ITAT Mumbai Judgments — May 2024

The Tribunal held that a cooperative bank is a species of cooperative society. Therefore, interest income earned by a cooperative society from deposits with a cooperative bank is eligible for deduction under Section 80P(2)(d) of the Act.

The Tribunal held that a cooperative bank is a species of cooperative society. Therefore, interest income earned by a cooperative society from deposits with a cooperative bank is eligible for deduction under Section 80P(2)(d) of the Act.

The Tribunal observed that the assessee had not claimed depreciation on buildings amounting to Rs. 73,15,000 in its income tax return or audited accounts. The only depreciation claimed was Rs. 34,55,672 on other assets. This fact was brought to the notice of the AO, yet the disallowance was made. The Tribunal found a lack of application of mind by both the AO and CIT(A) in this regard.

The Tribunal noted that the assessee was not given an opportunity to submit details of deposits before the disallowance was made under section 143(1). To meet the ends of justice, the issue was restored to the Assessing Officer for further examination.

The Tribunal held that since the additions made by the Assessing Officer were deleted by the Tribunal in earlier proceedings, the foundation for the penalty was removed. Consequently, the penalty levied by the Assessing Officer was not sustainable, and the CIT(A)'s deletion was justified.

The Tribunal held that penalty proceedings are distinct from quantum proceedings. Failure to deduct TDS on interest paid by a partner to a firm does not automatically amount to concealment or furnishing inaccurate particulars of income, and penalty under Section 271(1)(c) is not leviable in such cases.

The Tribunal found that the CIT(A) had correctly restricted the addition to the profit element embedded in the bogus purchases (3%), aligning with previous decisions and the AO's own stance in other assessment years. The assessee failed to discharge the onus of proving the genuineness of the purchases.

The Tribunal noted that the physical appeal was dismissed in limine and not on merits. The electronic appeal was dismissed due to a delay and the misunderstanding that two appeals could not be admitted. The Tribunal condoned the delay and remanded the case to the Ld. Commissioner for a decision on merits.

The Tribunal confirmed the CIT(A)'s order, holding that penalty under Section 271(1)(c) is not leviable when the income addition is based purely on estimation, following various High Court and Tribunal decisions.

The Tribunal held that the first ground of appeal, related to the non-adjudication of additions made under section 143(1), was dismissed as the assessee had not filed an appeal against the intimation and a rectification application was pending. Regarding the second ground, concerning the disallowance of CSR expenses under section 80G, the Tribunal held that the assessee is entitled to the deduction.

The Tribunal held that the Rs.15.00 lacs cash credit was received from the sale of a property, not a loan, and thus the classification in the balance sheet as a loan was an error, not a ground to reject its genuineness. Regarding expense disallowances, the Tribunal granted the assessee another opportunity to furnish evidence.

The Tribunal held that both the Assessing Officer and the CIT(A) failed to pass reasoned orders and did not adjudicate on the assessee's claim for relief under Section 89. The Tribunal quashed the impugned orders and restored the case to the Assessing Officer for fresh assessment.

The Tribunal held that the withdrawal from the provident fund, after serving for more than five years, is exempt under Section 10(12) of the Income Tax Act. The lower authorities failed to consider the evidence and facts presented regarding the exemption. Therefore, the addition made on account of this withdrawal was not sustainable.

The Tribunal confirmed the CIT(A)'s order, holding that penalty under Section 271(1)(c) is not leviable when the income addition is based purely on estimation, following various High Court and Tribunal decisions.

The Tribunal noted this was a recurring issue and, consistently with its previous decisions in the assessee's own cases for several prior assessment years, held that the lease rental income for metal alloys cannot be treated as royalty. It reiterated that the assessee merely provided alloys, not services related to intellectual property of bushings, and thus, the consideration was not royalty under either the Income Tax Act or the India-USA DTAA. Consequently, the addition made by the AO was deleted.

The Tribunal held that since the additions made by the Assessing Officer were deleted by the Tribunal in earlier proceedings, the foundation for the penalty was removed. Consequently, the penalty levied by the Assessing Officer was not sustainable, and the CIT(A)'s deletion was justified.

The Tribunal found that the Transfer Pricing Officer (TPO) had acknowledged that the assessee furnished all required details and the value of SDT with Associated Enterprises (AE) regarding ALP was not disturbed in the TPO's order under section 92CA(3). Since the TPO had accepted the details and ALP computed by the assessee, the Tribunal held that there was no basis for levying the penalty under section 271G, and thus, deleted it.

The Tribunal held that the set-off of brought forward long-term capital losses against long-term capital gains is permissible, even if the computation methods or tax rates differ. The AO's disallowance of indexation benefit was also addressed in relation to specific provisions for non-residents.

The Tribunal held that since the additions made by the Assessing Officer were deleted by the Tribunal in earlier proceedings, the foundation for the penalty was removed. Consequently, the penalty levied by the Assessing Officer was not sustainable, and the CIT(A)'s deletion was justified.

The Tribunal held that the non-compete fee received by the assessee was in the nature of a capital receipt. The amendment to Section 28(va) of the Income Tax Act, which treats such fees as revenue receipts, was effective only from A.Y. 2004-05 onwards and did not have retrospective effect for the year under consideration.

The Tribunal held that the initiation of revisionary proceedings regarding Essar India shares was improper as no transaction occurred in the assessment year. For 'Shri Nath' shares, the Tribunal found that the transactions were conducted on the stock exchange through a registered broker, with STT levied and routed through banking channels, thus deleting the addition.

The Tribunal found that both the assessment order and the appellate order were passed without providing the assessee with adequate opportunity for hearing, a mandatory condition. Therefore, the Tribunal set aside both orders and restored the matter to the Assessing Officer for fresh adjudication after providing the assessee with an opportunity to be heard.

The Tribunal held that the provisions of the IBC Code, 2016, prevail over the Income Tax Act, 1961, limiting the Income Tax authorities' jurisdiction to assess tax dues but not allowing recovery during moratorium. The CIT(A) erred by dismissing the appeal without adjudicating on merits. Consequently, the Tribunal set aside the CIT(A)'s order and restored the case for fresh adjudication on merits after providing the assessee an opportunity of hearing.

The Tribunal held that since the additions made by the Assessing Officer were deleted by the Tribunal in earlier proceedings, the foundation for the penalty was removed. Consequently, the penalty levied by the Assessing Officer was not sustainable, and the CIT(A)'s deletion was justified.

The Tribunal found that the averments made by the Appellant were factually correct. No interest-bearing loans/advances were granted to partners. The firm had incurred losses in previous years, resulting in a debit balance in partners' capital accounts. The disallowance of interest expenses under Section 36(1)(iii) was deleted.

The Tribunal found that the lower authorities erred in denying interest on the DDT refund, as Section 244A applies to all refunds under the Income Tax Act, and interest on excess DDT paid is a statutory and non-discretionary obligation. It held that the assessee is entitled to interest on the refunded amount from the date of payment of the excess tax/additional tax.

The Tribunal held that once the revisionary order under section 263 was quashed by the Tribunal, the consequent assessment order passed under section 147 read with section 263 became infructuous.

The Tribunal held that the disallowance under Section 14A cannot exceed the exempt income earned. It also noted that the Hon'ble Bombay High Court has held that Section 14A is relatable to the earning of actual income, not notional or anticipated income.

The Tribunal held that the provisions of the Insolvency and Bankruptcy Code (IBC), 2016, override the Income Tax Act. Income tax authorities can determine tax dues but cannot initiate recovery during moratorium without court leave.

The Tribunal found the reasons provided by the assessee for the delay, including advanced dementia, daughter's personal issues, and unawareness of proceedings, to be genuine, bonafide, and reasonable. Consequently, the delay of 180 days in filing the first appeal was condoned. The case was remanded back to the Ld. Commissioner for a decision on the merits of the appeal, with directions for the assessee to cooperate.

The Tribunal noted that the assessee had subsequently e-filed fresh appeals before the CIT(A) along with a condonation petition. Therefore, the Tribunal remitted the appeals back to the CIT(A) to be heard along with the e-filed appeals.

The Tribunal held that the audit report in Form 10CCB could be furnished with a revised return, especially when the original return was filed within the due date. The amendment to Section 80-IA(7) regarding the time for furnishing the report was not applicable to the assessment year in question.

The Tribunal held that while the SFIO report constituted fresh tangible material, the AO failed to apply his mind to the facts and made contradictory statements in the reasons recorded. The Tribunal found that the AO incorrectly treated the aggregate turnover as escaped income, ignoring that netting buy and sell transactions would result in a loss. Consequently, the reassessment proceedings and the consequent assessment order were quashed.

The Tribunal noted that the assessee did not properly represent their case before the lower authorities due to the unavailability of their Chartered Accountant and lack of awareness of ITBA portal notices. Considering principles of natural justice, the Tribunal decided to remit the case back to the AO for a fresh consideration.

The Tribunal noted that the assessee had subsequently e-filed fresh appeals before the CIT(A) along with a condonation petition. Therefore, the Tribunal remitted the appeals back to the CIT(A) to be heard along with the e-filed appeals.

The Tribunal noted that the impugned orders were passed ex-parte. The addition of the entire purchases without considering sales was found to be unsustainable. Furthermore, a subsequent assessment order for the same year, based on a reassessment after a survey action, was also considered. The Tribunal found that the original assessment order lacked merit in light of subsequent events and a subsequent order.

The Tribunal, referencing a Special Bench decision in the case of All Cargo Global Logistics, held that an ICD/CFS qualifies as an inland port for the purposes of section 80IA(4). The Tribunal noted that previous co-ordinate benches had consistently allowed similar deductions for the assessee and in other similar cases.

The Tribunal held that the penalty notices issued under Section 271(1)(c) read with Section 274 of the Act were defective because the Assessing Officer failed to strike off the irrelevant limb of the charge, making the notice vague. Following the jurisdictional High Court's decision in Mohd. Farhan A. Shaikh, the Tribunal concluded that such a defect vitiates the penalty proceedings.

The Tribunal held that the penalty orders were passed based on assessment orders that were set aside and merged with subsequent Tribunal orders. Since the relevant assessment orders did not survive in the eyes of law, the penalty orders and the upholding orders by the CIT(A) also did not survive.

The Tribunal held that the penalty notices issued under Section 271(1)(c) read with Section 274 of the Act were defective because the Assessing Officer failed to strike off the irrelevant limb of the charge, making the notice vague. Following the jurisdictional High Court's decision in Mohd. Farhan A. Shaikh, the Tribunal concluded that such a defect vitiates the penalty proceedings.

The Tribunal noted that the impugned orders were passed ex-parte. The addition of the entire purchases without considering sales was found to be unsustainable. Furthermore, a subsequent assessment order for the same year, based on a reassessment after a survey action, was also considered. The Tribunal found that the original assessment order lacked merit in light of subsequent events and a subsequent order.

The Tribunal held that interest income earned by a co-operative society on investments made with a co-operative bank is eligible for deduction under Section 80P(2)(d), even after the insertion of Section 80P(4). The Tribunal followed various High Court and ITAT judgments supporting this view.

The Tribunal held that the penalty orders were passed based on assessment orders that were set aside and merged with subsequent Tribunal orders. Since the relevant assessment orders did not survive in the eyes of law, the penalty orders and the upholding orders by the CIT(A) also did not survive.

The Tribunal upheld the order of the CIT(A). It was held that the AO lacked material evidence to prove the receipt of Rs. 5 crores by the assessee, as the investigation wing did not provide corroborating evidence and the assessee's bank accounts and books of accounts did not reflect such receipts.

The Tribunal, referencing a Special Bench decision in the case of All Cargo Global Logistics, held that an ICD/CFS qualifies as an inland port for the purposes of section 80IA(4). The Tribunal noted that previous co-ordinate benches had consistently allowed similar deductions for the assessee and in other similar cases.

The Tribunal held that the AO and CIT(A) failed to acknowledge the assessee's repeated clarifications that the amount of Rs. 32,95,767/- represented bank interest and charges capitalized for fixed assets and was not debited to the Profit and Loss Account, nor claimed as a deduction. The disallowance was made solely based on the TAR reporting.

The Tribunal held that the proviso to Section 56(2)(viib) allows the stamp duty value on the date of the agreement to be considered if the agreement and registration dates differ. Since the agreed value on the agreement date (29/11/2012) was higher than the stamp duty value on that date, the difference was not taxable.

The Tribunal held that transaction charges paid to stock exchanges are for facilities provided, not technical services, thus no TDS under Section 194J was deductible. Consequently, the disallowance under Section 40(a)(ia) for these charges was deleted. Other grounds were also addressed, with some allowed and others dismissed.

The Tribunal held that interest income earned by a co-operative society on its investments held with a co-operative bank is eligible for deduction under Section 80P(2)(d), even after the insertion of Section 80P(4). The Tribunal followed the Karnataka High Court's decision in Pr. Commissioner of Income Tax vs. Totagars Cooperative Sale Society.

The Tribunal held that interest income earned by a co-operative society on its investments held with a co-operative bank is eligible for deduction under Section 80P(2)(d), even after the insertion of Section 80P(4). The Tribunal followed the Karnataka High Court's decision in Pr. Commissioner of Income Tax vs. Totagars Cooperative Sale Society.