ITAT Mumbai Judgments — April 2022

The Tribunal held that the definition of computer software in Note 7 of Appendix-I does not differentiate between system and application software. Relying on High Court precedents, it ruled that software licenses are eligible for depreciation at 60%.

The Tribunal held that the ex-gratia payment received by the assessee was in the nature of salary paid in advance, not compensation for termination of employment. Therefore, the assessee was entitled to relief under Section 89 read with Rule 21A of the IT Rules.

The Tribunal held that Section 43B is not applicable when the assessee has not claimed any deduction on account of service tax payable. Following the jurisdictional High Court's decision, the Tribunal set aside the orders of the lower authorities.

The Tribunal held that the compensation received by the assessee should be treated as salary received in advance, not as compensation for loss of employment. Therefore, the assessee is entitled to claim relief under Section 89(1).

The Tribunal noted that the CIT(A) had changed the assessee's residential status from non-resident to resident but not ordinarily resident. Both parties agreed to remit the issue back to the CIT(A) for a fresh examination.

The Tribunal held that the additions made by the AO were not sustainable as the electronic evidence (pen drive) lacked the mandatory certificate under Section 65B(4) of the Indian Evidence Act, rendering it inadmissible. The Tribunal also found that the issue of annual letting value was consistently decided in favor of the assessee in previous years.

The Tribunal held that the disallowance of labour contractor expenses was made without concrete evidence and confirmed the CIT(A)'s decision to delete the addition. The ad-hoc disallowance of credit card expenses was also directed to be allowed. The addition on account of sale of loom and commission was also deleted, as the findings from another group entity could not be applied.

The Tribunal held that the disallowance of labour contractor expenses was made without concrete evidence and confirmed the CIT(A)'s decision to delete the addition. The ad-hoc disallowance of credit card expenses was also directed to be allowed. The addition on account of sale of loom and commission was also deleted, as the findings from another group entity could not be applied.

The Tribunal upheld the CIT(A)'s decision, following a co-ordinate bench's ruling in a similar case involving BMPL. The Tribunal found no reason to disturb the CIT(A)'s findings that the assessee had discharged the initial onus regarding the identity, creditworthiness, and genuineness of the transaction.

The Tribunal held that the additions made by the AO were not sustainable as the electronic evidence (pen drive) lacked the mandatory certificate under Section 65B(4) of the Indian Evidence Act, rendering it inadmissible. The Tribunal also found that the issue of annual letting value was consistently decided in favor of the assessee in previous years.

The Tribunal held that there was no cogent reason for the delay in filing the appeal. Consequently, the appeal was dismissed as time-barred.

The Tribunal held that the disallowance of labour contractor expenses was made without concrete evidence and confirmed the CIT(A)'s decision to delete the addition. The ad-hoc disallowance of credit card expenses was also directed to be allowed. The addition on account of sale of loom and commission was also deleted, as the findings from another group entity could not be applied.

The Tribunal held that the disallowance made by the Assessing Officer was not justified, following the jurisdictional High Court's decisions. The amendment inserting Explanation 2 to Section 36(1)(va) was considered prospective.

The Tribunal held that the additions made by the AO were not sustainable as the electronic evidence (pen drive) lacked the mandatory certificate under Section 65B(4) of the Indian Evidence Act, rendering it inadmissible. The Tribunal also found that the issue of annual letting value was consistently decided in favor of the assessee in previous years.

The Tribunal held that the disallowance of labour contractor expenses was made without concrete evidence and confirmed the CIT(A)'s decision to delete the addition. The ad-hoc disallowance of credit card expenses was also directed to be allowed. The addition on account of sale of loom and commission was also deleted, as the findings from another group entity could not be applied.

The Tribunal held that the assessee had entered into agreements for the purchase of flats in 1997 and made substantial payments, indicating they were the actual beneficiaries. Therefore, the compensation received should be treated as long-term capital gains.

The Tribunal held that the additions made by the AO were not sustainable as the electronic evidence (pen drive) lacked the mandatory certificate under Section 65B(4) of the Indian Evidence Act, rendering it inadmissible. The Tribunal also found that the issue of annual letting value was consistently decided in favor of the assessee in previous years.

The Tribunal held that the High Court decision did not lay down a specific ratio for splitting entrance fees between capital and revenue receipts. The CIT(A)'s decision, which followed the High Court's principle of treating entrance fees equivalent to ordinary member fees as capital, was upheld.

The Tribunal held that the slump sale to a wholly-owned subsidiary is covered under Section 47(iv) and thus not a taxable transfer. Regarding Section 115JB, while the adjustment made by the assessee was not explicitly listed in Explanation 1, capital receipts/profits should be excluded from book profits as per judicial precedents.

The Tribunal held that the disallowance of labour contractor expenses was made without concrete evidence and confirmed the CIT(A)'s decision to delete the addition. The ad-hoc disallowance of credit card expenses was also directed to be allowed. The addition on account of sale of loom and commission was also deleted, as the findings from another group entity could not be applied.

The Tribunal upheld the CIT(A)'s decision, following a co-ordinate bench's ruling in a similar case involving BMPL. The Tribunal found no reason to disturb the CIT(A)'s findings that the assessee had discharged the initial onus regarding the identity, creditworthiness, and genuineness of the transaction.

The Tribunal upheld the CIT(A)'s decision, following a co-ordinate bench's ruling in a similar case involving BMPL. The Tribunal found no reason to disturb the CIT(A)'s findings that the assessee had discharged the initial onus regarding the identity, creditworthiness, and genuineness of the transaction.

The Tribunal held that the Ld.CIT(A) was correct in admitting the valuation report as additional evidence, as it was crucial to the assessment. The Tribunal also agreed with the Ld.CIT(A)'s finding that Section 56(2)(viib) was not applicable in the year of conversion of OFCDs into preference shares.

The Tribunal dismissed the appeal in limine as time-barred because the explanation for the delay did not inspire confidence. The grounds of appeal regarding disallowance of interest and treatment of business income were not adjudicated.

The Tribunal held that the AO had made due inquiries and consciously decided not to make an addition regarding the rent from AIILSG, as it was a nominal amount charged consistently since 2005. The donation was also explained as a transfer on donor's instructions. Therefore, the assessment order was not erroneous or prejudicial to the revenue.

The Tribunal held that the reopening of assessment was bad in law because the Assessing Officer failed to provide the necessary documents relied upon to the assessee, violating principles of natural justice. Consequently, the assessment order was not sustainable.

The Tribunal dismissed the Revenue's appeal as not maintainable due to low tax effect, following a CBDT circular. The Revenue was given liberty to seek restoration if they could produce a revenue audit objection.

The Tribunal found that the CIT(A) did not adequately address the submissions and directed the case back to the CIT(A) for a fresh adjudication. The assessee was granted one more opportunity to present its case.

The Tribunal held that the Assessing Officer failed to record satisfaction for initiating penalty proceedings in the assessment order. Additionally, the notices issued under Section 274 r.w.s. 271(1)(c) were found to be defective as the irrelevant limb was not struck off, vitiating the penalty proceedings.

The CIT(A) deleted the disallowance, holding that Section 14A is applicable only when exempt income is actually earned. The ITAT upheld this decision, relying on various High Court and Supreme Court judgments.

The Tribunal upheld the order of the CIT(A) as the assessee failed to provide material to substantiate the eligibility for exemptions under Sections 54B and 54F. The assessee also did not appear for multiple hearings.

The Tribunal held that remuneration paid to a working partner is a share of profits and not an expenditure in the nature of salary to an employee. Therefore, Section 40A(3) is not applicable to such payments, especially when Section 40(b) conditions are met.

The Tribunal held that the addition was not sustainable as it was solely based on the builder's statement without corroborative material from the assessee. The Tribunal also noted the lack of compliance with the Evidence Act for electronic evidence.

The Tribunal held that Section 70(2) of the Income Tax Act allows set-off of STCL against gain from any other capital asset without making a distinction between transactions with or without STT. Following various judicial precedents, the Tribunal found no infirmity in the CIT(A)'s order.

The Tribunal held that Section 144C(1) of the Income Tax Act, 1961, requiring a draft assessment order, is applicable only when there is a proposed variation in the income or loss returned which is prejudicial to the assessee. Since there was no variation in the quantum of income, the AO was not justified in issuing a draft assessment order. Consequently, the assessment order was time-barred.

The Tribunal held that additions made in unabated assessments without incriminating material are not justified. Consequently, the assessee's appeals for certain assessment years were allowed.

The Tribunal held that the gross profit margin of the comparable company, ADS Diagnostics Ltd., was incorrectly calculated by the TPO. It directed the TPO to recalculate the margin considering the correct valuation of closing stock, which resulted in a lower margin.

The Tribunal held that the CPC lacked jurisdiction to make such an adjustment under Section 143(1), as there were High Court decisions favoring the assessee. Furthermore, the amendment by the Finance Act, 2021, was not retrospective, and for the assessment year in question, the assessee's position was supported by existing jurisprudence.

The Tribunal held that additions made in unabated assessments without incriminating material are not justified. Consequently, the assessee's appeals for certain assessment years were allowed.

The Tribunal held that the CPC had no jurisdiction to make such an adjustment under section 143(1) as there were High Court decisions in favor of the assessee prior to the Finance Act, 2021 amendment. Furthermore, the amendment was not retrospective, and for AY 2018-19, the disallowance was not justified.

The Tribunal held that the transfer pricing adjustment made by the TPO for cost allocation towards central and regional support services was to be deleted due to insufficient benchmarking. Regarding prior period expenses, a portion was allowed as deduction as they crystallized in the current year, while another portion was confirmed as disallowed.

The Tribunal allowed the appeal, following a coordinate bench's decision on similar facts and issues for a prior assessment year. The Tribunal noted that the grounds related to jurisdiction were not required to be adjudicated as the appeal was allowed on merits.

The Tribunal upheld the order of the CIT(A), stating that penalty under Section 271(1)(c) cannot be levied on additions made purely on an estimated basis without concrete evidence of concealment.

The Tribunal upheld the order of the CIT(A), stating that penalty under Section 271(1)(c) cannot be levied on additions made purely on an estimated basis without concrete evidence of concealment.

The Tribunal agreed that since no additions were made and no prejudice was caused to the assessee, the appeal had become infructuous. Both parties agreed to this position.

The Tribunal upheld the CIT(A)'s decision to delete the disallowance of software expenses and club payments, following earlier consistent rulings. The issue of toll road income was restored to the Assessing Officer for de novo consideration. Several grounds raised by the assessee concerning disallowance under Section 14A were also restored to the Assessing Officer for recomputation.

The Tribunal upheld the CIT(A)'s decision to delete the disallowance of software expenses and club payments, following earlier consistent rulings. The issue of toll road income was restored to the Assessing Officer for de novo consideration. Several grounds raised by the assessee concerning disallowance under Section 14A were also restored to the Assessing Officer for recomputation.

The Tribunal held that Section 50 of the IT Act is a deeming provision for computation of capital gains and does not change the nature of the asset. It also held that disallowance under Section 14A cannot exceed the exempt income and is not warranted if interest-free own funds exceed investments in tax-free securities.

The Tribunal found that while the CIT(A) decided on merits, the assessee did not get a proper hearing. The Tribunal set aside the appeal to the CIT(A) for a fresh decision after granting an opportunity to the assessee.

The Tribunal held that for the purpose of Section 54, the date of possession of the new residential flat is the relevant date for determining compliance with the time limits, not the date of the purchase agreement. The assessee was entitled to the deduction.