ITAT Mumbai Judgments — August 2018

The Tribunal held that the Assessing Officer's basis for determining excess premium, which was the book value of equity shares, was not applicable to preference shares. The Tribunal found that the transaction had commercial substance with a clear redemption value, and the nature and source of the receipt were adequately explained.

The Tribunal held that the payment received for the sale of imaging equipment, which included embedded software, was not in the nature of royalty. The dominant character of the transaction was the sale of the machine, and the software was inseparable from it.

The Tribunal condoned the delay in filing the appeals, finding sufficient cause. For the quantum appeal, it restored the issues to the Assessing Officer for fresh examination due to a lack of opportunity for the assessee. For the penalty appeal, it deleted the penalty levied under Section 271(1)(c) as it was based on a mere change in the head of income.

The Tribunal noted that CBDT Circular No. 3/2018 directs that departmental appeals with a tax effect not exceeding Rs. 20 lakhs should not be filed or pressed. Since the present appeal falls within this limit and is not covered by exceptions, it is not maintainable.

The Tribunal noted that CBDT Circular No. 3/2018 instructs that departmental appeals with a tax effect below Rs. 20 lakhs should not be filed or pressed. As this appeal falls within that limit and is not an exception, it is not maintainable.

The Tribunal held that since the ITAT had already quashed the revision order passed by the Pr. CIT under Section 263, the subsequent assessment order passed by the AO had become infructuous. Therefore, there was no reason to interfere with the CIT(A)'s order.

The Tribunal upheld the disallowances made by the Assessing Officer. It found the assessee to be negligent in pursuing the appeal and unable to controvert the AO's findings with evidence.

The Tribunal upheld the CIT(A)'s decision, agreeing that gains on early settlement of forward foreign exchange contracts are capital gains and eligible for exemption under Article 13(4) of the India-Singapore DTAA, even considering Article 24. The assessee's grounds regarding quantification and interest were dismissed as infructuous.

The Tribunal held that the claim of rent-free occupation of the constructed floors by the assessee needed factual verification. Since this was not properly examined by the lower authorities, the issue was restored to the Assessing Officer for fresh adjudication.

The ITAT noted that CBDT Circular No. 3/2018 instructs that departmental appeals should not be filed or pressed if the tax effect is below Rs. 20 lakhs. The present appeal fell under this category.

The Tribunal noted that CBDT Circular No. 3/2018 instructs that departmental appeals with a tax effect not exceeding Rs. 20 lakhs should not be filed or pressed. As these appeals fell within that limit and were not covered by exceptions, they were dismissed.

The Tribunal noted that CBDT Circular No. 3/2018 instructs that departmental appeals with a tax effect not exceeding Rs. 20 lakhs should not be filed or pressed. As these appeals fall within this limit and are not covered by exceptions, they are dismissed.

The Tribunal found that the assessee's non-appearance was due to the death of its Managing Director and the subsequent unavailability of records. The Tribunal decided to restore the matter to the AO for fresh adjudication.

The Tribunal held that the addition was unsustainable as the AO failed to provide concrete evidence or an opportunity for cross-examination. A subsequent statement from the builder's representative explicitly denied receiving any 'on money' from the assessee.

The Tribunal held that the surplus from the shareholder's account is to be considered as part of the life insurance business income as per actuarial valuation. It also held that losses from pension funds, even if the income is exempt under Section 10(23AAB), should be excluded when determining the actuarial valuation surplus.

The Tribunal found that the assessee had itself offered the interest income for taxation and provided no evidence to the contrary. Therefore, the assessee's contention that the AO wrongly taxed this income was rejected.

The Tribunal noted that the CIT(A)'s action of restricting the addition to 6.5% was already confirmed by the Tribunal in the Revenue's own appeal for the same assessment year. Therefore, the assessee's appeal to reduce the addition further was not found to have merit.

The Tribunal upheld the CIT(A)'s decision, agreeing that gains on early settlement of forward foreign exchange contracts are capital gains and eligible for exemption under Article 13(4) of the India-Singapore DTAA, even considering Article 24. The assessee's grounds regarding quantification and interest were dismissed as infructuous.

The Tribunal held that the mere decline of a claim made in the return of income does not automatically warrant penalty. However, the PCIT's exercise of revisional powers was found justified regarding the initial dropping of penalty proceedings. The Tribunal directed the AO to verify facts and decide on penalty for the balance amount.

The Tribunal upheld the CIT(A)'s decision, agreeing that gains on early settlement of forward foreign exchange contracts are capital gains and eligible for exemption under Article 13(4) of the India-Singapore DTAA, even considering Article 24. The assessee's grounds regarding quantification and interest were dismissed as infructuous.

The Tribunal held that no penalty is leviable on the addition related to capital gains as the quantum addition was restricted by a prior Tribunal order. For advertisement expenses, the Tribunal noted the AO's lack of satisfaction regarding intentional evasion. For disallowances under Section 40(a)(ia), the Tribunal followed the Gujarat High Court ruling that such disallowances do not amount to furnishing inaccurate particulars.

The CIT(A) deleted the disallowance, holding the loss to be a business loss and not speculative. The Tribunal upheld this decision, relying on High Court and ITAT precedents that the explanation to Section 73 is not applicable in certain circumstances, including when the gross total income consists mainly of income from capital gains.

The Tribunal set aside the CIT(A)'s order and restored the matter to the AO. This was to examine a DRDO certificate classifying the LCD screens as automatic data processing machines, which could impact their depreciation eligibility.

The Tribunal upheld the CIT(A)'s decision to delete the addition, finding that the assessee had discharged its onus under Section 68 by establishing the identity, genuineness, and creditworthiness of the loan transaction. The lender was also regularly assessed to tax and had a long-standing, accepted running account with the assessee.

The Tribunal noted that as per CBDT Circular No. 3/2018, departmental appeals with a tax effect not exceeding Rs. 20 lakhs should not be filed or pressed. Since the present appeal fell within this limit and was not covered by any exceptions, it was dismissed.

The Tribunal noted that CBDT Circular No. 3/2018 instructs that departmental appeals with a tax effect not exceeding Rs. 20 lakhs should not be filed or pressed. As the present appeal falls within this limit and is not covered by exceptions, it is not maintainable.

The Tribunal held that the primary condition for initiating penalty under section 271AAA is that a search and seizure operation must have been carried out in the case of the assessee. Since this condition was not met, the penalty proceedings were invalid.

The Tribunal held that the reopening of assessment was invalid because the CIT granted approval mechanically without applying his mind, as evidenced by a cursory endorsement and errors in the reasons provided by the AO. The assessment order was therefore declared void ab initio.

The Tribunal noted a CBDT circular instructing that departmental appeals with a tax effect below Rs. 20 lakhs should not be filed or pressed. As the present appeal fell within this limit and had no exceptions, it was dismissed.

The Tribunal noted that as per CBDT Circular No. 3/2018, departmental appeals with a tax effect not exceeding Rs. 20 lakhs should not be filed or should be withdrawn/not pressed. The present appeal was not covered by any exceptions.

The Tribunal found that the CIT(A) admitted additional evidence in contravention of Rule 46A without seeking a remand report from the AO. The Tribunal also noted that the CIT(A) did not provide a positive finding on the genuineness of the expenditure shown in the bank statements.

The Tribunal held that the agreements for purchase of additional areas were not registered due to inadequate stamping. Therefore, the assessees could not claim deduction under Section 54 as they had not acquired the new asset.

The Tribunal dismissed the appeal filed by the Revenue. The dismissal was based on the tax effect of the appeal being below the monetary limit prescribed by the CBDT for filing appeals before the ITAT.

The Tribunal held that neither the AO nor the CIT(A) conducted proper inquiry or verification of the additional evidence submitted by the assessee. Therefore, the matter was restored to the AO for de novo adjudication after proper verification and inquiry, in the interest of substantial justice.

The Tribunal held that the comparable company selected by the TPO was functionally dissimilar and directed the AO to recompute the ALP using appropriate comparables. It also deleted the disallowance under Section 14A, following the Delhi High Court ruling that no disallowance is warranted in the absence of exempt income.

The Tribunal held that disallowance under Section 14A cannot exceed the exempt income earned, following the Delhi High Court's decision. It also directed the AO to restrict disallowance of interest expenses to the net interest, following the Bombay High Court's ruling.

The Tribunal upheld the Commissioner (Appeals)'s decision, following its own consistent rulings in the assessee's prior assessment years. The Tribunal found no material difference in facts between the current assessment years and the earlier ones where the deduction was allowed.

The Tribunal followed its previous decision in the assessee's own case for AY 2010-11, holding that income from operating a shopping mall, given the company's objects and the nature of services provided, should be assessed as business income. The Tribunal upheld the CIT(A)'s order.

The Tribunal upheld the CIT(A)'s decision, agreeing that gains on early settlement of forward foreign exchange contracts are capital gains and eligible for exemption under Article 13(4) of the India-Singapore DTAA, even considering Article 24. The assessee's grounds regarding quantification and interest were dismissed as infructuous.

The Tribunal upheld the reopening of the assessment. Regarding bogus purchases, it confirmed the CIT(A)'s decision to restrict the disallowance to 12.5% of the disputed purchases, citing the profit element embedded in such transactions. For unsold flats, the Tribunal followed a Supreme Court decision and dismissed the revenue's appeal.

The Tribunal condoned the delay in filing the appeal and set aside the CIT(A)'s order. The matter was restored to the CIT(A) for fresh adjudication on merits, emphasizing the need for proper opportunity and evidence.

The Tribunal held that only the profit element embedded in the alleged bogus purchases should be taxed, not the entire purchase price. They directed the AO to estimate the profit at 12.5% on the disputed purchases.

The Tribunal upheld the CIT(A)'s decision, agreeing that gains on early settlement of forward foreign exchange contracts are capital gains and eligible for exemption under Article 13(4) of the India-Singapore DTAA, even considering Article 24. The assessee's grounds regarding quantification and interest were dismissed as infructuous.

The Tribunal upheld the CIT(A)'s decision, agreeing that gains on early settlement of forward foreign exchange contracts are capital gains and eligible for exemption under Article 13(4) of the India-Singapore DTAA, even considering Article 24. The assessee's grounds regarding quantification and interest were dismissed as infructuous.

The Tribunal held that the reopening of assessment was bad in law as it was based on a mere change of opinion and lacked fresh material. The proviso to Section 147, concerning limitations for reopening, was also considered.

The Tribunal held that since the estate of the deceased had already offered the income substantively and the legal heirs had undertaken not to claim refunds, the protective additions made in their hands were unnecessary and should be deleted.

The Tribunal confirmed the CIT(A)'s decision, holding that the rental and service charges should be treated as 'Income from House Property', following its own previous orders in the assessee's own case.

The Tribunal restored the disallowance under Section 14A to the Assessing Officer for fresh adjudication, citing consistency with previous orders. For the disallowance of Employees' Provident Fund contribution, the Tribunal directed the AO to verify and delete the disallowance if paid before the return filing due date.

The Tribunal held that the service tax reimbursement was not an international transaction and deleted the transfer pricing adjustment, following a co-ordinate bench decision. It also set aside the disallowance of advertisement and sales promotion expenses, holding them to be revenue expenditure, by following its own precedent for the assessee.