ITAT Mumbai Judgments — April 2020

The Tribunal held that the RBI circular relaxing realization periods for SEZ units means there's no prescribed time limit for realizing export proceeds, thus not violating Section 10AA conditions. The issue of export turnover definition was also restored to the AO based on High Court precedent.

The Tribunal set aside the addition made on account of the sale of the colour printing machine, directing the deletion of the adjustment. The adjustment on the pouching machine was affirmed, and the appeal on delayed TDS interest was dismissed as not pressed. The issue of depreciation on goodwill was admitted as an additional ground and restored to the AO.

The Tribunal held that certain comparable companies were not truly uncontrolled transactions due to prior agreements with associated enterprises. It also directed the exclusion of companies with different business models or significant intangible assets.

The Tribunal held that the assessee had duly accounted for cash received from customers in its books of accounts. The mere fact that money was received in cash does not justify the addition as unexplained expenditure when the transactions were recorded. Therefore, the additions made by the AO and confirmed by the CIT(A) were deleted.

The Tribunal restored the issue of common cost allocation to the Assessing Officer/TPO for re-examination based on underlying turnover. It also directed the TPO to consider only the trading segment of a comparable company for benchmarking. The adjustment on account of import duties was also restored to the TPO/AO for consideration.

The Tribunal held that only the profit element embedded in bogus purchases should be added, not the entire amount. It modified the CIT(A)'s order to sustain an addition of 8% of the total bogus purchases.

The Tribunal held that the assessee's activity of leasing properties constituted business. Therefore, the rental income should be taxed under the head 'Profits and Gains from Business or Profession', not 'Income from House Property'.

The Tribunal held that the misappropriated amount, which was illegally diverted and subsequently refunded by the bank, does not constitute taxable income in the hands of the assessee. The assessee had no legal right to the money and an unqualified duty to repay it.

The Tribunal upheld the CIT(A)'s decision to restrict the disallowance under section 14A to the amount of exempt income. The Tribunal also followed a co-ordinate bench decision to delete the disallowance of interest expenses.

The ITAT held that the CIT(A) should have decided the appeal on its merits rather than dismissing it for non-prosecution. The case was remitted back to the CIT(A) for a fresh decision.

The Tribunal held that when sales are not doubted, a 100% disallowance for bogus purchases is not justified. Considering the AO's lack of inquiry and the grey market purchases, the Tribunal restricted the disallowance to 2% of the bogus purchases.

The Tribunal held that the CIT(A) is mandated to pass an order on merits and not dismiss an appeal for non-prosecution. The issue was remitted to the Assessing Officer for fresh consideration.

The Tribunal held that no disallowance on account of bogus purchases can be made if sales are not doubted, citing jurisdictional High Court precedent. The ad-hoc disallowance on an estimate basis does not imply furnishing inaccurate particulars or concealment of income.

The Tribunal held that the assessee had provided substantial documentary evidence to support the share transactions. The AO's reliance on an investigation report without providing cross-examination of involved parties was found to be infirm.

The Tribunal held that a statement obtained during a survey, without corroborative evidence, cannot be the sole basis for an addition. Since the addition was solely based on such a statement and the matter was previously remanded for fresh examination which did not yield further evidence, the addition is liable to be deleted.

The Tribunal held that 100% disallowance of bogus purchases is not permissible when sales are not doubted, as sales are impossible without purchases. However, the disallowance should be restricted to 12.5% of the bogus purchases after deducting the gross profit already declared by the assessee.

The Tribunal held that additions based solely on an admission during a survey, without corroborative material, are not sustainable. The assessee's contention that cash receipts were not noted in the impounded material for these specific flats needed factual examination.

The Tribunal held that the CIT's jurisdiction under Section 263 is not ousted by an appeal filed for a different assessment year. The CIT correctly exercised his jurisdiction by remitting the matter for de novo assessment.

The Tribunal held that the payments for future projects were not commission/brokerage and the compensation for alternative accommodation was not rent. Therefore, TDS was not deductible on these payments. The Tribunal also allowed the assessee's cross-objections regarding the limitation period.

The Tribunal upheld the CIT(A)'s decision to sustain a 9% disallowance on bogus purchases. It reasoned that when sales are not doubted, 100% disallowance is not justified, but purchases from the grey market warrant some disallowance to meet the ends of justice.

The Tribunal upheld the CIT-A's decision to sustain only 12.5% disallowance on bogus purchases. It was noted that since sales were not doubted, 100% disallowance was not justified, and the 12.5% disallowance met the ends of justice given purchases were made from the grey market.

The Tribunal upheld the CIT(A)'s order, finding that a 12.5% disallowance was just given that the sales were not doubted. It was noted that 100% disallowance is not permissible when sales are not questioned, but purchases from the grey market warrant some disallowance.

The Tribunal upheld the CIT-A's decision to sustain only 12.5% disallowance on bogus purchases. It reasoned that 100% disallowance is not justified when sales are not doubted, but acknowledged purchases from the grey market warrant some disallowance.

The Tribunal upheld the CIT(A)'s decision to sustain only 12.5% disallowance on bogus purchases. It reasoned that when sales are not doubted, 100% disallowance is not justified, and 12.5% meets the ends of justice given grey market purchases.

The Tribunal upheld the CIT(A)'s decision to sustain only 7.26% disallowance on bogus purchases. It was noted that since the sales were not doubted, 100% disallowance was not permissible, and the partial disallowance met the ends of justice.

The Tribunal upheld the CIT(A)'s decision to sustain a 10% disallowance on bogus purchases. It noted that when sales are not doubted, 100% disallowance is not permissible, but purchases from the grey market warrant some disallowance to meet the ends of justice.

The Tribunal found the ad-hoc disallowance based on surmise and conjecture to be unsustainable. It directed that the disallowance be restricted to 5% of the impugned expenditure.

The Tribunal held that 100% disallowance of bogus purchases is not justified when sales are not doubted. Considering the grey market purchases and lack of AO's inquiry, a 2% disallowance was deemed appropriate.

The Tribunal upheld the CIT(A)'s decision to sustain a 10% disallowance on bogus purchases, considering that the sales were not doubted. It was noted that purchases from the grey market can lead to savings for the assessee at the expense of the exchequer.

The Tribunal upheld the CIT(A)'s order, finding that a 9% disallowance was just and reasonable when sales were not doubted. It noted that 100% disallowance is not permissible if sales are genuine, as some purchase is necessary for sales.

The Tribunal held that the reopening under Section 147 was bad in law because the AO failed to obtain proper sanction from the designated authority (Principal CIT or CIT) as required by Section 151(1) after four years from the end of the assessment year. Furthermore, the AO demonstrated a complete non-application of mind by incorrectly stating that no assessment under Section 143(3) was framed.

The Tribunal held that the PCIT erred in initiating revision proceedings under Section 263 as the AO had taken a possible view after proper inquiry, and there was no change in law or facts from previous years. The principle of consistency was also applied.

The Tribunal upheld the CIT(A)'s decision, stating that penalty under Section 271(1)(c) requires cogent evidence of concealment or furnishing inaccurate particulars, and mere disallowance of purchases or estimation-based additions do not automatically attract penalty.

The Tribunal upheld the CIT(A)'s decision to sustain only 12.5% disallowance on bogus purchases. It reasoned that 100% disallowance is not justified when sales are not doubted, as some purchases are necessary for sales. However, purchases from the grey market warrant some disallowance.

The Tribunal held that the assessee had discharged its initial burden of proving the identity, genuineness, and creditworthiness of the loan creditors by providing necessary documentation. Therefore, the addition made by the Assessing Officer was not justified.

The Tribunal held that the AO failed to exercise due diligence in examining the financials of the Bhilai unit, making the assessment order erroneous and prejudicial to the revenue. Therefore, the Pr. CIT's revision order was upheld.

The Tribunal upheld the order of the CIT(A), finding no material to establish factual or legal incorrectness. The Tribunal also found no reason to hold the notice issued under Section 274 r.w.s. 271(1)(c) as invalid.