ITAT Mumbai Judgments — July 2018

The Tribunal allowed the assessee's request to withdraw the appeal. The appeal was dismissed as withdrawn.

The assessee's counsel submitted that they wished to withdraw the appeal. The Departmental Representative had no objection, and the Tribunal granted permission for the withdrawal.

The Tribunal observed that the purchases were consumed in the business and the assessee declared a reasonable gross profit. Therefore, the ad-hoc addition of 25% was not justified.

The Tribunal held that the Tax Residency Certificate issued by Mauritian authorities constitutes sufficient evidence for beneficial ownership of the interest income, as per CBDT Circular No. 789. Therefore, the interest income is not taxable in India.

The Tribunal held that merely because a dealer defaults in VAT payment does not automatically make them non-existent or their transactions bogus. While acknowledging the AO's concerns, the Tribunal found that the purchases were supported by bills, payments by cheque, and utilization in manufacturing.

The Tribunal, following its own precedent in the assessee's own case for a prior assessment year, restored the entire matter to the Assessing Officer for de novo adjudication. This was based on the assessee's claim that it is a state or agent of the state, exempt from Union taxation under Article 289 of the Constitution.

The Tribunal held that the penalty was not sustainable as the deposits were in the individual's account and added to the HUF's income on an estimated basis. The Tribunal relied on various High Court judgments to support this decision.

The Tribunal held that the loss on cancellation of foreign exchange contracts is a business loss, not speculative, following its own previous decisions and High Court pronouncements. It also upheld the CIT(A)'s decision to reject a comparable company due to significant product dissimilarity and allowed Section 10A deduction before setting off losses.

The Tribunal held that the reopening of assessment was valid based on tangible and cogent information received by the AO. The assessee's failure to establish the genuineness of purchases from non-existent parties was also confirmed.

The Tribunal found that the CIT(A)'s previous order on the quantum addition was not speaking and reasoned, leading to a remand. Given the issues of opportunity and jurisdiction raised, and the prior remand on quantum, the Tribunal decided to remand the penalty appeal as well.

The Tribunal admitted additional evidence for the land purchase issue and restored it to the AO for fresh examination. For club membership expenses, the Tribunal also restored the issue to the AO to determine if the facility was used for business purposes.

The Tribunal upheld the CIT(A)'s order, following the jurisdictional High Court's decisions which allowed depreciation as application of income for trusts. The Tribunal noted that the jurisdictional High Court's decision is binding.

The Tribunal held that the waiver of a loan cannot be taxed under Section 28(iv) of the IT Act, following the Supreme Court decision in CIT vs. Mahindra and Mahindra Ltd. Therefore, the addition made by the revenue was not sustainable.