ITAT Mumbai Judgments — August 2022

The Tribunal directed the Assessing Officer to restrict the addition on account of rent disallowance under Section 40(a)(ia) to 30%. However, the addition for unexplained rent payment of Rs. 5,00,000/- was confirmed.

The Tribunal held that Section 79 of the Income Tax Act does not disallow carry forward of losses incurred in the relevant previous year. It also held that unabsorbed depreciation is distinct from business loss for the purpose of Section 79.

The Tribunal held that the disallowance under Section 14A cannot exceed the exempt income earned by the assessee. The AO was directed to restrict the disallowance to Rs. 1,511.

The Tribunal held that since the additions on which the penalty was levied were already deleted by the Tribunal, the penalty cannot survive. The impugned order of the CIT(A) was upheld.

The Tribunal found that the assessee was not granted a reasonable opportunity of hearing by the CIT(A) and that additional evidence needed to be considered. Therefore, the order of the CIT(A) was set aside.

The Tribunal found that the Assessing Officer made a high-pitch assessment without proper or complete investigation. The value declared in the Bill of Entry was notional, and the AO failed to investigate how cash was brought into the bank account for payments.

The Tribunal found that the CIT(A) passed an ex-parte order without properly examining the merits and without giving the assessee an opportunity to present evidence. Therefore, the case was remitted back to the CIT(A) for adjudication de novo.

The Tribunal held that the rectification under Section 154 was bad in law as it involved a debatable issue of valuation, not a mistake apparent from the record. The DVO's report was considered a subsequent development beyond the scope of Section 154.

The Tribunal held that the Explanation to Section 73 of the Income Tax Act, which deems certain share trading activities as speculation business, has exceptions. The assessee's gross total income, which included substantial income from house property, capital gains, and other sources, fell under these exceptions.

The assessee's authorized representative requested to withdraw the appeal. The Tribunal allowed the withdrawal of the appeal.

The Tribunal held that once the business has commenced, interest earned on short-term fixed deposits from surplus funds awaiting use in business operations should be treated as business income and can be adjusted against interest expenditure. The facts were distinguished from the case of Tuticorin Alkali Chemicals and Fertilizers Ltd.

The Tribunal held that the reopening of assessment was bad in law due to mechanical approval by the CIT, as there was no application of mind. Consequently, the reassessment order was quashed, and the appeals filed by the department were dismissed.

The Tribunal held that the reopening of assessment was bad in law due to mechanical approval by the CIT, as there was no application of mind. Consequently, the reassessment order was quashed, and the appeals filed by the department were dismissed.

The Tribunal held that the reopening of assessment was bad in law due to mechanical approval by the CIT, as there was no application of mind. Consequently, the reassessment order was quashed, and the appeals filed by the department were dismissed.

The Tribunal held that the reopening of assessment was bad in law due to mechanical approval by the CIT, as there was no application of mind. Consequently, the reassessment order was quashed, and the appeals filed by the department were dismissed.

The Tribunal held that the reopening of assessment was bad in law due to mechanical approval by the CIT, as there was no application of mind. Consequently, the reassessment order was quashed, and the appeals filed by the department were dismissed.

The Tribunal held that the appeal was not barred by limitation as the assessee had filed it physically before the due date and the CBDT circular provided for an extended period for e-filing due to technical issues. The case was remanded back to the CIT(A) for a decision on merits.

The Tribunal held that the shareholder contributions represented non-refundable deposits for occupying the building, not taxable income. It also affirmed the principle of mutuality, allowing expenses related to building maintenance and dividend income.

The Tribunal found that the Assessing Officer made a high-pitch assessment without proper or complete investigation. The value declared in the Bill of Entry was notional and not the actual value of imports, and the AO failed to investigate how cash was brought into the bank account for payments.

The Tribunal held that the AO's action of making an addition contrary to the APA was in gross violation of Section 92CC(3) of the Act. The addition made by the AO was deleted.

The Tribunal held that the assessee had reasonable cause for non-compliance due to the COVID-19 pandemic, which caused practical difficulties. Therefore, the penalty levied under Section 271(1)(b) was deleted.

The Tribunal held that the assessee had a reasonable cause for non-compliance due to the COVID-19 pandemic and its impact on staff availability. Therefore, the penalty levied under Section 271(1)(b) was directed to be deleted.

The Tribunal agreed with the assessee's concession that the CIT(A) had inadvertently granted relief on the entire closing stock. The relief granted by the CIT(A) was vacated.

The Tribunal held that the purposes for accumulation, "Seafarers enhancement programme scheme" and "Professional and Hard Skill enhancement," were specific and aligned with the trust's objects. Therefore, the denial of accumulation by the AO was set aside.

The Tribunal held that the grounds challenging the assumption of jurisdiction under Section 147 and the validity of the assessment are dismissed. The Tribunal found that the assessee had produced supporting documents and that the issue of merit of addition was already decided in favour of the assessee.

The Tribunal held that penalty on an estimated addition, especially when the original addition was reduced by the ITAT, is not sustainable. Therefore, the penalty imposed by the AO was directed to be deleted.

The Tribunal held that Section 2(22)(e) cannot be invoked if the assessee is not a shareholder of the lending company. It also held that delayed deposit of employees' PF contribution is allowable if paid before the due date of filing the return of income.

The Tribunal held that the action of the AO and CIT(A) was bad in law as the TDS was reflected in Form 26AS and Form 16A, and the assessee had relied on department-generated records. The Tribunal set aside the disallowance and directed to grant full TDS credit.

The Tribunal held that the grounds challenging the assumption of jurisdiction under Section 147 and the validity of the assessment are dismissed. The Tribunal found that the assessee had produced supporting documents and that the issue of merit of addition was already decided in favour of the assessee.

The Tribunal held that the CIT erred in exercising jurisdiction under Section 263 as the AO had made necessary inquiries and taken a possible view. The assessment order was not erroneous or prejudicial to the revenue.

The Tribunal held that the assessee was eligible for depreciation on non-compete fees and that interest on borrowed funds and advances to sister concerns were allowable. The addition on account of sundry creditors and deferred revenue expenditure were also deleted.

The Tribunal noted that the CIT(A) had acknowledged genuine reasons for the assessee's non-compliance. However, the CIT(A)'s basis for estimating income and confirming additions for unexplained jewellery was not sufficiently substantiated.

The Tribunal held that penalty on an estimated addition, especially when the original addition was reduced by the ITAT, is not sustainable. Therefore, the penalty imposed by the AO was directed to be deleted.

The Tribunal noted that the CIT(A) had acknowledged genuine reasons for the assessee's non-compliance. However, the CIT(A)'s basis for estimating income and confirming additions for unexplained jewellery was not sufficiently substantiated.

The Tribunal noted that the CIT(A) had acknowledged genuine reasons for the assessee's non-compliance. However, the CIT(A)'s basis for estimating income and confirming additions for unexplained jewellery was not sufficiently substantiated.

The Tribunal held that the TPO erred in comparing the assessee to engineering/data analytics companies. It directed the inclusion of two companies (KJMC Global Market and Kinetic Trust) as comparables and the exclusion of Khandwala Securities and Keynote Corporate Services due to functional dissimilarity and abnormally high/fluctuating profits, respectively.

The Tribunal held that the AO's view of adding the difference as income from other sources after rejecting the assessee's computation was plausible. The PCIT's order was quashed for wrongly assuming facts and violating natural justice by not providing a reasonable opportunity.

The Tribunal held that the grounds challenging the assumption of jurisdiction under Section 147 and the validity of the assessment are dismissed. The Tribunal found that the assessee had produced supporting documents and that the issue of merit of addition was already decided in favour of the assessee.

The Tribunal held that the CIT(A) erred in disallowing the interest expenses as the income from the property was accepted and standard deductions were allowed. Furthermore, the Tribunal found that the AO had not recorded the necessary satisfaction for disallowance under Section 14A, and the CIT(A) could not substitute this lapse.

The Tribunal held that Section 23(5) was not applicable for the assessment year in question as it was inserted prospectively. The assessee had already declared rental income, and the PCIT failed to provide cogent evidence to disprove the assessee's submissions.

The Tribunal held that while the assessee failed to prove the genuineness of transactions, only the profit element embedded in such purchases should be taxed, not the entire amount. The disallowance of 25% confirmed by the CIT(A) was considered high.

The Tribunal held that while the transactions were not at arm's length and had grey areas, the revenue failed to demonstrate any loss to the exchequer or diversion of interest-bearing funds. Therefore, no grievance was made out by the revenue.

The Tribunal upheld the deletion of the transfer pricing adjustment, following a consistent view from previous years. However, it reversed the deletion of the education cess deduction, acknowledging a subsequent amendment to the Finance Act.

The Tribunal allowed the deduction under Section 80P(2)(d) for interest income earned from Co-operative Banks. It followed the principle of preferring the assessee-favorable view when conflicting decisions of non-jurisdictional High Courts exist.

The Tribunal set aside the CIT(A)'s order regarding the bad debt claim and restored it to the AO for re-examination of the date of sale and whether the amount was disclosed as revenue. The Tribunal also directed the AO not to treat the claim as speculative loss.

The Tribunal held that the TPO erred in comparing the assessee to engineering/data analytics companies. It directed the inclusion of two companies (KJMC Global Market and Kinetic Trust) as comparables and the exclusion of Khandwala Securities and Keynote Corporate Services due to functional dissimilarity and abnormally high/fluctuating profits, respectively.

The Tribunal condoned the delay, holding that the levy of late fees under Section 234E was not permissible for TDS statements filed before June 1, 2015. For statements filed after this date, the levy was confirmed.

The Tribunal held that the lower authorities erred in not considering the revised return filed due to the amalgamation order. It followed the Supreme Court's decision in Dalmia Power Ltd. and directed the AO to accept the revised return and complete the assessment.

The Tribunal held that the satisfaction note issued by the AO of the searched person was vitiated because it erroneously concluded that the seized ledger copies belonged to the assessee, when they were merely transactional records of the searched trust. Consequently, the assessment proceedings under Section 153C were void ab initio.

The Tribunal held that the satisfaction note issued by the AO of the searched person was vitiated because it erroneously concluded that the seized ledger copies belonged to the assessee, when they were merely transactional records of the searched trust. Consequently, the assessment proceedings under Section 153C were void ab initio.