ITAT Mumbai Judgments — May 2024

The Tribunal considered that the assessee had declared a gross profit of 8.29% on these purchases and that the revenue did not oppose applying a reasonable gross profit. The Tribunal found it reasonable to apply a gross profit rate of 10% on the bogus purchases, considering industry practices and previous rulings.

The Tribunal held that the CIT(A) erred by not considering the assessee's submissions, explanations, and the tax auditor's certificate regarding the adjustments made by the CPC. It directed the Assessing Officer to recompute the total income by taking into account all the assessee's submissions after providing a due opportunity of hearing.

The Tribunal held that there is no bar under Section 70 of the Income Tax Act for setting off short-term capital gains against short-term capital losses, irrespective of their tax rates. The Assessing Officer was directed to allow the set-off.

The Tribunal held that the interest on Fixed Deposits should not be taxed under 'Income from Other Sources' when the FD was used as a business asset, pledged for business loans, and the interest paid on the loan was higher than the interest earned on the FD. The Tribunal noted that identical issues for earlier assessment years were decided in favor of the assessee, and consistency should be maintained.

The Tribunal noted that the assessee did not appear for the hearing and had a history of non-compliance. Despite this, considering the facts, the Tribunal decided to remit the matter back to the CIT(A) for a fresh adjudication in the interest of justice.

The Tribunal upheld the CIT(A)'s decision, applying the legal maxim 'sublato fundamento cadit opus', meaning 'a foundation being removed, the superstructure falls'. It was held that once the foundational revisionary order u/s 263 is quashed, any subsequent assessment proceedings initiated based on that order become bad in law and are not sustainable. Consequently, the additions made during such proceedings were quashed.

The tribunal found that the CIT(A) erred in dismissing the appeal when the assessee had paid tax under the VSV Scheme and was awaiting Form 5. The tribunal held that the Assessing Officer should verify the payment made under Form 3 and subsequently issue Form 5 or communicate any issues to the assessee. The merits of the Section 68 addition were not adjudicated due to the VSV option.

The Tribunal held that there is no bar under Section 70 of the Income Tax Act for setting off short-term capital gains against short-term capital losses, irrespective of their tax rates. The Assessing Officer was directed to allow the set-off.

The Tribunal, while acknowledging the bogus purchases, held that the entire amount could not be added but only the profit element. To maintain consistency with a previous assessment year (AY 2010-11) where a 12.5% addition was made for similar bogus purchases, the Tribunal restricted the addition to 12.5% of the alleged bogus purchases or the voluntarily shown profit, whichever is higher.

The Tribunal held that the interest on Fixed Deposits should not be taxed under 'Income from Other Sources' when the FD was used as a business asset, pledged for business loans, and the interest paid on the loan was higher than the interest earned on the FD. The Tribunal noted that identical issues for earlier assessment years were decided in favor of the assessee, and consistency should be maintained.

The Tribunal noted the assessee's habitual non-compliance throughout the proceedings. However, taking a lenient approach, the Tribunal decided to remit the matter back to the CIT(A) for a fresh adjudication on merits. The Tribunal did not express any views on the merits of the case to avoid prejudice.

The ITAT condoned the 49-day delay in filing the appeal, acknowledging the assessee's genuine reasons based on his educational background and dependence on a practitioner. It observed that the CIT(A) had confirmed the additions without adequately examining the merits, such as the justification for the 12% estimated commission or further inquiry into the cash deposits. Consequently, the ITAT set aside the entire appeal to the CIT(A) for re-adjudication, directing that the assessee be given a proper opportunity of hearing.

The Tribunal held that since there was no variation in income during reassessment and the original demand had been paid within the stipulated time, the assessee was not liable for interest u/s 234B for the period after the completion of the original assessment. Consequently, the interest levied by the AO for this period was deleted. The issue regarding the validity of reopening u/s 147 was deemed academic.

The Tribunal observed that the primary issue was whether the assessee was an 'assessee in default'. Given the voluminous nature of data and the assessee's contention that recipients had paid taxes, the Tribunal decided to set aside the issues to the AO for fresh consideration.

The Tribunal held that the AO failed to record his satisfaction regarding the assessee's working of disallowance before invoking Rule 8D. Citing Supreme Court decisions, the Tribunal emphasized that the AO must record non-satisfaction based on the assessee's accounts and give an opportunity to explain before applying Rule 8D.

The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)'s order. It held that interest paid to a firm is deductible from interest received, making only the net interest taxable, citing High Court and Supreme Court precedents. Furthermore, the reopening under section 147 after four years was invalid as no failure to disclose material facts by the assessee was alleged or proven.

The Tribunal restored the appeals to the Assessing Officer for further investigation into the beneficiaries of the bogus transactions. The assessee was directed to cooperate with the investigation within 90 days, failing which the AO could decide the issue as per law.

The Tribunal restored the appeals to the Assessing Officer for further investigation into the beneficiaries of the bogus transactions. The assessee was directed to cooperate with the investigation within 90 days, failing which the AO could decide the issue as per law.

The Tribunal held that there is no bar under Section 70 of the Income Tax Act for setting off short-term capital gains against short-term capital losses, irrespective of their tax rates. The Assessing Officer was directed to allow the set-off.

The Tribunal noted that the CIT(A) passed an ex-parte order without specific reply or documents, potentially not deciding the appeal in its right perspective. Considering the circumstances, including the pandemic period when the order was passed, the Tribunal decided to set aside the order and remand the case back to the CIT(A) for a fresh decision.

The Tribunal noted that CBDT Circular No. 19/2023 dated 23/10/2023 allowed condonation of delay in filing Form 10-IC for AY 2021-22 under certain conditions. Since the appeal order was passed after the issuance of this circular, and the assessee fulfilled the conditions, the delay was condoned.

The Tribunal held that the entire amount of bogus purchases cannot be disallowed when the goods have been sold. Following judicial precedents, the Tribunal deleted the partial addition sustained by the CIT(A) and allowed the assessee's ground.

The Tribunal upheld the CIT(A)'s decision to delete the disallowance under section 14A read with Rule 8D, affirming that no disallowance is warranted for investments not yielding tax-free income and in the absence of exempt income. It also upheld the deletion of foreign travel expense disallowance, finding that the expenses were incurred wholly and exclusively for business purposes.

The Tribunal held that the amendment to Rule 128(9) of the Income Tax Rules, which allowed filing of Form 67 by the due date of return filing u/s 139(4), should be applied retrospectively. The Tribunal also noted that filing Form 67 is directory and not mandatory, and delays should not preclude the assessee from getting tax credit benefits.

The Tribunal held that since the assessment proceedings during which the penalty was initiated were quashed, the penalty cannot survive. The penalty was imposed under section 271(1)(c) for furnishing inaccurate particulars and concealment of income.

The Tribunal held that interest income earned by a co-operative society from its investments with other co-operative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act. It followed the consistent view of its co-ordinate benches.

The Tribunal held that neither the Assessing Officer nor the CIT(A) provided sufficient evidence or findings on record to demonstrate how the appellant received the cash loans of Rs. 14,00,000 in contravention of Section 269SS. No addition was made by the AO during the assessment.

The Tribunal held that penalty under section 271(1)(c) is not leviable on additions made on an estimate basis. The Assessing Officer must clearly prove concealment or inaccurate particulars. Since the addition was based on an estimate of 6% of bogus purchases, the penalty imposed was not justified.

The assessee failed to provide supporting documents for the claimed increase in expenses due to the change in accounting method. The CIT(A) dismissed the appeal for non-compliance. The Tribunal, considering principles of natural justice, provided one more opportunity for hearing.

The Tribunal found that the CIT(A) adopted an incorrect figure for TDS credit, leading to a short grant of INR 50,00,000/-. The Assessing Officer was directed to grant the correct TDS credit. For the interest under section 244A, the Assessing Officer was directed to re-compute the interest.

The Tribunal noted that the assessee had suffered personal losses during the period and could not effectively participate in the appeal proceedings before the CIT(A). Therefore, without delving into the merits, the Tribunal restored the appeal to the CIT(A) for fresh consideration.

The Tribunal held that the assessee had discharged its onus of proving the identity, genuineness, and creditworthiness of the creditors by providing PAN, IT returns, bank statements, and board resolutions. The Tribunal found no perversity in the concurrent findings of the lower appellate authorities.

The Tribunal held that since the assessment proceedings during which the penalty was initiated were quashed, the penalty cannot survive. The penalty was imposed under section 271(1)(c) for furnishing inaccurate particulars and concealment of income.

The Tribunal considered the assessee's explanation that she was a non-resident, undergoing cancer treatment in the USA, and therefore, it was not possible for her to comply with the notices. It was held that there was a bonafide reason for non-compliance.

The Tribunal held that the AO's appeal was not maintainable as it was filed in the name of a deceased person without mentioning the legal heir. The appeal was also incomplete as it did not include the full appellate order.

The Tribunal noted that the CIT(A) had dismissed the assessee's appeal due to non-prosecution and for being filed beyond the limitation period, without considering the assessee's prayer for time due to a retinal surgery of the person handling the matter. The Tribunal decided to remit the matter back to the CIT(A) for a de novo adjudication on merits.

The Tribunal restored the appeals to the Assessing Officer for further investigation into the beneficiaries of the bogus transactions. The assessee was directed to cooperate with the investigation within 90 days, failing which the AO could decide the issue as per law.

The Tribunal restored the appeals to the Assessing Officer for further investigation into the beneficiaries of the bogus transactions. The assessee was directed to cooperate with the investigation within 90 days, failing which the AO could decide the issue as per law.

The Tribunal held that the CIT(A) erred in dismissing the appeal for non-prosecution without adjudicating on merits. The appellate provisions require the CIT(A) to decide on the merits even in the absence of the assessee.

The Tribunal held that there is no bar under Section 70 of the Income Tax Act for setting off short-term capital gains against short-term capital losses, irrespective of their tax rates. The Assessing Officer was directed to allow the set-off.

The Tribunal held that the CPC violated mandatory provisions of section 143(1) by not providing any intimation or opportunity to the assessee before making the addition. Furthermore, the remuneration payment was allowable under section 40b of the Act, which permits up to Rs. 1,50,000 or 90% of book profit, whichever is higher.

The Tribunal held that there is no bar under Section 70 of the Income Tax Act for setting off short-term capital gains against short-term capital losses, irrespective of their tax rates. The Assessing Officer was directed to allow the set-off.

The ITAT held that the reassessment order was bad in law because the mandatory notice under Section 143(2) of the Income-tax Act was not issued. The tribunal noted that this issue was jurisdictional and went to the root of the assessment proceedings.

The Tribunal found that the CIT(A) erred by confirming additions without properly addressing the assessee's contentions or calling for a remand report. It was noted that the estimated speculation profit was upheld without verifying actual profit/loss, professional fees were incorrectly treated as interest, and cash deposit/share investment additions were confirmed without examining bank statements. Consequently, the Tribunal set aside the CIT(A)'s order and remanded the case back to the Assessing Officer for fresh adjudication, directing the assessee to submit all relevant details.

The ITAT observed that both the assessment and first appellate orders were ex-parte and, in the interest of natural justice, remanded the case to the CIT(A). The CIT(A) is directed to provide the assessee with a reasonable opportunity of hearing and adjudicate all issues on their merits. A cost of Rs. 5,000/- was imposed on the assessee for non-compliance with the notices issued by the CIT(A).

The Tribunal held that the lower authorities had not sufficiently examined whether the research products qualified as 'information' under the definition of 'Royalty' in the DTAA. Consequently, the issue was restored to the Assessing Officer for fresh verification, including the assessee's PE claim.

The tribunal allowed the assessee's request to withdraw the appeal. The appeal was dismissed as withdrawn after the learned DR had no objection to the withdrawal application.

The Tribunal noted that the assessee also did not appear before them and did not file any submissions, despite notices. In the absence of any contrary material or reason, and considering the ex-parte nature of the proceedings, the Tribunal found no perversity or illegality in the orders passed by the lower authorities.

The Tribunal observed that the assessee failed to appear or file submissions despite several notices. However, to ensure substantial justice, the Tribunal inclined to set aside the impugned order and remand the case to the Ld. Commissioner.

While the assessee did not deserve leniency due to non-compliance, the Tribunal found that the Ld. Commissioner could not decide the case properly in the absence of the assessee's submissions. Therefore, for substantial justice, the case is remanded.