ITAT Mumbai Judgments — June 2021

The Tribunal held that the CIT(A) was justified in allowing the appeal, following the principles of matching principle of accounting and revenue recognition as per AS-9. The addition made by the AO was deleted.

The Tribunal held that no purpose would be served in keeping the appeals pending. Therefore, the appeals were dismissed as withdrawn.

The Tribunal held that interest under Section 244A should be computed on the balance amount after adjusting refunds, following the Delhi High Court's interpretation. For additional interest under Section 244A(1A), the Tribunal restored the issue to the Assessing Officer for fresh examination based on the Gujarat High Court's caveat.

The Tribunal upheld the deletion of the penalty. It reasoned that since the addition was made on an estimated basis, penalty under Section 271(1)(c) was not leviable, following established judicial precedents.

The Tribunal held that interest under Section 244A should be computed on the balance amount after adjusting refunds, following the Delhi High Court's interpretation. For additional interest under Section 244A(1A), the Tribunal restored the issue to the Assessing Officer for fresh examination based on the Gujarat High Court's caveat.

The Tribunal held that interest under Section 244A should be computed on the balance amount after adjusting refunds, following the Delhi High Court's interpretation. For additional interest under Section 244A(1A), the Tribunal restored the issue to the Assessing Officer for fresh examination based on the Gujarat High Court's caveat.

The Tribunal held that the appeal filed by the Revenue was not maintainable because the tax effect was below the prescribed limit and the exception in the CBDT circular did not apply as the information was not from a law enforcement agency.

The Tribunal held that interest under Section 244A should be computed on the balance amount after adjusting refunds, following the Delhi High Court's interpretation. For additional interest under Section 244A(1A), the Tribunal restored the issue to the Assessing Officer for fresh examination based on the Gujarat High Court's caveat.

The Tribunal held that interest under Section 244A should be computed on the balance amount after adjusting refunds, following the Delhi High Court's interpretation. For additional interest under Section 244A(1A), the Tribunal restored the issue to the Assessing Officer for fresh examination based on the Gujarat High Court's caveat.

The Tribunal held that the earlier decision regarding the exclusion of two specific comparables in the assessee's own case for a prior assessment year would apply. It also ruled that interest income and foreign exchange gains are eligible for deduction under Section 10A, distinguishing it from Section 80HHC.

The Tribunal held that the disallowance sustained by the Tribunal was on an estimated basis and did not amount to concealment of income. Additionally, the tax effect was below the monetary limit stipulated by CBDT circular, making the appeals not maintainable.

The Tribunal upheld the CIT(A)'s decision to restrict the addition to 12.5% of the bogus purchases. The Tribunal found the CIT(A)'s decision to be judicious and correct, considering the gross profit ratio.

The Tribunal upheld the CIT(A)'s decision to delete the penalty. It was held that the addition on account of estimated gross profit on alleged bogus purchases and the disallowance of depreciation did not automatically attract penalty under Section 271(1)(c).

The Tribunal allowed the assessee to withdraw the appeal. The Revenue's representative also conceded to the withdrawal.

The Tribunal directed the exclusion of 'Excel' from the list of comparables due to fluctuating margins and directed the Assessing Officer to allow working capital adjustment for both software development and IT support services. The Tribunal noted that the assessee's primary grounds were related to the exclusion of specific comparables and working capital adjustments.

The tribunal noted that the assessee has opted for the Vivad Se Vishwas Scheme and the revenue representative conceded to the withdrawal. Therefore, the appeal was dismissed as withdrawn.

The Tribunal dismissed the revenue's appeal, holding that the appeal was not maintainable due to low tax effect as per CBDT Circular No. 17/2019. The exception for external agency information in CBDT Circular No. 3/2018 was held not applicable to penalty proceedings.

The Tribunal upheld the CIT(A)'s decision regarding the expenses related to land sale, stating the Assessing Officer could not rely on previous years' findings for the current assessment. Regarding the project income, the Tribunal estimated profit at 10% of advances received, modifying the CIT(A)'s estimation.

The Tribunal noted that the assessee had opted for the Vivad Se Vishwas Scheme and the Revenue representative conceded to the withdrawal. Therefore, the appeal was dismissed as withdrawn.

The Tribunal held that the comparable company 'Axis' should be excluded from the transfer pricing analysis. Regarding unearned revenue, the Tribunal followed its previous orders for the assessee, stating that the consistent method of revenue recognition followed by the assessee, aligned with Accounting Standard-9, should not be disturbed.

The Tribunal held that while the assessee did engage in bogus purchase transactions, the cash generated was utilized for legitimate business purposes like land acquisition and development. Therefore, the CIT(A)'s decision to allow a partial deletion of the addition was upheld.

The Tribunal dismissed the appeal as withdrawn, noting that the assessee had obtained 'Form 3' under the Vivad se Vishwas scheme. The assessee was granted liberty to seek restoration if the settlement was not finalized.

The tribunal dismissed both appeals as withdrawn. The assessee was granted liberty to seek restoration if the declaration under the scheme was not accepted.

The Tribunal held that the assessee had discharged its onus under Section 68 by providing evidence of the investor's identity, creditworthiness, and genuineness of the transactions. The revenue failed to provide any material to disprove the assessee's claim.

The tribunal dismissed the appeal as the assessee did not appear after the adjournment and did not provide an update on the 'Viwad Se Vishwas Scheme'. Liberty was granted to revive the appeal if the scheme declaration fails.

The Tribunal held that the standby maintenance charges were not fees for technical services but business income. It further ruled that only the portion of these charges attributable to the cable length within Indian territorial waters should be considered for taxation in India.

The Tribunal held that the show-cause notice issued under Section 274 r.w.s. 271(1)(c) was vague and omnibus, as it did not specify which limb of the section was applicable. Following jurisdictional High Court precedents, the Tribunal found this defect vitiated the penalty proceedings.

The Tribunal held that the standby maintenance charges were not fees for technical services but business income. It further ruled that only the portion of these charges attributable to the cable length within Indian territorial waters should be considered for taxation in India.

The Tribunal held that the penalty under Section 271AAA was not warranted as the assessee had not made any surrender of undisclosed income during the search, and the penalty was not initiated based on undisclosed income found during the search. The additions made by the AO were also based on presumptions and not on concrete evidence.

The Tribunal held that since the additions forming the basis of the penalty were restored to the AO for fresh adjudication by a prior Tribunal order, the penalty order could not be sustained. Consequently, the penalty was deleted.

The Tribunal allowed the assessee's appeals, following its decision in the preceding year. This included allowing claims for vacating disallowance under Section 14A and incremental/additional claims for deduction under Section 36(1)(vii) r.w. Sec. 36(1)(viia). The Tribunal also directed rectification of a clerical error regarding the amount of deduction under Section 36(1)(viii).

The Tribunal set aside the impugned order and allowed the appeal for statistical purposes, granting an opportunity to the assessee to appear before the Assessing Officer. The Assessing Officer was directed to issue a fresh notice, and the assessee was instructed to cooperate.

The Tribunal noted that the assessee had opted for the 'Vivad se Vishwas Scheme' and received the necessary form. Therefore, keeping the appeal pending would serve no purpose.

The Tribunal noted that the assessee had settled the dispute under the Vivad Se Vishwas Scheme. Consequently, the appeal was dismissed as withdrawn.

The Tribunal deleted the disallowance of lease rent, stating that revenue authorities cannot question the business decisions of an assessee when agreements are genuine and expenses are for business purposes. For professional fees, the matter was remitted back to the Assessing Officer for fresh adjudication, allowing the assessee an opportunity to substantiate its claim.

The Tribunal held that the registration under Section 12A was rejected without affording the assessee a reasonable opportunity to be heard. This procedural lapse necessitates a review of the CIT(E)'s decision.

The Tribunal upheld the CIT(A)'s decision, stating that appellate authorities can consider claims not made in the original return. The Tribunal found no justification to restore the matter to the AO for fresh adjudication, especially since the assessee's claim was substantiated and allowed in subsequent assessment years.

The Tribunal held that since the order under Section 263, which formed the basis for the revised assessment and subsequent penalty, was set aside, the penalty order could not survive independently. Therefore, the deletion of the penalty by the CIT(A) was upheld.

The Tribunal noted inconsistencies in the orders of the AO and CIT(A) regarding the filing of returns and the opportunities provided to the assessee. Considering the representation by the legal heir and potential communication gaps, the Tribunal decided to grant the assessee an opportunity to present their case.

The Tribunal upheld the Commissioner (Appeals)'s decision to restrict the disallowance to 12.5% of the non-genuine purchases. It reasoned that since the AO did not doubt the consumption and sales, only the profit element in the doubtful purchases should be added.

The Tribunal restored the issue to the Assessing Officer to verify if the assessee had sufficient interest-free funds to cover its investments. If confirmed, no disallowance under Section 14A read with Rule 8D(2)(ii) would be warranted.

The Tribunal held that MAT credit under Section 115JAA should be inclusive of surcharge and cess. The Tribunal noted that the ITR-6 format was amended from AY 2012-13 to compute MAT credit automatically including surcharge and cess.

The Tribunal held that the assessee had substantially complied with the directions of the Transfer Pricing Officer (TPO) to the extent practically possible given the nature of its trade. The failure to provide all details was considered to be backed by a reasonable cause, thus falling under Section 273B.

The Tribunal upheld the CIT(A)'s decision, stating that only the profit element embedded in non-genuine purchases can be disallowed when the sales are not doubted. The restriction of disallowance to 12.5% was found to be in conformity with settled legal principles.

The ITAT held that the CIT(A) erred in dismissing the appeal in limine without providing a reasonable opportunity of being heard, violating principles of natural justice. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal agreed with the CIT(A) that restricting the disallowance to 5% of the alleged non-genuine purchases was appropriate, considering the nature of the business and the VAT rate.

The Tribunal agreed with the CIT(A) that the disallowance should be restricted to 5% of the alleged non-genuine purchases, considering the applicable VAT rate and the nature of the business.

The Tribunal held that the Assessing Officer did not record proper satisfaction, based on the assessee's accounts, before invoking Rule 8D. Following the jurisdictional High Court's decisions, the Tribunal deleted the disallowance.

The Tribunal held that depreciation cannot be denied merely because the vehicle was registered in the name of a partner, provided the payment was made through banking channels and the vehicle was used for business purposes. The AO had not doubted the source of payment or the business use of the vehicle.

The ITAT set aside the CIT(A)'s order, finding that it was disposed of ex-parte without a reasoned decision on the merits. The CIT(A) is directed to decide the appeal afresh after providing a reasonable opportunity to the assessee.