ITAT Mumbai Judgments — May 2024

The Tribunal upheld the deletion of the addition by the CIT(A), stating that the assessee had discharged its onus under Section 68 by providing necessary documents. The Revenue failed to rebut the findings of the CIT(A).

The ITAT set aside the CIT(A)'s order and restored the issues to the CIT(A)'s file for fresh examination. The tribunal granted the assessee one more opportunity to present its case, emphasizing the principles of natural justice.

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 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 impugned order of the NFAC was liable to be set aside and was not legally sustainable. The primary reason was the violation of the principles of natural justice, as the appeal was decided ex parte without affording the appellant an effective opportunity to be heard. The Tribunal accepted the assessee's explanation, supported by an affidavit, that the non-compliance with notices was inadvertent due to a change in chartered accountants and the assessee's ill health. The Tribunal noted that the revenue did not file a counter-affidavit to controvert these reasons. Therefore, the Tribunal set aside the order dated 06.10.2023 and restored the appeal to the file of the Ld. CIT(A) with a direction to decide it afresh after giving an effective opportunity to the appellant within 90 days. The Tribunal did not decide the merits of the additions made by the AO or the issue of adjustment of cash against advance tax liability, as these were not adjudicated due to the procedural defect.

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 interest on loans borrowed for investment in shares, if not claimed as revenue expenditure, is eligible to be treated as cost of acquisition under Section 48. It also held that disallowance made under Section 14A cannot be adjusted against book profits computed under Section 115JB.

The Tribunal held that interest on loans borrowed for investment in shares, if not claimed as revenue expenditure, is eligible to be treated as cost of acquisition under Section 48. It also held that disallowance made under Section 14A cannot be adjusted against book profits computed under Section 115JB.

The Tribunal held that the PCIT was justified in invoking revisional powers regarding the non-verification of factual aspects for section 54F deduction, as the AO did not verify these details for the current assessment year. However, regarding the taxability of the amount received from the partnership firm, the Tribunal noted that the assessee retired in AY 2017-18 and the taxability under section 45(4) arises in the hands of the partnership firm, thus the PCIT was not justified in restoring this issue for AY 2018-19.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal held that the Assessing Officer had indeed issued and served the notice under Section 143(2), contrary to the CIT(A)'s finding. Furthermore, the Tribunal found that the assessee failed to discharge its onus under Section 68 regarding the genuineness of share premium transactions, restoring the Assessing Officer's addition.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal observed that there were lapses on the part of the department in not considering the earlier submissions and records when the appeal was transferred to NFAC. The Tribunal decided to restore the matter back to the CIT(A) for a decision on merits, directing it to be decided within six months. The CIT(A) was also directed to provide a proper opportunity of hearing to the assessee.

The Tribunal held that the AO had not disproved the documentary evidence furnished by the assessee regarding the purchase and sale of shares, which were routed through banking channels and a recognized stock broker. The Tribunal found no reason to suspect the genuineness of the long-term capital gains.

The Tribunal held that while Rule 46A(2) requires the Ld. CIT(A) to record reasons for admitting additional evidence, the facts and circumstances of the present case warranted such admission under Rule 46A(1)(b) because the assessee was prevented by sufficient cause from producing the evidence before the AO. The short period between the show-cause notice (23.03.2015) and the assessment order (30.03.2015), coupled with the large number of persons involved (2,83,067), meant the assessee had no reasonable time to furnish evidence. The Tribunal noted that the Ld. CIT(A) did transmit the additional evidence to the AO for a remand report, and the AO provided comments on merits, thus not violating principles of natural justice. The Tribunal cited the Supreme Court decision in State of UP Vs. Sudhir Kumar Singh, holding that procedural infractions do not lead to invalidity unless prejudice is caused. In this case, no prejudice was caused to the Revenue. Therefore, the Tribunal found no merit in the revenue's grounds regarding the admission of additional evidence and the subsequent deletion of additions, dismissing these grounds.

The Tribunal held that the assessee failed to provide sufficient evidence to prove they were merely an entry operator and not a beneficiary of the accommodation entries. The onus was on the assessee to prove the genuineness of the transactions, identity, and creditworthiness of the parties involved.

The Tribunal held that the reopening of the assessment beyond four years was not justified as the assessee had made full and true disclosure of material facts during the original assessment. The AO failed to demonstrate any failure on the part of the assessee to disclose facts.

The Tribunal held that since the TDS credit was verifiable in Form 26AS and the Assessing Officer had allowed it after verification of accounts and documents, the Revenue's grounds lacked substance.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal set aside the CIT(A)'s order, remitting the issues back for fresh adjudication. It granted the assessee one more opportunity to present evidence, citing principles of natural justice.

The Tribunal held that the assessee failed to provide sufficient evidence to prove they were merely an entry operator and not a beneficiary of the accommodation entries. The onus was on the assessee to prove the genuineness of the transactions, identity, and creditworthiness of the parties involved.

The Tribunal noted that the basis for the assessment order dated 29/03/2023 was the revision order dated 22/02/2022, which had already been set aside by the ITAT. Consequently, the assessment order itself was also set aside.

The Tribunal observed that the CIT(A) dismissed the appeal ex-parte without providing a reasonable opportunity for hearing, which violates principles of natural justice. The Tribunal decided to provide one more opportunity to the assessee.

The Tribunal, considering the interest of natural justice and the submissions made, found it appropriate to grant the assessee one more opportunity to present its case before the Assessing Officer.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal held that the assessee's own funds exceeded its investments, making disallowance of interest expenditure under Rule 8D(2)(ii) unwarranted. The Tribunal also accepted the assessee's scientifically computed disallowance of Rs. 5,77,116/- under Rule 8D(2)(iii) as minimal investment activity made it reasonable.

The Tribunal held that while Rule 46A(2) requires the Ld. CIT(A) to record reasons for admitting additional evidence, the facts and circumstances of the present case warranted such admission under Rule 46A(1)(b) because the assessee was prevented by sufficient cause from producing the evidence before the AO. The short period between the show-cause notice (23.03.2015) and the assessment order (30.03.2015), coupled with the large number of persons involved (2,83,067), meant the assessee had no reasonable time to furnish evidence. The Tribunal noted that the Ld. CIT(A) did transmit the additional evidence to the AO for a remand report, and the AO provided comments on merits, thus not violating principles of natural justice. The Tribunal cited the Supreme Court decision in State of UP Vs. Sudhir Kumar Singh, holding that procedural infractions do not lead to invalidity unless prejudice is caused. In this case, no prejudice was caused to the Revenue. Therefore, the Tribunal found no merit in the revenue's grounds regarding the admission of additional evidence and the subsequent deletion of additions, dismissing these grounds.

The Tribunal noted that the assessee had filed adjournment petitions and was not given an adequate opportunity to present their case. In the interest of natural justice, the Tribunal decided to provide the assessee with one more opportunity.

The Tribunal upheld the CIT(A)'s decision to restrict the disallowance under Section 14A to the extent of exempt income earned. It also dismissed the revenue's ground regarding disallowance to book profit.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The CIT(A) held that the Explanation to Section 14A, inserted by the Finance Act, 2022, is retrospective and allows disallowance even if no exempt income has accrued or arisen.

The Tribunal held that the reopening of the assessment beyond four years was not justified as the assessee had made full and true disclosure of material facts during the original assessment. The AO failed to demonstrate any failure on the part of the assessee to disclose facts.

The Tribunal held that the sales tax subsidy received by the assessee is to be construed as a capital receipt, not chargeable to tax. This decision was based on the consistent view taken by Coordinate Benches in previous assessment years and the reliance placed on the judgment of the Hon'ble Jurisdictional High Court of Bombay in PCIT vs. Welspun Steel Ltd. The reasoning was that the subsidy was granted to encourage industrial development in backward areas and was not directly related to the acquisition of plant or machinery. The cost of fixed assets was merely a measure adopted for quantifying the subsidy, not a payment to meet any portion of the actual cost. Therefore, the subsidy did not partake of the incidents that would require its deduction from the actual cost under Section 43(1) of the Act. Consequently, the subsidy should be excluded from book profits while computing under Section 115JB. The Tribunal dismissed the Revenue's grounds of appeal.

The Tribunal condoned the delay in filing appeals before both the CIT(A) and the ITAT, finding sufficient and reasonable cause due to the assessee's bonafide circumstances beyond their control. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal held that the assessee had consistently added back BDDR provisions in its income computation for preceding years. When recoveries were made from bad debts, these were claimed as deductions in the year of recovery. The Tribunal noted that a similar issue for AY 2011-12 was decided in favor of the assessee, and the Revenue had not contested that decision. The Tribunal found that the assessee had provided all necessary documentary evidence, substantiating their claim.

The Tribunal condoned the delay in filing appeals before the CIT(A) and the Tribunal, finding sufficient and reasonable cause due to the assessee's bonafide circumstances. The appeals were set aside to the Assessing Officer for fresh adjudication on merits.

The Tribunal noted that the assessee had no exempt income during the relevant assessment year. Therefore, no disallowance under section 14A r.w. Rule 8D could be made. The Tribunal relied on decisions from the Gujarat High Court and Delhi High Court.

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). The Tribunal followed the precedents set by the Karnataka and Gujarat High Courts, which supported this view.

The Tribunal noted that the tax-effect was below the threshold stipulated in CBDT Circular No. 5 of 2024. Therefore, the appeal was dismissed.

The Tribunal noted that the AO had reopened the assessment based on information received from the DGIT (Investigation) regarding accommodation entries. Despite opportunities, the assessee failed to establish the genuineness of the purchases. However, the AO did not provide sufficient material to disprove the corresponding sales.

The Tribunal noted that the purchase parties could not be produced, and notices sent to them were returned unserved. However, the assessee had provided purchase bills and payment details. Following judicial precedents, the Tribunal upheld the CIT(A)'s estimation of profit at 10% on the bogus purchases, considering it a reasonable estimate of the profit element.

The Tribunal held that penalty under section 271(1)(c) of the Act levied on additions made merely on estimations is unsustainable. High Courts have consistently held that if an addition is made purely on an estimated basis without concrete evidence of concealment, no penalty is leviable.

The Tribunal granted the assessee's request to withdraw the appeal. The appeal was accordingly dismissed as withdrawn.

The Bombay High Court, referencing the Macrotech Developers Ltd. case, held that the department cannot reject a VSVS application solely based on a pending prosecution for tax arrears. The court stated that the scheme's exclusion is for prosecution related to tax arrears, not other issues. Therefore, the assessee's declaration should be decided in conformity with the DTVSV Act.

The assessee requested to withdraw the appeals as they were filed in error and the matter had already been disposed of by another bench of the tribunal.

The Tribunal held that the disallowance under Section 14A of the Act cannot exceed the amount of exempt income earned by the assessee during the year. This position is supported by various High Court and ITAT judgments, and the principle of estoppel does not prevent the assessee from seeking a lower disallowance. Therefore, the disallowance was restricted to the extent of exempt dividend income.