ITAT Mumbai Judgments — August 2019

The Tribunal held that in the absence of any exempt income earned during the relevant assessment year, no disallowance under Section 14A read with Rule 8D can be made. This decision was based on established judicial precedents.

The Tribunal set aside the CIT(A)'s order dismissing the appeal and restored the issues to the CIT(A)'s file. The assessee needs to demonstrate with evidence that the admitted tax liability was paid.

The Tribunal held that the assessee made full disclosure of the claims in its books of accounts and offered sufficient explanation. Therefore, the penalty under Section 271(1)(c) was not imposable, as a mere disallowance of a claim reflected in the books does not attract penalty.

The Tribunal held that the disallowances made by the lower authorities were based on estimation, surmises, and presumptions without concrete findings of suppressed income. Therefore, the Tribunal set aside the orders of the lower authorities and directed the deletion of the disallowances.

The Tribunal held that 100% disallowance for bogus purchases is not justified when sales are not doubted, as sales are impossible without purchases. The addition should be limited to the profit element embedded in such purchases.

The Tribunal held that disallowances under Section 14A should be restricted to the extent of exempt income earned. If no exempt income is earned, no disallowance under Section 14A is permissible. The Tribunal also directed the AO to recompute book profit under Section 115JB without resorting to Section 14A computations.

The tribunal held that the first appellate authority failed to consider the digital signature, which is more authentic than a physical signature. Therefore, the appeal should be adjudicated on its merits.

The Tribunal held that Section 292BB of the Income Tax Act is applicable from Assessment Year 2008-09 onwards and not for the assessment year 2007-08. Therefore, the assessee could validly object to the late service of the notice under Section 143(2). Consequently, the assessment order was quashed as bad in law.

The Tribunal held that no disallowance under Section 14A is justified if no exempt income has been earned. Judicial precedents of High Courts are to be preferred over CBDT circulars.

The Tribunal held that mere technical lapses should not prevent an assessee from seeking justice, especially in the initial stages of e-filing where technical glitches could occur. The assessee was directed to e-file the appeal within 15 days, and it would be treated as filed in time.

The Tribunal held that TDR rights constitute a capital asset and the surplus from their transfer should be assessed as capital gains, not speculative business profit. It also ruled that the period of holding should be considered from the original acquisition date, making it long-term capital gains.

The Tribunal noted that the Revenue did not provide any material to show the appeal was protected by exceptions to the monetary limit. Therefore, the appeal was deemed withdrawn/not pressed.

The Tribunal upheld the CIT(A)'s decision that the Lonavala property was used for professional purposes and thus not subject to deemed rental income. It also agreed with the CIT(A)'s computation of capital gains based on actual sale consideration, not stamp duty valuation, and the classification as long-term capital gain.

The Tribunal held that the compensation was for relinquishing the 'right to sue' and not for the sale of property. Since the cost of acquisition of the 'right to sue' is indeterminable, the charging section for capital gains fails.

The Tribunal held that the municipal rateable value is a recognized basis for determining the Annual Letting Value (ALV) of a property. It also found merit in the argument that a co-owned property occupied by a family member could be considered notionally self-occupied.

The Tribunal held that payments for training programs did not qualify as FTS as they did not make available technical knowledge. It also ruled that access to systems was not royalty or FTS, as the assessee did not own the brand and provided the services in the ordinary course of business.

The Tribunal held that disallowances under Section 14A should be restricted to the extent of exempt income earned. If no exempt income is earned, no disallowance under Section 14A is permissible. The Tribunal also directed the AO to recompute book profit under Section 115JB without resorting to Section 14A computations.

The Tribunal held that disallowances under Section 14A should be restricted to the extent of exempt income earned. If no exempt income is earned, no disallowance under Section 14A is permissible. The Tribunal also directed the AO to recompute book profit under Section 115JB without resorting to Section 14A computations.

The Tribunal held that the Assessing Officer failed to discharge the burden of proving that the assessee actually received the higher interest income. Mere information in AIR or payer's books is insufficient if disputed by the assessee without further corroboration.

The Tribunal held that initiating penalty proceedings under one charge (furnishing inaccurate particulars) and levying it under a different charge (concealment of income) is impermissible in law. This violates the principles of natural justice as the assessee is not aware of the specific charge to defend against.

The Tribunal held that interest earned from short-term fixed deposits, even if from borrowed funds for a project, is assessable as business income during the construction period. Consequently, it should be reduced from the capital work-in-progress.

The Tribunal restored the issue of notional interest on the loan to the AO for further examination, allowing the assessee one more opportunity to present evidence. However, the Tribunal allowed the claim for bad debts, setting aside the CIT(A)'s order.

The Tribunal upheld the decision of the lower authorities, agreeing that the subscription fees received by the assessee constitute 'royalty' income taxable in India. Consequently, the AO's assessment and the CIT(A)'s confirmation were found to be correct.

The Tribunal held that issuing a penalty notice without specifying the charge violates principles of natural justice and renders the penalty proceedings invalid. The assessee is deprived of their right to respond to a specific charge.

The Tribunal upheld the Commissioner (Appeals)'s decision to delete the addition. It found that the assessee had provided sufficient evidence to prove the genuineness of the purchases, and that similar transactions involving the seller (DSTPL) had been accepted as genuine by higher authorities.

The Tribunal held that the deemed dividend under Section 2(22)(e) is taxable only in the hands of the shareholder and not in the hands of the concern to which the loan is granted. The assessee, not being a shareholder of the lender company, cannot be taxed on this deemed dividend.

The Tribunal held that disallowances under Section 14A should be restricted to the extent of exempt income earned. If no exempt income is earned, no disallowance under Section 14A is permissible. The Tribunal also directed the AO to recompute book profit under Section 115JB without resorting to Section 14A computations.

The Tribunal held that 100% disallowance of purchases is not justified when sales are not doubted. It directed the Assessing Officer to restrict the addition to bring the gross profit rate on bogus purchases to the same level as genuine purchases.

The Tribunal agreed that only the profit element in gray market purchases should be taxed, not the entire purchase amount. However, it reduced the estimated profit margin from 8% to 3% based on industry norms and the advantage gained by the assessee.

The tribunal upheld the CIT(A)'s decision to delete the addition, finding that the assessee had discharged its onus by providing sufficient evidence of identity, creditworthiness, and genuineness of the transactions. The AO's reliance on retracted statements without further investigation was deemed insufficient.

The Tribunal held that penalty cannot be levied when additions are made on an ad-hoc estimation basis. Following various High Court and Tribunal decisions, it was concluded that estimated additions do not amount to concealment or furnishing inaccurate particulars of income.

The Tribunal held that penalty cannot be levied when additions are made on an ad-hoc estimation basis. Following various High Court and Tribunal decisions, it was concluded that estimated additions do not amount to concealment or furnishing inaccurate particulars of income.

The Tribunal held that penalty cannot be levied when additions are made on an ad-hoc estimation basis. Following various High Court and Tribunal decisions, it was concluded that estimated additions do not amount to concealment or furnishing inaccurate particulars of income.

The Tribunal, following its own prior order in the assessee's own case for AY 2008-09, rejected the assessee's ground of appeal. The Tribunal upheld the addition of the amount as interest income.

The Tribunal, following its own prior order in the assessee's own case for AY 2008-09, rejected the assessee's ground of appeal. The Tribunal upheld the addition of the amount as interest income.

The Tribunal held that the Revenue failed to provide corroborative evidence to support the loose paper's contents, especially since all parties denied the cash transaction. The Tribunal relied on previous decisions in similar cases involving the same evidence.

The Tribunal held that the assessee's activities, despite generating some surplus, were not primarily driven by profit motive. The scale of commercial activities like luxury buses and tour packages was found to be insignificant compared to its core public transport function.

The Tribunal agreed that only the profit element in gray market purchases should be taxed, not the entire purchase amount. However, it reduced the estimated profit margin from 8% to 3% based on industry norms and the advantage gained by the assessee.

The Tribunal found that the CIT(A) had not provided sufficient evidence of multiple adjournments sought by the assessee. Therefore, the assessee was granted one more opportunity to present their case.

The Tribunal held that the AO and CIT(A) erred in confirming the addition without providing the assessee an opportunity to cross-examine the third parties whose statements were the basis of the decision. This violated the principles of natural justice.

The Tribunal agreed that only the profit element in gray market purchases should be taxed, not the entire purchase amount. However, it reduced the estimated profit margin from 8% to 3% based on industry norms and the advantage gained by the assessee.

The Tribunal accepted the assessee's contention that expenses cannot be disallowed during a temporary lull in business. Since the assessee failed to provide explanations to the AO, the matter was restored to the AO for fresh adjudication.

The Tribunal upheld the Commissioner (Appeals)'s decision to add the share capital under Section 68. The assessee failed to prove the identity, creditworthiness, and genuineness of the transactions, and did not appear before the Tribunal to present their case.

The Tribunal noted that the assessee's legal ground challenging the reopening of assessment was not decided by the CIT(A). Therefore, the appeal and cross-objection were restored to the CIT(A) for fresh adjudication on all issues.

The Tribunal held that while 100% disallowance for bogus purchases is not justified when sales are not doubted, a 12.5% disallowance on such purchases, reduced by the gross profit rate already declared, would meet the ends of justice. Additionally, ad-hoc disallowances on expenses based on cryptic remarks were set aside.

The Tribunal held that while 100% disallowance for bogus purchases is not justified when sales are not doubted, a 12.5% disallowance on such purchases, reduced by the gross profit rate already declared, would meet the ends of justice. Additionally, ad-hoc disallowances on expenses based on cryptic remarks were set aside.

The Tribunal held that while 100% disallowance for bogus purchases is not justified when sales are not doubted, a 12.5% disallowance on such purchases, reduced by the gross profit rate already declared, would meet the ends of justice. Additionally, ad-hoc disallowances on expenses based on cryptic remarks were set aside.

The Tribunal held that while 100% disallowance for bogus purchases is not justified when sales are not doubted, a 12.5% disallowance on such purchases, reduced by the gross profit rate already declared, would meet the ends of justice. Additionally, ad-hoc disallowances on expenses based on cryptic remarks were set aside.

The Tribunal agreed that only the profit element from gray market purchases should be taxed. However, considering industry margins and potential VAT savings, the profit element was restricted to 3% of the non-genuine purchases.

The Tribunal held that while 100% disallowance for bogus purchases is not justified when sales are not doubted, a 12.5% disallowance on such purchases, reduced by the gross profit rate already declared, would meet the ends of justice. Additionally, ad-hoc disallowances on expenses based on cryptic remarks were set aside.