ITAT Mumbai Judgments — September 2019

The Tribunal held that the tax effect in both appeals was below the prescribed monetary limit of Rs. 50 Lacs for appeals before the Appellate Tribunal. Therefore, the appeals were not maintainable as per the CBDT circulars.

The Tribunal upheld the CIT(A)'s decision, agreeing that the stock loss was genuine due to the factory closure and stock deterioration. It also affirmed the CIT(A)'s allowance of depreciation and various expenses, stating that the business was temporarily halted, not closed, and the expenses were for business purposes.

The Tribunal restored the additions to the file of the AO for fresh examination. The AO was directed to consider the documentary evidence furnished by the assessee and provide an opportunity for hearing, keeping the issue of reopening validity open.

The Tribunal held that the notices under section 143(2) were issued without jurisdiction and/or were time-barred. Consequently, the assessment orders were rendered null and void.

The Tribunal held that since the assessee earned no exempt income, Section 14A is not applicable, following the Bombay High Court's decision in Ballarpur Industries Limited. The disallowance under Section 14A was deleted.

The Tribunal held that the notices under section 143(2) were issued without jurisdiction and/or were time-barred. Consequently, the assessment orders were rendered null and void.

The Tribunal held that the transaction was part of the assessee's business and the income should be taxed in the year the flat is received from the builder or handed over to the buyer, as actual sale takes place in that year. The direction to tax on accrual basis was set aside.

The Tribunal held that since sales were not doubted, a 100% disallowance for bogus purchases was not justified. However, purchases from the 'grey market' warranted some disallowance. The disallowance was directed to be 12.5% of the bogus purchases, reduced by the gross profit already declared.

The Tribunal held that the genuineness of the expenditure was not in doubt, and revenue authorities should not question the business expediency of an assessee's activity. Therefore, the disallowance of depreciation and interest was set aside.

The Tribunal held that the interest expenditure and interest income were directly correlated as the assessee used interest-bearing funds for advances. It found no infirmity in the assessee's accounting treatment and relied on Supreme Court precedent, setting aside the lower authorities' orders.

The Tribunal held that the transaction was part of the assessee's business and the income should be taxed in the year the flat is received from the builder or handed over to the buyer, as actual sale takes place in that year. The direction to tax on accrual basis was set aside.

The Tribunal held that since the assessee earned no exempt income, Section 14A is not applicable, following the Bombay High Court's decision in Ballarpur Industries Limited. The disallowance under Section 14A was deleted.

The Tribunal upheld the CIT(A)'s decision, agreeing that the stock loss was genuine due to the factory closure and stock deterioration. It also affirmed the CIT(A)'s allowance of depreciation and various expenses, stating that the business was temporarily halted, not closed, and the expenses were for business purposes.

The Tribunal dismissed the Revenue's appeal as not maintainable. This decision was based on a CBDT circular directing withdrawal of appeals where the tax effect is below a certain threshold.

The Tribunal upheld the CIT(A)'s decision, agreeing that the stock loss was genuine due to the factory closure and stock deterioration. It also affirmed the CIT(A)'s allowance of depreciation and various expenses, stating that the business was temporarily halted, not closed, and the expenses were for business purposes.

The Tribunal found that the assessee's claim of nexus between borrowed funds and investment in firms was not sufficiently proven during assessment. Therefore, the matter was restored to the Assessing Officer for re-adjudication.

The Tribunal upheld the CIT(A)'s order, agreeing that the AO rightly levied penalty for furnishing inaccurate particulars of income. The assessee failed to prove the genuineness of the cash credits and did not challenge the quantum addition.

The Tribunal held that disallowance under Section 14A cannot exceed the amount of exempt income earned. It also held that the disallowance made under Section 14A read with Rule 8D should not be added for computing book profit under Section 115JB.

The Tribunal held that the Hon'ble High Court's decisions on depreciation for toll roads did not address the specific issue of depreciation on the 'right to collect toll' as an intangible asset. Therefore, the matter was remanded for fresh adjudication.

The Tribunal upheld the deletion of additions under Section 10AA and Section 36(1)(iii), following previous decisions. The disallowance under Section 14A was restricted to the extent of exempt income earned.

The Tribunal upheld the deletion of additions under Section 10AA and Section 36(1)(iii), following previous decisions. The disallowance under Section 14A was restricted to the extent of exempt income earned.

The Tribunal held that the Revenue's appeal was not maintainable as the tax effect was below the revised monetary limit specified in the CBDT circulars. The assessee's cross-objection was dismissed as infructuous because the Revenue's appeal was dismissed.

The Tribunal held that the reassessment proceedings were invalid because the AO's reasons to believe were based on incorrect facts, specifically the non-filing of the tax return. Consequently, the reassessment order and the penalty were quashed.

The Tribunal dismissed the Revenue's appeal on the grounds that the CIT(A) correctly deleted the disallowances based on prior ITAT decisions. The Tribunal admitted the assessee's additional grounds, finding them related to the assessment records, and remanded them to the AO for adjudication.

The Tribunal held that the reassessment proceedings were invalid because the AO's reasons to believe were based on incorrect facts, specifically the non-filing of the tax return. Consequently, the reassessment order and the penalty were quashed.

The Tribunal held that the CIT(A) erred in confirming the disallowance under Section 14A read with Rule 8D without proper verification of the assessee's submissions regarding the utilization of own funds for investments. However, the Tribunal upheld the deletion of disallowance of consultancy charges paid to Mr. Arata Nambu.

The Tribunal dismissed the Revenue's appeal on the grounds that the CIT(A) correctly deleted the disallowances based on prior ITAT decisions. The Tribunal admitted the assessee's additional grounds, finding them related to the assessment records, and remanded them to the AO for adjudication.

The Tribunal followed a co-ordinate bench's decision in an identical case. The income from the sale of flats was to be treated as capital gains, not business income.

The Tribunal held that the reassessment proceedings were invalid because the AO's reasons to believe were based on incorrect facts, specifically the non-filing of the tax return. Consequently, the reassessment order and the penalty were quashed.

The Tribunal held that interest on late payment of service tax is compensatory in nature and not penal, thus allowable as a business expenditure. It followed the Gujarat High Court's decision in CIT vs Kaypee Mechanical India (P.) Ltd.

The Tribunal found that the CIT(A) erred in rejecting the additional evidence and that the AO's ad-hoc disallowances were not justified. The matter was restored to the AO for fresh adjudication.

The Tribunal set aside the CIT(A)'s ex-parte order and restored the issue to the CIT(A)'s file for fresh adjudication. The assessee was granted one more opportunity to present their case with supporting evidence.

The Tribunal remitted the issue of interest on advances to related parties to the Assessing Officer for fresh consideration. It held that changes in closing stock valuation must be reflected in the opening balance and allowed puja expenses and payments to relatives of deceased employees based on earlier ITAT orders. VRS expenditure was held allowable under Section 37(1) after verification. The issue of Section 14A disallowance was remitted to the Assessing Officer for fresh adjudication. The Tribunal upheld the CIT(A)'s decision to treat service charges separately from house property income. Finally, it remitted an issue regarding 'Income from Other Sources' to the CIT(A) for decision.

The Tribunal admitted the additional grounds raised by the assessee. It restored the issue of treating the TUF subsidy as a capital receipt to the Commissioner of Income Tax (Appeals) for fresh adjudication.

The Tribunal restored the issue of interest expenditure disallowance to the Assessing Officer to verify the correctness of the assessee's claim for proportionate disallowance. For disallowance under Section 14A, the Tribunal directed that it should not exceed the exempt income earned.

The Tribunal held that the appeal filed by the Revenue was not maintainable due to low tax effect. The tax effect was below ₹50 Lakhs, as per CBDT Circular No. 17/2019.

The Tribunal considered the assessee's request for withdrawal. As the Departmental Representative did not object, the Tribunal allowed the withdrawal request.

The Tribunal held that the use of the word 'provision' might have been an inadvertent mistake and that writing off a part of the debt is permissible. The matter was restored to the Assessing Officer for verification.

The Tribunal directed the Assessing Officer to recompute the deduction under Section 10A of the Act in terms of the Supreme Court decision in M/s. Yokogawa India Ltd. The issue of set-off of carried forward losses was set aside to the Assessing Officer for verification. The issue regarding credit of fringe benefit tax was also set aside to the Assessing Officer for verification and grant of credit.

The Tribunal directed the Assessing Officer to recompute the deduction under Section 10A of the Act in terms of the Supreme Court decision in M/s. Yokogawa India Ltd. The issue of set-off of carried forward losses was set aside to the Assessing Officer for verification. The issue regarding credit of fringe benefit tax was also set aside to the Assessing Officer for verification and grant of credit.

The Tribunal found that the CIT(A) had restricted the addition by estimating profit at 8% on bogus purchases. The Tribunal directed the AO to recompute the income by applying a profit rate of 5% on such purchases.

The Tribunal agreed that a profit rate of 12.5% was on the higher side, considering the business nature and VAT paid on bogus purchases. The AO was directed to recompute income by applying a profit rate of 5%.

The Tribunal found that the estimated profit rate of 8% was on the higher side and directed the AO to recompute the income by applying a profit rate of 5% on the bogus purchases.

The Tribunal found the 12.5% profit rate to be on the higher side, considering the business and VAT paid on these purchases. It directed the AO to recompute the income by applying a profit rate of 5%.

The Tribunal directed the Assessing Officer to recompute the deduction under Section 10A of the Act in terms of the Supreme Court decision in M/s. Yokogawa India Ltd. The issue of set-off of carried forward losses was set aside to the Assessing Officer for verification. The issue regarding credit of fringe benefit tax was also set aside to the Assessing Officer for verification and grant of credit.

The Tribunal dismissed the Revenue's appeals. This was based on the submission that the tax effect was below ₹.50 Lacs, making the appeals not maintainable as per CBDT Circular No. 17/2019.

The Tribunal restored the issues related to erroneous TDS additions to the Assessing Officer for verification and to grant relief as per law. It also restored the addition made under Section 115JB to the Assessing Officer for fresh adjudication.

The Tribunal dismissed the Revenue's appeals. This was based on the submission that the tax effect was below ₹.50 Lacs, making the appeals not maintainable as per CBDT Circular No. 17/2019.

The Tribunal held that the tax effect in the appeal was less than Rs. 50 Lakhs. Therefore, in view of CBDT Circular No. 17/2019, the appeal filed by the Revenue was not maintainable.

The Tribunal dismissed the appeals filed by the revenue, stating they were not maintainable as the tax effect was below the CBDT's limit. The revenue was granted liberty to seek revival if the appeals were later found to be outside the scope of the circular.