ITAT Mumbai Judgments — October 2018

The Tribunal upheld the disallowance of interest on overdraft, agreeing with the lower authorities that the expenditure was not incurred wholly and exclusively for the purpose of earning interest income from fixed deposits.

The Tribunal condoned the delay in filing the appeals before the CIT(A), finding the assessee's reasons for delay to be reasonable. The Tribunal set aside the CIT(A)'s order and restored the appeals to the CIT(A)'s file for adjudication on merits.

The Tribunal held that merely making a claim which is not sustainable in law does not automatically amount to furnishing inaccurate particulars. Following the Supreme Court decision in CIT v. Reliance Petroproducts (P.) Ltd., the penalty was deleted.

The Tribunal held that as per CBDT Instruction No. 3/2018, appeals with a tax effect below Rs. 20 lakhs are not maintainable before the ITAT. Therefore, the appeals filed by the Revenue were dismissed.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had not actually claimed depreciation on the specific flat in its income computation under Section 32 of the IT Act, despite it appearing in depreciation schedules for Companies Act purposes. Therefore, Section 50 of the IT Act was not applicable.

The Tribunal held that there is no bar to issuing shares at a high premium if a valuation report is obtained and the investment is through banking channels. The CIT(A) had rightly considered the evidence of identity, creditworthiness, and genuineness of the transaction.

The Tribunal upheld the reopening of assessment under Section 147, finding that the Assessing Officer had material to form a belief that income had escaped assessment. However, the addition made on account of lease premium, rent, and interest was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that merely claiming a deduction under a wrong section, when the claim was otherwise bona fide, does not warrant a penalty under Section 271(1)(c). The assessee's mistake was not an intentional concealment or furnishing of inaccurate particulars.

The Tribunal held that no transfer of property took place as per the Income Tax Act, 1961, given the pending litigation, the cancellation of the sale agreement, and the fact that the property remained in the assessee's name with possession retained. Therefore, no capital gains tax could be levied.

The Tribunal held that the CIT was justified in passing the revision order as the AO had not made any inquiry into the expenses, making the assessment order erroneous. The revision orders for both assessment years were upheld.

The Tribunal noted that the assessee's own funds exceeded the investment value and that the AO did not consider the jurisdictional Bombay High Court decision. Therefore, the matter was restored to the AO for recomputation of disallowance.

The Tribunal upheld the CIT(A)'s decision, stating that disallowance under Section 14A should be restricted to the dividend income earned. This followed a consistent view of the Tribunal.

The Tribunal held that additions based on untested material, without confronting the assessee with the statement of a third party and without allowing cross-examination, are unsustainable, especially when the assessee provided documentary evidence of genuine transactions.

The Tribunal held that the income of a discretionary trust cannot be taxed in the hands of the beneficiaries unless the income has been distributed and received by them. Since the assessees had not contributed to the trust, made any transactions, or received any distributions, the additions were not sustainable.

The Tribunal held that the income of a discretionary trust cannot be taxed in the hands of the beneficiaries unless the income has been distributed and received by them. Since the assessees had not contributed to the trust, made any transactions, or received any distributions, the additions were not sustainable.

The Tribunal held that the income of a discretionary trust cannot be taxed in the hands of the beneficiaries unless the income has been distributed and received by them. Since the assessees had not contributed to the trust, made any transactions, or received any distributions, the additions were not sustainable.

The Tribunal held that the appeal filed by the Revenue was not maintainable due to the tax effect being below the revised monetary limit set by the CBDT. Therefore, the appeal was dismissed.

The Tribunal restored the issue to the Assessing Officer for factual verification of the assessee's contentions regarding the use of borrowed funds and funding of capital work-in-progress. The CIT(A)'s order was set aside.

The Tribunal upheld the CIT(A)'s decision to delete the disallowance under Section 14A, finding no infirmity as the assessee had sufficient own funds. It also sustained the deletion of ESOP expenses, agreeing that they are allowable as revenue expenditure.

The Tribunal noted that the tax effect was below the monetary limit stipulated by CBDT Circular No. 3/2018 for filing appeals. The Revenue did not provide any material to show the appeal was covered by exceptions to the circular.

The Tribunal upheld the order of the CIT(A), agreeing that any disallowance under Section 14A should be restricted to the exempt income earned. This decision followed a consistent view of the Tribunal.

The Tribunal found it appropriate to restore the issue to the file of the Assessing Officer. The Assessing Officer is to decide the matter in light of the observations made by the Tribunal in the Revenue's appeal.

The Tribunal held that service tax, being a statutory levy collected on behalf of the government and having no profit element, should not be included in the freight receipts for computing taxable income under Section 44B. The Assessing Officer was directed to recompute the income excluding the service tax component.

The Tribunal upheld the CIT(A)'s decision, following its own prior ruling for the Assessment Year 2010-11. It was held that the transactions through PMS, funded by the trust's corpus and with the intention of wealth preservation, constituted capital gains and not business income.

The Tribunal held that the rent for the use of the building and the maintenance/amenity charges should be considered as Income from House Property. This decision followed a previous order of the Tribunal in the assessee's own case and similar cases.

The Tribunal confirmed the order of the CIT(A) allowing the claim for depreciation. The issue was held to be covered by the decision of the Hon'ble Bombay High Court and the Tribunal's own earlier decision in the assessee's case.

The Tribunal held that the AO failed to record satisfaction with reference to the assessee's books of account before invoking Rule 8D. Following the Supreme Court judgment in Godrej & Boyce Mfg Co Ltd vs ACIT, the disallowance was deleted.

The Tribunal noted that the tax effect was below the monetary limit as per CBDT Instruction No. 3 of 2018. Therefore, the appeal of the Revenue was not maintainable.

The Tribunal held that the payments pertained to Grishma Constructions & Trading Pvt. Ltd., a group concern, and not the assessee. Since Grishma Constructions was the party interested in vacating the property for its project, the addition made in the hands of the assessee was deleted.

The Tribunal held that the AO's failure to specify the limb of Section 271(1)(c) for which penalty was proposed in the notice was a violation of natural justice. Consequently, the penalty notice was deemed invalid.

The Tribunal found merit in the assessee's contention that the interest expenditure needed apportionment between investment and F&O activities. The issue was restored to the AO for re-examination and proper apportionment.

The Tribunal held that the issue regarding the rural status of branches and eligibility for deduction under Section 36(1)(viia) requires reconsideration due to fresh notifications submitted by the assessee. The depreciation claim also needed further examination by the Assessing Officer.

The Tribunal held that the penalty notices were bad in law due to non-application of mind by the AO and violation of natural justice. The failure to specify the charge prejudiced the assessee's right to defend themselves.

The Tribunal acknowledged the assessee's casual approach but, in the interest of justice, restored the assessment to the AO. The assessee is directed to provide all necessary evidence to substantiate its claims.

The Tribunal held that the penalty notices were bad in law due to non-application of mind by the AO and violation of natural justice. The failure to specify the charge prejudiced the assessee's right to defend themselves.

The Tribunal held that the penalty notices were bad in law due to non-application of mind by the AO and violation of natural justice. The failure to specify the charge prejudiced the assessee's right to defend themselves.

The Tribunal held that the penalty notices were bad in law due to non-application of mind by the AO and violation of natural justice. The failure to specify the charge prejudiced the assessee's right to defend themselves.

The Tribunal dismissed the appeal in limine due to significant delay and lack of merit in the reasons provided for condonation. The Tribunal also noted that the assessee had no grievance with the CIT(A)'s order for AY 2007-08.

The Tribunal held that the penalty notices were bad in law due to non-application of mind by the AO and violation of natural justice. The failure to specify the charge prejudiced the assessee's right to defend themselves.

The Tribunal held that the penalty notices were bad in law due to non-application of mind by the AO and violation of natural justice. The failure to specify the charge prejudiced the assessee's right to defend themselves.

The Tribunal held that since the order under section 263, which led to the revised assessment order, was quashed by the Tribunal, the subsequent order under section 154 became infructuous. Therefore, the appeal against the section 154 order was dismissed.

The Tribunal held that the issue raised was a legal one arising from the assessment records and could be raised at any stage, citing Supreme Court precedents. Therefore, the assessment order was set aside to the AO for a fresh decision on the legal issue.

The Tribunal held that the rent for the use of the building and the maintenance/amenity charges should be considered as Income from House Property. This decision followed a previous order of the Tribunal in the assessee's own case and similar cases.

The Tribunal held that the penalty notices were bad in law due to non-application of mind by the AO and violation of natural justice. The failure to specify the charge prejudiced the assessee's right to defend themselves.

The Tribunal noted that a similar issue for a prior assessment year was set aside to the CIT(A) for re-adjudication. Therefore, the Tribunal restored the matter to the CIT(A) with similar directions for re-appreciation of the assessee's claim regarding Section 10A deduction. Regarding depreciation, the Tribunal confirmed the CIT(A)'s direction to the AO to re-verify the facts.

The Tribunal held that penalty cannot be imposed where income is estimated or additions are made on guesswork. Furthermore, the AO's initiation of penalty for concealment of income and imposition for furnishing inaccurate particulars, along with a non-specific notice, demonstrated a lack of application of mind, making the penalty order bad in law.

The Tribunal held that the penalty notices were bad in law due to non-application of mind by the AO and violation of natural justice. The failure to specify the charge prejudiced the assessee's right to defend themselves.

The Tribunal held that no separate disallowances can be made when income is computed under the Tonnage Tax Scheme, as per previous coordinate bench decisions. Therefore, the CIT(A)'s order was upheld.

The Tribunal held that the issue regarding the rural status of branches and eligibility for deduction under Section 36(1)(viia) requires reconsideration due to fresh notifications submitted by the assessee. The depreciation claim also needed further examination by the Assessing Officer.