ITAT Mumbai Judgments — January 2024

The Tribunal found that while the assessee failed to prove the genuineness of purchases from the suppliers of bills, the revenue did not doubt the usage of materials for construction work. Therefore, a reasonable disallowance was deemed appropriate to account for potential revenue leakage.

The Tribunal held that the assessee's operations did not constitute a Permanent Establishment in India. It found that RGA Services, an Indian entity, did not have the authority to conclude contracts on behalf of the assessee and lacked the necessary licenses to act as a reinsurer or broker.

The Tribunal held that the concept of deemed rental income is applicable to self-occupied properties, not vacant let-out properties. For vacant let-out properties, the actual rent received or receivable is considered, as per Section 23(1)(c) of the Act.

The Tribunal found that while the assessee failed to prove the genuineness of purchases from the suppliers of bills, the revenue did not doubt the usage of materials for construction work. Therefore, a reasonable disallowance was deemed appropriate to account for potential revenue leakage.

The Tribunal restored the appeals to the file of the CIT(A) to provide the assessee with one more opportunity to be heard. A cost of ₹10,000 per appeal was imposed on the assessee, payable to the Prime Minister's Relief Fund.

The Tribunal observed that the AO did not allow cross-examination of the key witness. The witness's statement was later retracted, and the diary entries were not clearly linked to the assessee. The Tribunal found the material insufficient to sustain the additions made.

The Tribunal held that the assessee was not eligible for deduction under Section 80IA. The SPVs, being distinct legal entities that entered into agreements with NHAI and executed the infrastructure projects, were the eligible 'enterprises', not the assessee which provided advisory services.

The Tribunal held that the late filing of Form No. 67 was a procedural defect, not a substantive one. The Tribunal relied on previous decisions, including 'Sonakshi Sinha' and 'Yogesh Dnyandeo Kinage', which treated such defects as rectifiable.

The Tribunal noted that the assessee failed to provide necessary submissions and documents to substantiate its claim before the lower authorities, leading to ex-parte decisions. However, considering the peculiar facts, the Tribunal remanded the case to the Commissioner for a fresh decision.

The Tribunal found that the Assessing Officer lacked sufficient material to make the addition under Section 68. While the reassessment proceedings were validly initiated based on information from the DGIT, the evidence presented did not conclusively prove that the appellant received an unsecured loan from Sankhala Exports Pvt. Ltd. or that the amount constituted an unexplained cash credit.

The Tribunal held that the service of notice under section 143(2) is a mandatory condition precedent for the validity of assessment proceedings. The Tribunal found that the Revenue Department failed to prove the proper service of the notice.

The Tribunal held that the deficiencies in KYC and account opening procedures found during the search did not constitute 'incriminating material' for concluded assessments. Therefore, additions under Section 153A could not be made for unabated assessments.

The Tribunal held that the assessee had produced sufficient documentary evidence to establish the genuineness of the transaction, and the failure of the creditors to appear personally should not be the sole basis for addition. The AO should have considered the other evidence provided.

The Tribunal held that the Ld. CIT(A) should have decided the appeal on merit, even without the assessee's representation. Since the appeal was not decided on merit and the assessee's submissions were not considered, the impugned order was set aside.

The Tribunal noted that construction expenses related to pending bills or works for Tower D1, even if incurred after sale, are allowable as they pertain to common areas or unfinished works, which are builder's responsibility. Regarding establishment and interest expenses, the Tribunal found that if the assessee continued its real estate business activities, these expenses are deductible without direct linkage to a specific project.

The tribunal upheld the CIT(A)'s finding that the addition under Section 69 was not justified as the investment was not recorded in the assessee's books. The tribunal also noted that the reassessment proceedings were void ab initio due to jurisdictional issues.

The Tribunal held that the assessee was not eligible for deduction under Section 80IA. The SPVs, being distinct legal entities that entered into agreements with NHAI and executed the infrastructure projects, were the eligible 'enterprises', not the assessee which provided advisory services.

The Tribunal held that the assessee was not eligible for deduction under Section 80IA. The SPVs, being distinct legal entities that entered into agreements with NHAI and executed the infrastructure projects, were the eligible 'enterprises', not the assessee which provided advisory services.

The Tribunal upheld the CIT(A)'s decision to delete the additions, finding that the statement relied upon by the Revenue was withdrawn and no further corroborating evidence was presented. The Tribunal followed previous decisions involving related group entities.

The Tribunal noted that the assessee's main contention was that the alleged fraudulent claim was lodged by Mr. Rajesh Tiwari, who was not a competent Chartered Accountant and had no degree. The assessee claimed they never availed of such a fraudulent claim. The Tribunal considered that the AO had made additions under section 68 on the ground of fraudulent refund claims and the assessee's AR had expressed inability to produce documentary evidence. Therefore, a reasonable opportunity was to be provided to the assessee.

The Tribunal held that the material and documents found during the search were not incriminating in nature. The AO's observations regarding deficiencies in KYC documentation, account opening forms, and violations of society byelaws, while potentially leading to action under other statutes or by authorities like the RBI, did not, in themselves, constitute incriminating material that would justify additions under Section 68 of the Act for concluded and unabated assessments. The Tribunal noted that the assessee received money in the normal course of business from members, and the violations of Rule 114B by depositors or Rule 114E by the assessee did not automatically mean the deposited money belonged to the assessee. Furthermore, no material was found in post-search inquiries to suggest the money belonged to the assessee. The Special Auditor also highlighted discrepancies but did not find material to conclude the deposited amounts belonged to the assessee. Consequently, the additions made by the AO under Section 153A for the assessment years 2012-13 to 2015-16 were deleted. The Tribunal found that the material/documents found during the search were not of a nature that incriminated the assessee or raised any doubt against it, and if anything, may have incriminated the members in whose accounts the money was deposited. The Tribunal also noted that proceedings were initiated against members based on the material found. Therefore, the AO could not have made additions under Section 153A for concluded assessments. The other grounds raised by the assessee were rendered academic.

The Tribunal held that the deficiencies in KYC and account opening procedures found during the search did not constitute 'incriminating material' for concluded assessments. Therefore, additions under Section 153A could not be made for unabated assessments.

The Tribunal held that the AO erred by not referring the matter to the valuation officer as mandated by Section 50(C)(2) when the assessee objected to the stamp duty value. The CIT(A) also erred by dismissing the appeal without considering the merits.

The Tribunal held that additions not based on the reasons recorded for reopening are unsustainable without a fresh notice under Section 148. Consequently, the assessment order was quashed as void-ab-initio.

The Tribunal held that no transfer pricing adjustment can be made on a domestic transaction referred to the TPO after the omission of Section 92BA(i) by the Finance Act, 2017, even if the transaction occurred in an earlier assessment year. Disallowances under Section 14A were also partly deleted.

The Tribunal held that the AO had applied his mind and conducted inquiries, and the assessment order did not suffer from the twin conditions of being erroneous and prejudicial to the revenue. Therefore, the Pr.CIT's action of assuming jurisdiction under section 263 was not acceptable.

The Tribunal held that the AO had applied his mind and conducted inquiries, and the assessment order did not suffer from the twin conditions of being erroneous and prejudicial to the revenue. Therefore, the Pr.CIT's action of assuming jurisdiction under section 263 was not acceptable.

The Tribunal held that the assessee had complied with the provisions of section 270AA(1) by paying the tax and seeking immunity. However, the application in the prescribed form number 68 was delayed due to technical glitches on the IT portal during the Covid-19 pandemic, and the assessee had provided evidence of this. The Tribunal noted that no opportunity of hearing was provided to the assessee before rejecting the immunity application.

The Tribunal held that the AO's enhancement of the Section 14A disallowance was unwarranted and directed its deletion. Regarding the foreign exchange gain, the Tribunal found it to be a capital receipt not exigible to tax, overturning the AO's decision to tax it under Section 28(iv).

The Tribunal held that the AO's enhanced disallowance under Section 14A was unwarranted and directed its deletion. Regarding the foreign exchange gain, the Tribunal found it to be a capital receipt and not taxable as business income under Section 28(iv).

The Tribunal held that the CIT invoked Section 263 based on the AO's proposal, without forming an independent opinion. Furthermore, the CIT's finding that no reference was made to the TPO was contrary to the facts, as a reference was made within the extended time limit provided by the Taxation and Other Laws (Regulation of Amendment of Certain Provisions) Act, 2020.

The Tribunal held that the deficiencies in KYC and account opening procedures found during the search did not constitute 'incriminating material' for concluded assessments. Therefore, additions under Section 153A could not be made for unabated assessments.

The Tribunal noted that the sale consideration was received by the assessee's son, who had declared it in his return of income. The AO should have reopened the son's assessment for the difference between the sale price and the stamp valuation. The addition in the hands of the assessee was directed to be deleted.

The Tribunal held that the allotment letter, which fixed the consideration for the property, should be regarded as an agreement for the purposes of Section 56(2)(x). Therefore, the assessee was entitled to the benefit of the provisos to Section 56(2)(x).

The Tribunal held that the issue was covered by its own earlier decisions for previous assessment years. Consequently, the disallowance made by the AO was deleted.

The Tribunal held that the issue was covered by its own earlier decisions for previous assessment years. Consequently, the disallowance made by the AO was deleted.

The Tribunal held that the passing of a draft assessment order under Section 144C(1) is mandatory for eligible assessees when a prejudicial variation is proposed. The direct final assessment order was therefore illegal.

The Tribunal held that the assessee was not eligible for deduction under Section 80IA. The SPVs, being distinct legal entities that entered into agreements with NHAI and executed the infrastructure projects, were the eligible 'enterprises', not the assessee which provided advisory services.

The Tribunal held that the deficiencies in KYC and account opening procedures found during the search did not constitute 'incriminating material' for concluded assessments. Therefore, additions under Section 153A could not be made for unabated assessments.

The Tribunal held that the deficiencies in KYC and account opening procedures found during the search did not constitute 'incriminating material' for concluded assessments. Therefore, additions under Section 153A could not be made for unabated assessments.

The Tribunal held that the material and documents found during the search were not incriminating in nature. The AO's observations regarding deficiencies in KYC documentation, account opening forms, and violations of society byelaws, while potentially leading to action under other statutes or by authorities like the RBI, did not, in themselves, constitute incriminating material that would justify additions under Section 68 of the Act for concluded and unabated assessments. The Tribunal noted that the assessee received money in the normal course of business from members, and the violations of Rule 114B by depositors or Rule 114E by the assessee did not automatically mean the deposited money belonged to the assessee. Furthermore, no material was found in post-search inquiries to suggest the money belonged to the assessee. The Special Auditor also highlighted discrepancies but did not find material to conclude the deposited amounts belonged to the assessee. Consequently, the additions made by the AO under Section 153A for the assessment years 2012-13 to 2015-16 were deleted. The Tribunal found that the material/documents found during the search were not of a nature that incriminated the assessee or raised any doubt against it, and if anything, may have incriminated the members in whose accounts the money was deposited. The Tribunal also noted that proceedings were initiated against members based on the material found. Therefore, the AO could not have made additions under Section 153A for concluded assessments. The other grounds raised by the assessee were rendered academic.

The Tribunal held that the material and documents found during the search were not incriminating in nature. The AO's observations regarding deficiencies in KYC documentation, account opening forms, and violations of society byelaws, while potentially leading to action under other statutes or by authorities like the RBI, did not, in themselves, constitute incriminating material that would justify additions under Section 68 of the Act for concluded and unabated assessments. The Tribunal noted that the assessee received money in the normal course of business from members, and the violations of Rule 114B by depositors or Rule 114E by the assessee did not automatically mean the deposited money belonged to the assessee. Furthermore, no material was found in post-search inquiries to suggest the money belonged to the assessee. The Special Auditor also highlighted discrepancies but did not find material to conclude the deposited amounts belonged to the assessee. Consequently, the additions made by the AO under Section 153A for the assessment years 2012-13 to 2015-16 were deleted. The Tribunal found that the material/documents found during the search were not of a nature that incriminated the assessee or raised any doubt against it, and if anything, may have incriminated the members in whose accounts the money was deposited. The Tribunal also noted that proceedings were initiated against members based on the material found. Therefore, the AO could not have made additions under Section 153A for concluded assessments. The other grounds raised by the assessee were rendered academic.

The Tribunal dismissed the revenue's grounds of appeal, finding the CIT(A)'s decisions to be legally correct and in consonance with judicial discipline. The assessee's cross-objection regarding the exempt income under Section 10(34) was restored to the AO for verification.

The Tribunal held that the AO's disallowance under Section 14A was excessive and directed its deletion. Regarding the foreign exchange gain, the Tribunal found it to be a capital receipt, not taxable as business income.

The Tribunal dismissed the revenue's grounds of appeal, upholding the CIT(A)'s decision. It relied on its own previous rulings in the assessee's and similar cases, confirming that the assessee's method of computing actuarial surplus was in accordance with the law and that exemptions under Section 10(34) and 10(23AAB) were allowable.

The Tribunal held that the method of computation of income followed by the assessee, which was consistent with previous ITAT decisions in the assessee's own case, was correct. It also upheld the allowability of exemptions claimed under Section 10(34) and Section 10(23AAB).

The Tribunal held that the assessee made the claim in a bonafide manner with full disclosure. Since the addition was based on an ad-hoc/estimate basis and later deleted, penalty was not warranted.

The Tribunal held that passing a draft assessment order under Section 144C(1) is mandatory for eligible assessees when a variation prejudicial to their interest is proposed. The direct final assessment order was therefore illegal and without jurisdiction.

The Tribunal noted that the CIT(A) passed an ex-parte order due to the assessee's non-appearance. In the interest of justice, the assessee was granted another opportunity to present their case on merits before the CIT(A). The matter was restored to the CIT(A) for de novo adjudication.

The Tribunal restored the issue of agricultural income yield to the Assessing Officer for expert determination. The issue of cash deposits was also restored to the AO for verification of prior agricultural income. The claim for telescoping the two additions was rejected.