ITAT Mumbai Judgments — February 2025

The Tribunal held that the reopening of the assessment under Section 147 was invalid. The reasons recorded for reopening were dated 11/02/2015, and the notice under Section 148 was issued on 20/02/2015. Crucially, the approval for reopening was sought on 11/02/2015, but the date of granting the approval is not mentioned, making it unclear whether it preceded the notice. Furthermore, the approval form incorrectly referred to the deleted Section 147(b). The Tribunal relied on a coordinate bench decision in ITA Nos. 92-94/Mum/2019, which held that such a cryptic and erroneous approval renders the reopening invalid. The Tribunal also noted that the reopening was made beyond four years, requiring sanction under Section 151(1), and found issues with the approval process. As the assessment order is quashed due to invalid reopening, the Tribunal deemed it unnecessary to delve into the merits of the case, including the addition under Section 68. The appeal of the assessee was allowed, and the appeal of the revenue was dismissed.

The Tribunal condoned the delay after finding sufficient cause, citing the Supreme Court's decision in Collector Land Acquisition, Anantnag Vs. MST Katiji. The Tribunal decided to restore the matter to the Assessing Officer for de novo adjudication on merits, granting the assessee an opportunity to represent their case.

The Tribunal condoned the delay in filing the appeal, considering the Assessee's circumstances and the extension provided by the Apex Court. The case was remanded to the Commissioner for a decision on merit.

The Tribunal held that the CIT(A) wrongly dismissed the appeal ex parte. The assessee should be granted an opportunity to present the case on merits. The impugned order was set aside, and the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that while there was non-compliance with statutory notices, it was not wanton or negligent, but rather a case of lack of sufficient compliance due to the assessee's limited understanding and circumstances. The Tribunal noted the disparity in law's implementation across different societal strata and directed the deletion of the penalty.

The Tribunal held that interest on trade receivables is a separate international transaction and not subsumed within working capital adjustments. However, in this specific case, since all invoices were realized within the agreed period, charging interest was not sustainable. The Tribunal also directed the AO to consider the claim for set-off of brought forward losses.

The Tribunal held that the assessee had a reasonable cause for the delay in filing the appeal due to a bonafide belief that the issue would be addressed via rectification u/s 154. Therefore, the delay was condoned, and the CIT(A) was directed to decide the matter afresh on merits.

The Tribunal dismissed the appeal as withdrawn, with liberty to reinstate it if the Vivad Se Vishwas application is not accepted. The dismissal was based on the assessee opting for the Vivad Se Vishwas Scheme.

The Tribunal held that the notice u/s 148 and the order u/s 148A(d) were issued beyond the period of three years from the end of the relevant assessment year. The approval for issuing the notice was obtained from the Principal Commissioner of Income Tax, which was not the specified authority as per Section 151(ii) of the amended law.

The Tribunal held that the notice u/s 148 and the order u/s 148A(d) were issued beyond the period of three years from the end of the relevant assessment year. The approval for issuing the notice was obtained from the Principal Commissioner of Income Tax, which was not the specified authority as per Section 151(ii) of the amended law.

The ITAT noted that the Addl./Joint CIT(A) dismissed the appeal ex-parte without adjudicating on merits, which is contrary to Section 250(6) of the Act. Citing a Bombay High Court precedent, the ITAT held that an appeal cannot be dismissed for non-prosecution. The ITAT set aside the impugned order and remanded the matter to the Addl./Joint CIT(A) for de novo adjudication on merits, ensuring a reasonable opportunity of hearing to the assessee.

The Tribunal held that assessments under Section 153A are permissible only if incriminating material is found during a search. In the absence of such material, the assessment order is beyond jurisdiction, and additions made therein are quashed.

The Tribunal held that the assessee had satisfied the conditions laid down in Section 249(4)(a) by filing the return and having the entire tax liability deducted at source. The CIT(A) erred in dismissing the appeal on this ground.

The Tribunal held that the mandate of approval of quantum of expenditure being in place only from 01-07-2016 meant that non-approval for the assessment year 2011-12 did not entitle the Assessing Officer to make a disallowance. The Tribunal respectfully followed the decision of a coordinate bench.

The Tribunal held that the assessee had discharged its primary onus by providing evidence for the identity, creditworthiness, and genuineness of the share applicants. Since the parties had responded to notices and their details were provided, the addition under Section 68 was deemed uncalled for.

The Tribunal held that the CIT(A) correctly observed that the addition made by the AO was not maintainable as Section 69C of the IT Act could not be invoked for the given transaction. The CIT(A)'s decision to delete the addition was found to be sound.

The assessee sought to withdraw the appeal as they had opted for the Vivad Se Vishwas Scheme. The appeal was dismissed as infructuous with liberty to file an application for recalling the appeal if the scheme application was not accepted.

The Tribunal held that the additional depreciation claim was allowable as the amendment to Section 32(1)(iia) was curative and the balance depreciation could be claimed in the subsequent year. It also held that CSR expenses are voluntary and eligible for deduction under Section 80G, with no correlation to disallowance under Section 37.

The Tribunal held that the reassessment proceedings were initiated based on a mere change of opinion, as the facts considered were available during the original assessment. Furthermore, the notice u/s 148 was issued more than four years after the assessment year, and the AO failed to disclose any material facts not fully and truly disclosed by the assessee. Consequently, the notice was held to be bad in law.

The Tribunal held that the rejection of books of account was not justified as the assessee provided sufficient documentary evidence and explanations. The addition on account of cash deposits during demonetization was also deleted as the assessee demonstrated sufficient cash in hand.

The Tribunal held that even if the claim is not allowable as a bad debt, it can be allowed as a business loss under Section 28 if it arises in the course of business and is incidental to it. The write-off of non-recoverable trade advances was considered a business loss.

The Tribunal held that the CIT(A) failed to provide a reasonable opportunity of being heard to the assessee before passing the enhancement order, which violates the principles of natural justice. Therefore, the matter was restored back to the CIT(A).

The Tribunal considered the assessee's application and decided to allow the withdrawal of the appeals.

The Tribunal held that the Assessing Officer and CIT(A) failed to controvert the supporting material and detailed submissions made by the assessee regarding the reasonableness of the payments. The disallowance under Section 40A(2)(b) was therefore not justified.

The Tribunal held that the Assessing Officer and CIT(A) failed to controvert the supporting material and detailed submissions made by the assessee regarding the reasonableness of the payments. The disallowance under Section 40A(2)(b) was therefore not justified.

The Tribunal held that the Assessing Officer and CIT(A) failed to controvert the supporting material and detailed submissions made by the assessee regarding the reasonableness of the payments. The disallowance under Section 40A(2)(b) was therefore not justified.

The Tribunal held that the Assessing Officer and CIT(A) failed to controvert the supporting material and detailed submissions made by the assessee regarding the reasonableness of the payments. The disallowance under Section 40A(2)(b) was therefore not justified.

The Tribunal held that the Assessing Officer and CIT(A) failed to controvert the supporting material and detailed submissions made by the assessee regarding the reasonableness of the payments. The disallowance under Section 40A(2)(b) was therefore not justified.

The Tribunal considered the assessee's application and decided to allow the withdrawal of the appeals.

The Tribunal found that the CIT(A) had erred in dismissing the appeals without proper adjudication. For AY 2015-16, the matter was to be decided on merits after condoning delay. For AY 2017-18, the matter was remanded to the CIT(A) to obtain the processing order and decide on merits.

The Tribunal found that the CIT(A) had erred in dismissing the appeals without proper adjudication. For AY 2015-16, the matter was to be decided on merits after condoning delay. For AY 2017-18, the matter was remanded to the CIT(A) to obtain the processing order and decide on merits.

The Tribunal found the assessee's non-compliance to be unintentional and, for the sake of justice, set aside the ex-parte order. The case was remanded to the Ld. Commissioner for a fresh decision after providing the assessee a proper opportunity of being heard. The assessee was also directed to update their correct contact information.

The Tribunal noted that during the hearing, only grounds 9 and 10, pertaining to the transfer pricing adjustment for AMP expenses, were argued and pursued by the assessee. The revenue had not demonstrated, through material or tangible evidence, an understanding or concerted action between the assessee and its Associated Enterprises (AEs) for promoting trademarks owned by the AEs. The Tribunal relied on decisions of higher judicial authorities, including the Delhi High Court in Maruti Suzuki India Limited and Whirlpool of India Ltd., which held that the bright line test cannot be used to presume an international transaction in the absence of evidence. The Supreme Court's dismissal of the revenue's SLP further supported this position. The Tribunal found that the AMP expenses incurred by the assessee were essential for its business as a telecom service provider, aimed at expanding its subscriber base, and not for promoting AEs' brands. The TPO's characterization of the assessee as a mere distributor was deemed unsubstantiated. The application of the bright line test without ensuring functional comparability and considering business-specific factors was considered methodologically flawed. The consistency of no adverse inference or adjustments in subsequent years also weakened the revenue's case. Therefore, the transfer pricing adjustment of Rs. 2,84,68,27,994/- in respect of AMP expenditure was held to be devoid of merit and set aside. The appeal of the assessee on grounds 9 and 10 was allowed. Other grounds were not adjudicated as they were not pursued.

The Tribunal held that the reopening of assessment was invalid as the required approval from the Principal Chief Commissioner of Income Tax was not obtained after the three-year period had elapsed. The assessment order was consequently quashed.

The Tribunal held that the transactions were due to a bonafide mistake by the broker, who rectified the client code within minutes of the original trade. The Tribunal found that the assessee did not benefit from these transactions, which actually belonged to its sister concern.

Considering the assessee's application to withdraw the appeals due to opting for the Vivad Se Vishwas Scheme, the Income Tax Appellate Tribunal dismissed the appeals as withdrawn. The tribunal granted liberty to the assessee to file an application for restoration if the VSVS application does not materialize or is not accepted.

The Tribunal held that loose sheets of paper, without independent corroborative evidence, do not have evidentiary value under Section 34 of the Evidence Act. Entries in such documents cannot fix liability on a person without further proof.

The Tribunal noted that during the hearing, only grounds 9 and 10 were argued and pursued by the assessee. The judgment then proceeds to discuss the Transfer Pricing (TP) adjustment of AMP transaction (Ground 10). The Tribunal held that the revenue failed to demonstrate, through material or tangible evidence, an understanding or concerted action between the assessee and its AEs for promoting trademarks owned by the AEs, thus failing to establish an international transaction de hors the bright line test. The Tribunal relied on decisions of the Delhi High Court in Maruti Suzuki India Ltd. and Whirlpool of India Ltd., which held that the bright line test cannot be used to presume an international transaction without evidence. The Supreme Court's dismissal of the revenue's SLP further reinforced this position. The Tribunal found that AMP expenses were essential for the assessee's business as a telecom service provider and aimed at expanding its subscriber base, not promoting AEs' brands. The TPO's characterization of the assessee as a mere distributor was without substantive reasoning and contradicted the assessee's role. The business model chosen by the assessee is to be respected. The application of the bright line test without ensuring functional comparability and considering business-specific factors rendered the adjustment methodologically flawed. The absence of adverse inferences or TP adjustments in subsequent assessment years also weakened the revenue's case. Therefore, the TP adjustment of Rs. 2,84,68,27,994/- in respect of AMP expenditure was set aside, and the assessee's appeal on this ground was allowed. The judgment explicitly states that only grounds 9 and 10 were argued and allowed.

The Tribunal held that penalty under Section 271(1)(c) cannot be imposed when the tax liability is determined under Section 115JB (MAT) based on additions made under normal provisions. For the AY 2020-21, while the FAA's order was in excess of jurisdiction, the AO was directed to verify Form 29B and recompute the loss for fair play.

The Tribunal held that the reopening of assessment was bad in law. The AO failed to independently apply his mind, relied on borrowed satisfaction, and based the reopening on incorrect facts regarding the outstanding loans.

The Tribunal held that the appeal of the appellant could not be dismissed for non-prosecution without discussing the merits of the case. The Tribunal set aside the order of the CIT(A) and directed it to pass a fresh appellate order after discussing all issues and providing the appellant with adequate opportunity.

The ITAT noted that the CIT(A) had previously remitted the matter for the AO to determine the cost of acquisition and await the DVO report. Given that appeals of co-owners involving identical issues had already been restored to the CIT(A), the Tribunal allowed the appellant's appeal and restored the matter to the CIT(A) for joint disposal with the connected co-owner appeals.

The Tribunal held that penalty under Section 271(1)(c) cannot be imposed when the tax liability is determined under Section 115JB (MAT) based on additions made under normal provisions. For the AY 2020-21, while the FAA's order was in excess of jurisdiction, the AO was directed to verify Form 29B and recompute the loss for fair play.

The Tribunal held that the reopening of assessment was bad in law. The AO failed to independently apply his mind, relied on borrowed satisfaction, and based the reopening on incorrect facts regarding the outstanding loans.

The Tribunal held that loose sheets of paper, without independent corroborative evidence, do not have evidentiary value under Section 34 of the Evidence Act. Entries in such documents cannot fix liability on a person without further proof.

Considering the assessee's application to withdraw the appeals due to opting for the Vivad Se Vishwas Scheme, the Income Tax Appellate Tribunal dismissed the appeals as withdrawn. The tribunal granted liberty to the assessee to file an application for restoration if the VSVS application does not materialize or is not accepted.

The Tribunal held that penalty under Section 271(1)(c) cannot be imposed when the tax liability is determined under Section 115JB (MAT) based on additions made under normal provisions. For the AY 2020-21, while the FAA's order was in excess of jurisdiction, the AO was directed to verify Form 29B and recompute the loss for fair play.

The Tribunal considered the assessee's application to withdraw the appeal. Given that the assessee opted for the Direct Tax Vivad Se Vishwas Scheme, 2024, and had already paid the tax liability, the Tribunal allowed the withdrawal. Consequently, the appeal was dismissed as withdrawn.

The Tribunal found that the CIT(A) did not examine the merits of the case due to the assessee's non-appearance. To ensure fair disposal, one opportunity is granted to the assessee to prosecute the appeal before the CIT(A).

The Tribunal noted that the assessee had opted for the Direct Tax Vivad Se Vishwas Scheme, 2024. Considering the same, the Tribunal dismissed both appeals filed by the assessee.