ITAT Mumbai Judgments — September 2020

The Tribunal held that the assessee should not be characterized as a KPO but as a provider of non-binding investment advisory and related support services. It also directed the inclusion of specific comparables and exclusion of another in the transfer pricing analysis.

The Tribunal held that making a claim not sustainable in law does not amount to furnishing inaccurate particulars. Since the assessee disclosed the amount and provided explanations, no penalty is leviable under Section 271(1)(c).

The Tribunal held that since the order under Section 263 passed by the Pr. CIT was set aside/quashed by the ITAT, the consequential assessment order passed by the AO does not survive. Therefore, the appeal filed by the Revenue is dismissed.

The Tribunal found merit in the assessee's claim of non-receipt of notices and violation of natural justice. Therefore, the matter was remitted back to the CIT(A) for a fresh adjudication.

The Tribunal held that Section 40A(3) applies to cash expenditure in foreign currency equivalent to the specified rupee amount. It also found that the exceptions under Rule 6DD were not applicable.

The Tribunal held that certain items like dividends and interest income not assessable as business income, and share of profit from a firm, should be excluded from 'gross receipts' for the purpose of Section 44AB. Consequently, the assessee's gross receipts did not exceed the limits, making him not liable for TDS under Section 194A.

The Tribunal held that the maturity amount of the Keyman Insurance Policy is taxable as it matured after the amendment to Explanation-1 to Section 10(10D) came into effect. It was also held that the income cannot be taxed as capital gains as a life insurance policy is not a capital asset capable of transfer under Section 2(47).

The Tribunal held that the allocation of expenditure is a debatable issue and cannot be rectified under Section 154. It also allowed expenses for gifts/freebies to doctors, stating the CBDT circular was not applicable to pharmaceutical companies.

The Tribunal upheld the assessee's use of the CUP method, noting consistent prior rulings in its favor. It also deleted additions related to gross profit, finding no evidence of manipulation and that the Assessing Officer's conclusions were based on conjecture.

The Tribunal, considering the principle of natural justice and the assessee's negligence, decided to grant another opportunity to the assessee to represent their case before the CIT(A). The case was remitted back for re-adjudication.

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

The Tribunal held that provisions of Section 92B(2) of the Income Tax Act, prior to its amendment effective 01/04/2015, would not apply to transactions between domestic entities, thus they are not deemed international transactions. The TP adjustment on intra-group services was restored to the AO/TPO for re-adjudication.

The Tribunal held that the issuance of a notice under Section 148 before recording the reasons for reopening is a clear violation of Section 148(2). Such a notice is invalid, rendering the subsequent reassessment proceedings and order void.