ITAT Mumbai Judgments — December 2021

The Tribunal found that the CIT(A) had passed an ex-parte order due to the assessee's non-appearance. However, considering the principles of natural justice, the Tribunal decided to provide one more opportunity to the assessee to present their case.

The Tribunal held that the Assessing Officer's basis for estimating suppressed profit at 35% was not provided, and the CIT(A)'s reduction to 20% was justified. Furthermore, the appeal was dismissed on grounds of low tax effect as the information was from an internal department source, not an external one as per CBDT circulars.

The Tribunal noted that once a matter is settled under the Vivad Se Vishwas Scheme, the related appeal is required to be withdrawn. The Tribunal therefore dismissed the appeal as withdrawn.

The Tribunal upheld the CIT(A)'s decision, stating that only the suppressed profit element embedded in bogus purchases can be taxed, not the entire purchase amount. The High Court's decision in a similar case was relied upon.

The Tribunal held that a protective addition cannot be sustained when a substantive addition for the same amount has been made in the hands of another assessee. Therefore, the protective addition made in the hands of the assessee companies was deleted.

The Tribunal held that since the assessee's own interest-free funds were more than the investments, no disallowance of interest expenditure was warranted. The issue of interest under Section 234C was restored to the Assessing Officer for recomputation.

The Tribunal held that the commission payments were genuine based on the documentary evidence provided by the assessee. Regarding other expenses, it found the ad-hoc disallowance to be on the higher side and reduced it.

The Tribunal held that once an exemption under section 10(23C)(iv) is granted by the Chief Commissioner, the Assessing Officer cannot decline to give effect to it by re-examining the charitable nature of the activities. The AO should have granted the exemption.

The Tribunal found the disallowance of 12.5% to be on the higher side. To meet the ends of justice, it deemed it appropriate to restrict the disallowance to 5% of the unproved purchases and expenses.

The Tribunal upheld the CIT(A)'s decision, stating that invoking Section 69 is incorrect when investments are recorded in books and substantive additions have been made in the hands of other parties. The protective additions were deemed not maintainable.

The Tribunal held that payments for 'off-the-shelf' software and maintenance/support services are not royalty under the India-Finland tax treaty. Retrospective amendments to Section 9(1)(vi) of the Income Tax Act cannot override the treaty provisions.

The Tribunal upheld the CIT(A)'s decision, stating that since the sales turnover was accepted, the entire purchases could not be disallowed. Only the profit element embedded in the alleged bogus purchases could be disallowed.

The Tribunal upheld the CIT(A)'s order, finding no evidence to support the addition. The assessee had no transactions with Mukesh Choksi or Compuwiz Securities, and the shares in question were held since 2004.

The tribunal held that the CIT(A) has a statutory obligation to decide appeals on merits after granting a fair opportunity of hearing. Dismissing an appeal for non-prosecution is contrary to law.

The Tribunal held that Section 14A r.w.r. 8D is not attracted while computing book profit under Section 115JB. Therefore, the disallowance made under Section 14A should be disregarded for MAT computation.

The Tribunal held that the AO erred in not referring the valuation to a Valuation Officer as required by law when the assessee disputed the stamp duty value. However, it rejected the assessee's argument that Section 56(2)(vii)(b) was not applicable due to the property being under construction or the developer's alleged fraud.

The Tribunal held that the CIT(A) should have adjudicated the appeal on merits after considering the material and providing an opportunity to the assessee, as required by Section 250(6) of the Act. The case was restored to the CIT(A) for fresh adjudication.

The Tribunal held that levying late fees under Section 234E for periods prior to June 1, 2015, is not justified. This decision was based on previous ITAT rulings on similar facts.

The Tribunal held that the assessee should not be at fault for the employer's non-compliance and should be given credit for the TDS deducted. The matter was restored to the AO to verify the deduction from the employer's records and allow credit irrespective of whether the TDS was deposited.

The Tribunal held that the conditions for invoking Section 41(1) were not met as there was no remission or cessation of a trading liability. The assessee had made substantial payments, and the remaining amount was a debit balance, not a ceased liability.

The Tribunal held that the addition of 12.5% on bogus purchases was on the higher side, considering the assessee's declared GP of 13.37%. The addition was restricted to 5% of the bogus transactions to meet the ends of justice.

The Tribunal held that staff welfare and conveyance expenses are business requirements and deleted the disallowance. It also deleted the disallowance of interest on unsecured loans, stating the Assessing Officer lacked cogent evidence to prove the interest rate was excessive.

The Tribunal acknowledged the settlement under the Vivad Se Viswas Scheme. Consequently, the appeals pending before the Tribunal were dismissed as withdrawn.

The Tribunal noted that the assessee had filed a declaration under the Vivad se Vishwas Scheme and received Form 5. Accepting the assessee's request, the appeal was dismissed as withdrawn.

The Tribunal dismissed the appeals as infructuous because the assessee chose to avail the benefits under the 'Vivad Se Vishwas Scheme 2020'. The dismissal was with liberty to restore the appeals if desired.

The Tribunal held that the reopening of the assessment was invalid and bad in law because the AO had wrongly assumed jurisdiction and reopened a concluded assessment based on a mere change of opinion, without any tangible material. The CIT(A)'s decision to quash the reassessment order was upheld.

The Tribunal dismissed the appeals as infructuous because the assessee chose to avail the benefits under the 'Vivad Se Vishwas Scheme 2020'. The dismissal was with liberty to restore the appeals if desired.