ITAT Mumbai Judgments — July 2024

The Tribunal held that additions made under the deeming provisions of Section 50C, based on stamp duty valuation, do not automatically attract penalty under Section 271(1)(c) if the assessee has furnished all relevant documents and the AO has not doubted their genuineness. The penalty is not sustainable.

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 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.

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 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 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 held that the compensation received by the assessee was towards hardship, shifting, and corpus funds due to redevelopment. Following previous coordinate bench decisions, this compensation was considered a capital receipt and not taxable income.

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 restored the issue back to the CIT(A) for fresh adjudication, considering the assessee's submissions. This was done in the interest of substantial justice, acknowledging the circumstances presented by the assessee's counsel.

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 restored the issue of cash deposits to the CIT(A) for considering additional evidence, as it was not properly considered earlier. The issue of property purchase was also restored to the CIT(A) for verification of the assessee's claim that a firm purchased the property.

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 sufficient evidence to prove unaccounted receipts, as the sales did not materialize and the assessee disowned the contents. The Tribunal also allowed the deduction for professional fees, finding it to be a genuine business expenditure corroborated by financial statements.

The Tribunal restored the matter to the file of the CIT(A) for fresh adjudication. This was subject to the assessee paying a cost of Rs. 25,000/- to the Prime Minister Relief Fund within one month.

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 was justified in charging proportionate expenses against the short-term capital gains, as some expenses from the profit and loss account must have been incurred for earning this income. The assessee failed to substantiate the exclusion of expenditure related to capital gains.

The Tribunal held that temporary investments in mutual funds or bank deposits by a venture capital fund are permissible under SEBI regulations and the trust deed. The Tribunal found no violation of SEBI regulations, upholding the CIT(A)'s decision.

The Tribunal restored the matter to the Assessing Officer to verify if the flat was part of the retirement consideration or a separate transaction. The appeal was allowed for statistical purposes.

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 held that the invocation of Section 14A and Rule 8D was justified given the significant exempt income and the assessee's failure to conclusively demonstrate no expenditure was incurred for it. The CIT(A)'s direction to recalculate the disallowance as per Rule 8D was affirmed.

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) did not provide sufficient material to substantiate the date of commencement of activities or how the conditions were not fulfilled. Therefore, the case was restored to the CIT (Exemptions) for a fresh decision after providing an opportunity to the assessee.

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 temporary investments in mutual funds or bank deposits by a venture capital fund are permissible under SEBI regulations and the trust deed. The Tribunal found no violation of SEBI regulations, upholding the CIT(A)'s decision.

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 upheld the CIT(A)'s decision that income from the service centre business should be taxed as business income, not income from house property. It also confirmed the allowability of sales promotion expenses 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 Tribunal held that income from the service center should be taxed as business income, not house property income. It also upheld the CIT(A)'s decision to allow sales promotion expenses as revenue expenditure.

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.