ITAT Mumbai Judgments — March 2022

The Tribunal held that while one of the trust's objects, 'to try to raise the status and dignity of the teaching profession,' was related to education, another object, 'to amend, modify, substitute or add any new object for promotion of the public good,' was unrelated. The Tribunal found that the existence of an unrelated object in the trust deed, regardless of whether it was acted upon, disentitled the assessee to exemption.

The Tribunal allowed the carry forward of deficits, following Supreme Court precedent. It also allowed exemption under Section 11 for violations of Section 13(2)(h) but dismissed grounds related to Section 13(1)(d) as not pressed. Interest under Section 234A was directed to be computed after verification.

The ITAT condoned the delay in filing the appeal before the CIT(A), finding the reasons provided in the affidavit to be sufficient cause. The matter was remitted back to the CIT(A) for adjudication on merits.

The Tribunal allowed the carry forward of deficits, following Supreme Court precedent. It also allowed exemption under Section 11 for violations of Section 13(2)(h) but dismissed grounds related to Section 13(1)(d) as not pressed. Interest under Section 234A was directed to be computed after verification.

The Tribunal allowed the carry forward of deficits, following Supreme Court precedent. It also allowed exemption under Section 11 for violations of Section 13(2)(h) but dismissed grounds related to Section 13(1)(d) as not pressed. Interest under Section 234A was directed to be computed after verification.

The Tribunal allowed the carry forward of deficits, following Supreme Court precedent. It also allowed exemption under Section 11 for violations of Section 13(2)(h) but dismissed grounds related to Section 13(1)(d) as not pressed. Interest under Section 234A was directed to be computed after verification.

The Tribunal allowed the carry forward of deficits, following Supreme Court precedent. It also allowed exemption under Section 11 for violations of Section 13(2)(h) but dismissed grounds related to Section 13(1)(d) as not pressed. Interest under Section 234A was directed to be computed after verification.

The Tribunal found the reasons for rejecting the internal TNMM and segmental accounts unconvincing. It held that the disclaimer by the auditor was common and the variance in PLIs was not sufficient grounds for rejection.

The Tribunal upheld the decision of the CIT(A) that the AO issued the notice for reopening the assessment with incorrect reasons. Therefore, the reassessment proceedings were considered bad in law.

The Tribunal condoned the delay in filing the appeal due to the severe circumstances faced by the assessee's directors. It was held that the ex-parte assessment and additions were made without affording proper opportunity due to these circumstances.

The Tribunal upheld the authorities' decision to treat the foreign exchange fluctuation gain on the repayment of the loan as revenue income. The Tribunal found that the loan was given for strategic business expansion, making it a revenue transaction.

The Tribunal held that the disallowance of the business loss set-off under Section 143(1) was not permissible in such a summary manner. The limitations of disclosure in a specific column of the ITR cannot be used against the assessee.

The Tribunal held that the waiver of the principal amount, being a capital receipt, is not taxable. Regarding the interest waiver, it upheld the CIT(A)'s decision to restore the issue for verification of whether the assessee had claimed deduction under Section 43B in preceding years.

The Tribunal held that the provisions of Section 234E for levying late fees are applicable only from June 1, 2015. Therefore, late fees cannot be charged for the financial years prior to this date.

The Tribunal held that Section 69C is not applicable as the assessee had sufficient funds from loans to make the payments. The Tribunal also noted that the AO had not denied the existence of the vendor and that the lack of specific details on invoices was a mere presumption.

The Tribunal held that the notice issued under Section 274 read with Section 271(1)(c) was bad in law because it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following the jurisdictional High Court's decision, the penalty was directed to be deleted.

The Tribunal upheld the CIT(A)'s decision to delete the addition on share application money, finding that the identity, genuineness, and capacity of the creditor were sufficiently established, including the source of funds. The Tribunal also affirmed the deletion of depreciation disallowance, accepting that the cars were owned by the company and used for business purposes.

The Tribunal held that the lender company did not have accumulated profits on the date of the loan transaction, as evidenced by negative reserves and surplus in its financial statements. The method adopted by the AO for calculating accumulated profits was also found to be not in accordance with accounting standards.

The Tribunal held that since purchase vouchers were produced and payments were made through banking channels, the assessee could not be penalized for concealment or furnishing inaccurate particulars of income. The penalty was set aside.

The Tribunal held that the disallowance was not justified, following the jurisdictional High Court's decisions which stated that payments made before the due date of filing the return of income are allowable under Section 43B. The amendment to Section 36(1)(va) was considered prospective.

The Tribunal held that since the contributions were deposited before the due date of filing the Income Tax Return, they are allowable as a deduction. The amendment brought by the Finance Act 2021, which made such disallowances mandatory, was held not applicable retrospectively to the assessment year in question.

The Tribunal held that the 11-day delay in filing the appeal was sufficiently excused due to the prevailing COVID-19 lockdown. Furthermore, following jurisdictional High Court decisions, the employee's contribution to PF paid before the return filing due date is allowable as a deduction.

The Tribunal held that the CIT(A)'s rectification order under Section 154 was unsustainable. The Tribunal found that the addition made by the AO under Section 153A was not based on any incriminating material found during the search, and the information relied upon arose after the search and the original assessment.

The Tribunal held that contributions paid before the due date for filing the return of income under section 139(1) are allowable. However, payments made beyond this due date are not.

The Tribunal upheld the CIT(A)'s decision that the sales tax incentive was a capital receipt, not taxable as revenue. It also decided that the market value for domestic transfer pricing should not change based on the Calcutta High Court decision, setting aside the authorities' view.

The Tribunal held that the CIT(A) erred by solely relying on the restoration of the Section 12A registration without examining the merits of the AO's contentions regarding Section 2(15) and Section 13(8). The matter was remitted back to the CIT(A) for adjudication on merits.

The Tribunal held that the CIT(A) erred by solely relying on the restoration of the Section 12A registration without examining the merits of the AO's contentions regarding Section 2(15) and Section 13(8). The matter was remitted back to the CIT(A) for adjudication on merits.

The Tribunal held that the CIT(A) erred by solely relying on the restoration of the Section 12A registration without examining the merits of the AO's contentions regarding Section 2(15) and Section 13(8). The matter was remitted back to the CIT(A) for adjudication on merits.

The Tribunal upheld the CIT(A)'s decision, agreeing that Section 14A disallowance is not applicable when no exempt income is earned. It also found the provision for warranty expenses to be a valid deduction based on past experience and judicial precedents.

The Tribunal held that for foreign currency denominated loans to AEs, the interest rate should be benchmarked considering the rate applicable in the country where the loan is received or consumed. It also addressed the issue of share pledges as international transactions.

The Tribunal upheld the CIT(A)'s decision that the sales tax incentive was a capital receipt, not taxable as revenue. It also decided that the market value for domestic transfer pricing should not change based on the Calcutta High Court decision, setting aside the authorities' view.

The Tribunal held that for foreign currency denominated loans to AEs, the interest rate should be benchmarked considering the rate applicable in the country where the loan is received or consumed. It also addressed the issue of share pledges as international transactions.

The Tribunal affirmed the CIT(A)'s decision to restrict the addition to 12.5% of the bogus purchases, finding it judicious and correctly decided based on relevant case laws. The Tribunal held that only the profit element embedded in such purchases should be added.

The Tribunal held that the penalty notice issued by the AO was untenable due to non-application of mind and failure to specify the exact charge against the assessee. The notice was vague and did not strike off irrelevant clauses, violating principles of natural justice.

The Tribunal upheld the CIT(A)'s decision that the sales tax incentive was a capital receipt, not taxable as revenue. It also decided that the market value for domestic transfer pricing should not change based on the Calcutta High Court decision, setting aside the authorities' view.

The Tribunal held that the Assessing Officer failed to establish that the interest paid by the assessee was excessive or unreasonable by comparing it to fair market rates. Therefore, the disallowance under Section 40A(2)(b) was not justified.

The Tribunal held that the land in question was agricultural land and therefore exempt from tax. The sale of agricultural land, situated in a rural area and used for agricultural purposes, cannot be treated as a capital asset. The addition made by the Assessing Officer and confirmed by the CIT(A) was set aside.

The Tribunal held that the Assessing Officer failed to examine the taxability of FCTR and did not consider the CBDT circular, rendering the assessment order erroneous and prejudicial to revenue. However, the Tribunal vacated the Principal Commissioner's observations on merits.

The Tribunal held that the assessee's claim of immunity under IDS 2016 was invalid due to non-payment of taxes. Since no other reasonable cause for not filing the return was provided, the penalty under Section 271F was justified.

The Tribunal held that the date of taking possession of the new residential flat should be considered as the date of purchase for Section 54 purposes. Since this date fell within the permissible period from the sale of the original asset, the assessee was entitled to the deduction.

The Tribunal held that the PCIT was correct in revising the assessment order regarding the deduction under Section 36(1)(viii) due to errors in calculating long-term finance income. However, the revisionary order was not sustainable concerning repossessed vehicles and unpaid leave encashment.

The Tribunal held that the Assessing Officer's failure to dispose of the assessee's objections to the reopening of assessment was a jurisdictional defect. Furthermore, the addition under Section 69 was incorrect as the assessee had not claimed any long-term capital gains exemption under Section 10(38) and had provided a satisfactory explanation regarding the share transactions.

The tribunal held that the IBNR/IBNER provisions are allowable as revenue expenditure. The issue of co-insurance fees was remanded to the AO for fresh consideration due to lack of evidence. The expenditure on IT accessories was confirmed as revenue expenditure.

The Tribunal held that the CIT(A) erred in partly disallowing salary and wages and upholding the disallowance for contract expenses. The Tribunal found that the assessee had provided sufficient evidence for these expenses and that they were incurred for business purposes.

The Tribunal held that since the transactions between the assessee and its Indian AE were at arm's length price and accepted by the Transfer Pricing Officer, no further profit attribution was required. The existence of a PE in such a scenario becomes tax-neutral.

The Tribunal held that for foreign currency denominated loans to AEs, the interest rate should be benchmarked considering the rate applicable in the country where the loan is received or consumed. It also addressed the issue of share pledges as international transactions.

The Tribunal held that for foreign currency denominated loans to AEs, the interest rate should be benchmarked considering the rate applicable in the country where the loan is received or consumed. It also addressed the issue of share pledges as international transactions.

The CIT(A) deleted the addition made by the AO. The AO appealed this deletion, arguing that the payment of the liability was not proven and that the sale of another property to settle this liability lacked legal documentation.

The Tribunal upheld the order of the CIT(A), finding that the CIT(A) had considered the factual aspects and relevant judicial decisions. The revenue failed to present any new cogent material to controvert the CIT(A)'s observations.

The Tribunal held that penalty cannot be levied on additions made purely on estimations. Furthermore, defects in the penalty notice, such as not striking off irrelevant clauses and mentioning both limbs of Section 271(1)(c), vitiate the penalty proceedings.