ITAT Mumbai Judgments — May 2023

The Tribunal directed the CIT(A) to reconsider the delay condonation application. The CIT(A) is to consider the explanation of delay from the date of tax payment to the filing of the appeal and decide if there was a sufficient cause.

The Tribunal found that the CIT(A) had rejected the assessee's appeal without analyzing the merits of the case. Therefore, the case was remanded back to the CIT(A) for a fresh decision on merit after providing the assessee with a reasonable opportunity of being heard.

The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal in limine due to the delay in filing. The tribunal upheld this decision as the assessee failed to provide documentary evidence for the reasons cited for the delay.

The Tribunal directed the CIT(A) to reconsider the delay condonation application. The CIT(A) is to consider the explanation of delay from the date of tax payment to the filing of the appeal and decide if there was a sufficient cause.

The Tribunal followed the Hon'ble Madras High Court's decision, which held that employee contributions to PF/ESIC must be remitted within the due date prescribed by the respective Acts, irrespective of when the salary was paid. Therefore, the disallowance was confirmed.

The Tribunal held that the second assessment order passed by the Assessing Officer was null and void ab-initio. This was because it reassessed income that was already the subject matter of an appeal before the CIT(A), contravening the proviso to Section 147 of the Act.

The Tribunal is considering the assessee's appeal against the CIT(A)'s order. The appeal challenges the assessment order's validity and specific disallowances, including pre-operative expenses and interest on late TDS payment.

The Tribunal directed the CIT(A) to reconsider the delay condonation application. The CIT(A) is to consider the explanation of delay from the date of tax payment to the filing of the appeal and decide if there was a sufficient cause.

The Tribunal held that the Supreme Court's decision in Checkmate Services Pvt. Ltd. is declaratory and applies retrospectively. Therefore, the disallowance for late deposit of employee's PF contribution is valid, and the assessee cannot claim it indirectly under Section 37.

The Tribunal dismissed the Revenue's ground regarding Section 14A disallowance, agreeing with the CIT(A) that no exempt income was earned. The Tribunal also dismissed the Revenue's ground concerning the write-off of TDS, allowing it as a deduction under Section 36(1)(vii).

The Tribunal held that the CIT(A) failed to follow the mandate of Section 250(6) by not providing reasons for each ground of appeal. The ex-parte order was set aside for violating natural justice.

The Tribunal held that only the profit element embedded in the on-money receipts is taxable, not the entire amount. It further held that this profit element should be taxed in the year the sale of the flat is accounted for, aligning with the taxability of the cheque component.

The Tribunal directed the CIT(A) to reconsider the delay condonation application. The CIT(A) is to consider the explanation of delay from the date of tax payment to the filing of the appeal and decide if there was a sufficient cause.

The Tribunal held that only the profit element embedded in the on-money receipts is taxable, not the entire amount. It further held that this profit element should be taxed in the year the sale of the flat is accounted for, aligning with the taxability of the cheque component.

The Tribunal held that only the profit element embedded in the on-money receipts is taxable, not the entire amount. It further held that this profit element should be taxed in the year the sale of the flat is accounted for, aligning with the taxability of the cheque component.

The Tribunal held that the assessee had substantially complied with the booking terms by making significant payments, and the developer accepted these payments. Therefore, the proviso to Section 56(2)(vii)(b) was attracted, and the stamp duty value on the booking date should be compared with the agreement value.

The Tribunal held that the penalty proceedings were vitiated due to the Assessing Officer's failure to strike out the irrelevant limb in the penalty notice. Consequently, the penalty levied by the Assessing Officer was deleted.

The Tribunal upheld the CIT(A)'s decision, allowing the deduction for unamortized brokerage expenses as the business was discontinued and the expense was incurred in the relevant year. It also allowed the ESOP expenses, considering them as actual staff welfare expenditure incurred for employee retention and motivation.

The tribunal held that the notice issued for penalty was defective due to vagueness, as it invoked both 'concealment of income' and 'furnishing inaccurate particulars of income' without striking off the irrelevant clause. This vagueness persisted even in the penalty order.

The Tribunal upheld the disallowance of the director's education expenses. It found that the assessee failed to demonstrate how the course, particularly in international business management for a trading company with no foreign presence, was directly and exclusively for the company's business.

The Tribunal held that the hardship compensation was a capital receipt and not taxable in the hands of the assessee. It also noted that the compensation was received as inheritance on behalf of legal heirs, not solely by the assessee.

The Tribunal held that the assessee discharged its onus for the loan from Maheshwari Prabhakar Kunte due to prior acceptance and supporting documents. However, for the loan from Harish Poojary, the assessee failed to prove creditworthiness and genuineness.

The Tribunal held that the AO failed to disprove the genuineness of the loan transaction despite the assessee providing sufficient documentary evidence. The addition under Section 69A was incorrect as the transaction was recorded in the books and the assessee offered a satisfactory explanation.

The Tribunal held that when sales are accepted as genuine, the entire purchases cannot be treated as non-genuine. The profit element embedded in such purchases should be estimated and added to income.

The Tribunal held that the assessee had provided sufficient documentary evidence, including purchase and sale contract notes and bank statements, to prove the genuineness of the share transactions. The Tribunal noted that the transactions were conducted through a recognized stock exchange and routed through banking channels.

The Tribunal held that the PCIT's order invoking Section 263 was valid as the assessment order was erroneous and prejudicial to the revenue's interest. The Assessing Officer had not properly inquired into the investment issue.

The Tribunal directed the CIT(A) to reconsider the delay condonation application. The CIT(A) is to consider the explanation of delay from the date of tax payment to the filing of the appeal and decide if there was a sufficient cause.

The Tribunal held that the issue of depreciation on computer software is a debatable issue and not a matter of rectification. Therefore, the Assessing Officer was not justified in making a rectification on this substantive issue.

The Tribunal held that the issue of depreciation on computer software is a debatable issue and not a matter of rectification. Therefore, the Assessing Officer was not justified in making a rectification on this substantive issue.

The Tribunal held that a notice issued under Section 148 of the Income Tax Act in the name of a deceased person is void ab initio and without jurisdiction. Therefore, the reassessment proceedings initiated based on such a notice are invalid.

The Tribunal held that the cash deposits were substantiated by the assessee's cash sales, which were reflected in the audited books of accounts and offered for taxation. The addition under Section 68 would lead to double taxation.

The Tribunal held that the AO's approach of disallowing 100% of purchases without disturbing the sales was flawed. It noted that the standard of proof in income tax proceedings is preponderance of probability, not beyond doubt. The Tribunal directed the AO to re-compute the disallowance based on the profit embedded in the purchases.

The Tribunal held that Section 56(2)(x) of the Income Tax Act, introduced effective from 01.04.2017, cannot be applied retrospectively to a transaction (agreement dated 13.07.2009) entered into prior to its commencement. Therefore, the addition made under this section was set aside.

The Tribunal admitted additional evidence filed by the assessee concerning the source of funds for the investment and cash credits. The Tribunal restored these issues to the Assessing Officer for fresh adjudication.

The Tribunal held that the TDS credit should be granted if the income is taxable in India and offered for taxation, or if the income is not chargeable to tax in India, the refund should be issued. The issue was set aside to the Assessing Officer for examination.

The Tribunal noted that the assessee had inadvertently omitted the sale of the Thane flat and had invested in a new property exceeding the aggregated capital gains. To meet the ends of justice, the Tribunal set aside the AO's order and restored the issues to the AO for fresh decision.

The Tribunal held that the disallowance of employee's contribution to PF/ESI paid after the due date is not allowable under section 36(1)(va) and falls under the nature of an incorrect claim, which can be adjusted under section 143(1)(a)(ii). However, for payments made on the day after the due date due to a holiday, the issue was restored to the AO for examination under Section 10 of the General Clauses Act.

The Tribunal held that the amount received was in the nature of compensation for breach of contract, not for the transfer of any right, title, or interest in the property. Therefore, it could not be taxed as capital gains.

The Tribunal held that the assessee, being a cooperative housing society and not a bank, is not covered by the exclusionary provisions of Section 80P(4). Therefore, the deduction under Section 80P(2)(d) for interest earned from investments in a cooperative bank is allowable.

The Tribunal upheld the decision of the CIT(A) to restrict the disallowance to 12.5% of the non-genuine purchases. This was based on the precedent set by the Tribunal in the assessee's own case for earlier assessment years.

The Tribunal held that the penalty was levied on an estimated basis for Section 14A disallowance, and the return was filed before the insertion of Section 14A. Furthermore, many of the additions on which penalties were levied were deleted by appellate authorities. Therefore, the penalty was not maintainable.

The Tribunal held that the proviso to Section 92C(2) mandates the use of the arithmetical mean (simple average) for computing the arm's length price. However, it directed the exclusion of two comparable companies with abnormally high profits (>100%) for re-computation.

The Tribunal restored the matter back to the AO, directing the assessee to produce evidence that the prior period expenses materialized in the current year. The AO is to decide the issue after verification.

The Tribunal held that the amount received was in the nature of compensation for breach of contract, not for the transfer of any right, title, or interest in the property. Therefore, it could not be taxed as capital gains.

The Tribunal held that the assessee, being a cooperative housing society and not a bank, is not covered by the exclusionary provisions of Section 80P(4). Therefore, the deduction under Section 80P(2)(d) for interest earned from investments in a cooperative bank is allowable.

The Tribunal held that a penalty under Section 271(1)(c) cannot be levied solely on additions made on an estimated basis. The AO had not conclusively established concealment of income.

The Tribunal held that the issue of depreciation on computer software is a debatable issue and not a matter of rectification. Therefore, the Assessing Officer was not justified in making a rectification on this substantive issue.

The Tribunal held that the amount received was in the nature of compensation for breach of contract, not for the transfer of any right, title, or interest in the property. Therefore, it could not be taxed as capital gains.

The Tribunal held that the addition on account of establishment expenses was not a mistake apparent from the record and thus not rectifiable under Section 154. However, the disallowance of deduction under Section 11(2) was upheld as the assessee failed to comply with the prescribed procedure by not filing Form 10 within the due date.

The Tribunal held that the delay in filing the appeal before the CIT(A) should be considered in light of the Covid-19 pandemic and the Supreme Court's directions for excluding the period of lockdown. The Tribunal set aside the CIT(A)'s order and remanded the case for a decision on merits.