ITAT Mumbai Judgments — March 2025

The Tribunal upheld the order of the CIT(A) and dismissed the Revenue's appeals. The Tribunal noted that while CSR is not an admissible business deduction under Section 37(1) due to Explanation 2, there is no specific bar in Section 80G that prevents deduction for CSR expenses if the conditions laid out in Section 80G are otherwise fulfilled. The Tribunal referred to a catena of decisions by various Benches of the ITAT, including coordinate benches, which consistently held that there is no bar in claiming deduction under Section 80G in respect of CSR expenses. The Tribunal found that the assessee had fulfilled all conditions for deduction under Section 80G. It was also observed that the AO had not verified the nature of payments qualifying for exemption under Section 80G and the quantum of eligibility. Therefore, the AO was directed to verify the conditions necessary to claim deduction under Section 80G and grant deduction to the extent of eligibility. The grounds raised by the Revenue were dismissed.

The Tribunal noted that the reopening of assessment and the assessment orders themselves were quashed by a coordinate bench. Since the foundation for treating the assessee as a business concern and levying penalties has been abolished, the penalties are no longer sustainable.

The Tribunal noted that the reopening of assessment and the assessment orders themselves were quashed by a coordinate bench. Since the foundation for treating the assessee as a business concern and levying penalties has been abolished, the penalties are no longer sustainable.

The Tribunal noted that the reopening of assessment and the assessment orders themselves were quashed by a coordinate bench. Since the foundation for treating the assessee as a business concern and levying penalties has been abolished, the penalties are no longer sustainable.

The Tribunal noted that the reopening of assessment and the assessment orders themselves were quashed by a coordinate bench. Since the foundation for treating the assessee as a business concern and levying penalties has been abolished, the penalties are no longer sustainable.

The Tribunal held that the AO relied solely on the investigation wing's report without establishing that the assessees' transactions were part of manipulated schemes. The Tribunal noted that the purchases and sales were through banking channels and the stock exchange, and the shares were held in demat accounts.

The Tribunal observed that for multiple hearing dates, no one was present from the appellant's side to argue the case. Consequently, the Tribunal decided that the appellant was not interested in prosecuting the appeal.

The Tribunal found that there was a reasonable cause for noncompliance before the CIT(A). Therefore, in the interest of justice, the Tribunal set aside the order of the CIT(A) and restored the matter to the Assessing Officer for de-novo consideration.

The Tribunal found that there was a reasonable cause for noncompliance before the CIT(A). Therefore, in the interest of justice, the Tribunal set aside the order of the CIT(A) and restored the matter to the Assessing Officer for de-novo consideration.

The Tribunal found that there was a reasonable cause for noncompliance before the CIT(A). Therefore, in the interest of justice, the Tribunal set aside the order of the CIT(A) and restored the matter to the Assessing Officer for de-novo consideration.

The Tribunal upheld the CIT(A)'s decision to consider the property's value as per the registered valuer's report of Rs. 28.68 Crores. The difference between this value and the sale consideration was rightly held to be taxable as deemed dividend.

The Tribunal upheld the CIT(A)'s decision to consider the property's value as per the registered valuer's report of Rs. 28.68 Crores. The difference between this value and the sale consideration was rightly held to be taxable as deemed dividend.

The Tribunal held that the profit embedded in the on-money transactions should be taxed, not the entire receipt. They estimated the net profit at 22% of the unaccounted business receipts, modifying the CIT(A)'s estimation of 26%.

The Tribunal noted the assessee's consistent non-compliance before the lower authorities. However, in the interest of justice and to uphold the principles of natural justice, the assessee was granted one more opportunity to present its case before the AO.

The Tribunal held that the CIT(A) erred in estimating net profit at 26% on unaccounted receipts. The Tribunal found that the CIT(A) had not properly appreciated the evidence regarding expenses incurred and the nature of the transactions.

The Tribunal held that the reassessment proceedings were vitiated due to the deletion of the primary basis for initiation, as per the maxim 'sublato fundamento cadit opus'. Consequently, the assessment order was deemed bad in law.

The Tribunal upheld the CIT(A)'s decision to consider the property's value as per the registered valuer's report of Rs. 28.68 Crores. The difference between this value and the sale consideration was rightly held to be taxable as deemed dividend.

The Tribunal held that the reassessment proceedings were vitiated due to the deletion of the primary basis for initiation, as per the maxim 'sublato fundamento cadit opus'. Consequently, the assessment order was deemed bad in law.

The Tribunal noted that the issue of limitation for re-assessment notices was settled by the Supreme Court in the context of TOLA. Regarding the deduction of foreseeable losses, the Tribunal referred to a coordinate bench's decision for AY 2016-17 which disallowed such claims, distinguishing it from earlier favorable decisions.

The Tribunal held that the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) and the Supreme Court's decision in Ashish Agarwal were applicable to the reassessment proceedings. The Tribunal also ruled that foreseeable losses on construction contracts, as per Accounting Standard 7, are allowable as a deduction under Section 28 of the Income Tax Act.

The Tribunal held that dividend cannot be assessed in the hands of the assessee if the shares were not registered in its name. It also directed the AO to allow the claim of interest expenditure as a deduction under Section 57 of the Act.

The Tribunal held that neither the AO nor the CIT(A) had complete facts regarding the transactions, including details on payment, nature, utilization of funds, and repayment. Consequently, it was impossible to determine if the assessee was a beneficiary or a conduit.

The Tribunal held that the Assessing Officer erred by accepting the 'on-money' receipts but disregarding the expenses found in the same seized documents. Relying on High Court judgments, the Tribunal stated that seized papers must be interpreted as a whole.

The Tribunal held that the stamp duty value on the date of the agreement fixing the consideration should be taken for the purpose of Section 56(2)(x) of the Act, provided that part payment was made through an account payee cheque or similar electronic mode on or before the date of the agreement. The Tribunal found that both conditions were fulfilled in this case.

The Tribunal followed a coordinate bench's decision in an identical case involving the same seller and project. It held that additions based on estimation of 'on-money' where no incriminating documents were found are not sustainable.

The Tribunal upheld the CIT(A)'s decision to consider the property's value as per the registered valuer's report of Rs. 28.68 Crores. The difference between this value and the sale consideration was rightly held to be taxable as deemed dividend.

The Tribunal upheld the CIT(A)'s decision to consider the property's value as per the registered valuer's report of Rs. 28.68 Crores. The difference between this value and the sale consideration was rightly held to be taxable as deemed dividend.

The Tribunal upheld the CIT(A)'s decision to consider the property's value as per the registered valuer's report of Rs. 28.68 Crores. The difference between this value and the sale consideration was rightly held to be taxable as deemed dividend.

The tribunal noted that the issue of deductibility of foreseeable losses on construction contracts has seen conflicting decisions from coordinate benches. While some benches allowed the deduction based on accounting standards like AS 7, others disallowed it as unascertained liabilities. The tribunal acknowledged the need for a consistent approach.

The Tribunal held that the TPO's adjustment of the ALP for management fees to Nil was unsustainable. Following a coordinate bench decision and considering Section 92(3) of the Income Tax Act, the Tribunal found that such an adjustment would lead to a reduction in the income chargeable to tax in India.

The Tribunal decided on the issues as follows: Regarding the transfer pricing adjustment for ITeS services (Ground No. 2), the Tribunal did not provide a specific finding on the entire Rs.7,78,33,860 adjustment in the provided text. However, it addressed specific comparable companies. For Aspire Systems (India) Pvt. Ltd. and Cyber Infrastructure Pvt. Ltd., the Tribunal directed their exclusion from the benchmarking analysis for "Receipt from Software Development Services" (Ground No. 3). The reasoning for excluding Aspire Systems was the unavailability of complete annual accounts, specifically the profit and loss account, which prevented the determination of margins and income streams. For Cyber Infrastructure Pvt. Ltd., the exclusion was based on the lack of segmental information for BPO services, as the company earned revenue from multiple streams (software exports and BPO services), making it not functionally comparable without such segmentation. Regarding the transfer pricing adjustment for IT services (Ground No. 3), the Tribunal directed the exclusion of Aspire Systems (India) Pvt. Ltd. and Cyber Infrastructure Pvt. Ltd. from the benchmarking analysis. The reasoning for exclusion was the unavailability of complete financial data (profit and loss account for Aspire Systems) and lack of segmental information (for Cyber Infrastructure Pvt. Ltd.). Regarding the levy of penalty under section 271(1)(c) r.w. Section 274 (Ground No. 4), the Tribunal held that it was premature and dismissed this ground. The Tribunal also dismissed an application for additional grounds of appeal as not pressed. The operative direction was to exclude the two identified companies from the benchmarking exercise for software development services.

The Tribunal held that neither the AO nor the CIT(A) had complete facts regarding the transactions, including details on payment, nature, utilization of funds, and repayment. Consequently, it was impossible to determine if the assessee was a beneficiary or a conduit.

The Tribunal held that the assessee was a regular trader with a small profit and had not claimed exemption under Section 10(38). The addition of entire sale proceeds was not tenable, and the appellant did not engage in price manipulation. The additions were deleted.

The Tribunal held that the reassessment proceedings were vitiated due to the deletion of the primary basis for initiation, as per the maxim 'sublato fundamento cadit opus'. Consequently, the assessment order was deemed bad in law.

The tribunal noted that the Assessee had settled the dispute under 'The Direct Tax Vivad Se Vishwaas Scheme, 2024'. Therefore, the present appeal was dismissed as withdrawn.

The Tribunal considered the assessee's consistent accounting policy of recognizing foreseeable losses on construction contracts based on accepted accounting practices like AS 7. It noted that the revenue's concession in a previous Supreme Court case regarding AY 2015-16 and the assessee's detailed working supported the claim.

The Tribunal held that the assessee had a reasonable cause for non-compliance with the show cause notice, as they were given insufficient time and one trustee was traveling abroad. The assessee had also modified its objectives to restrict activities within India.

The Tribunal held that the assessee had a reasonable cause for non-compliance with the show cause notice, as they were given insufficient time and one trustee was traveling abroad. The assessee had also modified its objectives to restrict activities within India.

The Tribunal held that the transaction was not a case of receipt of immovable property for inadequate consideration and thus Section 56(2)(x) was not applicable. The matter could at most attract capital gains provisions where the assessee would be eligible for deduction.

The Tribunal held that the Assessing Officer/TPO should consider the assessee's Function, Asset, and Risk (FAR) analysis and apply the Comparable Uncontrolled Price (CUP) method if comparables are available. If CUP cannot be applied, the TNMM method may be adopted with appropriate adjustments. The matter was remitted back to the AO/TPO for de novo verification.

The Tribunal held that dividend cannot be assessed in the hands of the assessee if the shares were not registered in its name. It also directed the AO to allow the claim of interest expenditure as a deduction under Section 57 of the Act.

The Tribunal upheld the CIT(A)'s decision to consider the property's value as per the registered valuer's report of Rs. 28.68 Crores. The difference between this value and the sale consideration was rightly held to be taxable as deemed dividend.

The Tribunal upheld the CIT(A)'s decision to consider the property's value as per the registered valuer's report of Rs. 28.68 Crores. The difference between this value and the sale consideration was rightly held to be taxable as deemed dividend.

The Tribunal held that the contribution to Core SGF is an allowable business expenditure. For the Section 14A issue, the Tribunal set aside the CIT(A)'s order, restoring the matter to the CIT(A) for re-examination of the assessee's revised disallowance claim.

The Tribunal held that the initial basis for scrutiny by the AO was incorrect. While the assessee's declared income in subsequent years was low, it was possible to save Rs. 3.75 lakhs over the years. Therefore, the addition of the deposit as unexplained income was not justified.

The Tribunal acknowledged the CIT(E)'s reason for rejection was the trust deed's objects extending beyond India. However, considering the assessee's undertaking and the fact that no funds had been spent outside India, the Tribunal decided to give the assessee one more opportunity to present their application.

The Tribunal held that the CIT(A) erred in rejecting the DVO's report without providing an opportunity to the DVO to be heard and explain discrepancies. The Tribunal also noted that the AO is generally bound by the DVO's report when obtained. The case was remitted back to the Assessing Authority to decide the valuation issues, considering objections against the DVO's report and the presumptive value under Section 50C, and then compute the fair market value and relief.

The tribunal held that the CIT(A) should not have dismissed the appeal due to delay, as the appellant's extensive efforts to resolve the issue constituted a sufficient reason for the delay. The AO was directed to pass a rectification order within one month, and the appeal was allowed for statistical purposes.

The Tribunal held that only the profit embedded in unaccounted receipts can be taxed, not the entire amount. It upheld the CIT(A)'s estimation of net profit at 26% on unaccounted business receipts, considering various High Court judgments.

The Tribunal held that the CIT(A) erred in estimating the net profit at 26% on unaccounted receipts, as it was higher than what the assessee offered. The Tribunal found that the CIT(A) did not properly consider the assessee's submissions regarding expenses incurred from the unaccounted receipts.