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382 orders · Page 7 of 8
The Tribunal held that the substantive addition made in the case of M/s IPCA Laboratories Ltd. for over-invoicing was unjustified. Consequently, the protective addition in the assessee's hands was also deleted.
The Tribunal decided the issues as follows: Issue 1: For AYs 2009-10 and 2010-11, which were unabated assessments, the Tribunal held that additions made in original assessments under Section 143(3) could not be re-added in Section 153A assessments without incriminating material. The Tribunal relied on the principles laid down in CIT vs. Kabul Chawla and PCIT vs. Abhisar Buildwell (P) Ltd. The Tribunal noted that these issues had been partly or fully allowed by the Tribunal in prior regular appeals concerning the original assessments. Therefore, the additions were deleted for these unabated years. Issue 2: For AY 2014-15, concerning the addition of notional gains to book profit under Section 115JB, the Tribunal allowed the assessee's claim. It observed that similar gains were not added in earlier unabated AYs 2012-13 and 2013-14 by the same AO, who had accepted the assessee's computation. Following the principle of consistency as per Radhasoami Satsang v. CIT, and noting that there was no specific adjustment prescribed in Explanation (1) to Section 115JB for such gains, the Tribunal upheld the assessee's claim for reduction. The additional ground raised by the assessee was allowed.
The Tribunal held that the assessee had provided sufficient documentary evidence for the purchase and sale of shares, including bank statements and demat statements. It relied on various High Court and ITAT judgments that allowed similar claims when the assessee provided evidence and no adverse findings were made against them.
The Tribunal noted that the AO primarily relied on a generalized report from the investigation wing without specific material linking the assessee's transactions to manipulation. The assessee provided evidence of share purchase and sale through banking channels and the stock exchange, with shares held in Demat account. The Tribunal found these facts similar to a High Court decision where similar additions were deleted.
The Tribunal partly allowed the revenue's appeal regarding Section 14A by restricting the disallowance to 0.50% of exempt income. The Tribunal dismissed the appeal concerning accommodation entries, upholding the addition made by the AO.
The Tribunal held that the substantive addition made in the case of M/s IPCA Laboratories Ltd. for over-invoicing was unjustified. Consequently, the protective addition in the assessee's hands was also deleted.
The Tribunal addressed several issues. Regarding the Transfer Pricing adjustment for technical know-how fees, the assessee's argument that the Tribunal in its own case for AY 2013-14 had decided similar issues, and that the 'need-based test' was rejected in AY 2018-19, was considered. The Tribunal noted that the TPO rejected TNMM and held ALP to be 'NIL'. The Tribunal ultimately dismissed the assessee's ground 3 (rejection of comparables) as infructuous, as the margins were within the ±5% range even after exclusion, implying no TP adjustment was required. For reimbursement of employee expenses, the assessee's contention that foreign nationals were in India for business/employment was supported by visa details and Form 16. The Tribunal found no merit in the Revenue's ground 3 of appeal concerning TP adjustments deleted by the DRP for stationery, printing, and scanning, stating the DRP did not rely on additional evidence and the Revenue could not point to any such evidence. The Tribunal dismissed this ground of the Revenue. The Tribunal also addressed the issue of provisions written back, holding, based on decisions like PCIT vs. Petro Araldite (P) Ltd. and Tetra pack, that such provisions are inextricably linked with business operations and should be considered operating income. The Revenue's appeal on this issue was dismissed. The Tribunal also addressed the disallowance under Section 40(a)(i) concerning payments to RMS, stating that the assessee had entered into an agreement with a third-party vendor for collection of dues, and the AE initially made the payment which was reimbursed. The judgment excerpt ends before a final decision on this specific ground is recorded.
The Tribunal decided that the issue of technical know-how fees should be adjudicated based on previous Tribunal rulings in the assessee's own case. For employee expenses, the Tribunal considered restoring the issue to the Assessing Officer for examining additional evidence.
The Tribunal held that the cash investment was fully covered by the additional income declared by the joint venture in earlier years before the Settlement Commission and in subsequent returns. Therefore, no separate addition was warranted.
The Tribunal partly allowed the appeal regarding Section 14A disallowance, restricting it to 0.50% of exempt income. It allowed the appeal concerning interest disallowance on capital advances, finding no evidence of borrowed funds being used. However, it dismissed the appeal concerning additions for accommodation entries due to lack of substantiation.
The Tribunal held that for unabated assessments, additions made under Section 153A without incriminating material found during the search are unsustainable. Regarding bogus purchases, the Tribunal ruled that only the profit element embedded in such purchases should be taxed, not the entire value, citing various High Court judgments.
The Tribunal partly allowed the revenue's appeal in ITA No.3952/Mum/2015 concerning the disallowance under Section 14A. The Tribunal found that the AO had not brought material to prove investments were made from borrowed funds. It directed the AO to restrict the disallowance under Rule 8D(2)(iii) for administrative expenses to 0.50% of the investment on which exempt income was earned. The Tribunal dismissed the assessee's appeal regarding additions for accommodation entries. It relied on the CIT(A)'s finding that statements made by the CFO and Director under oath, admitting to accommodation entries with ICSA (India) Ltd. and other entities, were not conclusively controverted by the assessee. The Tribunal noted that while the assessee produced contracts and bills, these could be part of a facade for accommodation entries. The Tribunal confirmed the addition of Rs.31,78,153/- and dismissed the assessee's ground related to commission of Rs.5,36,000/- on bogus accommodation entries from Orataman Realtors Ltd., finding no conclusive proof of genuineness. The revenue's appeal in ITA No.971/Mum/2020 was dismissed, and the assessee's appeal in ITA No.7900/Mum/2019 was also dismissed.
The Tribunal held that for AYs 2009-10 and 2010-11, which were unabated assessments, the additions made by the AO in the Section 153A assessment were unsustainable if they were already part of the original assessment under Section 143(3) and no incriminating material was found during the search. The Tribunal relied on the Supreme Court's decision in PCIT vs Abhisar Buildwell (P) Ltd. which settled the issue that completed assessments can only be disturbed in Section 153A proceedings if incriminating material is unearthed. The Tribunal noted that the lower authorities had already granted partial relief on merits for some of these issues, and the assessee had also pointed out prior Tribunal rulings on these specific points. The Tribunal's decision on this specific issue was to follow the Supreme Court's precedent regarding unabated assessments and the requirement of incriminating material.
The Tribunal held that the substantive addition made in the case of M/s IPCA Laboratories Ltd. for over-invoicing was unjustified. Consequently, the protective addition in the assessee's hands was also deleted.
The Tribunal held that for unabated assessment years, additions made in the original assessment could not be re-added in a Section 153A assessment without incriminating material from the search. It also ruled that subsidies received for setting up new industries are capital receipts and should be excluded from book profit computation under Section 115JB.
The Tribunal upheld the CIT(A)'s decision to restrict the disallowance to the gross profit ratio on the impugned purchases, rather than the entire amount. This was based on the principle that only the profit element embedded in bogus purchases should be taxed.
The Tribunal upheld the CIT(A)'s decision to restrict the disallowance to the gross profit ratio on the impugned purchases, rather than the entire amount. This was based on the principle that only the profit element embedded in bogus purchases should be taxed.
The Tribunal held that the reassessment proceedings were illegal and without jurisdiction. The AO recorded incorrect facts and showed a non-application of mind while recording the reasons for reopening the assessment, and the sanction obtained from the PCIT was also without proper application of mind. Therefore, the reopening was deemed invalid.
The Tribunal held that the AO primarily relied on a generalized investigation report without specific material against the assessee. Since the purchase of shares was accepted in an earlier year and the sale occurred through the stock exchange via banking channels, the sale consideration could not be treated as unexplained cash credit.
The Tribunal noted that the CIT(A) had not adequately dealt with all the grounds raised by the assessee, particularly concerning the partial cost of acquisition and payment to the society. The Tribunal found it appropriate to restore the entire matter to the CIT(A) for a fresh disposal according to law.
The Tribunal upheld the CIT(A)'s decision to restrict the disallowance to the gross profit ratio on the impugned purchases, rather than the entire amount. This was based on the principle that only the profit element embedded in bogus purchases should be taxed.
The Tribunal held that the Assessing Officer (AO) was justified in disallowing the commission payments as the assessee failed to provide adequate evidence to substantiate the genuineness of the transactions and the services rendered by the commission recipients. The assessee's argument that staff were compensated for hard work and tax was paid on their salaries was not considered sufficient. The Tribunal upheld the CIT(A)'s decision to disallow the commission. Regarding Section 14A, the Tribunal confirmed the CIT(A)'s disallowance, implying that the assessee's submissions regarding interest-free funds were not accepted. However, concerning the disallowance of purchases, the Tribunal, respectfully following the jurisdictional High Court and other High Court decisions, held that the entire purchase amount should not be added back as income. Instead, only the profit element embedded therein should be treated as income. The AO was directed to calculate the gross profit on the disputed purchases based on the profit ratio of other actual purchases made by the assessee in the year. The CIT(A) had already restricted the addition to a gross profit ratio of 5.87% of purchases, which the Tribunal found to be in line with the cited precedents.
The Tribunal held that for AY 2013-14 and 2014-15, the original assessments had attained finality prior to the search. Therefore, in view of the proviso to Section 153A, the assessments had to be reckoned as unabated. The CIT(A) had correctly deleted the additions made by the AO as they were not based on any incriminating material found during the search. The Tribunal affirmed the CIT(A)'s finding that the statement recorded under Section 132(4) and other documents did not constitute incriminating material in the context of unabated assessments. For AY 2017-18, the Tribunal confirmed the CIT(A)'s decision to delete the disallowance under Section 14A. It was an admitted fact that the assessee had not earned any exempt income during the year. Following the jurisdictional High Court's decision in M/s. Nirved Traders Pvt. Ltd. and other High Court judgments, the Tribunal held that no disallowance under Section 14A can be made when there is no exempt income. This principle was also applied to the disallowance while computing book profit under Section 115JB. Consequently, all appeals of the Revenue were dismissed, and the cross-objections were dismissed as infructuous.
The Tribunal held that the definition of 'Co-operative Society' under Section 2(19) of the Income Tax Act includes societies registered under state cooperative societies acts, which can encompass co-operative banks. Therefore, interest income earned from investments in a co-operative bank by a co-operative society is eligible for deduction under Section 80P(2)(d).
The Tribunal partly allowed the assessee's appeal, dismissing some grounds and restoring others to the AO for fresh adjudication. The Department's appeal was dismissed entirely. Specifically, the levy of interest under Section 234D was deleted, and the issue of interest expense was restored to the AO.
The Tribunal held that the Revenue's grounds regarding the scope of Section 153A were infructuous as the CIT(A) had decided on merits. It also held that VAT/Excise refunds were capital receipts and set aside the issue for verification. Penalties levied under Section 271(1)(c) were deleted as the underlying additions were not sustained.
The Tribunal held that the reopening of assessment was bad in law due to improper authorization. On merits, it found that the transactions were not sham, as the assessee acted on public notices and the conditions of Section 94(7) were not met.
The Tribunal held that the reassessment proceedings were illegal and without jurisdiction. The AO recorded incorrect facts and showed a non-application of mind while recording the reasons for reopening the assessment, and the sanction obtained from the PCIT was also without proper application of mind. Therefore, the reopening was deemed invalid.
The Tribunal held that the Revenue's grounds regarding the scope of Section 153A were infructuous as the CIT(A) had decided on merits. It also held that VAT/Excise refunds were capital receipts and set aside the issue for verification. Penalties levied under Section 271(1)(c) were deleted as the underlying additions were not sustained.
The Tribunal found that a coordinate bench had previously quashed the revision order passed under section 263. Based on this, the Tribunal held that the subsequent assessment order passed under section 143(3) read with section 263 had no legal basis. Therefore, the Tribunal found no infirmity in the CIT(A)'s findings.
The Tribunal held that the assessee, being a cooperative society, is eligible for deduction under Section 80P(2)(d) for interest income earned from investments in other cooperative societies or cooperative banks. It also directed the AO to allow clubhouse expenses against income under the concept of mutuality, as clubhouse services were provided only to members.
The Tribunal held that grounds raised by the revenue regarding the scope of Section 153A were infructuous as the CIT(A) had decided the additions on merits. Regarding foreign exchange loss, the Tribunal ruled that Section 43A of the Act was not applicable to indigenous assets, and such losses could not alter the actual cost of assets.
The tribunal held that grounds raised by the revenue regarding the scope of Section 153A were infructuous as they did not emanate from the lower authorities' orders. The tribunal also upheld the deletion of penalties as the underlying additions were deleted.
The Tribunal allowed the assessee's appeal partly, dismissing the department's appeal. Specific grounds regarding the rejection of books of account, additions for unexplained investments, and interest expenses were decided in favor of the assessee or restored to the AO for fresh consideration. Levy of interest under Section 234D was disallowed.
The Tribunal held that statements recorded under Section 132(4) can only be treated as incriminating material if supported by corroborative evidence. The CIT(A) had correctly deleted the additions as they were not based on incriminating material found during the search, especially since the assessments for the relevant years were unabated.
The Tribunal held that the CIT(A) was correct in deleting the additions under Section 68 as the assessee had provided sufficient evidence for the source of funds and the assessment years were unabated. For AY 2017-18, the Tribunal upheld the deletion of Section 14A disallowance as no exempt income was earned.
The Tribunal decided the issues as follows: Regarding the first issue concerning the loan of ₹60,18,566 from MMLPL, the Tribunal noted from the confirmation of accounts that the assessee had a credit balance on each closing day of the year under consideration. There was no debit balance on any closing day. Therefore, the Tribunal found no loan was withdrawn during the year and deleted the additions proposed by the AO under Section 2(22)(e). For the second issue concerning payments to RHPL and SSPDPL, the Tribunal acknowledged that the assessee held substantial interest in these companies and MMLPL had accumulated profits. However, based on the submitted bank statements and ledger accounts, the Tribunal observed that RHPL and SSPDPL utilized the funds received from MMLPL for their own business purposes, and none of the funds were utilized for the direct or indirect benefit of the assessee. Therefore, the provisions of Section 2(22)(e) could not be invoked, and Ground No. 2 raised by the assessee was allowed. Ground No. 3 was not pressed by the assessee and was dismissed.
The Tribunal held that the AO had sufficient reason to believe that income had escaped assessment, validating the reopening of the case. However, the Tribunal found that the assessee had provided a valuation report and documentary evidence to substantiate the share premium, and the investors were reputable entities.
The Tribunal held that the assessee had provided a valuation report and other documents to substantiate the share premium. The AO had accepted the identity and creditworthiness of shareholders but doubted the genuineness of the transaction.
The Tribunal held that the AO had not pointed out any specific adverse findings in the valuation report and that the valuation of shares is a commercial decision between parties. Therefore, the addition on account of share premium was not justified.
The Tribunal held that the AO had sufficient reason to reopen the assessment. However, it found that the assessee had provided a valuation report and other documents to justify the share premium. The Tribunal also noted that the valuation of shares is a commercial decision between parties.
The Tribunal held that the assessee had provided sufficient documentation, including a valuation report and evidence of investor credibility, to justify the share premium. The AO's addition under Section 68 was deemed unsustainable as the genuineness of the transaction was established.
The Tribunal held that the reopening of assessment was invalid and bad in law because the reasons recorded by the AO were based on incorrect facts and lacked application of mind. The approval granted by the Principal CIT was also found to be without proper consideration of the facts.
The tribunal found that the CIT(A) order was passed in violation of the principles of natural justice. The tribunal set aside the impugned order and granted one more opportunity to the assessee to submit details before the jurisdictional Assessing Officer.
The Tribunal held that the addition made by the Assessing Officer under Section 68 of the Income Tax Act, 1961, was not justified and upheld the order of the CIT(A) in deleting the addition. The Tribunal observed that the assessee had demonstrated that the sales and purchases were properly reflected in its books of account, and no discrepancies were found by the tax authorities. The Tribunal noted that the cash deposits were explained as arising from the sale of gold/jewellery, and the revenue had not provided any contrary findings to suggest the deposits were from other sources. The Tribunal found that the assessee had submitted relevant information during assessment proceedings, and the cash deposits matched the financial statements. The Tribunal relied on the decision in Hirapanna Jewellers, which held that if sales are genuine and supported by sufficient stock, and the sales are offered for taxation, then additions under Section 68 are not warranted. The Tribunal also referred to decisions of the Delhi High Court in Kailash Jewellery House and Gujarat High Court in Vishal Exports Overseas Ltd. to support its view. The Tribunal concluded that since the assessee admitted the receipts as sales and offered them for taxation, there was no basis for making an addition under Section 68 or taxing them again under Section 115BBE. Consequently, the appeal filed by the revenue was dismissed.
The Tribunal held that the reassessment proceedings were illegal and without jurisdiction. The AO recorded incorrect facts and showed a non-application of mind while recording the reasons for reopening the assessment, and the sanction obtained from the PCIT was also without proper application of mind. Therefore, the reopening was deemed invalid.
The Tribunal held that the reassessment proceedings were illegal and without jurisdiction. The AO recorded incorrect facts and showed a non-application of mind while recording the reasons for reopening the assessment, and the sanction obtained from the PCIT was also without proper application of mind. Therefore, the reopening was deemed invalid.
The Tribunal held that the reassessment proceedings were illegal and without jurisdiction. The AO recorded incorrect facts and showed a non-application of mind while recording the reasons for reopening the assessment, and the sanction obtained from the PCIT was also without proper application of mind. Therefore, the reopening was deemed invalid.
The Tribunal held that the additions under Section 68 were not based on incriminating material found during the search, especially since the assessments for those years had attained finality. For AY 2017-18, it was held that no disallowance under Section 14A can be made when no exempt income has been earned.
The Tribunal held that the reassessment proceedings were invalid and bad in law because the AO recorded incorrect facts and failed to apply his mind. The approval granted under section 151 was also without proper application of mind.