ITAT Mumbai Judgments — February 2023

The Tribunal held that the second rectification order passed under Section 154 was time-barred as it was passed beyond the prescribed limitation period. Furthermore, even on merits, the assessee was entitled to the deduction based on previous Tribunal decisions.

The Tribunal held that the assessee had a reasonable cause for the delay in filing the appeal before the CIT(A) due to pursuing rectification proceedings. The addition of the employee's contribution to PF & ESI, which was already disallowed by the assessee, resulted in a double addition and was therefore illegal.

The Tribunal revised the estimate of the project cost and directed the Assessing Officer to adopt the profit worked out as per the percentage completion method for the assessment years in question. The appeals were allowed partly.

The Tribunal held that the PCIT's order under Section 263 was not justified. It found that the Assessing Officer had indeed verified the goodwill and share premium during assessment, and that amalgamation, under Section 47(vi), is recognized as a transfer for certain purposes, making the goodwill an allowable asset for depreciation.

The Tribunal held that the disallowance made by the CPC under Section 143(1) is permissible. This is because the Hon'ble Supreme Court in the case of Checkmate Services Private Limited has ruled that employee contributions to PF and ESI, if not deposited by the due date, are not allowable as deductions.

The Tribunal condoned the delay, citing sufficient cause and the principle of substantial justice. The Tribunal further held that the assessment order framed under Section 143(3) was invalid as it should have been framed under Section 153C, and thus quashed the assessment order.

The Tribunal allowed the claim for leave encashment on actual payment basis for AY 2017-18. For other grounds, the Tribunal directed the AO to decide the pending application for TDS/TCS credit and restored the claim for interest on PNCD to the AO for consideration.

The Tribunal condoned the delay in filing the appeal. Regarding the purchases, the Tribunal restricted the disallowance to 3% of the bogus purchases, considering the profit margin in the diamond trading industry and directing verification of profit already offered.

The Tribunal held that the CPC was not authorized to disallow the deduction under Section 80P while processing the return under Section 143(1). The adjustment made by the CPC was deleted.

The Tribunal held that the PCIT's order under Section 263 was not justified. It found that the Assessing Officer had indeed verified the goodwill and share premium during assessment, and that amalgamation, under Section 47(vi), is recognized as a transfer for certain purposes, making the goodwill an allowable asset for depreciation.

The Tribunal revised the estimate of the project cost and directed the Assessing Officer to adopt the profit worked out as per the percentage completion method for the assessment years in question. The appeals were allowed partly.

The Tribunal revised the estimate of the project cost and directed the Assessing Officer to adopt the profit worked out as per the percentage completion method for the assessment years in question. The appeals were allowed partly.

The Tribunal held that the reopening of assessment under Section 147 was valid. However, the addition for bogus purchases should be restricted to the extent of bringing the gross profit rate on such purchases to the same rate as other genuine purchases.

The Tribunal held that the reopening of assessment under Section 147 was valid. However, the addition for bogus purchases should be restricted to the extent of bringing the gross profit rate on such purchases to the same rate as other genuine purchases.

The Tribunal held that the AO was mandated to pass a draft assessment order before issuing the final assessment order, even in cases of remand from the Tribunal. Failure to do so renders the assessment order invalid and unsustainable.

The Tribunal held that the Principal Commissioner erred in invoking Section 263 without properly considering the assessment proceedings and without invoking Explanation 2 of Section 263 in the show cause notice. The revision order was found unsustainable.

The Tribunal held that the purposes specified for accumulation were identical to the objects in the Memorandum of Association and not vague. It also relied on a Supreme Court decision stating that Form 10 can be filed before assessment completion and that minor inaccuracies in purpose declaration do not automatically lead to rejection of the claim.

The Tribunal held that the appeal was not maintainable on ground no. 3 as the Assessing Officer had accepted the assessee's claim in the remand report, and the CIT(A) deleted the addition based on it. Consequently, the remaining grounds were dismissed due to low tax effect.

The Tribunal held that the corporate guarantee commission of 0.5% charged by the assessee was at arm's length, considering previous rulings and the market value of the vessels. For performance guarantee, the Tribunal held 0.5% as the ALP.

The Tribunal held that the PCIT erred in directing the Assessing Officer to initiate penalty proceedings under Section 270A, as the initiation of penalty proceedings is a discretionary power of the Assessing Officer. The Tribunal found that the PCIT, being a supervisory authority, could not step into the shoes of the Assessing Officer to mandate penalty initiation.

The Tribunal held that CIL should be excluded as a comparable because it was engaged in product development and lacked segmental data to differentiate it from software services. Aspire Systems India Ltd. was also excluded due to the unavailability of its complete financial data, specifically the profit and loss account.

The Tribunal held that CIL should be excluded as a comparable because it was engaged in product development and lacked segmental data to differentiate it from software services. Aspire Systems India Ltd. was also excluded due to the unavailability of its complete financial data, specifically the profit and loss account.

The Tribunal held that the PCIT's assumption of jurisdiction under Section 263 was defective as it was based on the AO's proposal rather than an independent examination by the PCIT. The Tribunal also found that the AO had made enquiries regarding unsecured loans during the assessment proceedings.

The Tribunal held that the reduction of TDS credit in rectification proceedings under Section 154 was in violation of Section 154(3) as no proper notice was given to the assessee. The assessee had provided sufficient details in its return.

The Tribunal held that the PCIT's order under Section 263 was not justified. It found that the Assessing Officer had indeed verified the goodwill and share premium during assessment, and that amalgamation, under Section 47(vi), is recognized as a transfer for certain purposes, making the goodwill an allowable asset for depreciation.

The Tribunal is hearing appeals filed by the assessee challenging the assessment order. The facts of the appeals are identical, and a consolidated order is being passed. The assessee is engaged in providing legal services.

The Tribunal upheld the CIT(A)'s deletion of additions related to unexplained cash, noting that similar issues were settled before the Settlement Commission. For additions on accrued interest, the Tribunal followed jurisdictional High Court rulings stating no addition can be made under Section 153C without incriminating material when no assessment was pending.

The Tribunal held that the seized document relied upon by the AO pertained to Assessment Year 2008-09 and not the relevant Assessment Year 2007-08. Consequently, the addition made by the AO was deemed illegal and unsustainable.

The Tribunal held that the assessee had discharged its initial onus by providing details like PAN, bank statements, and audited financials of the shareholders. The onus shifts to the revenue to prove otherwise, and the AO failed to conduct a thorough investigation. The disallowance under Section 14A was also set aside.

The Tribunal held that Section 40(a)(ia) cannot be invoked for a shortfall in TDS deduction when tax has been deducted under a bonafide belief, even if under wrong provisions. The assessee can be declared in default under Section 201, but disallowance under Section 40(a)(ia) is not permissible in such cases.

The Tribunal upheld the CIT(A)'s deletion of additions related to unexplained cash, noting that similar issues were settled before the Settlement Commission. For additions on accrued interest, the Tribunal followed jurisdictional High Court rulings stating no addition can be made under Section 153C without incriminating material when no assessment was pending.

The Tribunal upheld the CIT(A)'s deletion of additions related to unexplained cash, noting that similar issues were settled before the Settlement Commission. For additions on accrued interest, the Tribunal followed jurisdictional High Court rulings stating no addition can be made under Section 153C without incriminating material when no assessment was pending.

The Tribunal held that if the assessment is reopened on a specific reason, the AO cannot make additions on other grounds if the original reason for reopening is not addressed. Since no addition was made on account of bank interest, the assessment order passed under section 147 was unsustainable.

The Tribunal held that foreign exchange losses on the ECB loan were revenue expenditure allowable under Section 37(1) as they were incurred for revenue considerations like interest cost savings. It also held that 'marked to market loss' on derivative contracts was not notional and was allowable as a hedging transaction.

The Tribunal held that the delay in filing Form 67 is a procedural lapse and not a mandatory condition that disentitles the assessee from claiming FTC. The provisions of the Act and DTAA do not prescribe such a consequence for non-compliance with Rule 128(9).

The Tribunal held that the PCIT was not justified in exercising revisionary powers under Section 263. The AO had conducted necessary inquiries and verified facts, and the PCIT's conclusions were based on incorrect appreciation of facts and calculations.

The Tribunal held that if the assessment is reopened on a specific reason, the AO cannot make additions on other grounds if the original reason for reopening is not addressed. Since no addition was made on account of bank interest, the assessment order passed under section 147 was unsustainable.

The Tribunal held that while the AO was justified in rejecting claims not made through a valid revised return, the appellate authorities, including the Tribunal, can entertain such claims. The matter was restored to the AO for fresh adjudication.

The Tribunal corrected clerical errors in its previous order. Specifically, it replaced the word 'assessee' with 'Revenue' in two paragraphs to accurately reflect that the appeal was filed by the Revenue.

The Tribunal held that the employees' contribution to PF and ESI, if not deposited by the prescribed due date, cannot be allowed as a deduction. This is based on the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs CIT.

The Tribunal found contradictory findings in the CIT(A)'s order regarding the nature of transactions under Section 68. Consequently, the issue was remanded back to the Assessing Officer for fresh examination.

The Tribunal held that the seized document relied upon by the AO pertained to Assessment Year 2008-09 and not the relevant Assessment Year 2007-08. Consequently, the addition made by the AO was deemed illegal and unsustainable.

The Tribunal held that the assessment order was passed in violation of the mandatory procedure prescribed under Section 144B of the Act. Following the jurisdictional High Court's decisions, the Tribunal concluded that non-compliance with Section 144B renders the assessment order non est (void).

The Tribunal held that disallowance under Section 14A is not warranted in the absence of exempt income. It also held that the comparable company used by the TPO was not appropriate as its activities differed from the assessee's software development services. The issue of foreign exchange fluctuation loss was remanded to the AO for verification.

The Tribunal dismissed the revenue's appeal, following coordinate bench decisions. It held that the issue of expenses pertaining to earlier years should be examined in those years, and the reduction of share of profit of AOP from book profit was allowable based on statutory amendments.

The Tribunal held that since the order under section 263 was already quashed by the ITAT, the consequent order passed under section 143(3) read with section 263 could not survive. Therefore, the CIT(A)'s order was upheld.

The Tribunal held that the reassessment proceedings were initiated beyond four years without establishing any failure on the part of the assessee, making the proviso to Section 147 applicable. The Assessing Officer also failed to demonstrate any failure on the assessee's part, indicating a change of opinion.

The Tribunal dismissed the Revenue's appeal because the assessee was undergoing corporate insolvency under the IBC, 2016. The appeal was dismissed with liberty to pursue it once the assessee is out of insolvency proceedings.

The Tribunal held that the appeals were not maintainable as they were filed by an unauthorized person. However, liberty was granted to the new management to reinstate the appeals if they deemed it necessary and authorized.

The Tribunal held that the appeals were not maintainable as they were filed by an unauthorized person. However, liberty was granted to the new management to reinstate the appeals if they deemed it necessary and authorized.