ITAT Mumbai Judgments — November 2022

The Tribunal partly allowed the assessee's appeal regarding trip expenses, reducing the disallowance. It also restored the transfer pricing adjustment for interest on loans to the AO/TPO for fresh adjudication. The Revenue's appeal regarding administrative expenses was dismissed due to low tax effect.

The Tribunal partly allowed the assessee's appeal regarding trip expenses, reducing the disallowance. It also restored the transfer pricing adjustment for interest on loans to the AO/TPO for fresh adjudication. The Revenue's appeal regarding administrative expenses was dismissed due to low tax effect.

The Tribunal held that disallowances under Section 14A require the AO to record specific satisfaction, and disallowances cannot be made if no exempt income is earned. It also ruled that disallowances made by the AO under Section 14A should not be added back for computing book profit under Section 115JB.

The Tribunal partly allowed the assessee's appeal regarding trip expenses, reducing the disallowance. It also restored the transfer pricing adjustment for interest on loans to the AO/TPO for fresh adjudication. The Revenue's appeal regarding administrative expenses was dismissed due to low tax effect.

The Tribunal upheld the CIT(A)'s decision regarding the addition on commission/brokerage income, finding the estimation of commission at 0.6% to be justified. The addition for unexplained cash of Rs. 41 lakh was also upheld as the assessee failed to provide documentary evidence and the Lodha Group did not claim ownership.

The Tribunal held that the demerger of the financial services business was not in accordance with the provisions of Section 2(19AA) of the Act. Consequently, it was considered a distribution of accumulated profits, making it liable for dividend distribution tax.

The Tribunal held that the assessment order was valid, overturning the CIT(A)'s decision on the notice issue. However, the Tribunal found that the addition made under Section 56(2)(vii)(b) was not decided on merits by the CIT(A). Therefore, the matter was restored to the CIT(A) for a decision on the merits of the addition.

The Tribunal held that disallowances under Section 14A require the AO to record specific satisfaction, and disallowances cannot be made if no exempt income is earned. It also ruled that disallowances made by the AO under Section 14A should not be added back for computing book profit under Section 115JB.

The Tribunal held that disallowances under Section 14A require the AO to record specific satisfaction, and disallowances cannot be made if no exempt income is earned. It also ruled that disallowances made by the AO under Section 14A should not be added back for computing book profit under Section 115JB.

The Tribunal upheld the deletion of the penalty, agreeing with the CIT(A) that the penalty had become infructuous due to subsequent directions regarding depreciation on capitalized pre-operating expenses.

The Tribunal held that disallowance under Section 14A should only consider investments that generated exempt income. It also ruled that the business of SEZ and non-SEZ units are distinct and that ad-hoc profit assumptions are unsustainable without rejecting books of account.

The Tribunal upheld the estimation of 12.5% profit on alleged bogus purchases, directing the AO to estimate profit accordingly and reduce the GP already offered. The Tribunal also allowed the appeal regarding retention money, directing the AO to consider it in light of the Bombay High Court decision.

The Tribunal held that the DRP failed to consider the rectified Form 35A and wrongly dismissed the objection based on the initial form's signatory status. The matter was remanded to the DRP for adjudication on merits, considering the rectified form.

The Tribunal held that the sales tax subsidy was a capital receipt and allowed the assessee's claim. However, it disallowed the deduction for education cess, stating it is part of income tax and not deductible.

The Tribunal held that the assessee had discharged the initial burden of proving the identity, genuineness, and creditworthiness of the creditors by providing various documents. The Assessing Officer's addition was based solely on a retracted statement.

The Tribunal held that as per Section 36(1)(va) of the Income Tax Act, it is an essential condition for deduction that employee contributions are deposited on or before the due date specified in the EPF/ESI Act. The Supreme Court in the case of Checkmate Services Pvt. Ltd. has upheld this interpretation.

The Tribunal held that Section 14A can only be invoked if there is actual exempt income earned during the year. Since the assessee earned no exempt income, no disallowance under Section 14A is permissible.

The Tribunal held that disallowances under Section 14A require the AO to record specific satisfaction, and disallowances cannot be made if no exempt income is earned. It also ruled that disallowances made by the AO under Section 14A should not be added back for computing book profit under Section 115JB.

The Tribunal held that disallowances under Section 14A require the AO to record specific satisfaction, and disallowances cannot be made if no exempt income is earned. It also ruled that disallowances made by the AO under Section 14A should not be added back for computing book profit under Section 115JB.

The Tribunal condoned the delay in filing the appeal before the CIT(A) on the grounds of natural justice and the society's circumstances. The matter was remanded to the CIT(A) for de novo adjudication on merits.

The Tribunal held that since the Settlement Commission had accepted the loan transaction as genuine in the hands of Ess Gee Developers Pvt. Ltd. and deleted the substantive additions, the protective addition made in the hands of the appellant should also be deleted. The basis for the protective addition no longer survived.

The Tribunal held that the penalty proceedings were vitiated due to a defect in the penalty notice. The notice was an omnibus show cause notice without striking off the inapplicable part, which is a violation of established legal precedent.

The Tribunal partly allowed the assessee's appeal regarding trip expenses, reducing the disallowance. It also restored the transfer pricing adjustment for interest on loans to the AO/TPO for fresh adjudication. The Revenue's appeal regarding administrative expenses was dismissed due to low tax effect.

The CIT(A) deleted the addition, finding that the AO had not considered the assessee's submissions and supporting documents, which showed a short-term capital loss. The Tribunal confirmed the CIT(A)'s order, noting that the AO ignored the purchase cost and the incurred loss.

The Tribunal held that the PCIT is not empowered to grant registration under Section 80G subject to conditions, as there is an inbuilt mechanism within the Act to ensure compliance. The conditions imposed by the PCIT were therefore set aside.

The Tribunal held that the PCIT is not empowered to grant conditional registration under Section 80G. The Act has an inbuilt mechanism to ensure compliance, and the Assessing Officer examines these during assessment proceedings.

The Tribunal held that the assessment proceedings were vitiated due to the non-issuance of a mandatory notice under Section 143(2) of the Income Tax Act. This defect is jurisdictional and cannot be cured.

The tribunal held that the late filing of Form 10B, without condonation by the prescribed authority, disentitles the assessee from claiming exemption. However, taxing gross receipts is unjustified; only net profit should be taxed after verifying expenses.

The Tribunal condoned the delay in filing the appeal. It also allowed the expenses on General and Administrative claims and deleted the disallowance made for prior period expenses, following its own previous decisions.

The Tribunal held that the Pr. Commissioner's order under Section 263 was passed without independent application of mind and was based solely on an audit objection. The Tribunal quashed the revision order as arbitrary, illegal, and without jurisdiction.

The Tribunal partly allowed the assessee's appeal regarding trip expenses, reducing the disallowance. It also restored the transfer pricing adjustment for interest on loans to the AO/TPO for fresh adjudication. The Revenue's appeal regarding administrative expenses was dismissed due to low tax effect.

The Tribunal held that the assessee had discharged its onus by submitting details and that the Assessing Officer/CPC had disallowed the deduction under Section 80GGA without proper justification. The Tribunal set aside the CIT(A)'s order and directed the Assessing Officer to allow the deduction.

The Tribunal condoned the delay in filing the appeal. It also allowed the expenses on General and Administrative claims and deleted the disallowance made for prior period expenses, following its own previous decisions.

The Tribunal held that the assessee had discharged the initial burden of proving the identity, genuineness, and creditworthiness of the creditors by providing various documents. The Assessing Officer's addition was based solely on a retracted statement.

The Tribunal held that the assessee had discharged the initial burden of proving the identity, genuineness, and creditworthiness of the creditors by providing various documents. The Assessing Officer's addition was based solely on a retracted statement.

The Tribunal upheld the CIT(A)'s decision, stating that the surplus in the shareholders account cannot be taxed separately and that Section 14A does not apply to insurance business. The addition on account of negative reserves was also deleted, following previous judgments.

The tribunal held that the PCIT's order was passed in violation of natural justice as the assessee was not heard. Therefore, the impugned order was set aside.

The Tribunal held that the excess cash found during the search was indeed generated from the bogus losses declared in A.Y. 2014-15 and 2015-16. Therefore, the addition made by the Assessing Officer was directed to be deleted.

The Tribunal condoned the delay in filing the appeal due to the assessee's bonafide reasons concerning the transition to online communication. The matter was restored to the Principal CIT for fresh adjudication after providing the assessee with an adequate opportunity to be heard.

The Tribunal restored the issue of transfer pricing adjustment to the Assessing Officer for fresh adjudication, finding that the comparability under the CUP method was not correctly applied. The additional ground regarding education cess was dismissed as not pressed, and the issue of refund of excess dividend distribution tax was restored to the AO pending a Special Bench decision.

The Tribunal held that while exemption under Section 11 cannot be claimed without prior 12A registration, the expenses incurred for running the trust and for its charitable objects should be allowed. The AO was directed to recompute the income after allowing these expenses.

The Tribunal held that the AO levied penalty without analyzing the explanation and material on record. Since the source of purchases was from books of account and various details were furnished, the purchases could not be deemed bogus, and thus no concealment of income was found.

The Tribunal found that the CIT(A) relied on the Assessing Officer's remand report without confronting the assessee. The Tribunal set aside the CIT(A)'s order and remanded the issue for fresh adjudication.

The Tribunal held that the addition was made on the basis of estimation and guesswork without independent inquiry. Therefore, the penalty levied and confirmed by the lower authorities is not sustainable.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was invalid because it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars, nor did it strike off the irrelevant portion. Following the jurisdictional High Court's decision, the penalty was deleted.

The Tribunal held that journal entries passed in the ordinary course of business for extinguishing mutual liabilities between sister concerns constitute a reasonable cause under Section 273B. Therefore, the penalty under Section 271E is not sustainable.

The Tribunal held that the demerger of the financial services business was not in accordance with the provisions of Section 2(19AA) of the Act. Consequently, it was considered a distribution of accumulated profits, making it liable for dividend distribution tax.

The Tribunal partly allowed the assessee's appeal regarding trip expenses, reducing the disallowance. It also restored the transfer pricing adjustment for interest on loans to the AO/TPO for fresh adjudication. The Revenue's appeal regarding administrative expenses was dismissed due to low tax effect.

The Tribunal upheld the CIT(A)'s decision to exclude 'Excel Infoways Ltd.' as a comparable, citing previous tribunal and high court rulings. It also upheld the deletion of Section 14A disallowance due to the absence of exempt income and the prospective nature of the Finance Act 2022 amendment.

The Tribunal partly allowed the assessee's appeal regarding trip expenses, reducing the disallowance. It also restored the transfer pricing adjustment for interest on loans to the AO/TPO for fresh adjudication. The Revenue's appeal regarding administrative expenses was dismissed due to low tax effect.