ITAT Mumbai Judgments — June 2025

The Tribunal held that the subvention income received by the assessee was significantly higher than the TP adjustment proposed by the TPO and already compensated for the AMP expenses. The Tribunal also noted that the Bright Line Test adopted by the TPO was not statutorily mandated and had been negated by higher courts.

The Tribunal held that the assessee had made out a reasonable cause for the delay in filing the appeal, attributing it to miscommunication of notices to a wrong email address. The Tribunal condoned the delay.

The Tribunal held that while the first limb of Section 194A(3)(v) excludes cooperative banks from exemption for payments to their members, the second limb, concerning payments to other cooperative societies, does not exclude cooperative banks. Therefore, if the assessee's gross turnover did not exceed Rs. 50 crores, it would not be liable for TDS.

The Tribunal dismissed the claim under Section 80P(2)(a)(i), citing Supreme Court precedents that interest income from surplus funds deposited in banks does not qualify. However, for the Section 80P(2)(d) claim, which allows deduction for interest from investments with other co-operative societies, the matter was remanded to the AO for factual verification of whether the investing entities were indeed co-operative societies.

The Tribunal condoned the delay, holding that it was due to bona fide reasons. The Tribunal further held that the CIT(E) failed to provide an adequate opportunity of being heard and that the issue of Section 13 violation should be examined during assessment proceedings, not at the registration stage.

The Tribunal held that the CIT(A) was justified in deleting the disallowance of deduction u/s 10A, following established precedents and judicial pronouncements in the assessee's own case. For the issue of allocation of common expenses, the Tribunal directed the AO to reconsider the matter.

The Tribunal found the CIT(A)'s restriction to 4.40% to be erroneous as it did not fully consider the AO's findings on the non-linkage of purchases to sales. However, the Tribunal also determined that the AO's initial 20% disallowance was on the higher side. Consequently, the Tribunal directed the AO to restrict the addition for bogus purchases to 10% of the total value to ensure fairness and prevent revenue leakage.

The Tribunal held that the assessee was unaware of the notices during appellate proceedings before the CIT(A) as they were sent to an incorrect email address. Therefore, the matter was remanded back to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee, being a co-operative bank, was not excluded from the requirement to deduct TDS under Section 194A(3)(v) if its gross turnover exceeded Rs. 50 crores. The matter was restored to the Assessing Officer for fresh determination.

The Tribunal held that the second limb of Section 194A(3)(v) provides exemption for payments made by a cooperative society to another cooperative society, provided the payer's gross turnover does not exceed Rs. 50 crores. The Tribunal restored the matter to the AO to verify the assessee's turnover for the relevant financial year.

The Tribunal held that the additions/disallowances made by the AO were unsustainable as they were not based on any incriminating material found during the search and seizure operation, especially since the assessment under Section 143(3) was already completed prior to the search. The disallowance of sales promotion expenses was also deleted as the assessee had already disallowed 50% of the expenses.

The Tribunal held that Section 50C of the Income Tax Act, 1961, is applicable only to the transfer of land or building or both, and not to the transfer of leasehold rights. Therefore, the adjustment made by the CPC was not valid.

The Tribunal held that the order issued by the PCIT under Section 263 was bad in law as it was passed without issuing a show cause notice and without giving the assessee an opportunity to be heard.

The Tribunal held that to meet the ends of justice, it was necessary to provide the assessee with a fair opportunity of being heard. Therefore, the appeal was restored back to the CIT(A) for fresh adjudication.

The Tribunal held that the cash withdrawn by the assessee was more than the cash deposited. In the absence of any findings regarding the utilization of withdrawn cash for other purposes, the Tribunal agreed with the assessee that the withdrawn cash was redeposited.

The Tribunal condoned the delay in filing the appeal. It was noted that the orders of both the AO and CIT(A) were ex-parte. Therefore, the matter was restored to the file of the AO for a denovo assessment.

The Tribunal held that the Assessing Officer had made sufficient inquiries and the assessee had provided adequate documentation to support the agricultural income claim. The PCIT's finding of inadequate inquiry was found to be factually untenable.

The Tribunal held that the surcharge should be levied based on the slab rates and not the MMR. The applicability of MMR for tax calculation does not automatically imply the highest slab rate for surcharge.

The Tribunal held that since the assessee filed the return within the extended period under section 139(4), the restriction under Chapter VIA regarding deduction of Part C of Chapter VIA does not apply to Part A and Part B. The matter was restored to the AO.

The Tribunal noted that the delay in filing the appeal before the first appellate authority was due to the COVID-19 pandemic and could not be attributed to the assessee. The Tribunal decided to remit the appeal back to the lower authorities.

The Tribunal held that the PCIT's order passed under Section 263 was bad in law as it was made without issuing a show cause notice and without providing an opportunity of hearing to the assessee. Therefore, the order was quashed.

The Tribunal held that the second limb of Section 194A(3)(v) provides an exemption for interest paid by a cooperative society to another cooperative society, subject to a gross turnover threshold of Rs. 50 crores for the payer. The matter was restored to the Assessing Officer to verify this turnover.

The Tribunal held that additions/disallowances made under Section 153A for an unabated assessment year (2012-13) were unsustainable as they were not based on any incriminating material found during the search. For AY 2017-18 and 2018-19, the Tribunal upheld the CIT(A)'s deletion of disallowances related to charter hire charges under Section 40A(2)(b) and victualling expenses, finding the AO's comparison methodology flawed and the assessee's expenses justified. The disallowance of sales promotion expenses for AY 2017-18 was also deleted, as the assessee had already disallowed 50% voluntarily.

The Tribunal held that disallowance under Section 14A should be restricted to investments yielding exempt income. It further held that employee costs provision for wage revision, based on a settlement agreement, is an allowable business expenditure. The AO was directed to verify the book profit computation.

The Tribunal held that the AO's disallowances under Section 153A were unsustainable as they were not based on incriminating material found during the search, and the issues were already examined in the original assessment. It also found that the disallowance of sales promotion expenses was partly self-disallowed by the assessee and the remainder was ad-hoc. The disallowance of charter hire charges was also deleted as the assessee paid lesser charges than unrelated parties.

The Tribunal held that since the assessee had disallowed all expenses debited to the Profit & Loss Account in its computation of income and had not earned any exempt income, the provisions of Section 14A were not attracted. Consequently, the addition made by the Assessing Officer and confirmed by the CIT(A) was deleted.

The Tribunal condoned the delay in filing the appeal, holding that there was a 'sufficient cause' for the delay. It held that the rejection order did not afford the assessee an adequate opportunity of being heard and that issues of fund application are better examined during assessment proceedings, not at the registration stage.

The Tribunal noted that the assessee had filed an application under the Vivad Se Vishwas Scheme, 2024, and Form 2 was pending. Therefore, the appeal was dismissed as withdrawn.

The Tribunal held that additions made under Section 153A were unsustainable as they were not based on any incriminating material found during the search, and the AO had merely revisited material from the original assessment. The disallowance of charter hire charges was deleted as the comparison made by the AO was unscientific. Similarly, the disallowance of sales promotion and victualling expenses was deleted.

The Tribunal noted that the assessee had provided extensive documentary evidence, including purchase bills, bank statements, supplier's affidavit, and stock registers. The AO had not conducted independent inquiry to contradict this evidence and had not rejected the assessee's books of accounts. Reliance was placed on Supreme Court judgments.

The Tribunal found that the assessee had satisfactorily explained the delay in filing the appeal before the CIT(A) due to ignorance of the newly introduced online filing procedure, which was considered bona fide. The delay was condoned, and the matter was remitted to the CIT(A) for fresh adjudication.

The Tribunal held that the delay in filing the appeal was caused by the assessee's lack of awareness of tax obligations and procedures, the illiteracy of its office bearers, and the recent appointment of a Chartered Accountant. It was deemed to be a bona fide misunderstanding rather than intentional avoidance. Consequently, the delay was condoned.

The Tribunal held that the facts did not support the AO's finding that the share price was rigged for huge profits. The minimal profit and the small increase in share price during the holding period indicated that the transaction was genuine. Therefore, the deletion of addition by the CIT(A) was upheld.

The Tribunal held that the assessee had discharged its primary onus by providing details of the investors and their bank accounts. The AO failed to bring any material on record to rebut the assessee's submissions. The statements relied upon by the AO were retracted, and for the relevant assessment year (2012-13), it was not required to prove the source of source.

The Tribunal allowed the assessee's appeal, finding no error in the assessee's tax planning. It held that Section 71(2) does not prescribe a specific sequence for setting off losses and grants the assessee the option to set off business losses against any head of income, including capital gains, to optimize deductions under Chapter VI-A. The Tribunal directed the Assessing Officer to grant the Chapter VI-A deduction as computed by the assessee.

The Tribunal set aside the order of the CIT(A) and directed it to pass a fresh order after giving an opportunity of being heard to the IRP, allowing the appeal for statistical purposes.

The Tribunal found that the assessee had demonstrated sufficient cause for the delay, supported by an affidavit and medical evidence. The delay was condoned, and the case was remanded back to the CIT(A) for fresh adjudication on merits, with adequate opportunity of hearing to the assessee.

The Third Member concurred with the Accountant Member, confirming the order of the CIT(A) which deleted the addition made by the AO. Consequently, the Revenue's appeal was dismissed.

The Tribunal held that the additions/disallowances were unsustainable as they were not based on incriminating material found during the search. The charter hire charges were found to be less than market rates when compared properly, and the sales promotion expenses were disallowed on an ad-hoc basis without cogent reasoning. Victualling expenses were also found to be supported by evidence.

The Tribunal noted that the assessee filed the return within the extended period under section 139(4) and that the restriction under Chapter VIA, as per section 80AC, pertains only to Part C. Therefore, the matter was restored to the Assessing Officer to allow deductions under Part A and Part B of Chapter VIA and also to allow credit for tax already paid.

The Tribunal held that the AO failed to establish how the assessee's case fell under the specific instances of misreporting defined in Section 270A(9). The incorrect claim was withdrawn suo moto by the assessee and did not fall under any of the specified clauses for misreporting.

The Tribunal held that the AO erred in invoking Section 147 when the correct procedure should have been Section 153C, as the basis of reassessment stemmed from a third-party search. The invocation of Section 147 was deemed invalid and without legal sanction.

The Tribunal set aside the order of the CIT(A) and directed it to decide the appeal afresh on merits after giving the assessee an opportunity to be heard and to make requisite compliance.

The Tribunal condoned the delay in filing the appeal, finding it to be bonafide. The Tribunal set aside the order of the CIT(E) and directed the CIT(E) to decide the application afresh after providing the assessee an opportunity for compliance.

The Tribunal held that neither the AO nor the CIT(A) sufficiently relied on objective market data to determine the fair market value of the purchases. The approach of disallowing based solely on a drop in gross profit rate without market evidence, or directing an average profit rate without proper justification, is not sustainable.