ITAT Mumbai Judgments — July 2018

The Tribunal held that the appeal filed by the Revenue was not maintainable due to the tax effect being below the prescribed monetary limit. The appeal was dismissed in limine.

The Tribunal held that the assessee, being a cooperative credit society whose activities are restricted to its members, is eligible for deduction under Section 80P. The CIT(A)'s decision to allow the deduction was upheld.

The Tribunal held that the penalty proceedings do not survive as the additions on which they were based were set aside by a previous Tribunal order. Therefore, the penalty orders were quashed.

The Tribunal directed the AO to compute guarantee fees at 0.9% based on an internal CUP and to compute interest on loans based on market rates for the repayment currency. The issues regarding Section 35D and Section 32(1)(ii)(a) were restored to the AO for fresh consideration.

The Tribunal held that the loan was taken for the purchase of property and the interest deduction was allowable. The disallowance made by the Assessing Officer was not sustainable and was deleted.

The Tribunal dismissed the assessee's appeal regarding the disallowance of long-term capital loss on the sale of shares, finding that the assessee failed to provide sufficient evidence like audited accounts. However, the Tribunal allowed the assessee's claim for long-term capital loss on the sale of land, agreeing with the CIT(A) that the purchase price was sufficiently evidenced by the sale agreement and conveyance deed.

The Tribunal upheld the CIT(A)'s decision, following a co-ordinate bench ruling. It held that the recoveries were held in a fiduciary capacity and not routed through the profit and loss account, thus not taxable in the current year. The Tribunal also dismissed grounds related to changes in estimation of recoveries, provision for employee pay-scale revisions, and ISO certification expenses.

The Tribunal confirmed the order of the CIT(A) in deleting the penalty. This was based on the fact that the addition on which the penalty was levied had already been deleted by the ITAT in the assessee's own case for the same assessment year.

The Tribunal held that the appeals filed by the revenue were covered by the CBDT circular regarding low tax effect. Therefore, the appeals were dismissed.

The Tribunal held that since the quantum additions, against which the penalty was levied, had already been deleted by the Tribunal, the penalty itself did not survive. The revenue failed to demonstrate any stay or reversal of the earlier decision by a higher authority.

The Tribunal found that the applicability of Section 194C, particularly concerning whether each GR (Goods Receipt) constitutes a separate contract, was not adequately examined by the lower authorities. Therefore, the matter was set aside.

The Tribunal followed a previous decision in the assessee's own case for a similar assessment year. It directed the Assessing Officer to sustain the addition to the extent of 12.5% of the value of bogus purchases.

The Tribunal held that the proviso to Section 36(1)(iii) applies to capital assets, not to land purchased as inventory for a real estate business. Therefore, interest on funds borrowed for acquiring property as inventory is an allowable deduction.

The Tribunal, following its own precedent for a prior assessment year, restricted the addition to 12.5% of the bogus purchases. The cross-objection by the assessee challenging any addition was dismissed.

The Tribunal held that the appeal was covered by the CBDT's low tax effect circular. Therefore, the revenue's appeal was dismissed.

The Tribunal held that interest earned on bank deposits, kept as margin money for Letters of Credit or Bank Guarantees required for the EOU's business, has a nexus with the eligible undertaking's business and is therefore eligible for Section 10B exemption. The Tribunal also affirmed the CIT(A)'s direction to the Assessing Officer to verify and allow carry forward losses of non-10B units as per law.

The Tribunal found that the tax effect of the disputed additions was below the Rs. 20 Lacs limit mentioned in CBDT Circular No. 03/2018. This circular applies to pending appeals as well.

The Tribunal held that the CIT(A) erred in rejecting additional evidence on technical grounds and should have admitted and evaluated them. The matter was restored to the Assessing Officer for a fresh assessment after admitting all evidence.

The Tribunal held that the appeal filed by the Revenue was not maintainable as the tax effect was below the prescribed monetary limit. Therefore, the appeal was liable to be dismissed in limine.

The Tribunal held that the income from the development rights was received by the members of the society and offered to tax by them, thus it could not be taxed again in the hands of the society. It also held that Section 50C was not applicable to the transfer of development rights.

The Tribunal held that the standby maintenance charges were not 'fee for technical services' and affirmed the CIT(A)'s decision. However, regarding the apportionment of income, the Tribunal directed the Assessing Officer to recompute it based on the cable length in Indian territorial waters.

The Tribunal verified the records and found that the appeal indeed pertained to the assessment year 2009-10. Consequently, a corrigendum was issued to correct the assessment year in the cause title.

The Tribunal dismissed the Revenue's appeal, stating that the tax effect of the penalty deletion was below the prescribed monetary limit for appeals as per CBDT Circular No. 03/2018. The cross-objection was also dismissed.

The Tribunal held that the tax effect of the disputed quantum was below the monetary limit specified in CBDT Circular No. 03/2018. Therefore, the appeal filed by the Revenue was not maintainable.

The Tribunal noted that most additions were deleted in the quantum appeal. The remaining additions were meager, and therefore, the Tribunal found no merit in the imposition of penalty.

The Tribunal held that the AO made the addition solely based on information from the investigation wing without independent investigation. The assessee had provided documentary evidence and an affidavit to disprove the transactions, which the AO failed to consider.

The Tribunal found that the expenses incurred were for annual maintenance charges of various assets like computers, UPS, and ACs, which are recurring in nature. Therefore, these were considered revenue expenditure.

The Tribunal held that since the payments were made to a government agency or at the instance of the Government of Maharashtra, the provisions of Section 196 of the Income Tax Act were applicable, meaning no TDS was required to be deducted. Therefore, the disallowance made by the Assessing Officer was incorrect.

The Tribunal found that the CIT(A) passed an ex-parte order without fully considering the assessee's objections and written submissions. Therefore, the matter was set aside to the CIT(A) for fresh adjudication.

The Tribunal held that the holding period for capital gains should be computed from the date of the allotment letter, not the date of the agreement execution. Consequently, the gains were correctly treated as long-term capital gains.

The Tribunal held that the appeal was covered by CBDT Circular No. 03/2018, which sets a monetary limit for appeals. Therefore, the Revenue's appeal was dismissed.

The Tribunal held that the reopening of the assessment was invalid as it was based on a change of opinion, as the AO had already made inquiries and passed an assessment order after considering the assessee's replies. Consequently, the additions made by the AO were not sustained.

The Tribunal held that once an asset becomes part of a block of assets and depreciation is granted, it cannot be denied in subsequent years. The issue of eligibility for depreciation on intangible assets should have been raised in the year of acquisition (AY 2005-06).

The Tribunal noted that the tax effect was below the monetary limit for appeals as per CBDT Circular No. 03/2018. Therefore, the Revenue's appeal was dismissed.

The Tribunal held that based on the precedent set by the Bombay High Court in a similar development agreement case, the capital gains are taxable in the year the development agreement was entered into, not the year of rectification or possession.

The Tribunal held that the deduction under Section 54EC could be claimed up to Rs. 1 crore, subject to fulfilling other conditions. However, the matter was remitted to the AO to verify if investments of Rs. 50 Lacs each were made in different financial years and within the stipulated six months.

The Tribunal noted that the tax effect of the additions was below the monetary limit prescribed by a CBDT circular for filing appeals. Therefore, the revenue's appeal was dismissed based on this circular.

The Tribunal found that the CIT(A) passed an ex-parte order without fully considering the assessee's objections and written submissions. Therefore, the matter was set aside to the CIT(A) for fresh adjudication.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when disallowances are made on technical grounds or due to lack of evidence, provided the genuineness of the payment is not disputed. The penalty on both disallowances was deleted.

The Tribunal held that the AO had examined the issue of interest capitalization and made a disallowance after considering the assessee's reply, thus adopting a permissible view. Since the assessment order was not erroneous, the revision under section 263 was not justified.

The Tribunal held that since the reopening was done after 4 years and the assessee had disclosed all material facts, the reopening was bad in law. The CIT(A)'s decision to quash the reassessment proceedings was upheld.

The Tribunal restored the matter to the file of the Pr. CIT for re-adjudication. This was primarily due to the Pr. CIT's failure to decide the jurisdictional issue raised by the assessee regarding the Pr. CIT's power to revise an assessment order passed in pursuance of DRP directions.

The Tribunal held that the appeals filed by the revenue were covered by the CBDT circular regarding low tax effect. Therefore, the appeals were dismissed.

The Tribunal considered the withdrawal applications filed by the assessee. The Revenue had no objection to the withdrawal.

The Tribunal held that the assessee had provided sufficient evidence, including the lender's bank statement, return of income, and Form 16, which proved the identity, genuineness, and creditworthiness of the loan. Therefore, the addition made by the Assessing Officer and confirmed by the CIT(A) was not justifiable.

The Tribunal held that the standby maintenance charges were not 'fee for technical services' and affirmed the CIT(A)'s decision. However, regarding the apportionment of income, the Tribunal directed the Assessing Officer to recompute it based on the cable length in Indian territorial waters.

The Tribunal noted that the tax effect of the disputed addition was below the Rs. 20 Lacs limit for appeals before the Tribunal, as per CBDT Circular No. 03/2018. Therefore, the revenue's appeal was dismissed.

The Tribunal held that the assessee failed to discharge the primary onus to prove the genuineness of work contract expenses and could not satisfactorily explain other debited expenses. Therefore, the additions sustained by the CIT(A) were justified.

The Tribunal upheld the disallowance under Section 14A, referencing the Apex Court judgment in Maxopp Investment Ltd. However, the issue regarding the adjustment of legal & professional expenses under Section 115JB was remitted back to the CIT(A) for adjudication.

The Tribunal dismissed the Revenue's appeal as not pressed, based on the Revenue's submission. Consequently, the assessee's Cross Objection was also dismissed as infructuous.