ITAT Mumbai Judgments — June 2023

The ITAT dismissed the ground related to gratuity provision as infructuous since it was not made in the scrutiny assessment order. For PF/ESIC contributions, the Tribunal upheld the disallowance based on the Supreme Court's decision in Checkmate Services, but remanded a small portion for verification.

The Tribunal held that the letters of confirmation from new members, along with summarized statements detailing donor names, PANs, amounts, and modes of payment, satisfied the requirements of Section 11(1)(d) of the Income Tax Act. The society's own rules also treated such fees as forming the corpus of its properties.

The Tribunal held that the disallowance made by the CPC under Section 143(1) for late payment of employee contributions to PF and ESI is permissible. The disallowance should be restricted to the extent of employee contributions.

The Tribunal held that the CIT(A) erred in deciding the issue without properly considering the facts in light of the Supreme Court's judgment in ACIT vs. Ahmedabad Urban Development Authority. The matter was remanded back to the CIT(A) for a fresh decision.

The Tribunal found that the AO could have further verified the identity and creditworthiness of the lender by issuing a notice under Section 133(6). Therefore, the issue was remanded back to the AO for fresh adjudication.

The Tribunal held that, following the Supreme Court's decision in Checkmate Services Pvt. Ltd., delayed deposit of employee's contribution to PF/ESIC beyond the due date results in disallowance of the deduction. The distinction between employer's and employee's contribution is crucial.

The Tribunal held that the appeal is partly allowed to the extent of verifying if the amount of Rs. 11,47,285/- was deposited before the due date. If found correct, this portion of the disallowance should be allowed.

The Tribunal upheld the CIT(A)'s decision, stating that Section 14A disallowance cannot exceed exempt income and that the amendment inserting an explanation to Section 14A is prospective. Regarding interest expenses, the Tribunal found the assessee had sufficient interest-free funds to cover advances, making the disallowance unjustified.

The Tribunal held that penalty under Section 271(1)(c) is not leviable on additions made purely on an estimated basis. Following a co-ordinate bench's decision in the assessee's own case, the penalty orders were set aside.

The Tribunal held that penalty under Section 271(1)(c) is not leviable on additions made purely on an estimated basis. Following a co-ordinate bench's decision in the assessee's own case, the penalty orders were set aside.

The Tribunal held that the delayed deposit of employees' contribution to PF and ESIC, even if made before the return filing due date, is not an allowable deduction under Section 36(1)(va) read with Section 43B. This decision follows the Supreme Court's ruling in Checkmate Services Pvt. Ltd. vs. CIT.

The Tribunal found that neither the AO nor the CIT(A) had properly examined the evidence submitted by the assessee. Therefore, the matter was remanded to the AO for de novo adjudication, with directions for thorough verification and potential field visits.

The Tribunal found that neither the AO nor the CIT(A) had properly examined the evidence submitted by the assessee. Therefore, the matter was remanded to the AO for de novo adjudication, with directions for thorough verification and potential field visits.

The Tribunal held that the payments received by Factiva Limited were not in the nature of royalty under Article 13 of the India-UK DTAA. It also found that the revenue failed to prove the existence of a Permanent Establishment in India.

The Tribunal held that the payments received by Factiva Limited were not in the nature of royalty under Article 13 of the India-UK DTAA. It also found that the revenue failed to establish that DJCIPL constituted an agency PE of Factiva Limited in India.

The Tribunal held that the network fees received by the assessee were neither in the nature of Royalty nor FTS as defined under Article 12 of the India-Netherlands DTAA. Consequently, the amount was not exigible to tax in India.

The assessee requested permission to withdraw the appeal due to the non-appealable nature of the PCIT's order. The Tribunal granted the request and dismissed the appeal as withdrawn.

The Tribunal found that neither the AO nor the CIT(A) had properly examined the evidence submitted by the assessee. Therefore, the matter was remanded to the AO for de novo adjudication, with directions for thorough verification and potential field visits.

The Tribunal held that the network fees received by the assessee were neither in the nature of Royalty nor FTS as defined under Article 12 of the India-Netherlands DTAA. Consequently, the amount was not exigible to tax in India.

The Tribunal held that the assessee failed to substantiate the source of cash deposited in bank accounts, leading to dismissal of that ground. For cash loans, the Tribunal considered the assessee's reconciliation and submissions regarding duplication and prior taxation, leading to a partial allowance.

The Tribunal held that the assessee failed to substantiate the source of cash deposited in bank accounts, leading to dismissal of that ground. For cash loans, the Tribunal considered the assessee's reconciliation and submissions regarding duplication and prior taxation, leading to a partial allowance.

The Tribunal held that the assessee failed to substantiate the source of cash deposited in bank accounts, leading to the dismissal of that ground. For cash loans, the Tribunal considered the assessee's reconciliation and submissions regarding duplication and prior taxation, directing relief in accordance with CBDT circulars.

The Tribunal found that neither the AO nor the CIT(A) had properly examined the evidence submitted by the assessee. Therefore, the matter was remanded to the AO for de novo adjudication, with directions for thorough verification and potential field visits.

The Tribunal upheld the CIT(A)'s decision to delete both additions, following its own prior ruling in a similar case involving a family member. The Tribunal found that the assessee had discharged the onus under Section 68 and that the AO had not disproved the genuineness of the transactions.

The Tribunal held that the payments to the interior decorator were explained by the cash balances available in the books of various family members. Therefore, the additions made by the AO and confirmed by the CIT(A) for unexplained expenditure were not justified.

The Tribunal directed the exclusion of 'Birla Global Asset Finance Co Ltd' from the comparable list for marketing services due to functional dissimilarity. For backend processing services, eight comparable companies were excluded based on previous tribunal decisions, leading to a direction for re-computation of the arm's length price.

The Tribunal upheld the CIT(A)'s decision to delete both additions, following its own prior ruling in a similar case involving a family member. The Tribunal found that the assessee had discharged the onus under Section 68 and that the AO had not disproved the genuineness of the transactions.

The Tribunal held that the AO erred in passing the assessment order in the name of a non-existent entity, as this renders the order bad in law. The assessment order was quashed due to this substantive illegality.

The Tribunal upheld the CIT(A)'s decision to delete both additions, following its own prior ruling in a similar case involving a family member. The Tribunal found that the assessee had discharged the onus under Section 68 and that the AO had not disproved the genuineness of the transactions.

The Tribunal held that the payments to the interior decorator were explained by the cash balances available in the books of various family members. Therefore, the additions made by the AO and confirmed by the CIT(A) for unexplained expenditure were not justified.

The Tribunal held that the payments to the interior decorator were explained by the cash balances available in the books of various family members. Therefore, the additions made by the AO and confirmed by the CIT(A) for unexplained expenditure were not justified.

The Tribunal held that the transactions of sale of shares were genuine and undertaken in the normal course of business by an assessee knowledgeable in stock markets. Therefore, the claim for exemption under Section 10(38) was allowed.

The ITAT recalled its earlier order, acknowledging that the Supreme Court's decision in Checkmate Services Pvt. Ltd. clarifies the law retrospectively. The Tribunal then dismissed the assessee's appeal based on this Supreme Court ruling.

The Tribunal held that a cooperative society is eligible for deduction under Section 80P(2)(d) on interest income earned from investments in other cooperative societies or cooperative banks. The earlier Supreme Court decision relied upon by the lower authorities was distinguished as not being on this specific issue.

The Tribunal held that interest income earned by a cooperative society from its deposits with cooperative banks is eligible for deduction under Section 80P(2)(d). It relied on various High Court and Tribunal decisions that distinguish between cooperative banks and other commercial banks for this purpose.

The Tribunal held that acquiring a flat in a building under construction is akin to construction for Section 54 purposes. Since possession was received within three years of the sale and the jurisdictional High Court views utilization of capital gains for a flat under construction as a method of construction, the exemption is allowable.

The ITAT recalled its earlier order, acknowledging that a subsequent Supreme Court decision clarified that delayed payment of employee's PF/ESIC contributions are not deductible. Consequently, the assessee's appeal grounds were dismissed.

The Tribunal set aside the CIT(A)'s order and remitted the issues back to the CIT(A) for fresh adjudication. The assessee was to be provided adequate opportunity of hearing and was expected to cooperate in submitting information.

The Tribunal held that the assessee, being a cooperative society, is eligible for deduction under Section 80P(2)(d) on interest income earned from investments in other cooperative societies or cooperative banks. The reliance on the Supreme Court decision in Totgars Cooperative Sales Society was found to be distinguishable on facts.

The Tribunal held that acquiring a flat in a building under construction is akin to construction for Section 54 purposes. Since possession was received within three years of the sale and the jurisdictional High Court views utilization of capital gains for a flat under construction as a method of construction, the exemption is allowable.

The Tribunal followed the ratio of the Hon'ble Supreme Court regarding the extension of limitation period and condoned the delay in filing the appeals. The core issue revolved around the applicability of DTAA rates for DDT on dividends paid to non-residents.

The Tribunal recalled its earlier order based on the Supreme Court's decision in Checkmate Services Pvt. Ltd., which clarified that delayed employee contributions to funds like PF/ESIC are not deductible. Consequently, the assessee's ground no. 22 was dismissed.

The Tribunal held that community development expenses were not disallowable as the amendment excluding CSR expenses was not applicable. Regarding additional depreciation, the Tribunal followed the Karnataka High Court's decision allowing the balance 50% in the subsequent year if the plant and machinery were used for less than 180 days.

The Tribunal held that a mere Board Resolution does not create a crystallised liability. The liability crystallises only when the resolution is acted upon, such as by serving notices to employees and lessors. Therefore, the provision made in the impugned assessment year was rightly rejected.

The Tribunal held that the activity of trading, specifically import for re-export, falls within the definition of 'services' as per the SEZ Act and Rules. Therefore, the assessee is eligible for deduction under Section 10AA.

The Tribunal held that the activity of trading, specifically import for re-export, falls within the definition of 'services' as per the SEZ Act and Rules. Therefore, the assessee is eligible for deduction under Section 10AA.

The Tribunal recalled its earlier order, acknowledging that the Supreme Court's decision on delayed employee contributions to PF/ESIC was binding and operates retrospectively. Consequently, the assessee's appeal grounds were dismissed.

The Tribunal held that deduction for employee's contribution to PF/ESI is allowed only if deposited within the due date as per the respective Acts. Relying on the Supreme Court decision in Checkmate Services Pvt. Ltd., the disallowance was confirmed.

The Tribunal confirmed the CIT(A)'s action and dismissed the appeal, upholding the addition made by the AO. The Tribunal noted that the assessee failed to provide evidence to challenge the reopening or the addition.

The Tribunal found that while the assessee was involved in purchase transactions, the addition estimated at 12.5% was high. To meet the ends of justice, the addition was restricted to 6% of the alleged bogus purchases.