ITAT Mumbai Judgments — July 2020

The Tribunal held that while assessing under normal provisions after withdrawing the benefit of Section 13, the assessee should be treated as an individual and allowed the benefit of indexation. It also allowed the set-off of earlier year deficits.

The Tribunal held that the TPO erred in applying the 'benefit test' to intra-group services and determining their ALP as Nil. It also found merit in the assessee's contention that domestic transactions were wrongly treated as deemed international transactions. The issues were restored to the TPO for fresh adjudication.

The Tribunal upheld the CIT(A)'s deletion of additions for TUF subsidy, following its own precedent. However, the issue of excluding interest subsidy from book profit was remitted to the CIT(A) for de novo consideration in light of jurisdictional High Court decisions. Disallowances under Section 14A and Section 36(1)(iii) were upheld in favor of the assessee, and the disallowance for employee PF contributions was also upheld.

The Tribunal upheld the CIT(A)'s deletion of additions for TUF subsidy, following its own precedent. However, the issue of excluding interest subsidy from book profit was remitted to the CIT(A) for de novo consideration in light of jurisdictional High Court decisions. Disallowances under Section 14A and Section 36(1)(iii) were upheld in favor of the assessee, and the disallowance for employee PF contributions was also upheld.

The Tribunal upheld the CIT(A)'s deletion of additions for TUF subsidy, following its own precedent. However, the issue of excluding interest subsidy from book profit was remitted to the CIT(A) for de novo consideration in light of jurisdictional High Court decisions. Disallowances under Section 14A and Section 36(1)(iii) were upheld in favor of the assessee, and the disallowance for employee PF contributions was also upheld.

The Tribunal upheld the CIT(A)'s deletion of additions for TUF subsidy, following its own precedent. However, the issue of excluding interest subsidy from book profit was remitted to the CIT(A) for de novo consideration in light of jurisdictional High Court decisions. Disallowances under Section 14A and Section 36(1)(iii) were upheld in favor of the assessee, and the disallowance for employee PF contributions was also upheld.

The Tribunal upheld the CIT(A)'s deletion of additions for TUF subsidy, following its own precedent. However, the issue of excluding interest subsidy from book profit was remitted to the CIT(A) for de novo consideration in light of jurisdictional High Court decisions. Disallowances under Section 14A and Section 36(1)(iii) were upheld in favor of the assessee, and the disallowance for employee PF contributions was also upheld.

The Tribunal held that the reopening of the assessment was not valid as it was based on a change of opinion and the AO did not have new material. The trust's activities were found to be charitable in nature, falling under the general objects specified in Section 2(15).

The Tribunal held that the Assessing Officer's own assessment order acknowledged that the notice u/s 142(1) was served and the assessee had made submissions. Therefore, the penalty levied under Section 271(1)(b) was not proper.

The Tribunal held that the reopening of the assessment was not valid as it was based on a change of opinion and the AO did not have new material. The trust's activities were found to be charitable in nature, falling under the general objects specified in Section 2(15).

The Tribunal agreed with the CIT(A) that while the purchases from suspect parties were not genuine, the sales declared by the assessee were not doubted. Therefore, the disallowance was rightly restricted.

The Tribunal allowed depreciation on non-compete fees, following a previous decision for an earlier assessment year. The disallowance under Section 14A for book profit computation was partly allowed, upholding the assessee's suo motu disallowance.

The Tribunal held that while the purchases from suspected parties were not genuine, the sales declared by the assessee were not doubted. Following the Gujarat High Court's decision in CIT vs. Smith P. Sheth, the Tribunal agreed with the CIT(A)'s findings.

The ITAT dismissed the appeal in limine due to the assessee's non-appearance and lack of seriousness in pursuing the proceedings. The tribunal found no reason to interfere with the CIT(A)'s ex-parte dismissal.

The Tribunal upheld the Dispute Resolution Panel's (DRP) direction to exclude International Flavors & Fragrances (I) Pvt. Ltd. and include Ultra Industries Ltd. as comparables. The Tribunal also allowed the assessee's claim for bad debt disallowance, following the Bombay High Court's decision.

The Tribunal held that the Assessing Officer erred in including the value of silver in the valuation of gold, making the addition unsustainable. It also found that the relief granted for jewellery under the CBDT circular was insufficient.

The CIT(A) deleted the addition, holding that the assessee had provided sufficient documentary evidence, including confirmations, bank statements, balance sheets, and IT returns of the investors. The tribunal noted that the AO's reliance on certain judgments was distinguishable from the present case.

The Tribunal held that additions made purely on estimation without supporting evidence, similar to a previous decision for a sister concern, should be deleted. For expenses related to rental income, the AO must determine actual expenses incurred rather than relying on notional deductions.

The Tribunal held that the assessee is providing non-binding investment advisory services and not KPO services. It directed the inclusion of ICRA Management Consulting Services Ltd. as a comparable and the exclusion of Excel Infoways Ltd., finding the latter not comparable due to its business activities.

The Tribunal, following precedent, reduced the addition to 8.51% of the alleged bogus purchases, considering the assessee's declared GP ratio and VAT rates. The Tribunal also addressed the procedural issue of pronouncement beyond 90 days due to lockdown conditions.

The Tribunal upheld the CIT(A)'s decision, agreeing that while the purchases might not be genuine, the sales declared by the assessee were not doubted. Therefore, the disallowance was restricted to 12.5% of the bogus purchases.

The Tribunal held that disallowance under Section 14A should be limited to the exempt income earned. The CIT(A) had not properly examined the assessee's alternative working for disallowance, hence the issue was remitted to the Assessing Officer. The adjustment under Section 115JB was also held not warranted.

The Tribunal held that the AO had made inquiries and was satisfied with the evidence provided by the assessee. Relying on precedents, the Tribunal found that the Pr. CIT's order under Section 263 was not justified as the assessment order was neither erroneous nor prejudicial to the revenue.

The Tribunal held that AMP expenses incurred in India by the assessee, without any specific agreement with AEs for brand promotion, do not constitute an international transaction. The Bright Line Test (BLT) for determining arm's length price of AMP expenditure was also deemed invalid.

The Tribunal held that Qualified Institutional Buyers (QIBs) are considered part of the 'public' for the purpose of Section 35D. Therefore, expenses incurred in connection with an issue of shares to QIBs are eligible for deduction.

The Tribunal held that appellate authorities can admit new claims. However, since the AO had not verified the goodwill valuation, the matter was remitted back to the AO for verification.

The Tribunal remitted the issue of Section 14A disallowance to the Assessing Officer for re-examination, following a precedent from an earlier assessment year. The deletion of interest charged by the TPO on share application money was upheld, as it was considered a genuine infusion of capital and not a loan transaction.

The Tribunal upheld the CIT(A)'s decision, finding it just and proper. The assessee had provided various documentary evidences, and the AO had accepted the purchases were made, albeit from unverified sources.

The Tribunal held that the assessee failed to discharge the primary onus of proving the genuineness of the transactions. However, the appeals were decided considering the facts of a similar case and the impact of the COVID-19 lockdown on pronouncement timelines.

The Tribunal held that the assessee failed to discharge the primary onus of proving the genuineness of the transactions. However, the appeals were decided considering the facts of a similar case and the impact of the COVID-19 lockdown on pronouncement timelines.

The Tribunal upheld the CIT(A)'s deletion of additions, finding that the Assessing Officer lacked proper inquiry regarding the TDS difference and that the source of the house property investment was adequately explained by the assessee. The Tribunal also discussed the impact of the COVID-19 lockdown on the time limit for pronouncement of orders.

The Tribunal held that the assessee failed to discharge the primary onus of proving the genuineness of the transactions. However, the appeals were decided considering the facts of a similar case and the impact of the COVID-19 lockdown on pronouncement timelines.

The Tribunal held that the assessee failed to discharge the primary onus of proving the genuineness of the transactions. However, the appeals were decided considering the facts of a similar case and the impact of the COVID-19 lockdown on pronouncement timelines.

The Tribunal held that interconnection charges are not in the nature of fees for technical services as they do not involve human intervention and operate automatically. Therefore, there is no liability to deduct tax at source on such payments.

The Tribunal held that interconnection charges are not in the nature of fees for technical services as they do not involve human intervention and operate automatically. Therefore, there is no liability to deduct tax at source on such payments.

The Tribunal held that the CIT(A)'s order was based on hyper-technicalities and that substantial justice should prevail over technicalities. Since an electronic appeal was filed, the CIT(A) was directed to decide the appeal on merits.

The Tribunal followed its earlier order for the same assessee, holding that income from developing, operating, and maintaining an IT Park, including lease rentals and maintenance charges, is business income. The Tribunal noted the company's objects included leasing properties and that the entire asset was for business purposes.

The Tribunal followed a coordinate bench's decision in the assessee's own case for a prior assessment year. It held that the addition sustained by the CIT(A) was excessive and should be restricted to 6% of the total purchases to cover potential revenue leakage.

The Tribunal held that for AY 2009-10, where the gross profit was 16.47% (above 15%), no addition was warranted. For AY 2010-11 and 2011-12, where gross profits were below 15%, additions were directed to the extent of the shortfall.

The Tribunal held that the receipts were not in the nature of royalty as they were for access to a database and statistical compilations of publicly available information, not for the use of copyright or any specific intellectual property. The Tribunal relied on previous rulings by the jurisdictional High Court and the AAR.

The Tribunal held that for AY 2009-10, where the gross profit was 16.47% (above 15%), no addition was warranted. For AY 2010-11 and 2011-12, where gross profits were below 15%, additions were directed to the extent of the shortfall.

The Tribunal held that for AY 2009-10, where the gross profit was 16.47% (above 15%), no addition was warranted. For AY 2010-11 and 2011-12, where gross profits were below 15%, additions were directed to the extent of the shortfall.

The Tribunal upheld the CIT(A)'s order, agreeing that only the profit element embedded in bogus purchases should be disallowed, following the precedent set by the Gujarat High Court. The Revenue failed to controvert the CIT(A)'s findings with any positive material.

The Tribunal remitted the issue of Section 14A disallowance to the Assessing Officer for re-examination, following a precedent from an earlier assessment year. The deletion of interest charged by the TPO on share application money was upheld, as it was considered a genuine infusion of capital and not a loan transaction.

The Tribunal held that write-off of staff advances, if irrecoverable, is an allowable business loss, especially when related to staff welfare. Furthermore, such a disallowance is a debatable issue and cannot be rectified under Section 154.

The Tribunal held that the receipts were not taxable as royalty. It relied on the jurisdictional High Court's decision in DIT vs. Dun and Bradstreet Information Services India Pvt Ltd, which concurred with an AAR ruling that similar information services were not royalty.

The Tribunal dismissed the Revenue's appeal as non-maintainable due to the low tax effect, citing a CBDT circular that increased the monetary limit for appeals. The Tribunal also addressed a procedural issue regarding the delay in order pronouncement, attributing it to COVID-19 lockdowns.

The Tribunal held that the enhancement of income by the CIT(A) was legally unsustainable as it was done without complying with the mandatory requirement of Section 251(2) of the Act, which mandates a show cause notice before enhancing income. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that appellate authorities can admit new claims. However, since the AO had not verified the goodwill valuation, the matter was remitted back to the AO for verification.

The Tribunal held that the compensation received was incidental to the assessee's business and not assessable as income from house property. The re-opening of assessment was also questioned.