ITAT Mumbai Judgments — July 2022

The Tribunal held that the show cause notice for penalty was vague and defective as it did not specify the limb of section 271(1)(c) applicable to each addition and failed to strike off inapplicable portions. This vitiated the penalty proceedings.

The Tribunal held that deemed rental income cannot be assessed on the value of unsold stock, as it represents stock-in-trade. It also held that interest earned on fixed deposits made as cash margins for bank guarantees is a capital receipt and should be reduced from project cost.

The Tribunal condoned the delay subject to a cost of Rs. 2,000/-. It held that pre-operative expenses should be capitalized in the year of business commencement and directed the Assessing Officer to allow depreciation on the capitalized amount, modifying the CIT(A)'s order.

The Tribunal partly allowed the appeals, setting aside some additions for fresh examination by the AO and confirming others. Specifically, the addition for personal expenses was reduced, while additions for consultancy fees and brokerage were confirmed.

The Tribunal partly allowed the appeals, setting aside some additions for fresh examination by the AO and confirming others. Specifically, the addition for personal expenses was reduced, while additions for consultancy fees and brokerage were confirmed.

The Tribunal upheld the CIT(A)'s order, finding it well-reasoned. The Tribunal agreed that the case was not one of entirely bogus purchases but rather obtaining bogus bills for purchases made from unknown sources, distinguishing it from the N.K. Proteins case.

The Tribunal followed a previous ITAT decision in a related case (Runwal Homes Pvt. Ltd.) which deleted additions based on estimations of 'on money' where no incriminating documents were found. The Tribunal found that the addition in the assessee's case was also based on estimation and thus not justified.

The Tribunal held that the TP adjustment on AMP expenses was not sustainable, following its own previous decisions. It also allowed depreciation on non-compete fees and directed the Assessing Officer to re-examine the TDS credit. However, it dismissed grounds related to interest under sections 234A and 234B and an additional ground regarding education cess.

The Tribunal held that the Commissioner had erred in invoking revisionary jurisdiction under Section 263. The Assessing Officer had conducted adequate inquiries and applied his mind, and the Commissioner's view was based on an incorrect assumption of facts and constituted a roving inquiry.

The Tribunal restored the issue of the Rs. 12,96,260/- liability to the AO for verification. The AO was directed to delete the addition if the assessee proved the liability was offered as income in AY 2019-20.

The Tribunal found that the CIT(A) passed the order without issuing notice to the assessee and on a misconception. The Departmental Representative conceded that the matter should be remanded.

The Tribunal held that a notice under Section 143(2) is not mandatory before completing an assessment under Section 153C, especially when the assessee accepts the undisclosed income. The assessee's request to treat her revised return as compliance to the 153C notice was also considered.

The Tribunal held that the PCIT erred in invoking revisional jurisdiction as the AO had already inquired into both issues. The PCIT's assumption that SAD had accrued was found to be factually incorrect, and the club expenses were deemed a necessary business expenditure. Therefore, the PCIT's action was without jurisdiction.

The Tribunal accepted the assessee's alternative submission that the payments were for works contract, not technical services. It restored the issue to the AO to examine the proviso to Section 201(1) regarding the recipient having offered the income and paid tax.

The Tribunal held that deemed rental income cannot be assessed on the value of unsold stock, as it represents stock-in-trade. It also held that interest earned on fixed deposits made as cash margins for bank guarantees is a capital receipt and should be reduced from project cost.

The Tribunal held that the show cause notice for penalty was vague and defective as it did not specify the limb of section 271(1)(c) applicable to each addition and failed to strike off inapplicable portions. This vitiated the penalty proceedings.

The Tribunal held that the show cause notice for penalty was vague and defective as it did not specify the limb of section 271(1)(c) applicable to each addition and failed to strike off inapplicable portions. This vitiated the penalty proceedings.

The Tribunal held that the show cause notice for penalty was vague and defective as it did not specify the limb of section 271(1)(c) applicable to each addition and failed to strike off inapplicable portions. This vitiated the penalty proceedings.

The Tribunal held that the show cause notice for penalty was vague and defective as it did not specify the limb of section 271(1)(c) applicable to each addition and failed to strike off inapplicable portions. This vitiated the penalty proceedings.

The Tribunal held that deemed rental income cannot be assessed on the value of unsold stock, as it represents stock-in-trade. It also held that interest earned on fixed deposits made as cash margins for bank guarantees is a capital receipt and should be reduced from project cost.

The Tribunal upheld the CIT(A)'s decision to delete the additions. It found that the assessee had provided sufficient evidence to explain the nature and source of the funds, and the valuation method used was acceptable.

The Tribunal held that since the original assessment order was quashed, the subsequent order passed by the PCIT under Section 263, which was based on the invalid assessment order, was also invalid. Therefore, the PCIT's orders were quashed.

The Tribunal held that since the original assessment order was quashed, the subsequent order passed by the PCIT under Section 263, which was based on the invalid assessment order, was also invalid. Therefore, the PCIT's orders were quashed.

The Tribunal held that the disallowance under Section 40(a)(i) was not justified as the rent was paid to a resident and not outside India. The mistake in the audit report was a clerical error, and the assessee had already offered 30% of the rent for disallowance as per Section 40(a)(ia).

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient evidence, including names, PAN, IT returns, bank statements, and ledger accounts of the lenders, and that the Assessing Officer failed to prove the transactions were not genuine.

The Tribunal accepted the assessee's alternative submission that the payments were for works contract, not technical services. It restored the issue to the AO to examine the proviso to Section 201(1) regarding the recipient having offered the income and paid tax.

The Tribunal held that deemed rental income cannot be assessed on the value of unsold stock, as it represents stock-in-trade. It also held that interest earned on fixed deposits made as cash margins for bank guarantees is a capital receipt and should be reduced from project cost.

The Tribunal accepted the assessee's alternative submission that the payments were for works contract, not technical services. It restored the issue to the AO to examine the proviso to Section 201(1) regarding the recipient having offered the income and paid tax.

The tribunal held that the appeals were not maintainable in their current format because insolvency proceedings had been initiated against the corporate debtors, and a moratorium was declared. Appeals should have been filed by the Interim Resolution Professionals (IRPs) with committee approval.

The tribunal held that the appeals were not maintainable in their current format because insolvency proceedings had been initiated against the corporate debtors, and a moratorium was declared. Appeals should have been filed by the Interim Resolution Professionals (IRPs) with committee approval.

The tribunal held that the appeals were not maintainable in their current format because insolvency proceedings had been initiated against the corporate debtors, and a moratorium was declared. Appeals should have been filed by the Interim Resolution Professionals (IRPs) with committee approval.

The tribunal held that the appeals were not maintainable in their current format because insolvency proceedings had been initiated against the corporate debtors, and a moratorium was declared. Appeals should have been filed by the Interim Resolution Professionals (IRPs) with committee approval.

The Tribunal held that the AO failed to record dissatisfaction with the assessee's disallowance as mandated by the Supreme Court. Therefore, the disallowance made by the AO under Section 14A was deleted.

The ITAT restored the matter to the Assessing Officer for fresh examination, directing the assessee to deposit a sum to the Prime Minister National Relief Fund and submit all details within specified timelines.

The Tribunal held that the AO cannot reject the books of account solely based on a lower gross profit ratio without proper justification. The method of estimating profit based on the average of previous years' ratios was also deemed improper.

The tribunal held that the appeals were not maintainable in their current format because insolvency proceedings had been initiated against the corporate debtors, and a moratorium was declared. Appeals should have been filed by the Interim Resolution Professionals (IRPs) with committee approval.

The Tribunal restored the appeal to the CIT(A) for de novo adjudication, finding that the assessee was not afforded a reasonable opportunity to present submissions.

The tribunal held that the appeals were not maintainable in their current format because insolvency proceedings had been initiated against the corporate debtors, and a moratorium was declared. Appeals should have been filed by the Interim Resolution Professionals (IRPs) with committee approval.

The Tribunal held that commission paid to non-resident agents for services rendered outside India is not taxable in India, following the decision in CIT v. Toshoku Ltd. It also directed a recomputation of disallowance under Rule 8D(2)(iii) considering only investments yielding exempt income.

The Tribunal held that additions made under Section 153A for unabated assessments must be based on incriminating material found during the search. It found that the purchases and labour charges were not supported by such material and that the assessee had provided sufficient documentation.

The Tribunal held that the Insolvency and Bankruptcy Code, 2016, specifically Section 14, prohibits the continuation of pending suits or proceedings against a corporate debtor during the moratorium period. The appeals were deemed not maintainable in their current form.

The Tribunal restored the appeal to the CIT(A) for a fresh adjudication, granting the assessee one more opportunity to be heard. The assessee was directed to cooperate with the proceedings.

The Tribunal held that while the assessee could not prove the genuineness of the suppliers beyond doubt, disallowing 100% of the purchases was unfair as the goods were consumed in production and sales were made. The Tribunal directed deletion of the disallowance, considering the profit element embedded in such purchases.

The Tribunal held that the Insolvency and Bankruptcy Code, 2016, specifically Section 14, prohibits the continuation of pending suits or proceedings against a corporate debtor during the moratorium period. The appeals were deemed not maintainable in their current form.

The Tribunal held that the cross-appeals were not maintainable in their current form due to the moratorium period and the non-impleadment of the Resolution Professional. The appeals were dismissed with liberty to revive them after the moratorium period.

The Tribunal held that the issue of depreciation on the right to collect annuity is covered by previous decisions in favour of the assessee's sister concerns. The provision for periodic maintenance was also allowed as an expenditure based on scientific valuation and the matching principle.

The Tribunal held that the cross-appeals were not maintainable in their current form due to the moratorium period and the non-impleadment of the Resolution Professional. The appeals were dismissed with liberty to revive them after the moratorium period.

The Tribunal held that the Insolvency and Bankruptcy Code, 2016, specifically Section 14, prohibits the continuation of pending suits or proceedings against a corporate debtor during the moratorium period. The appeals were deemed not maintainable in their current form.

The tribunal held that the appeals were not maintainable in their current format because insolvency proceedings had been initiated against the corporate debtors, and a moratorium was declared. Appeals should have been filed by the Interim Resolution Professionals (IRPs) with committee approval.

The tribunal held that the appeals were not maintainable in their current format because insolvency proceedings had been initiated against the corporate debtors, and a moratorium was declared. Appeals should have been filed by the Interim Resolution Professionals (IRPs) with committee approval.