ITAT Mumbai Judgments — July 2019

The Tribunal, following the Bombay High Court's decision, directed the Assessing Officer to restrict the addition to the extent of bringing the Gross Profit rate on alleged bogus purchases to the same rate as other genuine purchases. The assessee was directed to provide necessary details for this calculation.

The Tribunal held that for vacant properties, the ALV should be determined based on the municipal rateable value, following previous decisions of the ITAT and High Court. Consequently, the revenue's appeal was dismissed, and the assessee's appeal was allowed.

For AY 2005-06, the tribunal found that the assessee failed to discharge the initial onus to prove the genuineness of share transactions and remitted the matter back to the AO for further inquiry. For AY 2009-10, the tribunal found that the revenue failed to provide evidence of cash payment and restored the matter to the AO for re-appreciation of documentary evidence.

The Tribunal, following the Bombay High Court's decision, directed the Assessing Officer to restrict the addition to the extent of bringing the Gross Profit rate on alleged bogus purchases to the same rate as other genuine purchases. The assessee was directed to provide necessary details for this calculation.

The Tribunal held that the CIT(A) erred in directing the reopening of assessment for AY 2014-15 without providing the assessee an opportunity to be heard, violating Section 251(2). The disallowance of the cost of improvement was upheld due to lack of documentary evidence.

The Tribunal found that the assessee had provided voluminous evidence, including supplier confirmations, stock reconciliations, purchase and sales details, and bank statements showing payments. The AO failed to rebut this evidence or disprove the genuineness of the transactions.

The Tribunal held that since the basis for disallowing expenses and depreciation was similar (non-carrying out of business activities) and a coordinate bench had deleted penalty in a similar case for an earlier year, the penalty for depreciation should also be deleted.

The Tribunal upheld the CIT(A)'s decision, noting that similar issues in the assessee's own case for earlier assessment years were decided in favor of the assessee. The payment was considered business income and not royalty, and Google Ireland had no PE in India.

The Tribunal, following the Bombay High Court's decision, directed the Assessing Officer to restrict the addition to the extent of bringing the Gross Profit rate on alleged bogus purchases to the same rate as other genuine purchases. The assessee was directed to provide necessary details for this calculation.

The Tribunal held that reopening the assessment beyond four years without any failure on the part of the assessee to disclose material facts amounts to an impermissible review, akin to a change of opinion. Therefore, the reassessment proceedings were quashed.

The Tribunal found that the CIT(A)'s rejection of the assessee's contention was based on a factual error regarding the balance sheet figures. Therefore, the issue was restored to the Assessing Officer for a fresh examination.

The Tribunal found that the assessee had provided voluminous evidence, including supplier confirmations, stock reconciliations, purchase and sales details, and bank statements showing payments. The AO failed to rebut this evidence or disprove the genuineness of the transactions.

The Tribunal held that crawler cranes/dozers are to be treated as motor vehicles eligible for higher depreciation at 30%. This was based on their functional similarity to motor lorries and various judicial precedents, including the assessee's own case.

The Tribunal held that the AO's estimation of profit should have given credit for the profit already offered by the assessee. For the issues concerning creditors and cash credit, the Tribunal admitted additional evidence and restored the matters to the AO for fresh adjudication.

The Tribunal upheld the CIT(A)'s decision to sustain the addition of 12.5% of the bogus purchases. The Tribunal found that the AO was justified in estimating the profit element embedded in the impugned purchases, as the assessee failed to prove the genuineness of the transactions.

The Tribunal confirmed the order of the CIT(A), holding that while the assessee could not produce the parties, the AO had not doubted the sales, implying the purchases were necessary for those sales. The restriction to the peak of purchases was deemed appropriate.

The Tribunal held that the penalty order was passed against a non-existent entity, which is a jurisdictional defect that cannot be cured. Therefore, the penalty order was void ab initio and deserved to be quashed.

The Tribunal upheld the CIT(A)'s decision to delete the additions. The assessee had discharged its onus by providing evidence of identity, genuineness, and creditworthiness of the subscriber. The Tribunal also noted that subsequent amalgamation did not invalidate the original transaction.

The Tribunal held that the AO's failure to dispose of the assessee's objections against the reassessment proceedings vitiated the assessment. Following the jurisdictional High Court's decision, the Tribunal quashed the reassessment order.

The Tribunal found contradictions in the facts presented by the AO, CIT(A), and the assessee regarding cash withdrawals and expenditure. The matter was set aside to the AO for verification of the cash withdrawals from the bank.

The Tribunal upheld the CIT(A)'s decision to delete the addition, relying on the Supreme Court's ruling that unutilized MODVAT credit does not constitute chargeable income. The facts were not found to be distinguishable from the cited precedent.

The Tribunal held that the CIT's revision order under Section 263 was without basis. It found that the AO had made appropriate inquiries and accepted a plausible view on the exchange rate for interim dividends, and that Rule 115 of the Income Tax Rules was not applicable in this case.

The Tribunal held that dismissing an appeal solely on a technical defect without considering the merits infringes the assessee's right, especially when the defect was rectified. The CIT(A) erred in dismissing the appeal without discussing the issues on merit.

The Tribunal held that the AO failed to discharge the onus of proving the transaction as non-genuine, as the assessee had provided sufficient documentary evidence. The CIT(A) had rightly deleted the addition, and the AO's reliance on a retracted statement without independent inquiry was not justified.

The Tribunal held that since the income from composite letting of furnished flats was consistently assessed as business income in earlier years, and no new facts emerged, the Assessing Officer could not take an inconsistent view. The rental receipts are to be assessed as business income.

The Tribunal held that the assessment order passed against a non-existent entity after amalgamation is void ab initio and bad in law. The Assessing Officer should have made the assessment on the successor company as per Section 170(2) of the Income Tax Act.

The Tribunal held that interest expenses disallowed under Section 36(1)(iii) were allowable as they were for strategic business purposes. It also ruled that notional rent and society charges for properties used as business godowns/offices should not be added/disallowed.

The Tribunal held that interest expenses disallowed under Section 36(1)(iii) should be deleted as loans to subsidiaries were for business expediency. It also directed the deletion of notional rental income and society charges for properties used for the assessee's own business.

The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s deletion of additions related to book profit and interest expenditure, and the restriction on corporate guarantee commission. The assessee's cross-objection was partly allowed, with the issue of AIR details being restored to the AO for fresh adjudication.

The Tribunal held that the assessment order passed against a non-existent entity after amalgamation is void ab initio and bad in law. The Assessing Officer should have made the assessment on the successor company as per Section 170(2) of the Income Tax Act.

The Tribunal partly allowed the assessee's appeal regarding bogus purchases, restricting the addition to 12.5%. The revenue's appeal was dismissed on grounds related to interest expenditure and disallowance of statutory dues.

The Tribunal found that the assessee failed to appear before the CIT(A) despite multiple notices and adjournments. Consequently, the CIT(A) dismissed the appeal. The Tribunal set aside the CIT(A)'s order and restored the matter for a fresh decision after giving the assessee an opportunity to be heard.

The Tribunal held that the assessment order passed against a non-existent entity after amalgamation is void ab initio and bad in law. The Assessing Officer should have made the assessment on the successor company as per Section 170(2) of the Income Tax Act.

The Tribunal held that the CIT(A) erred in deleting the addition. While the identity, creditworthiness, and genuineness of the investor were not in doubt, the valuation of the share premium was not adequately explained by the assessee.

The ITAT held that the reopening of assessment was bad in law because it was done after four years without an allegation of failure by the assessee to disclose material facts. The Tribunal also found that the AO relied on 'borrowed satisfaction' rather than applying his own mind to the information received.

The Tribunal condoned the delay in filing the appeal, finding it to be for reasonable cause. The Tribunal further directed the Assessing Officer to allow the assessee's claim of deduction under Section 10B for the Pune Unit without adjusting the loss from the Nashik Unit.

The Tribunal held that disallowance of interest expenses should be made after netting off interest income with interest expenses. For administrative costs, the disallowance should only consider investments that yielded exempt income.

The Tribunal partly allowed the assessee's appeal regarding bogus purchases, restricting the addition to 12.5%. The revenue's appeal was dismissed on grounds related to interest expenditure and disallowance of statutory dues.

The Tribunal held that the CIT(A) had not properly appreciated the evidence submitted by the assessee, including the creditor's PAN, Aadhaar, and signed ledger confirmation. The Tribunal found that the assessee had provided sufficient proof of a genuine transaction.

The Tribunal held that the CIT(E) erred in cancelling the registration solely based on the collection of donations without proving that the trust's objects were not charitable or that its activities were not in accordance with its objects. The Tribunal restored the registration.

The Tribunal held that the assessment order passed against a non-existent entity after amalgamation is void ab initio and bad in law. The Assessing Officer should have made the assessment on the successor company as per Section 170(2) of the Income Tax Act.

The Tribunal directed the Assessing Officer to restrict the addition to the extent of bringing the Gross Profit rate on alleged bogus purchases to the same rate as other genuine purchases. The assessee was directed to furnish necessary details for this calculation.

The Tribunal held that carriage fees paid to cable operators are for work contracts covered under Section 194C, not technical services under Section 194J. This decision was based on established precedents from the ITAT and the jurisdictional Bombay High Court.

The Tribunal held that the DRP has the power to enhance income under Section 144C(8) even if no variation was proposed by the TPO, provided the assessee has raised objections. However, for the export of goods, the Tribunal restored the issue to the AO for verifying the acceptability of comparables under external TNMM, deeming it the most appropriate method.

The Tribunal considered the assessee's submission and acceded to the request to withdraw the appeal. The appeal was therefore dismissed as withdrawn.

The Tribunal held that only investments yielding exempt income should be considered for disallowance under Section 14A and remanded the issue to the AO for recalculation. Regarding depreciation, the Tribunal ruled that a BMW car used for commuting directors/officers is not a commercial vehicle and upheld the lower authorities' decision.

The Tribunal held that Section 14A cannot be invoked if the assessee has not earned any exempt income during the relevant assessment year. The disallowance under Section 14A should also be excluded when calculating income under MAT provisions (Section 115JB).

The ITAT held that the reopening of assessment was bad in law because it was done after four years without an allegation of failure by the assessee to disclose material facts. The Tribunal also found that the AO relied on 'borrowed satisfaction' rather than applying his own mind to the information received.

The Tribunal held that the AO should have examined the two supplier parties and allowed the assessee to cross-examine them. The Tribunal set aside the CIT(A)'s order and restored the matter to the AO for fresh adjudication after providing this opportunity.