ITAT Mumbai Judgments — November 2019

The Tribunal held that for non-abated assessments, assessment under Section 153A can only be made on the basis of incriminating material found during the search. Since no such material was found in this case, the assessment was quashed.

The Tribunal followed the Bombay High Court's decision in M/s Mohommad Haji Adam & Co., holding that additions should be restricted to the extent of bringing the Gross Profit (GP) rate on disputed purchases to the same rate as other genuine purchases.

The Tribunal held that the assessee failed to establish the genuineness of the purchases with cogent evidence, as the supplier could not be produced and notices were unserved. Therefore, the addition of 12.5% on estimated profit was upheld.

The Tribunal held that for non-abated assessments, assessment under Section 153A can only be made on the basis of incriminating material found during the search. Since no such material was found in this case, the assessment was quashed.

The Tribunal held that the reopening procedure was not violated. It deleted the estimated profit addition for AY 2009-10 and subsequent years due to lack of verification by the AO. For AY 2010-11 and 2011-12, the disallowance of rent expenses was directed to be verified by the AO based on whether the recipients had paid tax on the rent income.

The Tribunal confirmed the order of the CIT(A) in restricting the addition by applying a profit rate of 25% on the bogus purchases.

The Tribunal held that Section 43CA of the Income Tax Act, 1961, which deals with the deemed consideration for transfer of stock-in-trade, is pari materia with Section 50C. Therefore, the tolerance limit of 15% accepted by the Supreme Court in the case of C.B. Gautam should apply.

The Tribunal held that the assessee failed to establish the genuineness of the purchases with cogent evidence, as notices to the parties were unserved and they were not produced. Therefore, the addition of 12.5% of the questioned purchases was upheld.

The Tribunal found that the assessee failed to establish the genuineness of the purchases. However, following the Gujarat High Court's decision, it held that only the profit element embedded in such purchases can be added to the income.

The Tribunal held that since the assessee could not prove the genuineness of purchases, the expenditure could not be allowed. However, considering the nature of business and profit rates, the addition was restricted to 8% of the non-genuine purchases.

The Tribunal upheld the CIT(A)'s decision to delete the addition regarding the diminution in closing stock value. The Tribunal found the facts to be identical to a previous year where a similar addition was deleted.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 3% of the bogus purchases, considering the profit margin in the diamond trade and following its own precedent in the assessee's own case for a preceding year.

The Tribunal deleted the addition on estimated purchases for AY 2009-10, stating the AO did not conduct proper verification. For AYs 2010-11 and 2011-12, the Tribunal directed the AO to verify if the recipients of rent had paid tax on their income before confirming disallowances under Section 40(a)(ia).

The Tribunal upheld the CIT(A)'s decision to tax only the profit element of the bogus purchases, estimating it at 12.5%. The addition was restricted to Rs. 4,838/- instead of the entire purchase amount.

The Tribunal held that while the disallowance under Rule 8D(2)(iii) was justified, the average value of investments used for calculation should exclude those that did not yield exempt income during the year. The matter was set aside to the AO for recalculation.

The Tribunal held that the mere fact that the assessee could not establish the existence of liabilities during assessment proceedings does not automatically lead to concealment of income or furnishing inaccurate particulars. Additions made on an estimation basis alone are not sufficient for imposing penalty.

The Tribunal held that since the Pr. CIT's order was quashed, the original assessment order stands restored. Therefore, the CIT(A)'s dismissal of the appeal as infructuous was incorrect.

The Tribunal held that the assessee was not properly intimated about the fate of his adjournment request for penalty proceedings. It was also noted that the AO subsequently passed an assessment order under Section 143(3), implying subsequent compliances were accepted.

The Tribunal confirmed the CIT(A)'s decision to estimate profit at 12.5% on bogus purchases, finding it a reasonable approach when the genuineness of purchases is doubted but sales are not.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 8% of the alleged bogus purchases. It found that while the AO had reasons to believe purchases were bogus, the revenue failed to prove its case conclusively, and the CIT(A)'s reduction was reasonable considering the assessee's declared gross profit.

The Tribunal held that for non-abated assessments, assessment under Section 153A can only be made on the basis of incriminating material found during the search. Since no such material was found in this case, the assessment was quashed.

The Tribunal held that for non-abated assessments, assessment under Section 153A can only be made on the basis of incriminating material found during the search. Since no such material was found in this case, the assessment was quashed.

The Tribunal held that since the delay occurred after the amendment to Section 200A of the Income Tax Act, 1961, which incorporated the provisions of Section 234E for processing TDS statements, the levy of late filing fees was valid.

The Tribunal confirmed the CIT(A)'s decision to estimate profit at 12.5% on bogus purchases, finding it a reasonable approach when the genuineness of purchases is doubted but sales are not.

The Tribunal upheld the CIT(A)'s decision to delete the addition regarding the diminution in closing stock value. The Tribunal found the facts to be identical to a previous year where a similar addition was deleted.

The Tribunal upheld the CIT(A)'s decision to estimate profit at 6% on bogus purchases, finding it reasonable when the AO did not doubt the sales made from these purchases. Therefore, the addition was restricted to the estimated profit.

The Tribunal allowed the claim for bad debts as a business loss, following a jurisdictional High Court decision. It upheld the AO's adjustment for cessation of liability but corrected the amount. The issue of share trading loss was remanded to the AO for verification.

The Tribunal held that Section 200A, as amended effective from 01.06.2015, allows for the computation of fees under Section 234E. Therefore, fees under Section 234E cannot be levied for periods prior to 01.06.2015.

The Tribunal held that the AO had taken a plausible view, supported by jurisdictional ITAT orders, and that the PCIT erred in exercising revisional jurisdiction. The interest income earned by a cooperative society from investments in cooperative banks is eligible for deduction under Section 80P(2)(d).

The Tribunal held that since the assessee had provided bank statements to prove the genuineness of transactions, the AO should have conducted further inquiries instead of making an addition of the entire amount. The Tribunal affirmed the CIT(A)'s decision to estimate profit at 12.5% on the disputed purchases.

The Tribunal upheld the CIT(A)'s decision, holding that the agreement for royalty payment did not need to be in writing and that the terms of the sub-licensing agreement with an unrelated party could be used as an internal CUP. Therefore, no transfer pricing adjustment was warranted.

The Tribunal held that penalty under section 271AAB can only be levied if a search under section 132 of the Act was initiated against the assessee. Since no such search was conducted on the assessee, the penalty was deleted.

The Tribunal upheld the CIT(A)'s decision, holding that the agreement for royalty payment did not need to be in writing and that the terms of the sub-licensing agreement with an unrelated party could be used as an internal CUP. Therefore, no transfer pricing adjustment was warranted.

The Tribunal held that the reassessment proceedings under Section 147 were invalid as they were based on a change of opinion on the same set of documents available during the original assessment. Consequently, the assessment order was quashed.

The Tribunal held that no disallowance could be made under Rule 8D(2)(ii) and (iii) due to sufficient own funds and flawed calculation methods. However, a partial disallowance of 10% of exempt income was made for administrative expenses. For book profit computation under Section 115JB, the Tribunal held that Rule 8D cannot be applied, but actual expenses for earning exempt income should be considered.

The Tribunal held that since the revisional order under Section 263 was quashed, the original assessment order stands restored. Therefore, the dismissal of the appeal by the CIT(A) as infructuous was incorrect.

The Tribunal allowed the claim for bad debts as a business loss, following a jurisdictional High Court decision. It upheld the AO's adjustment for cessation of liability but corrected the amount. The issue of share trading loss was remanded to the AO for verification.

The Tribunal upheld the CIT(A)'s decision to estimate profit at 6% on bogus purchases, finding it reasonable when the AO did not doubt the sales made from these purchases. Therefore, the addition was restricted to the estimated profit.

The Tribunal held that the reassessment proceedings under Section 147 were invalid as they were based on a change of opinion on the same set of documents available during the original assessment. Consequently, the assessment order was quashed.

The Tribunal held that the bill of exchange pertained to AY 2005-06 and thus the addition for AY 2006-07 was deleted. The share transaction details were found to be 'dumb documents' lacking essential particulars, leading to the deletion of the addition.

The Tribunal held that the bill of exchange pertained to AY 2005-06 and thus the addition for AY 2006-07 was deleted. The share transaction details were found to be 'dumb documents' lacking essential particulars, leading to the deletion of the addition.

The Tribunal held that the '12 month period' under the India-UK Tax Treaty should be interpreted as the 'previous year' or 'financial year' as per domestic law. Since the assessee's personnel were in India for only 58 days within the relevant financial year, it did not constitute a PE.

The Tribunal noted that the assessee had maintained stock registers and made payments through banking channels, and the AO did not doubt the sales made from these purchases. However, the assessee failed to establish the genuineness of the purchases by producing the parties or their bank statements.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 12.5% of the bogus purchases. It found that the assessee failed to prove the genuineness of the purchases and that the CIT(A)'s decision was in line with High Court precedents regarding the profit element in such transactions.

The Tribunal found that while the reopening was valid, the estimated addition of 12.5% was excessive. It reduced the addition to 5% of the alleged bogus purchases, considering the assessee's business nature and the fact that payments were made through banking channels.

The ITAT found that the CIT(A) had failed to pass a speaking order and wrongly observed that the assessee had not challenged the penalty. The matter was restored to the CIT(A) for re-adjudication.

The Tribunal held that the AO made additions solely based on the Director's statement without independent corroborating evidence. The AO had also accepted similar deposits in earlier assessment years without additions, indicating inconsistent application of criteria.

The Tribunal held that the disallowance under Section 14A should be restricted to the amount worked out by the assessee. It also held that unabsorbed depreciation of earlier years cannot be notionally brought forward and set off against profits of eligible business in the initial assessment year under Section 80IA(5). The Tribunal allowed deduction for prior period expenses as they crystallized during the assessment year.

The Tribunal noted that the assessee had maintained stock registers and made payments through banking channels, and the AO did not doubt the sales made from these purchases. However, the assessee failed to establish the genuineness of the purchases by producing the parties or their bank statements.

The Tribunal held that while the purchases were alleged to be bogus, the assessee had maintained stock registers and made payments through banking channels. The only deficiency was the lack of transportation receipts or weighment slips.