ITAT Mumbai Judgments — February 2025

The Tribunal, in the interest of justice, remitted the issue back to the AO to verify the assessee's details and consider the claim for deduction under Section 10AA in accordance with the law.

The Tribunal held that the non-recovery of a principal loan amount advanced as part of business activity should be allowed as a bad debt or business loss, distinguishing it from cases of loan waiver. The AO's reliance on the Mahindra & Mahindra judgment was found not applicable as it dealt with waiver, not non-recovery.

The Tribunal held that since the allotment and part-payment for the three flats occurred prior to the insertion of Clause 'f' of Section 80IB(10), and these flats were allotted to different family members, there was no concealment or inaccurate particulars of income. Therefore, penalty could not be levied.

The Tribunal held that the assessee's application was rejected by the CIT(E) without affording due opportunity. Citing previous decisions with similar circumstances, the Tribunal restored the issue to the CIT(E) for fresh consideration.

The Tribunal held that the Commissioner ought to have given the assessee a reasonable opportunity to amend the object clause or delete the offending part, which was not done. The application was also found to be incomplete.

The Tribunal held that the assessee had sufficiently discharged the onus to establish the identity, creditworthiness, and genuineness of the lenders. As the entities are independently assessed to income tax, the addition made by the AO was not justified and directed to be deleted.

The Tribunal held that the approval for the Section 148A(d) order and the Section 148 notice was obtained from an authority not specified under Section 151(ii) of the Act for the given period, thereby affecting the Assessing Officer's jurisdiction. Consequently, the reassessment proceedings and the assessment order were quashed.

The Tribunal held that there was a mismatch in the limbs of Section 271(1)(c) of the Act concerning the initiation of penalty proceedings and the penalty order. The AO did not come to a clear finding on whether there was concealment of income or furnishing of inaccurate particulars.

The Tribunal held that the requirement of filing Form 10-IC is directory, not mandatory. Technical glitches in the portal preventing timely filing do not deprive the assessee of the benefit, especially when the form was filed before the assessment order and other conditions are met. The delay in filing is condoned.

The Tribunal held that the error in selecting the clause was inadvertent and clerical. It noted that the assessee had met the timeline requirements for filing the application under the correct clause. The impugned order was set aside, and the matter was restored to the CIT(E).

The Tribunal condoned the delay of 72 days, citing bonafide reasons and relying on Supreme Court judgment. The Tribunal set aside the CIT(A)'s order and restored the penalty appeal for de novo adjudication, directing the CIT(A) to consider the outcome of the quantum appeal.

The Tribunal noted that the appeals were filed ex-parte and the DR had no objection. Both appeals were remanded back to the CIT(A) to decide afresh after giving due opportunity of hearing to the assessee.

The Tribunal held that the payments for the purchase of the property were made by the assessee's father from his bank accounts. Upon reviewing the breakup, it was found that none of these payments fell within the relevant financial year (2017-18 for AY 2018-19). Therefore, the addition on account of unexplained investment was not justified.

The Tribunal held that the reassessment proceedings were not exercised in a fair manner. The reasons for reopening were recorded by an officer different from the one who initiated the reassessment, and the reasons were recorded after the issuance of the notice under section 148 and were beyond the limitation period. Therefore, the reassessment notice and the consequential assessment order were quashed.

The Tribunal held that no penalty could be levied in this case because the assessee had already disclosed the capital gain in the return of income, which was accepted by the AO without any disallowance. The penalty proceedings were initiated after the assessment was completed, and no inaccurate particulars were found.

The Tribunal held that while there was a failure to respond to notices, the assessee had a reasonable cause due to the Director's severe personal hardship. Therefore, the assessee is entitled to exemption under Section 273B of the Act, and the penalty is deleted.

The Tribunal held that the notice issued under Section 148 of the Act on 27/07/2022 was barred by limitation, as the period of six years from the end of the Assessment Year 2015-2016 expired on 31/03/2022. Therefore, the reassessment proceedings and the consequent assessment order were quashed.

The Tribunal held that the assessee had correctly filed the application for renewal under clause (ii) of the first proviso to Section 80G(5), as it was already an approved trust. The provisional approval was not a sole basis for rejection.

The Tribunal partially allowed the assessee's appeal by restricting the addition to 5% of the alleged bogus purchases, following the rule of consistency with previous years. The Revenue's appeal was dismissed.

The Tribunal held that the AO failed to specify the exact charge under Section 271(1)(c) for levying the penalty, and thus the penalty could neither be levied nor sustained. The Tribunal noted that the assessee had disclosed all particulars and explained the loan transaction.

The Tribunal held that disallowance under Rule 8D(2)(iii) must consider only investments yielding exempt income. For commission and club expenses, the Tribunal followed its own earlier decisions in favor of the assessee, finding identical facts and legal positions. The amendment to Form 3CL was held not applicable to the assessment years in dispute.

The assessee opted to settle the dispute under the DTVSV Scheme, 2024 and requested permission to withdraw the appeals. The Revenue did not object to this request. Consequently, the appeals were allowed to be withdrawn and dismissed as withdrawn.

The Tribunal held that the delay in filing the appeal before the first appellate authority was due to sufficient cause. The first appellate authority should have condoned the delay and decided the appeal on merits.

The Tribunal held that Section 68 of the Income Tax Act requires that sums must be found credited in the assessee's books of account. Since the assessee opted for presumptive taxation under Section 44AD and was not obligated to maintain books, the addition made under Section 68 based on bank passbook entries was not justified.

The Tribunal noted that the appeals were filed ex-parte and the DR had no objection. Both appeals were remanded back to the CIT(A) for a fresh decision, with a direction to provide due opportunity of hearing to the assessee and for the assessee to comply with the notices.

The assessee applied to withdraw the appeals after opting for the DTVSV Scheme, 2024. The Department did not object to this request.

The Tribunal held that disallowance under Rule 8D(2)(iii) should consider only investments yielding exempt income. Regarding Section 35(2AB), commission, and club expenses, the Tribunal followed its own consistent view in prior years, finding the factual position identical and upholding the deletion of disallowances made by the AO.

The Tribunal considered various grounds of appeal, primarily concerning the exclusion/inclusion of comparables in transfer pricing analysis, working capital adjustments, and other transfer pricing adjustments. The Tribunal provided directions for re-verification of comparables, allowed working capital adjustments, and partly allowed other grounds for statistical purposes.

The Tribunal allowed the appeal to be withdrawn, noting that the assessee had complied with the VSV Scheme requirements and paid the dues.

The Tribunal held that the denial of deduction under Section 11 for the alleged violation of Section 13 was not justified. Relying on a previous decision in the assessee's own case for A.Y. 2012-2013, where a similar issue was decided in favor of the assessee, the Tribunal reversed the stand of the first appellate authority.

The Tribunal held that the notices issued under Section 148 for AY 2015-16 were invalid and time-barred as they were not issued within the prescribed time limits, considering TOLA and Supreme Court judgments. Similarly, for AY 2016-17 and 2017-18, the notices were held invalid due to non-compliance with Section 151 regarding prior approval from the appropriate authority.

The Tribunal held that the CIT(A) correctly deleted the disallowance of depreciation on trucks as the firm had purchased them and reflected them in its assets, and also followed the Supreme Court's ruling on the wider meaning of 'owned' in Section 32(1). The disallowance on home theatre and car was also deleted as it was made on an ad-hoc basis without evidence of personal usage.

The Tribunal held that the assessee had not duly received various notices issued by the AO, except for the notice dated 04.01.2023. The return filed in response to this notice was considered valid and within time, allowing the benefit of Section 44AD.

The Tribunal held that Section 68 of the Income Tax Act is not applicable in this case as the transactions were a revaluation of assets by the AOP and not an introduction of undisclosed income. The Tribunal also found that the brokerage expenses were allowable as revenue expenditure since they were paid through banking channels, TDS was deducted, and no adverse findings were made by the Assessing Officer.

The Tribunal held that the difference in stamp duty value and purchase value for Unit No. 307, amounting to Rs. 5,14,461/-, should be deleted as it falls under an exception. Consequently, the addition was further reduced.

The Tribunal held that disallowance under Rule 8D(2)(iii) must consider only investments that yielded exempt income in the year under consideration, directing the AO to recompute. For other issues regarding weighted deduction (Section 35(2AB)), commission expenditure, and club expenses, the Tribunal followed its prior decisions favouring the assessee, dismissing the Revenue's grounds.

The Tribunal held that disallowance under Rule 8D(2)(iii) requires consideration of only investments yielding exempt income. For weighted deductions, commission expenses, and club expenses, the Tribunal followed its earlier decisions in favour of the assessee, stating that factual positions were identical.

The Tribunal directed the AO/TPO to adopt rates agreed under the Bilateral APA with the UK AE for transactions with the USA AE, resolving grounds related to ITeS services and transfer pricing adjustments. The ground regarding TDS credit was also directed to be provided.

The Tribunal held that the appeals should be remitted back to the CIT(A) to pass a detailed order on merits after considering the assessee's submissions and granting a proper opportunity of being heard.