ITAT Mumbai Judgments — July 2024

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 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 condoned the delay of 304 days, acknowledging the bona fide cause for the delay due to the incorrect email ID. The Tribunal decided to restore the case to the CIT(A) for adjudication on merits, ensuring the assessee is given a proper opportunity to be heard.

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 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 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 noted that the appeal was filed with a delay of 15 days, which was condoned considering the assessee's financial constraints and the legal precedent. The Tribunal restored the appeals to the Assessing Officer for further investigation based on the findings of a coordinate bench on identical facts for other assessment years.

The Tribunal upheld the deletion of additions related to the purchase of shares and commission, noting that profit element alone is subject to addition and Section 68 was not applicable. The Tribunal also confirmed the affirmation of the addition related to the sale consideration by the lower authority.

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 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 initial notice under section 148 of the Act was issued by an officer who lacked jurisdiction. Although a subsequent notice was issued by the jurisdictional AO, it was beyond the prescribed limitation period. The Tribunal further noted that a jurisdictional notice with an inherent defect is not curable and relied on High Court judgments.

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 condoned the delay in filing the appeal, acknowledging the 'sufficient cause' presented by the assessee. While noting the assessee's non-compliance in previous proceedings, the Tribunal decided to give one more opportunity to present the case before the CIT(A) based on the principles of natural justice.

The Ld. CIT(A) rejected the condonation of delay application, stating that the reason provided was not a 'good and sufficient cause' and cited legal precedents emphasizing the importance of timely filing. However, the Appellate Tribunal found it appropriate to restore the matter to the Ld. CIT(A) for reconsideration.

The Tribunal held that while the rejection of books of account was justified, further estimation of income on turnover was not warranted due to specific facts. For share capital additions, the Tribunal found insufficient evidence to establish creditworthiness and identity, restoring the issue to the AO for further examination. The cross-objections were rejected.

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 assessee failed to appear or provide necessary documents before the first appellate authority, leading to an ex-parte order upholding the AO's decision. The tribunal observed the assessee's non-compliance and decided to grant one more opportunity.

The Tribunal held that the CIT(A) passed an ex-parte order without deciding the appeal on merits, overlooking that remand proceedings were fixed after the appeal order date. The Tribunal also noted that the penalty order was passed without a remand report.

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 observed that the assessee was denied a reasonable opportunity to present its case due to the short span between the notice and the order. Therefore, the Tribunal directed the CIT(E) to accept a fresh application and consider it on merits.

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 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 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 held that the deferred consideration was contingent in nature and accrued only in AY 2022-23, thereby allowing Ground 1.1 of the assessee's appeal. It remanded the issues concerning revised cost of acquisition, incorrect tax/surcharge/cess computation, erroneous interest levy, erroneous refund mention, and the MFN clause for dividend tax rate back to the Assessing Officer for statistical purposes. Ground 1.2, relating to TDS credit for deferred consideration, was dismissed as infructuous.

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 CIT(A) deleted the addition, noting that SEBI had revoked its earlier observations and found no material evidence of wrongdoing. The Tribunal agreed, holding that the AO's reopening was based on SEBI's preliminary report without further investigation, and since SEBI later gave a clean chit, the basis for the addition was invalid.

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 Tribunal condoned the delay, stating that it was neither intentional nor malafide, and was based on a bonafide belief. The Tribunal noted that the lower authority mistakenly dismissed the appeal based on the incorrect assumption that the assessee had opted for the Vivad Se Vishwas Scheme.

The Tribunal, while acknowledging the assessee's non-compliance before the Ld. Commissioner, decided to set aside the impugned orders and remand the cases back to the Ld. Commissioner for a fresh decision on merits. This remand is conditional on the assessee depositing a token amount of Rs.11,000/- and cooperating fully with the appellate proceedings, providing all necessary documents and submissions.

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 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 ITAT observed that the assessee challenged the additions but was non-compliant throughout the appellate proceedings, leading to an ex parte order by the CIT(A). The Tribunal held that the assessee should be given one more opportunity to present their case.

The Assessing Officer (AO) treated Rs. 60 lakhs as unexplained cash credit under Section 68 of the Act. The Commissioner (Appeals) affirmed the reopening and the addition. The Tribunal observed that the AO did not rely on the statement of Shri Praveen Kumar Jain, which was the foundation for reopening, and that the actual share capital subscribed was Rs. 60 lakhs, which the assessee had already disclosed.

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 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 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 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 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 set aside the Ld. Commissioner's order and remanded the case for fresh adjudication, considering the Commissioner's inability to decide the issue on merits due to lack of information. The remand is conditional on the assessee depositing a token amount of Rs. 11,000/- within 15 days and cooperating by providing all necessary documents to the Ld. Commissioner.

The Tribunal held that the assessee had successfully discharged its primary onus under Section 68 by providing comprehensive documentation for the identity, creditworthiness, and genuineness of the transactions, including prior ITAT rulings for a group concern. The AO failed to controvert the evidence, and Section 56(2)(viib) was found not to be retrospectively applicable. Consequently, the additions made by the AO were deleted.

The Tribunal held that the assessee is empowered to choose its valuation method (DCF or NAV) as per Rule 11UA(2). The AO cannot reject the method chosen by the assessee and impose a different method. The CIT(A)'s deletion of the addition was upheld, as the valuation report was not shown to be fundamentally erroneous.

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 Income Tax Appellate Tribunal (ITAT) set aside the CIT(A)'s deletion of the estimated profit on turnover and the unexplained cash credit, restoring both issues to the AO for fresh, detailed inquiry. This inquiry is to verify the genuineness of trading activities and the identity, creditworthiness, and genuineness of share subscribers. The ITAT upheld the CIT(A)'s finding regarding the existence of sufficient incriminating material, thus rejecting the assessee's cross-objection on this point. Other cross-objections concerning the validity of assessment under 153C and denial of cross-examination were deemed academic due to the remand.

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 observed that the tax auditor's report stated the expenses were admissible under Section 35(1)(i) of the Act and debited to the profit and loss account, not that they were disallowable. The CPC's disallowance and the CIT(A)'s confirmation were based on a misunderstanding.

The CIT(A) deleted the penalty, holding that penalty is not leviable on additions made on an estimation basis. The Tribunal affirmed the CIT(A)'s decision by relying on previous ITAT rulings that penalty on estimated additions is not sustainable.

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 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.