ITAT Mumbai Judgments — September 2022

The Tribunal dismissed all appeals filed by both the assessee and the Revenue. The assessee's appeals were dismissed as they were not properly represented by the official liquidator. The Revenue's appeals were dismissed for not substituting the official liquidator as the respondent.

The Tribunal dismissed all appeals filed by both the assessee and the Revenue. The assessee's appeals were dismissed as they were not properly represented by the official liquidator. The Revenue's appeals were dismissed for not substituting the official liquidator as the respondent.

The Tribunal directed the AO to examine the extent of investment in a new residential property for claiming exemption under section 54 and 54F. The Tribunal also deleted the addition of Rs. 8,57,000, considering it a typographical error in the return.

The Tribunal held that the AO erred in making an addition for unexplained investments without considering the vital facts presented by the assessee. The assessee claimed payments were made from accounted sources and supported by documentary evidence.

The Tribunal dismissed the Revenue's appeals, citing the low tax effect as per CBDT circular. Liberty was granted to the Assessing Officer to recall the appeal if exceptions in the circular applied.

The Tribunal remanded both issues back to the Assessing Officer for fresh adjudication. The AO was directed to compute the disallowance under Section 14A after considering the assessee's financial statements and to verify the interest-free funds available for the loans advanced.

The Tribunal held that the assessee is entitled to depreciation on the right to collect toll as an intangible asset. It also held that interest income earned on fixed deposits maintained as per a loan agreement is business income, following its own previous decisions and the jurisdictional High Court's affirmation.

The Tribunal dismissed all appeals filed by both the assessee and the Revenue. The assessee's appeals were dismissed as they were not properly represented by the official liquidator. The Revenue's appeals were dismissed for not substituting the official liquidator as the respondent.

The Tribunal held that the dividend income from IDRs is not taxable in India under Article 10 of the India-Mauritius DTAA as the dividend-paying company was not a resident of India. It further held that the income falls under the residuary Article 22 of the DTAA, making it taxable only in Mauritius for the period prior to April 1, 2017.

The Tribunal upheld the Pr.CIT's order, finding that while the AO had called for information, there was no proper examination or verification regarding the applicability of Section 43CA. Therefore, the Pr.CIT's direction for fresh verification was justified.

The Tribunal found that the AO had not correctly appreciated facts regarding the investment in shares for Section 14A disallowance and that the issue of cost of improvement needed further verification. Consequently, these issues were remanded to the AO for fresh adjudication.

The Tribunal found that neither the AO nor the CIT(A) had properly examined the documents submitted by the assessee to support the share capital received. The issue requires a fresh examination.

The Tribunal dismissed all appeals filed by both the assessee and the Revenue. The assessee's appeals were dismissed as they were not properly represented by the official liquidator. The Revenue's appeals were dismissed for not substituting the official liquidator as the respondent.

The Tribunal held that the application challenging the assessment order's validity was not maintainable as the issue was not raised before the lower appellate authority. The appeal by the Revenue was dismissed on merits.

The Tribunal dismissed all appeals filed by both the assessee and the Revenue. The assessee's appeals were dismissed as they were not properly represented by the official liquidator. The Revenue's appeals were dismissed for not substituting the official liquidator as the respondent.

The Tribunal set aside the orders of both the quantum addition and penalty to the Assessing Officer for fresh adjudication. This was done to avoid multiplying litigation and to allow the assessee to furnish necessary details.

The Tribunal held that disallowances for labour contract payments should be deleted for parties who responded to notices. A partial disallowance was sustained for unverified payments, and additions related to labour sansthas were directed to be deleted. The validity of the assessment under Section 153C was deemed academic.

The Tribunal held that the CIT(A) erred in dismissing the appeal without granting a personal hearing to the assessee, thereby violating principles of natural justice. The matter was restored to the CIT(A) for fresh disposal after providing a personal hearing.

The Tribunal set aside the orders of both the quantum addition and penalty to the Assessing Officer for fresh adjudication. This was done to avoid multiplying litigation and to allow the assessee to furnish necessary details.

The Tribunal held that the Pr.CIT invoked Section 263 after the proceedings had abated due to the assessee opting for the Vivad se Vishwas scheme and making full and final payment. Therefore, the revision order passed by the Pr.CIT was quashed.

The Tribunal noted that the assessee did not appear before the CIT(A) despite opportunities, leading to an ex-parte dismissal. However, considering principles of natural justice, the Tribunal decided to provide another opportunity.

The Tribunal held that the assessee had a reasonable cause for the contravention as the amount was received from two different persons for a single event, and evidence was produced to support this. Additionally, it was the first year of the introduction of Section 269ST.

The Tribunal upheld the CIT(A)'s decision, stating that since the assessment for AY 2013-14 was unabated at the time of the search, additions under Section 153C could only be made if supported by incriminating material found during the search related to the assessee and the assessment year. No such material was found.

The Tribunal held that disallowances for labour contract payments should be deleted for parties who responded to notices. A partial disallowance was sustained for unverified payments, and additions related to labour sansthas were directed to be deleted. The validity of the assessment under Section 153C was deemed academic.

The Tribunal held that the Assessing Officer failed to discharge the onus of proving that the impounded documents and the related cash transactions pertained to the assessee. The assessee had provided evidence that the transactions were related to earlier assessment years and were not related to them.

The Tribunal held that while the assessee had not fully proven the receipt of all gold coins as gifts, a portion should be given credit considering the stature of the assessee and prior disclosures. Therefore, only a part of the gold coins would be subject to addition.

The Tribunal upheld the decision of the CIT(A) to restrict the addition to 2% of the admitted unaccounted sales, considering the retracted statement and lack of other corroborating evidence. The addition was based on an estimate of profit from unaccounted transactions.

The Tribunal held that Section 50 of the Income Tax Act, which treats capital gains on depreciable assets as short-term, is restricted to the computation of capital gains under Sections 48 and 49. For other purposes, such as determining the tax rate, the character of the gain as long-term should be retained if the asset was held for more than three years.

The Tribunal decided to remand the issue concerning Section 43CA to the Assessing Officer, allowing the assessee one opportunity to furnish the agreement copy to determine the stamp duty value as of the agreement date. The other grounds regarding audit fees and TDS borne by parties were dismissed.

The Tribunal held that disallowances for labour contract payments should be deleted for parties who responded to notices. A partial disallowance was sustained for unverified payments, and additions related to labour sansthas were directed to be deleted. The validity of the assessment under Section 153C was deemed academic.

The Tribunal held that since the revision order passed by the PCIT was set aside, the assessment order passed pursuant to it would not survive. Therefore, the CIT(A)'s decision to allow the assessee's appeal was upheld.

The Tribunal held that the assessee had provided sufficient documentation to explain the cash deposits, and the AO had not properly verified the same. Regarding depreciation, the Tribunal ruled that ownership relates back to the agreement date due to registration provisions and a Supreme Court decision.

The Tribunal dismissed the Revenue's appeal, holding that the tax effect of the penalty was below the monetary limit prescribed by CBDT Circular No. 17/2019 for appeals before the Tribunal. The Tribunal followed a coordinate bench decision stating that exceptions for quantum proceedings do not apply to penalty proceedings.

The Tribunal held that disallowances for labour contract payments should be deleted for parties who responded to notices. A partial disallowance was sustained for unverified payments, and additions related to labour sansthas were directed to be deleted. The validity of the assessment under Section 153C was deemed academic.

The Tribunal held that the assessee was entitled to the full deduction under Section 54 as the construction of the new flat was completed within three years from the date of the sale of the old house. There is no bar for allowing cost of construction paid prior to one year from the date of sale.

The Tribunal held that the TPO exceeded his jurisdiction by questioning the commercial wisdom of the assessee's expenditure and by applying the benefit test. The TPO's role is limited to determining the ALP, not to question the prudence of incurring expenses.

The Tribunal held that penalty cannot be levied on additions made on an estimated basis, as this does not amount to concealment or furnishing inaccurate particulars of income. The action of the CIT(A) in deleting the penalty was confirmed.

The Tribunal held that disallowance of interest payable to a cooperative bank under Section 43B was incorrect for AY 2016-17 as the amendment applied from AY 2018-19. However, the disallowance of 25% of land expenses was confirmed due to the assessee's failure to furnish details.

The tribunal noted that the matter was settled under the Vivad Se Vishwas Scheme 2020. The Departmental Representative did not oppose the withdrawal.

The Tribunal held that since the foundation of the AO's reassessment order (three out of four issues) was removed by a previous Tribunal order, the consequential proceedings and additions made by the AO were invalid. Therefore, the CIT(A)'s decision to grant relief was upheld.

The Tribunal held that while the capital expenditure claim was verified in reassessment, the revenue expenditure claim remained unverified. Therefore, the revision order was partly confirmed concerning the revenue expenditure.

The Tribunal held that the assessment proceedings were required to be framed under Section 153C read with Section 153A of the Act, not under Section 144. The assessment framed under Section 144 was therefore not sustainable and liable to be quashed.

The Tribunal held that the assessment proceedings were required to be framed under Section 153C read with Section 153A of the Act, not under Section 144. The assessment framed under Section 144 was therefore not sustainable and liable to be quashed.

The Tribunal held that the assessment proceedings were required to be framed under Section 153C read with Section 153A of the Act, not under Section 144. The assessment framed under Section 144 was therefore not sustainable and liable to be quashed.

The Tribunal held that the loans were repaid in subsequent years, were routed through account payee cheques, and supported by confirmations, bank statements, and PAN details. Following a coordinate bench decision on similar facts, the Tribunal dismissed the revenue's grounds.

The Tribunal restored the issue of theatrical distribution rights to the AO for de-novo evaluation, noting that the AO's case was based on Section 5(2) and not solely Section 9(1)(vi). The Tribunal directed the deletion of double-counted interest income and recomputation of tax on interest income at 15% as per the India-US DTAA, and also directed rectification of TDS credit and deletion of interest under Section 234C.

The Tribunal held that reopening of assessment based solely on client code modifications by the broker, without establishing collusion or escapement of income, is bad in law. The loss claimed by the assessee was considered genuine and supported by evidence.

The Tribunal found that the CIT(A) rejected the claim on flimsy grounds regarding additional evidence. The issue of the date of acquisition for Section 54 purposes was remanded to the Assessing Officer for fresh examination.

The Tribunal held that the management fee income did not fall within the definition of Fees for Technical Services (FTS) as the services did not 'make available' technical knowledge or skills to the Indian subsidiary. Following a coordinate bench's decision for a prior assessment year with identical facts, the addition was directed to be deleted.

The Tribunal held that interest expenses incurred for borrowing funds for stock-in-trade (real estate projects) are allowable as revenue expenditure, especially when the assessee follows the Percentage of Completion Method. The decision of the jurisdictional High Court in CIT vs Lokhandwala Construction Ind. Ltd. was found to be applicable.