ITAT Mumbai Judgments — September 2022

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.

The Tribunal held that the land in question was agricultural land, thus Section 194-IA was not applicable, and consequently, the disallowance under Section 40(a)(ia) was not warranted. The Tribunal also confirmed the deletion of additions made under Section 68 for debenture investments.

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.

The Tribunal held that the land in question was agricultural land, thus Section 194-IA was not applicable, and consequently, the disallowance under Section 40(a)(ia) was not warranted. The Tribunal also confirmed the deletion of additions made under Section 68 for debenture investments.

The Tribunal found that the submissions of the assessee regarding the timing of the transactions (i.e., not in the current financial year) were not verified by the lower authorities. Therefore, the issue was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the assessee had properly declared unutilized accumulated funds in the relevant assessment years as per Section 11(3). Therefore, the CIT(E)'s order under Section 263 was set aside.

The Tribunal held that transfer pricing provisions were not applicable to the specified domestic transaction after the omission of Section 92BA(1) and allowed depreciation on project management fees. It also allowed depreciation on toll roads based on its own prior decisions and treated fixed deposit interest as business income.

The tribunal held that the assessee failed to discharge its initial onus under Section 68 of the Act to prove the identity, creditworthiness, and genuineness of the transactions for the unsecured loans.

The Tribunal held that the assessee had provided sufficient evidence of share transactions, including demat statements and contract notes, and distinguished the present case from adverse precedents. The Tribunal found the transactions to be genuine and not merely accommodation entries.

The Tribunal held that issuing a notice under Section 148 to a non-existent company, after amalgamation, is invalid. This is because the jurisdiction invoked was against the legal principle that the amalgamating entity ceases to exist upon merger.

The Tribunal held that the assessee had provided sufficient evidence of share transactions, including demat statements and contract notes, and distinguished the present case from adverse precedents. The Tribunal found the transactions to be genuine and not merely accommodation entries.

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 held that the land in question was agricultural land, thus Section 194-IA was not applicable, and consequently, the disallowance under Section 40(a)(ia) was not warranted. The Tribunal also confirmed the deletion of additions made under Section 68 for debenture investments.

The Tribunal held that the CIT(A) erred in deleting the addition as the investor companies appeared to be paper companies lacking genuine business and sufficient funds. The Tribunal upheld the Assessing Officer's order, finding the transactions lacked genuineness and creditworthiness.

The Tribunal held that the land in question was agricultural land, thus Section 194-IA was not applicable, and consequently, the disallowance under Section 40(a)(ia) was not warranted. The Tribunal also confirmed the deletion of additions made under Section 68 for debenture investments.

The Tribunal held that the land in question was agricultural land, thus Section 194-IA was not applicable, and consequently, the disallowance under Section 40(a)(ia) was not warranted. The Tribunal also confirmed the deletion of additions made under Section 68 for debenture investments.

The Tribunal held that waiver of loan is a money transaction and not a benefit or perquisite in kind, thus not taxable under Section 28(iv). It also held that Section 56(2)(x) is not applicable as the money was not received in the year under consideration.

The Tribunal held that the discount claim was not proper as the entire sales had become bad debts and the assessee had already claimed them as such in a later assessment year. However, the disallowance under Section 40(a)(ia) was deleted, following the Bombay High Court's decision that TDS deposited before filing the return of income should not be disallowed.

The Tribunal decided that the addition under Section 50C was not justified as the AO failed to obtain a report from the DVO. The disallowance of compensation paid to encroachers was also deleted, referencing a prior ITAT decision. The disallowance of commission paid on sales was deleted as the genuineness was not doubted and the rate variation was not a cogent reason. The disallowance of vehicle and foreign travel expenses due to personal use was deleted as the vehicles were used wholly for business and foreign travel was for business purposes. The addition of undisclosed receipts based solely on Form 26AS was deleted. The ad hoc disallowance of mining expenses was deleted as supportive documents were furnished.

The Tribunal decided that the addition under Section 50C was not justified as the AO failed to obtain a report from the DVO. The disallowance of compensation paid to encroachers was also deleted, referencing a prior ITAT decision. The disallowance of commission paid on sales was deleted as the genuineness was not doubted and the rate variation was not a cogent reason. The disallowance of vehicle and foreign travel expenses due to personal use was deleted as the vehicles were used wholly for business and foreign travel was for business purposes. The addition of undisclosed receipts based solely on Form 26AS was deleted. The ad hoc disallowance of mining expenses was deleted as supportive documents were furnished.

The Tribunal decided that the addition under Section 50C was not justified as the AO failed to obtain a report from the DVO. The disallowance of compensation paid to encroachers was also deleted, referencing a prior ITAT decision. The disallowance of commission paid on sales was deleted as the genuineness was not doubted and the rate variation was not a cogent reason. The disallowance of vehicle and foreign travel expenses due to personal use was deleted as the vehicles were used wholly for business and foreign travel was for business purposes. The addition of undisclosed receipts based solely on Form 26AS was deleted. The ad hoc disallowance of mining expenses was deleted as supportive documents were furnished.

The Tribunal decided that the addition under Section 50C was not justified as the AO failed to obtain a report from the DVO. The disallowance of compensation paid to encroachers was also deleted, referencing a prior ITAT decision. The disallowance of commission paid on sales was deleted as the genuineness was not doubted and the rate variation was not a cogent reason. The disallowance of vehicle and foreign travel expenses due to personal use was deleted as the vehicles were used wholly for business and foreign travel was for business purposes. The addition of undisclosed receipts based solely on Form 26AS was deleted. The ad hoc disallowance of mining expenses was deleted as supportive documents were furnished.

The Tribunal noted that similar issues for earlier assessment years were set aside by a co-ordinate bench to the AO for fresh examination. Therefore, the present appeals were also set aside to the AO for a de novo decision.

The Tribunal held that disallowance under Section 14A was not warranted when interest-free funds exceeded investments. It also quashed assessment orders passed against a merged entity, deeming them void ab initio.

The Tribunal held that the assessee had provided sufficient evidence of the purchases, including invoices, delivery challans, and payment details. The Revenue failed to provide corroborative evidence beyond the fact that V3 Enterprises appeared on a sales-tax department website as a non-genuine dealer.

The Tribunal held that the filing of Form 67 is a directory, not mandatory, requirement. Provisions of DTAA override domestic laws, and FTC cannot be denied solely for delayed procedural compliance.

The Tribunal held that the filing of Form 67 is a directory, not mandatory, requirement. Provisions of DTAA override domestic laws, and FTC cannot be denied solely for delayed procedural compliance.

The Tribunal held that factoring charges are not in the nature of interest as defined under Section 2(28A) of the Income Tax Act, and therefore, TDS was not deductible. It also confirmed that since the payee had paid tax on the income, the assessee could not be treated as an assessee in default.

The Tribunal held that the appeal filed by the assessee was defective as it was not pursued by the authorized official liquidator. Similarly, the Revenue's appeal was also not maintainable as the official liquidator was not made a respondent.

The Tribunal decided the appeal on merits due to the assessee's non-appearance. The Assessing Officer's appeal challenged the deletion of an addition of ₹ 251 lakhs made under Section 69.

The Tribunal held that the requirement to file Form 67 by the due date of the return is directory, not mandatory, as the rules do not prescribe disallowance for delayed filing. The assessee is eligible for the foreign tax credit as Form 67 was filed before the completion of assessment.

The Tribunal followed its coordinate bench's decision in the assessee's own case for previous years. It held that for vacant properties, the annual value should be determined based on municipal value, not fair rental value derived from other properties or intended to let.

The Tribunal noted that similar issues for earlier assessment years were set aside by a co-ordinate bench to the AO for fresh examination. Therefore, the present appeals were also set aside to the AO for a de novo decision.

The Tribunal held that the reopening of assessment was bad in law. It found that the AO relied on material already on record during the original assessment and that the assessee had made full and true disclosure of primary facts.

The Tribunal held that the assessments made under Section 153C were not sustainable due to jurisdictional defects, specifically the absence of incriminating material found during the search. Consequently, additions based on these assessments were deleted.

The Tribunal held that while the assessee's explanation for cash withdrawals could not be accepted in toto due to lack of books of accounts, a portion of the deposits could be explained. They estimated the probable cash balance available with the assessee.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee's activities did not change in nature and that there was no dominant profit motive. The Tribunal relied on previous judicial pronouncements which held that the proviso to Section 2(15) did not disentitle such entities from exemption.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee's activities did not change in nature and that there was no dominant profit motive. The Tribunal relied on previous judicial pronouncements which held that the proviso to Section 2(15) did not disentitle such entities from exemption.

The Tribunal restored the matter to the CIT(A) for de novo adjudication, finding that the assessee was not given an adequate opportunity to present submissions regarding the enhancement proposed by the CIT(A).

The Tribunal held that the assessments made under Section 153C were not sustainable due to jurisdictional defects, specifically the absence of incriminating material found during the search. Consequently, additions based on these assessments were deleted.

The Tribunal held that the assessments made under Section 153C were not sustainable due to jurisdictional defects, specifically the absence of incriminating material found during the search. Consequently, additions based on these assessments were deleted.

The Tribunal found that the AO had valid reasons to reopen the assessment and that the assessee failed to discharge its onus regarding the share capital. However, to avoid the real beneficiary going scot-free, the addition was set aside and remanded for further investigation.

The Tribunal held that the assessments made under Section 153C were not sustainable due to jurisdictional defects, specifically the absence of incriminating material found during the search. Consequently, additions based on these assessments were deleted.

The Tribunal held that the assessments made under Section 153C were not sustainable due to jurisdictional defects, specifically the absence of incriminating material found during the search. Consequently, additions based on these assessments were deleted.

The Tribunal held that the CIT(A) had inadvertently dismissed the assessee's appeal instead of the appeal filed by the erstwhile EAHCL. The appeal was restored to the CIT(A) for de novo adjudication.

The Tribunal held that since the TPO found no defect in the assessee's transfer pricing approach during the remand proceedings and suggested a lower adjustment, the AO should have accepted this revised amount. The Tribunal directed the AO to restrict the addition to the amount suggested in the remand report.

The Tribunal held that the AO had conducted due inquiry and applied his mind before passing the assessment order, accepting the assessee's claim for keyman insurance premium deduction. Therefore, the assessment order was neither erroneous nor prejudicial to the revenue.