ITAT Mumbai Judgments — January 2023

The Tribunal held that the loss claimed by the assessee is allowable as a business loss under Section 28 of the Income Tax Act. The transactions were considered valid business dealings, not speculative transactions, and were carried out before any ban on the NSEL platform.

The Tribunal partly allowed the assessee's appeal. It held that the PCIT erred in raising issues not included in the show cause notice, violating principles of natural justice. Furthermore, issues outside the scope of limited scrutiny were also found to be improperly considered for revision.

The Tribunal held that the CIT(A) erred in dismissing the appeal in limine on the mistaken premise that the issue was settled under the Vivad Se Vishwas Scheme. The Tribunal found no evidence of such an application by the assessee.

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 decisions of the Hon'ble High Courts of Karnataka and Gujarat were relied upon.

The Tribunal held that the assessees were engaged in the illegal business of providing accommodation entries and money laundering. The AO and CIT(A) had rightly quantified the commission income earned from these unlawful activities.

The Tribunal held that the assessee is entitled to credit for TDS deducted by the employer, even if the employer defaulted in depositing it. The Revenue cannot recover the tax again from the assessee.

The Tribunal admitted the additional ground and found that the set-off of brought forward losses under the head 'house property' and 'capital gain' requires verification of the origin of these losses. The matter was restored to the Assessing Officer for verification.

The Tribunal upheld the disallowance of the deduction claimed by the assessee. It found that circumstantial evidence, including the pattern of donations and information from the Investigation Wing, went against the assessee.

The Tribunal upheld the disallowance of the deduction for donations made to the charitable trust. It found that the evidence, including the pattern of donations and information from the Investigation Wing, indicated that the trust was involved in issuing bogus donation entries.

The Tribunal held that the assessee should have been given an opportunity to cure the defect by filing the appeal electronically. Since this was the first year of mandatory e-filing and the physical appeal was accepted, the matter was remanded back to the CIT(A) for adjudication on merits.

The Tribunal restored the issue of prior period expenses to the Assessing Officer for verification. The grounds raised in the cross-objection were also allowed for statistical purposes.

The Tribunal found that both the AO and CIT(A) passed orders ex-parte due to the assessee's non-appearance. To ensure natural justice and allow the assessee to explain the cash deposit, the Tribunal set aside the CIT(A)'s order and remitted the case back to the AO for fresh adjudication.

The Tribunal allowed the appeals for sub-agent commission and market cess/supervision fees for statistical purposes, remanding the issue of prior period expenses back to the CIT(A) for fresh examination. The decision for the lead year was applied mutatis mutandis to the other years.

The Tribunal held that the bad debts written off were deductible as the company continued to operate with the same management and common resources. The Tribunal also allowed the appeal regarding interest on electricity deposit based on consistency and allowed the ground challenging interest under Section 234C.

The Tribunal held that when assessment proceedings are initiated based on material collected during a search on a third party, the assessment should be framed under section 153C, not section 147. Therefore, the assessment order framed under section 143(3) read with section 147 was void ab initio.

The Tribunal found that the CIT(A) had relied on incorrect facts and set aside the decision in one case, remanding it for fresh adjudication. In other cases, the Tribunal also set aside the CIT(A)'s decision due to perversity and restored the matters for fresh consideration.

The Tribunal found that the CIT(A) had relied on incorrect facts and set aside the decision in one case, remanding it for fresh adjudication. In other cases, the Tribunal also set aside the CIT(A)'s decision due to perversity and restored the matters for fresh consideration.

The Tribunal held that the assessees were engaged in the illegal business of providing accommodation entries and money laundering. The AO and CIT(A) had rightly quantified the commission income earned from these unlawful activities.

The Tribunal held that the assessees were engaged in the illegal business of providing accommodation entries and money laundering. The AO and CIT(A) had rightly quantified the commission income earned from these unlawful activities.

The Tribunal held that since the assessment year was non-abated and no incriminating material was found from the assessee's premises, additions could not be made based on documents found from third parties. The Tribunal also noted that the assessee was not provided with crucial seized material and statements for confrontation.

The Tribunal held that since the assessment year was non-abated and no incriminating material was found from the assessee's premises, additions could not be made based on documents found from third parties. The Tribunal also noted that the assessee was not provided with crucial seized material and statements for confrontation.

The Tribunal held that the addition made by the AO under Section 56(2)(viib) was based on a valuation report that was already submitted during the original assessment and not found during the search. Therefore, for a non-abated year, such an addition without incriminating material is not permissible.

The Tribunal held that the assessee acted as an investor, not a trader, and the transactions in HCL Technologies Ltd. shares were genuine capital transactions. The AO's reclassification and disallowance of loss were set aside.

The Tribunal held that the tax under normal provisions was higher than under MAT provisions, entitling the assessee to set-off MAT credit. The ground related to PF/ESIC contributions was dismissed as not pressed.

The Tribunal held that payments for putting up hoardings are not in the nature of rent and thus Section 194I of the Act is not applicable. The expenditure is considered works contract under Section 194C, on which TDS was duly deducted.

The Tribunal held that the addition made by the AO under Section 56(2)(viib) was based on a valuation report that was already submitted during the original assessment and not found during the search. Therefore, for a non-abated year, such an addition without incriminating material is not permissible.

The Tribunal held that the assessee had discharged the initial burden of proof by submitting documentary evidence like confirmations, bank statements, and financial statements of lenders. The AO's addition was based on third-party information and a retracted statement, overlooking the evidence provided by the assessee.

The Tribunal held that no litigation against the corporate debtor can continue during the moratorium period under the Insolvency and Bankruptcy Code. Furthermore, the appeal was not maintainable as it was not signed by the insolvency resolution professional.

The Tribunal held that the assessee, being a non-resident investor who suffered significant losses and used a professional portfolio manager, could not be presumed to be involved in money laundering for a modest gain already offered to tax. The AO's addition was based on a general investigation report without specific evidence against the assessee.

The Tribunal dismissed the revenue's grounds related to treating the branch as an agent and taxing interest income, following previous ITAT decisions. However, it allowed the revenue's grounds concerning transfer pricing adjustments for bank guarantees for statistical purposes, remanding the issue for de novo benchmarking.

The Tribunal held that the deletion of additions by the CIT(A) regarding foreign travel expenses and transfer pricing adjustments was justified. It also upheld the CIT(A)'s decision to admit additional evidence and dismissed the Revenue's appeals.

The Tribunal held that interest income derived by a co-operative society from its investments with any other co-operative society is eligible for deduction under Section 80P(2)(d). Following its own precedent and various High Court decisions, the Tribunal allowed the deduction.

The Tribunal held that the second penalty notice, which clearly specified the charge of furnishing inaccurate particulars of income regarding the Section 10B deduction, was valid. However, penalty could not be levied for the transfer pricing addition as it was not mentioned in the second notice.

The tribunal upheld the CIT(A)'s order, stating that the addition could not be sustained solely on the basis of a survey statement and stock difference without credible evidence. The explanations regarding alloy mixing and misidentification of precious stones were accepted.

The Tribunal upheld the CIT(A)'s decision, stating that the reopening of assessment was based on a change of opinion by the AO. The issues raised for reopening had already been inquired into during the original assessment proceedings.

The Tribunal held that the disallowance under Section 36(1)(iii) should be restricted to a proportionate amount. It also confirmed the CIT(A)'s decision regarding the disallowance under Section 14A for book profit computation.

The Tribunal held that the addition for contingent liabilities was incorrect as it was not debited to the profit and loss account and thus not claimed as a deduction. The disallowance for employee PF contributions was also found incorrect as the deposit was made before the due date.

The Tribunal held that no litigation against the corporate debtor can continue during the moratorium period under the Insolvency and Bankruptcy Code. Furthermore, the appeal was not maintainable as it was not signed by the insolvency resolution professional.

The Tribunal held that the CIT(A) erred in dismissing the appeal as withdrawn without proper verification, especially since the assessee denied opting for the VSV scheme. The case was therefore remanded back to the CIT(A) for a fresh decision on merits.

The Tribunal held that the CIT(A) order was ex-parte without touching the merits of the case. It was also noted that it was not on record if the notices were properly served. Therefore, the appeal was remitted back to the CIT(A) for a fresh decision after providing an adequate opportunity of being heard.

The Tribunal upheld the disallowance of the Debenture Redemption Reserve. It ruled that DRR is an appropriation of profits and not an ascertained liability or a permissible adjustment for computing book profits under Section 115JB, as per the Supreme Court's decision in Apollo Tyres Ltd.

The Tribunal found that the CIT(A) passed an ex-parte order without considering the assessee's adjournment request. Therefore, the matter was restored to the AO for fresh adjudication.

The Tribunal held that the deletion of additions by the CIT(A) regarding foreign travel expenses and transfer pricing adjustments was justified. It also upheld the CIT(A)'s decision to admit additional evidence and dismissed the Revenue's appeals.

The Tribunal held that interest income earned by a co-operative society from its investments with co-operative banks is eligible for deduction under Section 80P(2)(d). The CIT(A)'s order upholding the denial of deduction was therefore erroneous.

The Tribunal dismissed the revenue's grounds related to treating the branch as an agent and taxing interest income, following previous ITAT decisions. However, it allowed the revenue's grounds concerning transfer pricing adjustments for bank guarantees for statistical purposes, remanding the issue for de novo benchmarking.

The Tribunal dismissed the appeal as not maintainable because no representative appeared for the appellant, and the Interim Resolution Professional or Official Liquidator had not been impleaded in the proceedings. The appellant was granted liberty to file a Miscellaneous Application if desired.

The Tribunal held that the additional evidence sought to be produced by the assessee, including bank statements and income tax returns of himself and family members, was necessary to decide the issue. Therefore, the case was remitted back to the AO for fresh examination.

The Tribunal held that the assessee, being a cooperative credit society and not a cooperative bank, is not hit by Section 80P(4). Therefore, it is eligible for deductions under Section 80P(2)(a)(i) and 80P(2)(d).

The Tribunal held that the assessee, being a cooperative credit society and not a cooperative bank, is not hit by Section 80P(4). Therefore, it is eligible for deductions under Section 80P(2)(a)(i) and 80P(2)(d).

The Tribunal held that interest income earned by a co-operative society from its investments with co-operative banks is eligible for deduction under Section 80P(2)(d). The CIT(A)'s order upholding the denial of deduction was therefore erroneous.