ITAT Mumbai Judgments — May 2024

The Tribunal, considering the arguments and material evidence, found that while the assessee's contention of a profit margin between 4% to 4.8% might be realistic, the transactions were not entirely genuine. The AO's estimation of 12.5% and the CIT(A)'s partial allowance were re-examined.

The Tribunal held that the impugned orders were passed on a 'duplicate appeal' as they were not based on the appeals restored by the Tribunal. Therefore, the impugned orders were set aside.

The Tribunal held that the impugned orders were passed on a 'duplicate appeal' as they were not based on the appeals restored by the Tribunal. Therefore, the impugned orders were set aside.

The Tribunal held that the CIT(A) should have decided the appeal on merits after providing a reasonable opportunity of being heard. Notices through the ITBA portal alone are insufficient for proper service.

The Tribunal held that interest income earned by a cooperative society on its deposits with cooperative banks is eligible for deduction under Section 80P(2)(d). Following previous judicial precedents, the Tribunal set aside the CIT(A)'s order.

The Tribunal noted that the CIT(A) passed an ex-parte order. While normally the matter would be restored to the CIT(A), the assessee's claim that the issue is covered by a Bombay High Court decision led the Tribunal to restore the issues to the Assessing Officer for fresh examination.

The Tribunal restored the issue of annual let-out value to the AO for re-determination. It dismissed the additions related to reversed expenses, stock shortage, and scrap value, upholding the CIT(A)'s deletions.

The Tribunal held that the reassessment order was invalid because the notice under section 148 of the Act was not issued or served upon the assessee. Consequently, grounds 1 to 3 of the assessee's appeal were allowed.

The Tribunal held that interest income earned by a cooperative society from its investments with any other cooperative society is eligible for deduction under Section 80P(2)(d), irrespective of the insertion of Section 80P(4). A cooperative bank is considered a cooperative society for this purpose.

The Tribunal noted that the assessee did not appear before the Assessing Officer and CIT(A) due to an incorrect address and unreceived email notices. In the interest of natural justice, the Tribunal decided to give the assessee another opportunity to present their case.

The Tribunal noted that the CIT(A) dismissed the appeal ex-parte due to the assessee's non-appearance, despite the assessee having raised grounds challenging the denial of exemption and highlighting a pending condonation application for delayed filing of Form No. 10. The Tribunal considered the principles of natural justice and the assessee's argument of having a good case on merits.

The Tribunal held that there was no concealment of income as the assessee had disclosed all details regarding the tenancy right. The withdrawal of the depreciation claim was to settle a dispute, not to hide income.

The Tribunal held that the assessee failed to discharge the onus of explaining the source of cash deposits and the capital gains from property sale with documentary evidence. The lower authorities were justified in sustaining the additions. The assessee's appeals were heard ex-parte.

The Tribunal noted inconsistencies in the scrip names mentioned by the Investigation Wing and the AO, and that the AO failed to apply his mind and establish the identity of the exit provider. The linkage between the scrip, the alleged penny stock companies, and the assessee was not established, making the reopening and assessment order null and void.

The Tribunal held that the assessee failed to discharge the onus of explaining the source of cash deposits and the capital gains from property sale with documentary evidence. The lower authorities were justified in sustaining the additions. The assessee's appeals were heard ex-parte.

The Tribunal followed a coordinate bench's decision on identical facts, which upheld the CIT(A)'s reduction of the addition to 3% of the alleged bogus purchases. The Tribunal found no reason to interfere with the CIT(A)'s order.

The Tribunal held that the assessee failed to discharge the onus of explaining the source of cash deposits and the capital gains from property sale with documentary evidence. The lower authorities were justified in sustaining the additions. The assessee's appeals were heard ex-parte.

The Tribunal held that interest income earned by a co-operative society from investments in co-operative banks is eligible for deduction under Section 80P(2)(d). The Tribunal followed its own prior decision in the assessee's own case.

The Tribunal partially allowed the assessee's appeal by excluding certain comparable companies. It also dismissed the Revenue's appeal on grounds related to service tax refunds, deduction under Section 10A for interest income, and foreign exchange gains.

The Tribunal found that the AO did not provide details of parties for the alleged bogus purchases and did not inform the assessee about them, making the addition unjustified. Regarding sundry creditors, the assessee provided payment proofs and email confirmations, which were not properly considered by the lower authorities.

The Tribunal held that merely making a claim that is disallowed does not amount to furnishing inaccurate particulars of income. Since the issue was debatable and a co-ordinate bench had ruled in favour of the assessee on a similar issue, the penalty was deleted.

The Tribunal held that the appeal should not be treated as withdrawn until the issuance of a certificate by the Designated Authority in Form 5. Since Form 4 was not submitted, the appeal could not have been deemed withdrawn. The CIT(A) wrongly dismissed the appeal without deciding it on merits.

The Tribunal noted that the CIT(A) passed an ex-parte order due to the assessee's non-appearance. However, to provide a fair opportunity, the Tribunal set aside the CIT(A)'s order and restored the case to the CIT(A)'s file for a fresh adjudication, directing the assessee to cooperate.

The Tribunal held that the AO did not bring any material on record to disprove the genuineness, identity, and creditworthiness of the lenders. The assessee had provided sufficient documentary evidence, including loan confirmation letters, ITR acknowledgements, balance sheets, P&L accounts, and bank statements of the lenders. Therefore, the addition made by the AO and sustained by the CIT(A) was not justified.

The Tribunal considered the rival submissions and noted that a significant portion of the delay was covered by the Hon'ble Supreme Court's order granting extension of limitation due to Covid-19. After excluding this period, the actual delay was less than 100 days.

The Tribunal partially allowed the assessee's appeal by excluding certain comparable companies. It also dismissed the Revenue's appeal on grounds related to service tax refunds, deduction under Section 10A for interest income, and foreign exchange gains.

The Tribunal decided that the issue of depreciation on intangibles and goodwill had already been adjudicated in a previous appeal for AY 2013-14 and followed that finding. The ground related to MAT credit was considered consequential.

The Tribunal held that the CIT(A) had not decided the issue on merits and had not examined whether the expenditure was prohibited by law. Therefore, the matter was restored back to the CIT(A) for a fresh decision.

The Tribunal held that the reassessment proceedings were validly initiated based on the information gathered. However, regarding the additions, the Tribunal admitted additional evidence showing that similar deposits were already assessed in the hands of the depositors and remanded the issue for de novo adjudication.

The Tribunal upheld the CIT(A)'s decision, stating that the AO failed to conduct independent investigation and solely relied on the investigation wing's report. The Tribunal noted that shares were traded through the stock exchange and banking channels, and short-term capital gains were declared.

The Tribunal held that running dispensaries and hospitals is a main charitable object of the trust and is incidental to its objectives. It also found that the trust maintained separate books of accounts for these activities, thus fulfilling the conditions of Section 11(4A).

The Tribunal held that the reassessment proceedings were invalid due to lack of proper reasons to believe and independent application of mind by the Assessing Officer. The addition of unexplained cash credits was also not justified as the amounts were received in the usual course of business.

The Tribunal held that for an under-construction property, the date of possession when the property is inhabitable should be considered the date of purchase for Section 54 claims. This aligns with judicial precedents and the assessee's own case regarding the acquisition of the old property.

The Tribunal held that the reassessment proceedings were validly initiated based on the information gathered. However, regarding the additions, the Tribunal admitted additional evidence showing that similar deposits were already assessed in the hands of the depositors and remanded the issue for de novo adjudication.

The Tribunal decided that the issue of depreciation on intangibles and goodwill had already been adjudicated in a previous appeal for AY 2013-14 and followed that finding. The ground related to MAT credit was considered consequential.

The Tribunal held that since the quantum assessment orders were quashed, the penalty orders levied based on those assessments cannot survive. Therefore, the deletion of penalties by the CIT(A) was upheld.

The Tribunal restored the matter of computing interest under sections 234A and 234C to the Assessing Officer for re-verification. It also directed the Assessing Officer to rectify the book profit figure under section 115JB if not already disposed of. The penalty proceedings ground was dismissed as premature.

The Tribunal held that the penalty under section 271F was justified due to the lack of reasonable cause for not filing the return on time. However, for the penalty under section 271(1)(b), it was found that the assessee, being a non-resident, may not have been aware of notices sent via ITBA portal and old email, thus having a reasonable cause for non-compliance. The penalty under section 271(1)(c) was set aside to allow the assessee another opportunity to present their case before the AO.

The Tribunal held that the penalty under section 271F was justified due to the lack of reasonable cause for not filing the return on time. However, for the penalty under section 271(1)(b), it was found that the assessee, being a non-resident, may not have been aware of notices sent via ITBA portal and old email, thus having a reasonable cause for non-compliance. The penalty under section 271(1)(c) was set aside to allow the assessee another opportunity to present their case before the AO.

The Tribunal held that the penalty under section 271F was justified due to the lack of reasonable cause for not filing the return on time. However, for the penalty under section 271(1)(b), it was found that the assessee, being a non-resident, may not have been aware of notices sent via ITBA portal and old email, thus having a reasonable cause for non-compliance. The penalty under section 271(1)(c) was set aside to allow the assessee another opportunity to present their case before the AO.

The Tribunal held that since the quantum assessment orders were quashed, the penalty orders levied based on those assessments cannot survive. Therefore, the deletion of penalties by the CIT(A) was upheld.

The Tribunal noted that the assessee failed to comply with multiple notices, leading to ex-parte proceedings. While initially finding grounds for dismissal due to non-prosecution, the Tribunal decided to examine the substance of the dispute concerning the difference between stamp duty valuation and sale consideration.

The Tribunal noted that the assessee failed to comply with multiple notices, leading to ex-parte proceedings. While initially finding grounds for dismissal due to non-prosecution, the Tribunal decided to examine the substance of the dispute concerning the difference between stamp duty valuation and sale consideration.

The Tribunal held that for an under-construction property, the date of possession when the property is inhabitable should be considered the date of purchase for Section 54 claims. This aligns with judicial precedents and the assessee's own case regarding the acquisition of the old property.

The Tribunal followed a coordinate bench's decision in the assessee's own case for an earlier year, which was based on a Bombay High Court ruling. This decision allowed addition only to the extent of the difference in gross profit between genuine and non-genuine purchases.

The Tribunal noted that in the assessee's own case for AY 2010-11 and AY 2009-10, the ITAT had directed the AO to tax the profit margin at 5% of the alleged bogus purchases. Therefore, following the consistent view of the ITAT, the AO was directed to restrict the addition to 5% of the alleged bogus purchases.

The Tribunal held that the qualitative details of stock, such as piece-wise, color-wise, data-wise, and grade-wise, are not mandatory requirements under the Income Tax Act for a business of this nature, especially when quantitative details and proper books of accounts are maintained and audited. The previous year's and subsequent year's assessments also indicate acceptance of the assessee's accounting method.

On Ground No. 1, the Tribunal held that the notice under Section 143(2) was issued by the ACIT/NaFAC-1(2) Delhi in the capacity of prescribed authority. The Tribunal noted the amendment to Section 143(2) by the Finance Act 2016, which allows for issuance by the 'prescribed income-tax authority'. The judgment does not explicitly state the final decision on this ground, but the discussion implies the notice might be valid if issued by the prescribed authority. On Ground No. 5 (related to interest income), the Tribunal held that interest paid by the Indian branches (Permanent Establishment - PE) to the head office is not taxable in the hands of the head office in view of Article 12(5) and Article 7 of the India-France Double Taxation Avoidance Agreement (DTAA). The Tribunal reasoned that when a PE exists in India, only the profits attributable to the PE are taxed as per Article 7, and interest paid by the PE to the head office falls outside this scope. On Ground No. 7 (addition of Rs. 23,88,795), the Tribunal found that the AO had not considered the assessee's submissions regarding rental income. Therefore, this issue was restored to the AO for fresh decision after verification. Ground No. 8 (short credit of TDS) was not discussed and thus dismissed. Ground No. 9 (penalty proceedings) was considered premature and dismissed. The judgment does not provide findings on Ground No. 2 (data processing fees) and Ground No. 4 (surcharge and cess on data processing fees).

The CIT(A) allowed the assessee's appeal, quashing the rectification order, holding that it was passed against a non-existent entity and was therefore invalid. The Tribunal, upon considering the facts and legal precedents, affirmed the CIT(A)'s decision. The Tribunal noted that the AO was aware of the merger and that passing an order against a non-existent entity is bad in law.

The Tribunal held that the disallowance of depreciation on intangibles and goodwill was correct as no actual purchase or payment for goodwill was made. However, the disallowance of business advances and bad debts written off was set aside and restored to the AO for fresh adjudication, requiring the assessee to demonstrate fulfillment of statutory requirements.