ITAT Mumbai Judgments — July 2022

The Tribunal upheld the CIT(A)'s decision to tax only the profit element embedded in the bogus purchases, not the entire amount. The 6.5% profit rate was considered reasonable and not disputed by the revenue.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that profit should be estimated on bogus purchases at 12.5% and confirmed additions to that extent. The addition for unexplained expenditure was deleted as no evidence of incurring such expenditure by the assessee was found.

The Tribunal restored the issue of disallowance of reimbursement of salary to the Assessing Officer for verification of tax deduction. The appeal related to the AY 2015-16 concerning opening WIP was dismissed as infructuous.

The Tribunal condoned the delay in filing the appeal, acknowledging the assessee's explanation regarding his employer's demise and the subsequent discovery of the transactions. The matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal restored the issue of disallowance of reimbursement of salary to the Assessing Officer for verification of tax deduction. The appeal related to the AY 2015-16 concerning opening WIP was dismissed as infructuous.

The Tribunal upheld the CIT(A)'s decision to tax only the profit element embedded in the bogus purchases, not the entire amount. The 6.5% profit rate was considered reasonable and not disputed by the revenue.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that the loss incurred on defective goods, even if full payment was made and no legal action was taken against the supplier, is a genuine business loss. The Tribunal allowed the claim for loss of Rs. 17,00,000/-.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal noted that the assessee had opted for the Vivad Se Vishwas Scheme and settled the dispute. Consequently, the assessee wished to withdraw the appeal.

The ITAT upheld the CIT(A)'s decision to delete the addition. The tribunal noted that the AO's own subsequent report confirmed an arithmetic mistake in calculating the bank credits, validating the CIT(A)'s finding that the addition was unwarranted.

The Tribunal held that payments made to Holdings were not in the nature of royalty under Article 13(3) of the India-UK DTAA, following the Delhi High Court's decision in a similar case. Consequently, the appellants were not required to deduct TDS.

The Tribunal held that the sale agreement provided was not valid as per law due to several infirmities, including the purchase of stamp paper by a third party and the document not being registered. Consequently, the cash deposits were treated as unexplained income.

The Tribunal upheld the CIT(A)'s decision to tax only the profit element embedded in the bogus purchases, not the entire amount. The 6.5% profit rate was considered reasonable and not disputed by the revenue.

The Tribunal held that the lower authorities were not justified in sustaining additions for both commission income and gross profit, as this would lead to double taxation. It also noted that the conversion of a protective addition to a substantive addition by the CIT(A) was invalid without proper notice.

The Tribunal found that the CIT(A) had dismissed the appeal without proper opportunity and that the additions made to the assessee's income might have already been taxed in the hands of his employer or the company's director. Therefore, a denovo assessment was required.

The Tribunal held that since substantive additions were confirmed in the hands of beneficiaries, the protective additions in the hands of the assessee for investment were rightly deleted. However, the commission income earned by the assessee as an accommodation entry provider was taxable.

The Tribunal held that the CIT(A) erred in deleting additions made under Section 68 for credits from Global Paper Impex Pvt. Ltd. and Mr. Nemchand J. Gala, as the assessee failed to prove the genuineness of these transactions. The Tribunal also noted that the CIT(A)'s deletion of secured loans under Section 68 was correct.

The Tribunal held that the CIT(A) erred in deleting additions made under Section 68 for credits from Global Paper Impex Pvt. Ltd. and Mr. Nemchand J. Gala, as the assessee failed to prove the genuineness of these transactions. The Tribunal also noted that the CIT(A)'s deletion of secured loans under Section 68 was correct.

The Tribunal found merit in the assessee's submissions that shares were held for 33 months, purchased and sold through banking channels, and delivered from the Demat account. The share price movement was not abnormal, and there was no allegation of rigging.

The Tribunal held that the AO accepted the assessee's submissions on the very issues that formed the basis for reopening the assessment. Therefore, the reopening under Section 147 was invalid as the AO could not independently assess other income without a fresh notice.

The Tribunal held that for concluded assessments, additions under Section 153A can only be made if there is incriminating material found during the search. Since no such material was found for the Section 50C addition, it cannot be sustained.

The Tribunal held that the assessee had sufficient interest-free funds available to make the interest-free advances. Therefore, the disallowance of interest made by the AO was not justified.

The Tribunal held that the amendment to Section 36(1)(va) is prospective and not applicable for the assessment year in question. Payments made before the due date of filing the income tax return are deductible as per prevailing High Court judgments.

The Tribunal held that the lower authorities were not justified in sustaining additions for both commission income and gross profit, as this would lead to double taxation. It also noted that the conversion of a protective addition to a substantive addition by the CIT(A) was invalid without proper notice.

The Tribunal held that tenancy rights fall within the definition of intangible assets under Section 32(1)(ii) of the Income Tax Act, 1961. Following a coordinate bench decision, the Tribunal allowed the depreciation claim.

The Tribunal found that the CIT(A) had dismissed the appeal without proper opportunity and that the additions made to the assessee's income might have already been taxed in the hands of his employer or the company's director. Therefore, a denovo assessment was required.

The Tribunal held that the Taxation and Other Laws (Relaxations and Amendments of Certain Provisions) Act 2020 extended the time limit for filing Form 10-IC to March 31, 2021, irrespective of the due date for filing the income tax return. Therefore, the assessee was eligible for the concessional tax rate.

The Tribunal held that the interest income earned on the fixed deposit was inextricably linked to the business purpose of procuring funds for construction. Following Supreme Court and High Court judgments, the interest income was considered part of business activity.

The Tribunal upheld the PCIT's order, finding the AO's assessment flawed for not examining the share premium issue and accepting a valuation report that incorrectly included share application money in the net worth.

The Tribunal held that Section 199(1) of the Income Tax Act allows credit for TDS to the person from whose income it was deducted. The credit should be given to the assessee unless it has already been allowed to the successor company.

The Tribunal held that the lower authorities were not justified in sustaining additions for both commission income and gross profit, as this would lead to double taxation. It also noted that the conversion of a protective addition to a substantive addition by the CIT(A) was invalid without proper notice.

The Tribunal held that since substantive additions were confirmed in the hands of beneficiaries, the protective additions in the hands of the assessee for investment were rightly deleted. However, the commission income earned by the assessee as an accommodation entry provider was taxable.

The CIT(A) deleted the additions after examining the assessee's bank accounts and finding no evidence of the alleged transactions. The Tribunal confirmed the CIT(A)'s order as the Revenue failed to provide any material to controvert the findings.

The Tribunal held that a fresh claim made during assessment proceedings without filing a revised return cannot be entertained by the AO. However, the CIT(A) erred in not admitting the fresh claim made before him, as appellate authorities have the power to entertain such claims. The issue was remanded to the AO for examination.

The Tribunal allowed the assessee's appeal for statistical purposes regarding disallowance under section 14A, directing the AO to consider only investments yielding exempt income. The issue of foreign exchange loss was remanded to the AO for de novo adjudication after examining hedging details.

The Tribunal noted that the lower authorities relied solely on the agreement's title ('research and development service agreement') without verifying the actual functions performed. The Tribunal found that evidence suggested software development services and, following its own prior orders, set aside the issue to the AO/TPO for fresh determination.

The Tribunal found that the CIT(A) had dismissed the appeal without proper opportunity and that the additions made to the assessee's income might have already been taxed in the hands of his employer or the company's director. Therefore, a denovo assessment was required.

The Tribunal held that since the cash deposits were from the cash balance available in the books of account, which were not rejected by the Assessing Officer, the deposits could not be treated as unexplained. The Tribunal relied on case laws supporting the assessee's position.

The Tribunal found merit in the Revenue's contention that the CIT(A) allowed the claim without giving the Assessing Officer an opportunity to examine the genuineness and reasonableness of the expenses. The matter was set aside to the Assessing Officer for fresh examination.