ITAT Mumbai Judgments — July 2024

The Tribunal held that the AO was correct in invoking Section 50C for additions based on stamp duty valuation, but this alone does not automatically attract penalty under Section 271(1)(c) if there is no evidence of concealment or furnishing inaccurate particulars. The addition was based on deeming provisions, not conclusive proof of higher actual consideration received by the assessee.

The Tribunal held that the Ld. CIT(A) should have passed an order on merits even without submissions from the assessee. In the interest of justice, the Tribunal set aside the order of the Ld. CIT(A) and restored the matter for fresh adjudication.

The Tribunal condoned the 269-day delay, acknowledging it was due to a bonafide belief regarding jurisdiction. It observed that the CIT(E) dismissed the application in limine without considering the merits. Therefore, the Tribunal set aside the impugned order and remanded the case back to the Ld. Commissioner for a fresh decision on merits, granting the assessee a reasonable opportunity to substantiate its claim.

The Tribunal noted that the assessee had not responded to notices issued by the Ld. CIT(A). However, considering the explanation that notices were sent to an old email ID and in the interest of substantial justice, the Tribunal decided to restore the matter back to the Ld. CIT(A) for fresh adjudication after considering the assessee's submissions.

The Tribunal noted that a co-ordinate Bench had dealt with an identical addition/disallowance for AY 2015-16 in the Assessee's own case and deleted it. Following this precedent, the Tribunal found the addition by the AO and sustained by the Ld. Commissioner to be unsustainable.

The Ld. Commissioner decided the appeal ex-parte and affirmed the additions. Similarly, the assessee failed to appear or provide submissions before the Tribunal, leading to an ex-parte decision.

The Tribunal noted that the CIT(A) had not decided the issue on merits and had dismissed the appeal due to non-compliance by the assessee. Therefore, the Tribunal restored the matter to the CIT(A) for a fresh decision.

The Tribunal noted that the CIT(A) had dismissed the appeal in default, ex-parte, without properly adjudicating the grounds and adhering to principles of natural justice. Despite the assessee's failure to appear, the Tribunal deemed it appropriate to remit the matter back to the CIT(A) for a denovo adjudication on merit.

The Tribunal noted that the shares were purchased and sold through the stock market, and the assessee is a regular investor. The AO did not conduct independent inquiry and wrongly applied Section 68, which is for 'cash credits', to a capital loss. The Tribunal relied on a Bombay High Court decision where similar issues were decided in favor of the assessee.

The Tribunal noted that the assessee purchased and sold shares through the stock market, furnished all necessary documents, and was a regular investor. The AO's disallowance under Section 68, which applies to cash credits, was deemed incorrect as the transaction involved a capital loss, not a cash credit. The Tribunal relied on a Bombay High Court decision in a similar case.

The Tribunal held that the AO's assumption that the assessee was a non-filer was erroneous, as the assessee had indeed filed a return, which was physically acknowledged. The reassessment proceedings, initiated solely on the basis of the erroneous belief of non-filing, lacked the necessary nexus between tangible material and the formation of belief, rendering them invalid. Consequently, the reassessment proceedings were quashed.

The Tribunal, relying on previous co-ordinate bench decisions, held that compensation received from a developer for society redevelopment, including amounts for hardship, rehabilitation, shifting, and corpus funds, is a capital receipt and not liable to tax as revenue income or dividend. The Tribunal deleted the addition made by the Assessing Officer.

The Tribunal held that the CIT(A) was expected to state the points for determination, the decision, and the reasons, as per Section 250(6) of the Act. Even though the assessee was absent, principles of natural justice should be observed. Therefore, the matter was remitted back to the CIT(A) for de novo adjudication on merit.

The Tribunal noted that the assessee's counsel submitted an undertaking to comply with all notices if the matter was restored to the Ld. CIT(A). In the interest of substantial justice, the Tribunal decided to restore the appeals to the file of the Ld. CIT(A) for fresh adjudication.

The Tribunal observed that the Ld. Commissioner's order did not appear to be based on merits, and the communication of hearing notices to the Assessee was not clearly documented. For substantial justice, the case is remanded to the Ld. Commissioner for a fresh decision on merits after affording a reasonable opportunity to the Assessee.

The Tribunal observed that while the assessee challenged the additions, they failed to substantiate their claim before the first appellate authority. However, considering the principles of natural justice, the assessee was granted one more opportunity.

The Tribunal observed that the assessee had a reasonable and sufficient cause for the delay in filing the appeal, citing reasons such as migration and non-receipt of notices due to a change of address. The Tribunal directed the CIT(A) to condone the delay and adjudicate the appeal on its merits.

The Assessing Officer levied a penalty of Rs. 98,89,964/- under section 271G of the Act for non-compliance. The Tribunal noted that while the Assessee did eventually provide some documents, it was after the expiry of the statutory period. However, considering the delay was minuscule and the Assessee's reasons (being a foreign company appointing a new representative) appeared bonafide and unintentional, the Tribunal inclined to delete the penalty.

The ITAT found that the CIT(E) did not specify the date on which the assessee started its activities and did not discuss the relevant material or submissions from the assessee. Therefore, the Tribunal decided to restore the matter back to the CIT(E).

The Tribunal noted that the Ld. CIT(A)'s order did not reference any notice of hearing issued to the assessee. It was held that the Ld. CIT(A) is required by law to fix an appeal for hearing, issue notice, and pass a speaking order after hearing the assessee. Since this procedure was not followed, the order was set aside.

The Tribunal noted that the CIT(A) had not considered additional evidence. For the cash deposit addition, the matter was restored to the CIT(A) for considering the evidence. For the property addition, the CIT(A)'s finding was set aside as it was not in accordance with law, and the issue was restored to the CIT(A) for fresh verification and decision.

The Tribunal observed that the assessee had challenged the additions but was non-compliant throughout the appellate proceedings. However, considering the principles of natural justice, the assessee was granted one more opportunity to present her case before the CIT(A).

The Tribunal held that the piece of paper alone was not credible evidence to prove unaccounted income, as the buyers did not ultimately purchase the flats and the paper's contents were disputed. Regarding professional fees, the Tribunal found that the assessee had discharged its onus by providing bills and evidence of banking channel payments and TDS, and should not be penalized for the recipients' non-compliance.

The tribunal noted that the assessee did not comply with notices from the Assessing Officer and the Ld. CIT(A). The Ld. CIT(A) upheld the disallowance ex-parte. The tribunal acknowledged that the assessee's counsel argued that import transactions related to another concern, 'Priyansh Fashion', which used the assessee's IEC code.

The Tribunal noted that the levy of late fee under Section 234E was applicable only for TDS returns filed after 01.06.2015 as per the amended provisions of Section 200A. Since the TDS statement in question pertains to Q1 (01.01.2014-31.03.2014), which is prior to 01.06.2015, no late fee could be levied.

The Tribunal held that the Assessing Officer rightly excluded short-term capital gains from the business income. Expenses debited in the profit and loss account were also related to earning this capital gain, and the AO's proportionate expense allocation was justified. The assessee's contention that these expenses should not be reduced from business income was rejected.

The Tribunal followed its earlier decisions in the assessee's own case and in the case of HDFC Property Fund. It held that the assessee's investments in mutual funds were temporary investments permissible under its Trust Deed and SEBI regulations, and were not in violation of the Trust Deed or VCF Regulations. Therefore, the claim of exemption was allowed.

The CIT(A) relied on Supreme Court and High Court decisions, holding that amounts received by a partner upon retirement, including share of capital, profit, goodwill, etc., are not taxable as capital gains and exemption u/s 54F is valid. The ITAT restored the matter to the AO for verification.

The Tribunal found that the Ld. CIT(A) had adjudicated the appeals ex-parte without providing an adequate opportunity of being heard to the assessee. In light of the assessee's counsel's undertaking to fully comply with all notices if the matter was restored, and in the interest of substantial justice, the Tribunal decided to restore the appeals back to the Ld. CIT(A) for fresh adjudication. This fresh decision is to be made after considering the submissions of the assessee.

The Tribunal observed that the CIT(A) dismissed the appeal without considering the assessee's written submissions and evidence, relying on a Supreme Court decision regarding non-adjudication on merits. The Tribunal found that the original assessment order was also passed ex parte. Therefore, in the interest of justice, the assessee was granted another opportunity.

The Tribunal noted that the assessee failed to prove the genuineness of the purchases and that the lower authorities did not adequately consider the remand proceedings. The Tribunal decided to give the assessee one more opportunity to establish its case.

The Assessing Officer denied the exemption based on the non-filing of Form 10BB. However, the CIT(E) later granted the approval, and subsequently, the AO passed a rectification order allowing the exemption after the CBDT condoned the late filing of Form 10BB. The Revenue's appeal was rendered infructuous.

The Tribunal held that the penalty is unsustainable because the additions were made on an ad-hoc/estimated basis, and the assessee had provided substantial documentation for the purchases. Furthermore, the varying disallowance percentages indicated a lack of certainty regarding the original addition. The Tribunal also clarified that concealment of income and filing inaccurate particulars are distinct and cannot be used interchangeably, and that merely making an incorrect claim does not amount to furnishing inaccurate particulars.

The Tribunal ruled that the seized paper was not credible evidence for unaccounted income without corroboration, especially since the assessee disputed its contents and the transactions did not materialize as noted. It deleted the entire addition for unaccounted income. Regarding professional fees, the Tribunal found the assessee proved the payments were for business purposes, made through banking channels with TDS, and arranged a significant loan, thus deleting the disallowance.

The Tribunal found that the CIT(Exemptions) had not provided sufficient opportunity to the assessee to present its case and had not brought any material on record to substantiate its findings regarding the commencement of the assessee's activities. Therefore, the case was restored to the CIT(Exemptions) for a speaking order.

The ITAT noted that the CIT(A) dismissed the appeal in default after the assessee failed to appear on multiple occasions. However, considering the interest of justice and fair play, the Tribunal set aside the CIT(A)'s order and remitted the matter back for denovo adjudication on merit.

The Tribunal held that not all receipts are income and classified receipts into capital and revenue. Inter-bank transfers, sweep transfers, advance fees offered in the succeeding year, and sports grants were not considered income. The aggregate of these non-income receipts amounted to Rs. 8,40,01,474/-.

The Tribunal observed that this appeal was against an order that was also challenged in another appeal, ITA No.1807/M/2024, which had already been decided by the Tribunal. Therefore, the present appeal was deemed to be infructuous.

The Tribunal condoned the delay in filing the appeal, acknowledging the Trust's good work and the reasons provided. The Tribunal noted the appellant's concession that notices were not responded to, attributing it to incorrect email communication and lack of knowledge of the Income Tax Portal. The case was remitted back to the CIT(E) for adjudication on merits.

The Tribunal observed that the impugned order was ex-parte and not on merits. Considering the peculiar facts and the absence of adjudicated issues, the Tribunal set aside the order and remanded the case back to the Commissioner for fresh adjudication on merits.

The Tribunal condoned the delay, stating it was neither deliberate nor malafide. The Tribunal held that the lower authority acted hyper-technically by rejecting the application based on a minor error in mentioning the section, and that the application should have been treated as one for regularization.

The Tribunal held that the assessee's investments in mutual funds and other temporary investments were within the ambit of its Trust Deed and SEBI (VCF) Regulations. The Tribunal followed its own previous decisions and the decision of a coordinate bench in similar cases, finding no violation. Therefore, the denial of exemption by the Assessing Officer was incorrect.

The CIT(E) erred in rejecting the application without granting a personal hearing and summarily dismissing it. The Tribunal noted that the CIT(E) did not discuss the relevant material regarding the commencement of activity or specify how the conditions were not met. Therefore, the case was restored to the CIT(E) for a fresh speaking order.

The Tribunal noted that similar issues for prior assessment years had resulted in the deletion of penalties. The assessee argued that the cash transactions were due to financial exigencies and reasonable cause, as supported by previous Tribunal rulings.

The Tribunal observed that the assessee had challenged the additions before the CIT(A) but failed to appear or submit any written arguments, leading to the ex parte order. The Tribunal decided to give the assessee one more opportunity to present their case before the CIT(A).

The Tribunal held that income from the service center should be treated as business income, not income from house property, consistent with previous decisions and the nature of services provided. The disallowance of interest expenses under section 24(b) was also confirmed as allowable. Disallowances under section 14A were deleted as there was no exempt income. Sale promotion expenses were allowed as revenue expenditure.

The Tribunal condoned the 209 days delay in filing the appeal subject to a deposit of Rs. 10,000/-. However, the case was remanded to the Commissioner for a fresh decision, allowing the Assessee a reasonable opportunity to substantiate the delay in condonation. If successful, the Commissioner would decide the appeal on merits.

The ITAT upheld the CIT(A)'s findings, confirming that the service centre income, involving complex services, constituted 'business income'. It also affirmed the allowance of interest expenses under section 24(b) based on area allocation, deleted the section 14A disallowance due to the absence of exempt income, and allowed sales promotion expenses as revenue expenditure under section 37, consistent with past tribunal orders and judicial precedents.

The Tribunal noted that the assessee had not responded to notices from the CIT(A). However, the assessee's counsel provided an undertaking to comply with all notices if the matter was restored. Considering the interest of substantial justice, the Tribunal set aside the CIT(A)'s order.