ITAT Mumbai Judgments — October 2018

The Tribunal restored the issues concerning disallowance of interest on WIP, disallowance of interest under Section 14A, and addition of unexplained cash credit back to the Assessing Officer. This was to provide the assessee an opportunity to submit further documentation and for the AO to consider previous ITAT orders.

The Tribunal dismissed the revenue's appeal as the tax effect was below the monetary limit specified in the CBDT circular. The Tribunal also dismissed the assessee's cross-objection regarding interest additions, finding that the assessee failed to establish the nexus between loans and interest paid. However, the penalty under Section 271(1)(c) was deleted.

The Tribunal held that the salary paid to the Managing Trustee was reasonable given her experience and the lack of contrary evidence. It also found that the car purchase and rent payments did not violate Section 13. Consequently, the denial of exemption under Section 11 was reversed.

The Tribunal confirmed the CIT(A)'s decision to restrict the addition of estimated profit to 5% of the alleged bogus purchases. The CIT(A) had reduced the addition from 12.5% estimated by the AO, considering the assessee's business and declared GP.

The Tribunal upheld the CIT(A)'s decision to reduce the deduction under Section 10B. This was due to the assessee's failure to provide sufficient documentary evidence for export realization.

The Tribunal held that the payments received were for line production services and not for the use of or right to use any copyright. As per law, the commissioning party (Endemol India) was the owner of the copyright, thus no transfer of copyright occurred.

The Tribunal set aside the order of the CIT(A) as it was passed in the name of a non-existent assessee. The issues were restored to the file of the concerned CIT(A) for fresh adjudication.

The Tribunal held that a notice under section 143(2) can only be issued when a valid return is pending assessment. Since the notice was issued before the assessee filed the return in response to the section 148 notice, the assessment framed was invalid and bad in law.

The Assessing Officer had rectified the issues contested in the appeal, rendering it infructuous. The tribunal allowed the assessee to withdraw the appeal.

The Tribunal held that the purchase of multiple flats, even on different floors but in the same building, can be considered as investment in 'a residential house' for the purpose of Section 54F, following various High Court decisions.

The Tribunal upheld the DRP's direction, agreeing that service tax collected on behalf of the government is not includible in gross receipts for presumptive income calculation under Section 44B. This was based on High Court and Tribunal precedents.

The Tribunal upheld the CIT(A)'s decision to delete the penalties. It held that penalty under section 271D/271E cannot be levied solely on the basis of rough notes found with a third party, especially when the entries pertained to an advance for machinery, which is a business transaction and not a loan or deposit.

The Tribunal held that for a property developer, interest incurred on acquiring land shown as inventory must be allowed as an expense, even if no revenue is generated. Capitalization of the asset is not a prerequisite for allowing such interest as a revenue expense.

The tribunal held that the CIT(A) dismissed the appeal without considering the merits. In the interest of natural justice, the assessee should be given another opportunity to present its case.

The Tribunal held that making an addition based on a document that does not clearly state whether amounts were lent or borrowed by the assessee, and which the assessee has consistently disowned, is not justified. The Tribunal also noted the absence of corroborating incriminating material.

The Tribunal noted that CBDT Circular No. 03/2018 revised the monetary limits for filing appeals. Since the tax effect was below the specified limit, the appeal was dismissed as not maintainable.

The Tribunal noted that CBDT Circular No. 03/2018 revised the monetary limits for filing appeals. Since the tax effect was below the specified limit, the appeal was dismissed as not maintainable.

The Tribunal upheld the CIT(A)'s order, following a co-ordinate bench's decision on an identical issue for a previous assessment year. The partial relief granted by the CIT(A) was confirmed.

The Tribunal granted permission to the assessee to withdraw the appeal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal held that while the profit element embedded in the purchases should be taxed, the 30% estimated by the CIT(A) was excessive. Following the ratio in CIT vs. Simit P. Sheth, the addition was sustained at 15% of the alleged bogus purchases.

The Tribunal held that rental income from providing space to customers is integral to the business and eligible for 80IA deduction, especially as the CIT(A) had ruled favorably for a subsequent year. For interest income on fixed deposits and IT refunds, the Tribunal followed precedents allowing deduction if the deposits were made under business compulsion or if the interest was netted against business expenditure.