ITAT Mumbai Judgments — September 2022

The Tribunal held that since the AO failed to pass an order within the prescribed time limit after the section 263 order, and subsequent reassessment proceedings also resulted in no addition, the appeal challenging the section 263 order had become academic.

The Tribunal held that for Section 41(1) to apply, the assessee must have obtained a benefit by way of remission or cessation of liability. In the absence of any material to establish such a benefit or a unilateral act of writing off by the assessee, the addition was not sustainable.

The Tribunal held that deductions under section 10A are to be considered on a standalone basis for each eligible undertaking, and losses from one STP unit cannot be set off against profits of another for calculating the deduction. Regarding transfer pricing, the AO was directed to verify and delete the addition if it constituted a double addition.

The Tribunal held that the PCIT erred in invoking Section 263 as the AO had examined the issues, including depreciation on goodwill, and the transaction with Exova (UK) Ltd. was with an unrelated party at the time of share allotment. Therefore, the assessment order was not erroneous or prejudicial to the revenue.

The Tribunal held that the demise of the tax auditor constituted a reasonable cause for the failure to upload the audit report on time. The penalty levied under Section 271B was deleted in view of Section 273B.

The Tribunal held that the assessee failed to provide any material to substantiate its claim that the cost of assets was not claimed as application of income. Therefore, the provisions of Section 11(6) were applicable, and depreciation was rightly disallowed.

The Tribunal held that the service of notice under Section 143(2) by affixture on a wrong address, without proper efforts for ordinary service, constitutes a jurisdictional defect. Consequently, the assessment proceedings are vitiated and unsustainable.

The Tribunal found that the CIT(A)'s order was contradictory and failed to address the core issue. Crucially, additional evidence was entertained without following due procedure, and the AO was not given an opportunity to examine key documents like the service agreement.

The Tribunal found that the CIT(A)'s order was contradictory and failed to address the core issue. Crucially, additional evidence was entertained without following due procedure, and the AO was not given an opportunity to examine key documents like the service agreement.

The Tribunal set aside the matter of exclusion of a comparable company to the file of the TPO for verification of outsourcing expenses and business model. It also addressed arguments regarding amalgamation and the use of segment results for benchmarking.

The Tribunal set aside the matter of exclusion of a comparable company to the file of the TPO for verification of outsourcing expenses and business model. It also addressed arguments regarding amalgamation and the use of segment results for benchmarking.

The Tribunal found that the CIT(A)'s order was contradictory and failed to address the core issue. Crucially, additional evidence was entertained without following due procedure, and the AO was not given an opportunity to examine key documents like the service agreement.

The Tribunal noted that the tax authorities did not address the assessee's contentions regarding the loan amount and the assessment year. Therefore, the Tribunal set aside the CIT(A)'s order and restored the issues to the Assessing Officer for fresh examination.

The Tribunal held that the disallowance of legal and professional fees was not justified as the assessee had a retainership agreement and had provided invoices and made payments through banking channels. Regarding purchases, the Tribunal found that the assessee had provided details and the goods were duly sold, thus not constituting accommodation entries. The Tribunal also upheld the deletion of additions related to unexplained stock of gold.

The Tribunal held that the Assessing Officer erred in rejecting the books of accounts and making additions solely based on statements made during surveys. It was found that the assessee had already accounted for the receipts, and expenses were supported by documentation.

The Tribunal held that while the purchases might be from bogus bills, the entire amount could not be disallowed. They reasoned that the assessee needed construction material and might have purchased it elsewhere at a lower cost. Therefore, a reasonable disallowance was appropriate.

The Tribunal held that while the purchases might be from bogus bills, the entire amount could not be disallowed. They reasoned that the assessee needed construction material and might have purchased it elsewhere at a lower cost. Therefore, a reasonable disallowance was appropriate.

The Tribunal upheld the CIT(A)'s order, stating that the AO failed to prove the absence of corresponding sales and that penalty on ad hoc estimation of GP rate on alleged bogus purchases cannot be sustained.

The Tribunal held that the disallowance made by way of adjustment and intimation under Section 143(1) of the Income Tax Act was beyond its scope as it involved a debatable issue. Therefore, the addition was set aside.

The Tribunal held that the disallowance made by way of adjustment and intimation under Section 143(1) of the Income Tax Act was beyond its scope as it involved a debatable issue. Therefore, the addition was set aside.

The Tribunal held that the 27% limit prescribed in Rule 87 is applicable only to Superannuation Funds and not to Provident Funds. Therefore, contributions to Provident Funds, even if exceeding 27%, are allowable.

The Tribunal held that the disallowance of legal and professional fees was not justified as the assessee had a retainership agreement and had provided invoices and made payments through banking channels. Regarding purchases, the Tribunal found that the assessee had provided details and the goods were duly sold, thus not constituting accommodation entries. The Tribunal also upheld the deletion of additions related to unexplained stock of gold.

The Tribunal held that the Assessing Officer erred in rejecting the books of accounts and making additions solely based on statements made during surveys. It was found that the assessee had already accounted for the receipts, and expenses were supported by documentation.

The Tribunal held that the services rendered were routine business support and did not constitute fees for technical services under the India-Australia DTAA. The Tribunal upheld the CIT(A)'s decision, noting the consistent issuance of Nil TDS certificates for multiple years based on similar facts.

The Tribunal, considering the principles of natural justice and the possibility of various reasons for non-appearance, set aside the CIT(A)'s order. The disputed issues were remitted to the Assessing Officer for fresh adjudication with an opportunity for the assessee to present evidence.

The Tribunal held that the disallowance of legal and professional fees was not justified as the assessee had a retainership agreement and had provided invoices and made payments through banking channels. Regarding purchases, the Tribunal found that the assessee had provided details and the goods were duly sold, thus not constituting accommodation entries. The Tribunal also upheld the deletion of additions related to unexplained stock of gold.

The Tribunal held that the disallowance of legal and professional fees was not justified as the assessee had a retainership agreement and had provided invoices and made payments through banking channels. Regarding purchases, the Tribunal found that the assessee had provided details and the goods were duly sold, thus not constituting accommodation entries. The Tribunal also upheld the deletion of additions related to unexplained stock of gold.

The Tribunal noted that a previous order for the same assessment year had already declared the reassessment proceedings invalid. Consequently, the PCIT's order revising the invalid reassessment order was also deemed non-existent.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied when an addition is made on an estimated basis, as there is no concealment or furnishing of inaccurate particulars of income.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee was a mere facilitator collecting and distributing royalties to its members. The Tribunal agreed that income not realized or where the recipient was not identified could not be accounted for as income of the assessee.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied when an addition is made on an estimated basis, as there is no concealment or furnishing of inaccurate particulars of income.

The Tribunal held that each assessment year is a separate unit and cannot be assessed based on transactions of a previous year. It also found no valid reason for reopening the case for the current year as no bogus purchases were made in AY 2012-13.

The Tribunal held that the disallowance of legal and professional fees was not justified as the assessee had a retainership agreement and had provided invoices and made payments through banking channels. Regarding purchases, the Tribunal found that the assessee had provided details and the goods were duly sold, thus not constituting accommodation entries. The Tribunal also upheld the deletion of additions related to unexplained stock of gold.

The Tribunal held that the liaison office's activities were preparatory and auxiliary, not constituting a PE under the India-Japan DTAA. Consequently, the profits attributable to the liaison office were not taxable in India.

The Tribunal held that the liaison office's activities were preparatory and auxiliary, not constituting a PE under the India-Japan DTAA. Consequently, the profits attributable to the liaison office were not taxable in India.

The Tribunal held that the liaison office's activities were preparatory and auxiliary, not constituting a PE under the India-Japan DTAA. Consequently, the profits attributable to the liaison office were not taxable in India.

The Tribunal held that interest income derived by a co-operative society from investments made with a co-operative bank is eligible for deduction under Section 80P(2)(d). The PCIT erred in exercising revisional jurisdiction as the Assessing Officer had taken a possible view.

The Tribunal held that the liaison office's activities were preparatory and auxiliary, not constituting a PE under the India-Japan DTAA. Consequently, the profits attributable to the liaison office were not taxable in India.

The Tribunal held that the reassessment proceedings were bad in law as the reasons recorded for reopening did not mention the specific entities involved in the alleged transactions. The details regarding these entities were already provided during the original assessment proceedings.

The Tribunal held that the liaison office's activities were preparatory and auxiliary, not constituting a PE under the India-Japan DTAA. Consequently, the profits attributable to the liaison office were not taxable in India.

The Tribunal held that the issue flagged by the PCIT regarding the correct book profit on the sale of shares was not examined by the AO or CIT(A) in previous assessments. Therefore, the PCIT was competent to invoke Section 263 powers, and the assessment order was indeed erroneous and prejudicial to the revenue.

The Tribunal held that since the addition made on the basis of the recorded reasons (bogus purchases) was deleted, any other disallowance not part of the original reasons for reopening cannot be sustained. The Tribunal also noted that the assessee had consistently received the 80-IB deduction in other years and filed a manual return within the due date.

The Tribunal upheld the CIT(A)'s decision to delete the addition, finding that the initial deposit amount was already considered in the subsequent assessment year and taxing it again would lead to double taxation. The revenue failed to present new evidence to counter the CIT(A)'s findings.

The Tribunal held that while the purchases were not from the stated party and were likely from the grey market, the entire amount should not be disallowed. Only the profit element embedded in such purchases should be taxed.

The Tribunal held that as per Section 14 of the IBC, 2016, no suit can be pursued against a corporate debtor. Therefore, the appeal filed by the Revenue was dismissed.

The Tribunal noted that in an identical case for a different assessment year, the matter was remanded back to the CIT(A) for denovo adjudication. Following this precedent, the Tribunal also remanded the current appeal.

The Tribunal held that since the disallowance of the underlying commission expenses for earlier assessment years was deleted and confirmed by the Tribunal, the basis for disallowing the service tax in the current year did not survive. Therefore, the CIT(A)'s order deleting the disallowance was upheld.

The Tribunal directed the assessee to file separate appeals for the remaining quarters and condoned the delay, allowing the appeals for statistical purposes. Issues decided against the assessee were restored to the CIT(A) for fresh adjudication.

The Tribunal directed the assessee to file separate appeals for the remaining quarters and condoned the delay, allowing the appeals for statistical purposes. Issues decided against the assessee were restored to the CIT(A) for fresh adjudication.

The Tribunal held that the penalty proceedings were vitiated due to a defective show cause notice that did not strike off inapplicable parts, following the jurisdictional High Court's decision. Additionally, penalty cannot be sustained on additions made on an estimated basis.