5% of the bogus purchases. It found that the assessee failed to provide evidence for the genuineness of the purchases and the existence of the suppliers.