ITAT Mumbai Judgments — December 2022

The Tribunal held that the addition made by the AO on account of alleged excess share premium was unjustified. The Tribunal relied on judicial pronouncements and the legislative intent behind Section 56(2)(viib), stating that the premium was not unaccounted money and the shares were later sold at a higher price to a non-resident.

The Tribunal held that the assessment order passed in the name of a non-existent entity (erstwhile company) is void and bad in law. Consequently, revision proceedings initiated under Section 263 based on such an order are also invalid.

The Tribunal held that the delay in filing Form 67 does not preclude the assessee from claiming foreign tax credit, as the provision is directory and not mandatory. The matter was restored to the Assessing Officer for adjudication on merits.

The Tribunal held that interest earned from deposits in co-operative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, distinguishing it from income derived from the society's primary business of providing credit facilities.

The Tribunal held that since the assessee's sales were not disputed and there cannot be sales without purchases, the disallowance should be restricted to the accepted average gross profit rate of 7.62% for the assessment years 2008-09 and 2009-10.

The Tribunal held that the revision proceedings under Section 263 were justified as the AO had not adequately verified the expenses related to house property and the interest paid to related parties. However, the assessee's claim that interest paid was for construction loans under Section 24(b) was also noted.

The Tribunal held that the assessee is eligible for deduction under Section 80P(2)(d) for interest income earned on investments made with a co-operative bank. The lower authorities' reliance on the Totagars Co-operative Sales Society case was distinguished as not applicable to the facts of this case.

The Tribunal restored the matter to the CIT(A) for de novo adjudication on merits. This was done to grant the assessee another opportunity to present their case, considering the larger interest of justice.

The Tribunal held that the addition was not solely based on the partner's statement but was corroborated by the seized diary. However, the disallowance of VAT expenses was remanded for verification of documentary evidence.

The Tribunal held that the absence of a notice under section 143(2) renders the assessment proceedings void, as section 292BB does not cure a complete absence of notice. Therefore, the assessment order was quashed.