ITAT Mumbai Judgments — May 2022

The Tribunal found that the CIT(A) had not decided the appeal on merits. Therefore, in the interest of justice, the appeal was remitted back to the CIT(A) for a fresh decision.

The Tribunal deleted the addition of ₹2,69,736/- as the assessee's explanation of cash withdrawals and redeposits was deemed sufficient. The addition of ₹1,30,000/- was also partly deleted, considering it as gifts rather than loans. The disallowance of expenditure was restricted to 10%.

The Tribunal held that while the purchases were non-genuine, the addition should be restricted to the benefit derived by the assessee. Considering the possibility of cash discounts and the nature of the business, the addition was restricted to 5% of the non-genuine purchases.

The Tribunal upheld the CIT(A)'s order, finding that the assessee failed to fulfill the basic requirements of Section 80IA(4) for claiming the deduction. The appeal was dismissed as no new facts were presented by the assessee.

The Tribunal upheld the validity of the reopening of the assessment. However, it directed the AO to restrict the addition to 12.5% of the Rs. 25 lakhs, representing the profit embedded in the purchases, as the assessee had made payment by cheque and the AO had not disturbed the sales.

The tribunal held that protective additions cannot survive without a corresponding substantive addition in the hands of another person. Since no substantive addition was made in the hands of any other person, the protective additions made in the assessee's hands were quashed.

The Tribunal held that the amendment brought by the Finance Act, 2021, regarding delayed remittance of employee's PF/ESI contributions, is prospective in nature. Therefore, for assessment years prior to 2021-22, the assessee's claim for deduction is allowable if remitted before the due date of filing the return of income.

The Tribunal noted the assessee's request to withdraw the appeal and, with no objection from the revenue, dismissed the appeal as withdrawn.

The Tribunal found that the CIT(A) incorrectly upheld the ad-hoc disallowance, especially since the CIT(A) himself noted that expenses in this business are difficult to prove completely and no major infirmities were found. Therefore, the disallowance was directed to be deleted.

The Tribunal held that the AO had made appropriate inquiries and verifications regarding ESOP costs and payments to Facebook. The payments to Facebook were not considered royalty or fees for technical services, and the AO's order was neither erroneous nor prejudicial to revenue.

The Tribunal held that the addition should be restricted to the profit element embedded in the bogus purchases, not the entire amount. It directed the AO to compute the gross profit at 6.41% on the bogus purchases, aligning with the assessee's actual gross profit margin.

The Tribunal held that the initiation of reassessment proceedings under Section 147 was not valid. This was primarily due to procedural irregularities in obtaining the approval for reopening the assessment, specifically the sequence of recording reasons and granting sanction.

The Tribunal held that the initiation of reassessment proceedings under Section 147 was not valid. This was primarily due to procedural irregularities in obtaining the approval for reopening the assessment, specifically the sequence of recording reasons and granting sanction.

The Tribunal acknowledged the assessee's involvement in obtaining bogus purchase bills but found the 12.5% profit estimation to be high. Considering the GP ratio and other materials, the Tribunal restricted the addition to 6% of the bogus purchases.

The Tribunal held that the amendment brought by the Finance Act, 2021, regarding the due date for PF/ESI remittances, is prospective. Therefore, for the assessment year in question, the earlier position of law allowing deduction if paid before the due date of filing the return of income applies.

The Tribunal, following its own precedent for earlier assessment years, decided to remand the appeals back to the Assessing Officer. The Assessing Officer was directed to reconsider the taxability of royalty income, determine who received the sum on behalf of non-residents, and examine the applicability of Section 163 of the Act.

The Tribunal held that appellate authorities, including the Tribunal, have the power to admit fresh claims for deduction, as per the jurisdictional High Court's decision. The issue was restored to the Assessing Officer for verification and allowance if found in accordance with law.

The Tribunal upheld the CIT(A)'s decision, holding that Section 14A disallowance cannot be made when no exempt income is earned or claimed by the assessee. Consequently, the addition made to book profit under Section 115JB was also deleted.

The Tribunal held that the AO erred in invoking Rule 8D without proper justification and directed deletion of the disallowance under Section 14A. For the stock adjustment issue, the Tribunal restored the matter to the AO for fresh adjudication.

The Tribunal condoned the delay in filing the appeal before the CIT(A) as there was a reasonable cause due to the CPC's inaction on the rectification application. The CIT(A)'s order rejecting the condonation of delay was set aside.

The Tribunal held that disallowance under Section 143(1)(a)(iv) cannot be made if the audit report indicates a stand contrary to established judicial precedents. Payments made before the due date of filing the return of income are allowable.

The Tribunal held that substantial evidence, including the mother's pension book showing cash withdrawals, was produced by the assessee. Since this evidence was not fully scrutinized by the AO, the case was remitted back to the AO for verification.

The Tribunal allowed Ground 1 with a direction to the AO to decide based on Supreme Court ruling after assessee submits expense details. Ground 2 was dismissed as the issue was not final. Ground 3 was dismissed as scrap was generated during manufacturing.

The Tribunal held that the CPC cannot make such disallowances under Section 143(1) when the issue is debatable and covered by jurisdictional High Court decisions. The disallowance was reversed as the contributions were deposited before the due date of filing the return of income.

The Tribunal held that since the goods from the bogus purchase were sold and the profit therefrom was offered for taxation, a 100% addition of the purchase amount was not justified. It directed that only 15% of the bogus purchases be retained as income.

The Tribunal held that the amendment brought by the Finance Act, 2021, regarding the due date for remittance of employee's contribution to PF/ESI, is prospective. Therefore, for the assessment year in question (prior to the amendment's effective date), the assessee's payment before the due date of filing the return of income under Section 139(1) is allowable as a deduction.

The tribunal held that the penalty notice issued by the AO was invalid as it did not specify which limb of Section 271(1)(c) the proceedings were initiated under. Furthermore, the addition made by the AO was based on a statement recorded on oath during a survey, which lacks evidentiary value as per Supreme Court rulings.

The Tribunal acknowledged the assessee's involvement in obtaining bogus purchase bills but found the 12.5% profit estimation to be high. Considering the GP ratio and other materials, the Tribunal restricted the addition to 6% of the bogus purchases.

The Tribunal held that the penalty order suffered from severe defects as the notice under Section 274 was not properly issued and the addition itself was incorrect as the income belonged to the partnership firm. The assessee's explanation regarding TDS credit was also considered valid.

The Tribunal held that the initiation of reassessment proceedings under Section 147 was not valid. This was primarily due to procedural irregularities in obtaining the approval for reopening the assessment, specifically the sequence of recording reasons and granting sanction.

The Tribunal held that the CPC cannot make such disallowances under Section 143(1) when the issue is debatable and covered by jurisdictional High Court decisions. The disallowance was reversed as the contributions were deposited before the due date of filing the return of income.

The Tribunal held that the reassessment was invalid because the AO's reasons were based on an incorrect assumption of facts. The assessee had indeed disclosed speculation profit, making the set-off permissible and negating any failure to disclose.

The Tribunal held that the Ld. CIT(A) did not properly appreciate the facts and that the peak credit method was justified given the chronological entries on a single page. Therefore, the addition was restricted to the peak credit amount.

The Tribunal held that the CPC cannot make such disallowances under Section 143(1) when the issue is debatable and covered by jurisdictional High Court decisions. The disallowance was reversed as the contributions were deposited before the due date of filing the return of income.

The Tribunal, following its own precedent for earlier assessment years, decided to remand the appeals back to the Assessing Officer. The Assessing Officer was directed to reconsider the taxability of royalty income, determine who received the sum on behalf of non-residents, and examine the applicability of Section 163 of the Act.

The Tribunal held that the adjustment made under Section 143(1)(a) without issuing an intimation to the assessee violated the proviso to that section and the principles of natural justice. Furthermore, the Tribunal found merit in the assessee's contention regarding the exclusion of provision for deferred tax asset for computing book profit under Section 115JB.

The Tribunal found no infirmity in the lower authorities' order taxing 3% of the circular trading/accommodation entry provided by the assessee. The assessee failed to demonstrate the actual percentage of income earned.

The Tribunal found that the CIT(A) had issued a notice for hearing and the assessee had filed a reply, but these were not considered in the ex-parte order. Therefore, the Tribunal restored the matter to the CIT(A) for a fresh decision.

The Tribunal agreed with the assessee and the Revenue's representative that the appeal was not maintainable due to the low tax effect. Consequently, the appeal filed by the Revenue was dismissed.

The Tribunal held that the amendment to Section 36(1)(va) and Section 43B by the Finance Act, 2021, was prospective. Therefore, for the assessment year in question, the assessee's claim for deduction was allowable if the remittance was made before the due date of filing the return of income.

The Tribunal held that the CIT(A) erred in passing an ex-parte order without ensuring proper service of notice and providing adequate opportunity of hearing to the assessee. Therefore, the case was remitted back to the CIT(A) for fresh adjudication.

The Tribunal upheld the CIT(A)'s order, finding no illegality or perversity. The CIT(A) had correctly estimated the profit element at 6% of the bogus purchases, considering the assessee's average gross profit over 19 years.

The Tribunal held that while the initial adjustment under Section 143(1)(a) was proper, the disallowance itself was not justified. The Tribunal relied on jurisdictional High Court decisions stating that such payments are allowable if made before the due date of filing the income tax return.

The tribunal allowed the assessee to withdraw the appeal as there was no objection from the revenue. The appeal was dismissed as withdrawn.

The Tribunal held that disallowance of employee's contribution to welfare funds is not proper if paid on or before the due date of filing the return of income, as per the jurisdictional High Court's decision. The information in Form 3CD is not an audit report for prima facie adjustment.

The Tribunal held that the cross objection for AY 2006-07 was infructuous. For AY 2007-08 and 2008-09, the rectification orders were quashed as their foundation was removed. The appeal for AY 2010-11 was dismissed based on a Supreme Court decision.

The Tribunal held that the issue was covered by its own previous orders for earlier assessment years, where it had consistently held that similar receipts were not to be treated as royalty. Therefore, the addition made by the Assessing Officer was deleted.

The Tribunal held that the cross objection for AY 2006-07 was infructuous. For AY 2007-08 and 2008-09, the rectification orders were quashed as their foundation was removed. The appeal for AY 2010-11 was dismissed based on a Supreme Court decision.

The Tribunal deleted the addition of ₹2,69,736/- as the assessee's explanation of cash withdrawals and redeposits was deemed sufficient. The addition of ₹1,30,000/- was also partly deleted, considering it as gifts rather than loans. The disallowance of expenditure was restricted to 10%.