ITAT Mumbai Judgments — October 2022

The Tribunal, following a coordinate bench decision, held that the subsidy received under the PSI-2007 scheme is a capital receipt. Therefore, the addition made by the Assessing Officer was directed to be deleted.

The Tribunal held that the assessee provided a satisfactory explanation for the professional fees received, which were offered to tax. Treating the same income again as deemed income under Section 68 was legally untenable. Payments made for professional charges were also found to be genuine.

The Tribunal held that the assessee provided a satisfactory explanation for the professional fees received, which were offered to tax. Treating the same income again as deemed income under Section 68 was legally untenable. Payments made for professional charges were also found to be genuine.

The Tribunal condoned the delay in filing the appeal, finding the assessee's reasons convincing. Regarding the addition under Section 41(1), the Tribunal found no clear factual finding on whether the payables had ceased to exist or if write-offs had occurred by the successor entities.

The Tribunal held that the purchases could not be considered entirely bogus as there was a one-to-one correlation between purchases and sales, with payments made through banking channels and sales accepted by the AO. Furthermore, the Tribunal deleted the addition sustained by the CIT(A) on account of a 10% gross profit, finding no justification for such an ad-hoc estimation.

The Tribunal found no demonstrated nexus between the loan taken and the interest earned from fixed deposits. It held that deduction under Section 57(iii) requires a direct link between expenditure and income. The matter was remitted to the AO to examine loan utilization and potential income generation.

The Tribunal upheld the deletion of additions related to profit recognition, following the percentage completion method, and the deletion of notional rent on unsold flats held as stock-in-trade. The addition under Section 43CA was also deleted as the relevant sales occurred before the section's applicability.

The Tribunal held that interest income earned by a cooperative society on its investments with a cooperative bank is eligible for deduction under Section 80P(2)(d). The Tribunal followed previous decisions of coordinate benches and High Courts that supported this view.

The Tribunal found no illegality or perversity in the deletion made by the CIT(A). Therefore, the appeal filed by the Revenue was dismissed.

The Tribunal held that interest income earned by a cooperative society on its investments with cooperative banks is eligible for deduction under Section 80P(2)(d). The issue of commission income was already addressed by the CIT(A).

The Tribunal held that the deletion of additions on account of unexplained expenditure was justified as the amounts were offered to tax before the Settlement Commission. The Tribunal also upheld the deletion of additions related to ESOP expenses, finding that the issue was already concluded in favor of the assessee in prior proceedings. However, the deduction of education cess was disallowed due to a retrospective amendment.

The Tribunal held that the assessee had sufficient cash balance and cash sales to explain the cash deposits during demonetization. Regarding bogus purchases, the issue was decided based on previous appeals for AY 2014-15 to 2016-17.

The Tribunal held that the assessee provided a satisfactory explanation for the professional fees received, which were offered to tax. Treating the same income again as deemed income under Section 68 was legally untenable. Payments made for professional charges were also found to be genuine.

The Tribunal held that all inseparable components of a Solar Power Plant necessary for its erection, operation, and energy generation are eligible for the higher depreciation rate, drawing an analogy to windmills. The issue of deemed rent was restored to the Assessing Officer for re-examination.

The Tribunal upheld the CIT(A)'s decision, agreeing that the job workers were not genuine entities but name-lenders used to obtain benefits under the Group Workshed Scheme. The disallowance was restricted to the net income of these entities.

The Tribunal held that the assessee had not claimed any expenses for earning exempt income, and similar disallowances in previous years were deleted and accepted by the revenue. Applying the principle of consistency, the disallowance was deleted.

The Tribunal held that while the purchases were suspect, a 100% addition was not justified as sales were not doubted. Following its own precedents, the Tribunal reduced the estimated profit addition from 25% to 12.5%.

The Tribunal held that the CPC was not empowered to make adjustments without issuing a notice to the assessee. Filing the audit report in Form 10B during the assessment proceedings is considered sufficient compliance with Section 12A(b).

The Tribunal found that both the AO and CIT(A) failed to analyze the issue from both legal and factual aspects. The assessment order was considered cryptic and lacked proper discussion of the facts.

The Tribunal held that the deletion of additions on account of unexplained expenditure was justified as the amounts were offered to tax before the Settlement Commission. The Tribunal also upheld the deletion of additions related to ESOP expenses, finding that the issue was already concluded in favor of the assessee in prior proceedings. However, the deduction of education cess was disallowed due to a retrospective amendment.

The Tribunal held that interest income earned by a cooperative society on its investments with a cooperative bank is eligible for deduction under Section 80P(2)(d). The Tribunal followed previous decisions of coordinate benches and High Courts that supported this view.

The Tribunal held that interest income earned by a cooperative society on its investments with a cooperative bank is eligible for deduction under Section 80P(2)(d). The Tribunal followed previous decisions of coordinate benches and High Courts that supported this view.

The Tribunal held that the CIT(A) erred in discarding the assessee's reliance on a previous ITAT decision. The Tribunal directed the AO to consider only investments yielding exempt income when computing disallowance under Rule 8D(2)(iii).

The Tribunal held that for unabated assessment years, additions under section 153C can only be made if based on incriminating material found during the search. Since no such material was found and the assessment for AY 2013-14 had attained finality, the AO's additions were not sustainable.

The Tribunal confirmed the order of the CIT(A), finding no error in restricting the disallowance to 8% based on the precedent set in the assessee's own case for AY 2009-10. The Revenue failed to provide any reason to deviate from this established position.

The Tribunal held that the CIT(A)'s rejection of the assessee's reliance on a previous ITAT decision was misplaced. The AO was directed to consider only investments that yielded exempt income when computing disallowance under Rule 8D(2)(iii).

The Tribunal held that the loan was genuine. The lender company's assessment had been completed without adverse inference regarding the loan, and the source of funds was traced to mutual fund redemption. The AO had not conducted sufficient inquiry to rebut the evidence.

The Tribunal held that the designing charges were inherently connected to the business of export of jewellery undertaken by the appellant's eligible unit. Therefore, these charges should be treated as business income and included for computing the deduction under Section 10A.

The Tribunal held that the AO had made sufficient inquiries regarding the capital introduction, as the partners' financial statements showed adequate sources and the transactions were through banking channels. Regarding investments, the Tribunal found that the time deposit pertained to a subsequent assessment year, and the alleged investment in bonds and debentures was denied by the assessee and not substantiated by the PCIT.

The Tribunal held that the CIT(A) wrongly discarded the assessee's reliance on a previous Tribunal decision. The AO was directed to consider only investments yielding exempt income for disallowance under Rule 8D(2)(iii).

The Tribunal held that the assessee did not get a proper opportunity to present its case before the AO regarding the share valuation. Citing the Supreme Court's decision in Tin Box Company, the Tribunal set aside the impugned order and remanded the issue back to the AO for de novo assessment.

The Tribunal held that the CIT(A) wrongly discarded the assessee's reliance on a previous Tribunal decision. The AO was directed to consider only investments yielding exempt income for disallowance under Rule 8D(2)(iii).

The Tribunal found no scope to interfere with the CIT(A)'s order, which enhanced the income by applying a consistent rate of commission on sales and loans/advances across different assessment years, correcting perceived inconsistencies in the AO's assessment.

The Tribunal held that the CIT(A) erred in deleting the addition without proper admission of additional evidence and without examining the genuineness of the credits in the assessee's books. The Tribunal set aside the issue back to the CIT(A) for fresh adjudication.

The Tribunal held that Section 56(2)(vii)(b) was introduced from 01/04/2014 and could not be applied to the Assessment Year 2010-11, when the MOU was entered. Therefore, the addition made by the AO was deleted.

The Tribunal found that the NFAC had made a gross mistake by deciding on incorrect issues. The Tribunal set aside the NFAC's order and remitted the case back to the NFAC to decide the appeal afresh after giving the assessee a proper opportunity of hearing.

The Tribunal held that the disallowance made by the AO was correct. Payments of employee's contributions to PF/ESI must be made by the due date prescribed under the respective acts to be eligible for deduction, as per the Supreme Court's decision in Checkmate Services (P.) Ltd.

The Tribunal held that the initiation of reopening proceedings under Section 147 was not sustainable as there was no tangible material with the AO. The estimation of income based on electricity consumption without rejecting the books of accounts was also found to be unsustainable.

The Tribunal found that the assessee had not made proper compliance before the AO or CIT(A). However, considering the large addition and the explanation provided by the assessee's counsel regarding the departure of their chartered accountant, the Tribunal set aside the order to the AO.

The Tribunal found the assessee's explanation and additional evidence inadequate to establish the genuineness and creditworthiness of the transaction. Therefore, the matter was remitted back to the CIT(A) for fresh adjudication.

The Tribunal held that the reasons recorded for reopening the assessment were unsustainable in law. Merely being a director or a 'Key Managerial Person' in a company does not, by itself, imply control over that company for the purpose of deeming it an associated enterprise under Section 92A(2)(j) of the Income Tax Act.

The Tribunal held that the AO and CIT(A) did not properly examine the assessee's explanations and documents regarding travelling and telephone expenses, nor did they adequately consider the submissions about interest income. The Tribunal found that the AO did not provide sufficient opportunity for the assessee to be heard.

The Tribunal held that the reasons recorded for reopening the assessment were unsustainable in law. Merely being a director or a 'Key Managerial Person' in a company does not, by itself, imply control over that company for the purpose of deeming it an associated enterprise under Section 92A(2)(j) of the Income Tax Act.

The Tribunal held that the income from the shareholders' account is part of the life insurance business and should be taxed at the rate prescribed for life insurance business. The Tribunal also noted that the AO had made adequate inquiries during the assessment proceedings.

The Tribunal held that the assessee mistakenly denoted the period as AY 2011-12 for the advance tax payment made on 13.12.2011. The case was remitted back to the AO to examine additional evidence and grant credit for AY 2012-13 if the amount was not claimed in AY 2011-12.

The Tribunal held that since the cash transactions were settled and offered to tax by the Indiabulls Group entities before the Settlement Commission, the addition in the hands of the assessee was not sustainable. The issue of the validity of proceedings under Section 153C became infructuous.

The Tribunal held that the assessee provided a satisfactory explanation for the professional fees received, which were offered to tax. Treating the same income again as deemed income under Section 68 was legally untenable. Payments made for professional charges were also found to be genuine.