ITAT Mumbai Judgments — November 2021

The Tribunal held that the Pr. CIT violated principles of natural justice by passing the Section 263 order in haste, without considering the assessee's submissions and without providing a reasonable opportunity to be heard. The Tribunal also found the Pr. CIT's observations regarding business operations and bad debts to be factually incorrect.

The Tribunal held that Section 41(1) was not applicable as the assessee had not written back the liability to income and had duly acknowledged the debt. The liability had not ceased to exist, and payments were made in subsequent years.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient explanations and evidence for the cash deposits, fixed deposits, and commission payments. The Tribunal also found that the CIT(A) was justified in accepting additional evidence.

The Tribunal found the Ld. CIT(A)'s order to be reasonable and proper after considering the details submitted and verifying the peak credit calculations. The Ld. CIT(A) had analyzed the 110 accounts and the peak in various accounts maintained by the assessee.

The Tribunal held that penalty cannot be levied on an estimate basis, especially when the additions were based on external information and not directly from the assessee's own filings. The penalty was also below the threshold for appeal.

The Tribunal held that in an unabated assessment year, an assessment can only be disturbed if incriminating material is found during a search. Since no such material was found to support the disallowance of interest expenses, the addition made by the AO was deleted.

The Tribunal held that penalty cannot be levied on income that is itself based on estimation. Since the quantum appeal was remitted and the CIT(A) sustained additions based on estimation, the penalty was directed to be deleted.

The Tribunal found the Ld. CIT(A)'s order to be reasonable and proper after considering the details submitted and verifying the peak credit calculations. The Ld. CIT(A) had analyzed the accounts and peak amounts for each year, providing proper explanations and findings.

The Tribunal held that the Assessing Officer lacked tangible material to form a belief that income had escaped assessment. The reopening was based on a fishing and roving inquiry, not on any specific evidence of genuineness or valuation issues.

The Tribunal found the Ld. CIT(A)'s order to be reasonable and proper after considering the details submitted and verifying the peak credit calculations. The Ld. CIT(A) had analyzed the accounts and peak amounts for each year, providing proper explanations and findings.

The Tribunal held that filing an appeal in the prescribed electronic form is mandatory as per Section 249(1) of the Income Tax Act. The CIT(A) has no discretion to waive or condone non-adherence to this mandatory provision.

The Tribunal held that the PCIT was not justified in invoking revisionary powers under Section 263 as the AO had made enquiries and taken a possible view. The PCIT failed to independently examine the evidence and merely relied on an investigation report, substituting his view for the AO's.

The Tribunal held that the right to collect annuity is an intangible asset eligible for depreciation under Section 32(1)(ii). It also held that the provision for periodic maintenance, made on a scientific basis and in line with the matching principle, is an allowable expenditure.

The Tribunal held that interest expenditure incurred for acquiring a property, even if not directly generating business income in the year, is allowable if the property is used by employees (directors in this case). Other petty expenses incurred for business purposes were also allowed to be carried forward as business losses.

The Tribunal held that the assessee had provided sufficient documentation to prove the genuineness of the consultancy charges. Since the books of accounts were not rejected and the modus operandi remained consistent, the disallowance made on an estimated basis was unjustified.

The Tribunal found the Ld. CIT(A)'s order to be reasonable and proper after considering the details submitted and verifying the peak credit calculations. The Ld. CIT(A) had analyzed the accounts and peak amounts for each year, providing proper explanations and findings.

The Tribunal held that when non-genuine purchases are supported by onward sales, only the profit element should be disallowed, not the entire purchases. They agreed with the Assessing Officer's estimation of profit.

The Tribunal found the Ld. CIT(A)'s order to be reasonable and proper after considering the details submitted and verifying the peak credit calculations. The Ld. CIT(A) had analyzed the accounts and peak amounts for each year, providing proper explanations and findings.

The Tribunal found the Ld. CIT(A)'s order to be reasonable and proper after considering the details submitted by the assessee and verifying the peak credit calculations. The Ld. CIT(A) had analyzed the accounts and peak amounts for each year, providing proper explanations.

The Tribunal found the Ld. CIT(A)'s order to be reasonable and proper after considering the details submitted and verifying the peak credit calculations. The Ld. CIT(A) had analyzed the accounts and peak amounts for each year, providing proper explanations and findings.

The Tribunal held that the difference between the face value of shares allotted (Rs. 10) and their Fair Market Value (Rs. 10.19) was negligible. It agreed with the assessee that the shares were allotted at a value very close to the face value, and the tax authorities should interpret the law practically.

The Tribunal found the Ld. CIT(A)'s order to be reasonable and proper after considering the details submitted and verifying the peak credit calculations. The Ld. CIT(A) had analyzed the accounts and peak amounts for each year, providing proper explanations and findings.

The Tribunal held that since the issue was remitted back to the AO for verification and computation as per law, there was no prejudice to the Revenue. The AO was directed to follow the CIT(A)'s directions.

The Tribunal held that the commercial portion of the project was a separate entity and the assessee's residential project satisfied the conditions for deduction under Section 80IB(10). Therefore, the CIT(A) was correct in allowing the deduction.

The Tribunal observed that the CIT(A) dismissed the appeal without dealing with the merits of the case. For the sake of justice, the Tribunal decided to give the assessee another opportunity to present their case.

The Tribunal held that the principle of consistency should be applied as the Revenue had accepted the assessee's treatment in earlier and subsequent years. It also held that reimbursement of maintenance charges from the tenant does not constitute income.

The Tribunal held that the penalty was not justifiable as there was no record of proper service of notice on the assessee and the assessee's submissions were not taken into consideration. Therefore, the penalty was ordered to be deleted.

The Tribunal held that the CIT(A) was justified in deleting the addition as the parallel books of accounts for the entire Ahuja group did not show a negative cash balance. The excess cash outgo was explained by cash loans taken, which were independently assessed.

The Tribunal noted that the assessee's declaration under VSVS was accepted and a final settlement form was issued. Therefore, the appeal was rendered infructuous.

The Tribunal allowed the withdrawal of the appeals filed by the assessee. This was based on a letter from the official liquidator seeking withdrawal due to the company's liquidation proceedings.

The Tribunal dismissed the appeal as it had become infructuous. The Revenue sought dismissal as they had availed benefits under the 'Vivad Se Vishwas Scheme 2020'.

The Tribunal accepted the assessee's explanation for 169.45 carats of stock difference, directing no addition for that amount. For the remaining 10.7 carats, the Tribunal remanded the issue to the AO to apply respective rates for rough rejections and rough diamonds as per the Government Valuation report.

The Tribunal held that the CIT(A) erred in disallowing interest under Section 36(1)(iii) as it was not an issue before him and the investment was made for business expediency. Therefore, interest on borrowed funds used for business purposes is allowable.

The Tribunal held that no interest expenditure disallowance can be made under Section 14A if the assessee has earned net interest income. However, the disallowance of administrative expenses under Rule 8D(2)(iii) was directed to be recomputed based on average investments that actually earned dividend income.

The Tribunal held that the assessee cannot be denied the benefit of Section 80G deduction merely because the payment forms part of CSR expenses, as this would lead to double disallowance. Regarding bad debts and fish purchases, the Tribunal found that the Assessing Officer had verified these expenses, and thus Section 263 was not applicable.

The Tribunal held that since the assessee voluntarily withdrew the claim to avoid litigation and buy peace, and there was no evidence of concealment, the penalty was not justified. The addition was made based on the assessee's surrender, not on detection by the AO.

The Tribunal upheld the CIT(A)'s order, finding no infirmity in restricting the disallowance to a percentage of purchases. For penalty proceedings, the Tribunal held that penalty cannot be levied when an ad-hoc estimation of profit is made, as it does not amount to concealment or furnishing inaccurate particulars.

The Tribunal upheld the CIT(A)'s order, finding no infirmity in restricting the disallowance to a percentage of purchases. For penalty proceedings, the Tribunal held that penalty cannot be levied when an ad-hoc estimation of profit is made, as it does not amount to concealment or furnishing inaccurate particulars.

The Tribunal upheld the CIT(A)'s order, finding no infirmity in restricting the disallowance to a percentage of purchases. For penalty proceedings, the Tribunal held that penalty cannot be levied when an ad-hoc estimation of profit is made, as it does not amount to concealment or furnishing inaccurate particulars.

The Tribunal held that the disallowance under Section 14A read with Rule 8D cannot exceed the amount of exempt income earned. This legal position is well-settled by numerous High Court judgments.

The Tribunal held that the disallowance of interest was unwarranted as the interest was paid to a non-related party and the rate was market-driven. The Tribunal also noted that the borrowings were utilized for business purposes.

The Tribunal held that the CIT(A) did not violate Rule 46A as the assessee had provided the necessary details and reconciliation before the Assessing Officer. The information submitted before the CIT(A) was not new but rather substantiated the assessee's claims.

The Tribunal found that the CIT(A) passed an ex-parte order without giving proper opportunity of hearing. Therefore, the Tribunal set aside the order and remanded the appeal back to the CIT(A) for fresh adjudication.

The Tribunal held that if the quantum addition, which formed the basis for the penalty, has been deleted, then the concealment penalty under Section 271(1)(c) would not survive. The order of the CIT(A) deleting the penalty was upheld.

The Tribunal held that the interest paid on the loan was for business purposes as the assessee had a business connection and substantial shareholding in the subsidiary. Therefore, the interest deduction is allowable under Section 36(1)(iii).

The Tribunal held that the assessment was made on the wrong person, as the income was taxable in the hands of the Estate of Late Vrajlal C. Mehta and not in the hands of the legal heir, Anoop Mehta. The assessment order was quashed as it was initiated with the wrong jurisdiction.

The Tribunal noted that it consistently holds the profit element in such cases to be 12.5%. Since the CIT(A) had already estimated 25%, which was higher, and the assessee had not appealed, the Revenue's grounds were dismissed.

The Tribunal held that the assessee had substantiated the genuineness of the share transactions with documentary evidence. Consequently, the addition made under Section 68 and the disallowance under Section 69C were vacated.

The Tribunal upheld the CIT(A)'s decision to estimate the profit element at 12.5% on bogus purchases, considering it to be on the higher side. The Tribunal also noted that the assessee had not appealed against this order.

The Tribunal held that since the purchases were of fabrics, on which VAT is not leviable, the profit element should only be the incidental profit from cash purchases in the grey market. Following a previous order, the Tribunal estimated this profit at 1%.