ITAT Mumbai Judgments — September 2018

The Tribunal upheld the CIT(A)'s decision to estimate the profit on bogus purchases at 12.5% and reduce the ad-hoc expense disallowance to 10% of cash expenses. The Tribunal found these estimations to be fair and justified.

The Tribunal held that the Revenue's appeal was not maintainable due to the low tax effect, as per the CBDT circular. Consequently, the assessee's cross-objection became infructuous.

The Tribunal held that a reduction in profit rate alone cannot be the sole basis for an addition. The AO's ad hoc addition without specific findings was set aside.

The Tribunal upheld the decision of the CIT(A) by following its own previous orders for other assessment years concerning the same assessee and the same issue. The Tribunal found no reason to interfere with the CIT(A)'s reduction in the estimated income.

The Tribunal held that Section 44AF is a special provision for computing profits of retail trade, and if applicable, the assessee is liable to tax only on 5% of turnover or a higher sum declared. The CIT(A) failed to address this submission and made additions based on surmise.

The Tribunal held that there was a proper agreement with the AE for interest payment on late payments. The assessee's plea that the 5% interest rate was comparable to bank lending rates was considered cogent.

The Tribunal, following its own precedent in the assessee's own case on identical facts, restricted the impugned additions to 10% of the amount claimed as bogus purchases. The balance addition was deleted.

The Tribunal, proceeding ex-parte, partly allowed the appeals by modifying the additions for household expenses. However, the additions for unexplained credits were confirmed due to the assessee's failure to provide satisfactory explanations.

The Tribunal noted that a similar issue concerning the same recipient was remitted back to the Assessing Officer in a co-ordinate bench's decision. Therefore, the Tribunal remitted the matter back to the Assessing Officer for de novo adjudication.

The Tribunal, proceeding ex-parte, partly allowed the appeals by modifying the additions for household expenses. However, the additions for unexplained credits were confirmed due to the assessee's failure to provide satisfactory explanations.

The Tribunal, proceeding ex-parte, partly allowed the appeals by modifying the additions for household expenses. However, the additions for unexplained credits were confirmed due to the assessee's failure to provide satisfactory explanations.

The Tribunal held that interest subsidy received by the assessee is a reimbursement of actual interest paid and has a direct nexus with the profits of the undertaking. Therefore, it should not be excluded while computing the deduction under Section 80IC.

The Tribunal noted that the tax effect in both appeals was below the revised monetary limit for filing appeals. Consequently, the appeals were not maintainable.

The Tribunal held that no TDS was required on commission payments to foreign sales agents whose income is not taxable in India. Similarly, for freight charges paid to foreign shipping companies, the Tribunal followed a co-ordinate bench decision and allowed the deduction.

The Tribunal held that while the AO cannot entertain claims not made through a revised return, appellate authorities are free to admit such claims if they are in accordance with the law. The AO was directed to allow the set-off of business loss.

The Tribunal held that the assessee's predominant and sole objective was to provide education. The CIT (Exemptions) had wrongly rejected the approval sought by the petitioner.

The Tribunal noted that the CIT(A) had failed to adjudicate the grounds related to the expenditure attributable to earning the interest income. Therefore, the issue was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the CIT (Exemptions) erred in rejecting the application. The Tribunal found that the predominant and sole objective of the institution was to provide education, and activities like intensive development and scholarships fall within the broad meaning of education.

The Tribunal held that the appeal had to be dismissed in terms of CBDT Circular No. 03/2018, which specifies a monetary limit for appeals. Therefore, the appeal filed by the Revenue was dismissed.

The Tribunal condoned the delay in filing the appeal. Subsequently, it held that since the additions made in the assessment order were deleted, the penalty arising from it was not sustainable and thus dropped the penalty.

The Tribunal condoned the delay in filing the appeal. Following its own precedents and the principles of law, the Tribunal held that penalty under Section 271(1)(c) cannot be levied solely based on an addition in assessment without establishing conscious concealment or furnishing of inaccurate particulars.

The Tribunal held that while the purchases were not fully substantiated, the addition should be restricted to the profit element. It modified the addition to 10% of the total bogus purchases, considering the increased gross profit rate.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 6.5% of the bogus purchases, considering it as a reasonable profit element. The Tribunal found no infirmity in the reopening of assessment based on the information received by the AO.

The Tribunal upheld the additions made by the Assessing Officer and confirmed by the CIT(A). The assessee failed to appear and provide any evidence to controvert the findings of the revenue authorities regarding the genuineness of the purchases.

The Tribunal found the CIT(A)'s disallowance of 15% to be on the higher side, considering the assessee's business and consistent gross profit ratios. The Tribunal directed the AO to recompute the profit by applying an additional profit rate of 10% on the unproved bogus purchases.

The Tribunal held that the assessee failed to substantiate the source of funds for the loan/investment. Therefore, the matter was restored to the Assessing Officer for fresh adjudication.