ITAT Mumbai Judgments — July 2025

The Tribunal held that the disallowance was unsustainable as there was no evidence of penal action or conviction under the Insurance Act against the assessee for violating its provisions. Therefore, Explanation-1 to Section 37(1) was not attracted. The Tribunal also noted that the disallowance was based on a report from Central Excise authorities, which was not sufficient grounds for disallowance under the Income Tax Act.

The Tribunal found merit in the assessee's submission that any disallowance should be restricted to the impugned purchases, not the entire turnover. The rejection of books was not justified as the assessee had furnished details and the AO investigated only a few parties.

The Tribunal noted a typographical error in the CIT(A)'s order regarding the tax rate. It held that the special rate of 12.5% accepted by the CIT(A) is applicable, and any additions should also be taxed at this rate, not 30%. The AO is directed to compute the tax accordingly.

The Tribunal held that penalty cannot be sustained for disallowances of interest and depreciation as the Assessing Officer did not establish these as undisclosed income or provide clear findings unearthed during the search. However, for other disallowances, the penalty was confirmed as the expenses were found to be paid to shell companies and not disclosed by the assessee.

The Tribunal noted that this is a recurring issue already decided by a coordinate bench in preceding assessment years, with no factual changes. The Tribunal reproduced its observation for assessment year 2011-12, stating that the revenue sharing model of 67:33 was consistently followed by the assessee and group entities, including in the years under appeal. The Tribunal found the revenue's contention that the facts were different from assessment year 2009-10 due to the revenue sharing model to be baseless. It reiterated its previous finding that determining the ALP of reimbursement of expenditure at nil is not supportable and that the benefit test is not an issue for the TPO to examine. The Tribunal also noted that in assessment year 2010-11, the TPO accepted the reimbursement of administrative expenses/management fee to AEs as at Arm's Length. Following the precedent in the assessee's own case for assessment year 2009-10, the Tribunal held that the adjustment deserved to be deleted. Accordingly, the adjustment was directed to be deleted for all years under consideration, and the grounds raised by the revenue were allowed. The cross-objections filed by the assessee regarding the validity of assessment orders were dismissed as infructuous, with liberty granted to contest the issue if the situation warranted.

The Tribunal held that the appeals were not maintainable in law due to fundamental defects in their filing, specifically the absence of the assessee's signature and a valid Power of Attorney for the person signing on their behalf. Despite repeated opportunities, these defects were not rectified.

The Tribunal held that the appeals were not maintainable in law due to fundamental defects in their filing, specifically the absence of the assessee's signature and a valid Power of Attorney for the person signing on their behalf. Despite repeated opportunities, these defects were not rectified.

The Tribunal held that the disallowance was unsustainable as there was no evidence of penal action or conviction under the Insurance Act against the assessee for violating its provisions. Therefore, Explanation-1 to Section 37(1) was not attracted. The Tribunal also noted that the disallowance was based on a report from Central Excise authorities, which was not sufficient grounds for disallowance under the Income Tax Act.

The Tribunal found that the assessee could not present necessary submissions due to reasons beyond their control and that the order was passed ex-parte. In the interest of justice, the assessee was granted one more opportunity, and the matter was remitted to the CIT(A) for a fresh decision.

The Tribunal held that the provisions of Section 40(a)(iib) of the Income Tax Act, 1961, are applicable to the assessee. The Tribunal reasoned that the payments made by the assessee to its foreign reinsurer for reinsurance services constitute royalty or license fees in the context of the Act. The Tribunal distinguished the present case from the precedents relied upon by the assessee, stating that the nature of the payments in this case is different. The Tribunal found that the assessee had failed to deduct tax at source on these payments as mandated by Section 195 of the Act. Consequently, the disallowance of these expenses under Section 40(a)(iib) was upheld. The Tribunal did not expressly leave any issue undecided. The operative direction is to uphold the disallowance.

The Tribunal noted that Kriya Impex Pvt. Ltd. was controlled by the same group that provided accommodation entries, as established in a previous Tribunal ruling. The assessee failed to produce the director of Kriya Impex Pvt. Ltd. for cross-examination, and the affidavit provided was insufficient to prove the genuineness of the loan. Therefore, the matter was remanded back to the Assessing Officer for fresh adjudication.

The Tribunal held that the appeals were not maintainable in law due to fundamental defects in their filing, specifically the absence of the assessee's signature and a valid Power of Attorney for the person signing on their behalf. Despite repeated opportunities, these defects were not rectified.

The Tribunal condoned the delay, finding sufficient cause for the assessee's inability to file the appeal on time. The matter was remitted back to the CIT(A) for a fresh decision on merits after granting the assessee a proper opportunity to be heard.

The Tribunal upheld the deletion of additions made by the AO. Regarding the first issue, the Tribunal noted that the CIT(A) had meticulously examined the documentary evidence provided by the assessee, including contractual agreements, invoices, payment proofs, registration certificates, and correspondence, which substantiated the genuineness of the transactions with Shri Dhyaneshwar Tukaram Kamble and M/s. S. M. Enterprises. The CIT(A) found that the contractor's registration and compliance with statutory obligations, along with the satisfactory explanation for cash withdrawals, demonstrated the legitimacy of the expenditure. The Tribunal agreed with the CIT(A)'s finding that the assessee had discharged its onus to prove the expenditure was incurred wholly and exclusively for business purposes. For the second issue concerning out-of-book purchases based on input-output ratio, the Tribunal found that the AO's conclusion was based on a theoretical exercise without credible evidence. The Tribunal observed that no incriminating material was found during the search, and the input-output ratio varied significantly due to factors like raw material quality and production location. The Tribunal also noted that similar input-output ratios in subsequent years did not lead to additions, and the comparison with Rashi Agro Industries Pvt. Ltd. was inappropriate. Therefore, the Tribunal upheld the CIT(A)'s deletion of the addition, finding its decision based on cogent evidence and proper appreciation of facts.

The Tribunal held that penalty cannot be sustained for disallowances of interest and depreciation as the Assessing Officer did not establish these as undisclosed income or provide clear findings unearthed during the search. However, for other disallowances, the penalty was confirmed as the expenses were found to be paid to shell companies and not disclosed by the assessee.

The Tribunal held that the matter deserved to be remanded to the CIT(A) for fresh adjudication. The CIT(A) was directed to examine the actual date of knowledge of the assessment order and, if a delay is found, afford the assessee an opportunity to file a condonation application.

The Tribunal found that the CIT(A) had erred in dismissing the appeal based on incorrect information regarding the filing date. The matter was restored to the Assessing Officer for a reasoned order.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient documentary evidence to prove the genuineness of the sub-contracting transactions. Regarding out-of-book purchases, the Tribunal found the AO's reliance on the input-output ratio to be speculative and lacking a scientific basis.

The Tribunal condoned the delay of 655 days in filing the appeal, considering the assessee's age, ill health, and bonafide reasons. The matter was remanded to the CIT(A) for fresh adjudication on merits.

The Tribunal held that the CIT(A) erred in rejecting the appeal on limitation grounds. The appeal was filed within the extended time limit provided by the CBDT circular, making the rejection unsustainable.

The Tribunal found that there was a sufficient cause for the non-compliance with the notice issued by the CIT(A). Therefore, the order of the CIT(A) was set aside and the matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the amendment to Section 14A via the Finance Act, 2022, which introduced an Explanation, is prospective. Therefore, for assessment years preceding AY 2023-24, Section 14A disallowance is not warranted in the absence of any exempt income earned by the assessee.

The Tribunal set aside the CIT(A)'s order and restored the matter for fresh adjudication. This was done to provide the assessee with an opportunity to be heard, considering the explanation for non-receipt of notices.

The Tribunal found that the CIT(A) had erred in dismissing the appeal based on incorrect information regarding the filing date. The matter was restored to the Assessing Officer for a reasoned order.

The Tribunal held that the disallowance was unsustainable as there was no evidence of penal action or conviction under the Insurance Act against the assessee for violating its provisions. Therefore, Explanation-1 to Section 37(1) was not attracted. The Tribunal also noted that the disallowance was based on a report from Central Excise authorities, which was not sufficient grounds for disallowance under the Income Tax Act.

The Tribunal held that penalty cannot be sustained for disallowances of interest and depreciation as the Assessing Officer did not establish these as undisclosed income or provide clear findings unearthed during the search. However, for other disallowances, the penalty was confirmed as the expenses were found to be paid to shell companies and not disclosed by the assessee.

The Tribunal held that the CIT(A)'s action violated the principles of natural justice by not allowing the assessee a reasonable opportunity to respond. Therefore, the impugned orders were set aside.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient documentary evidence to prove the genuineness of the sub-contracting transactions. Regarding out-of-book purchases, the Tribunal found the AO's reliance on the input-output ratio to be speculative and lacking a scientific basis.

The Tribunal noted that the Assessee was willing to amend clauses to comply with section 11 of the Act. Given this willingness and the peculiar facts, the Tribunal set aside the Commissioner's order.

The Tribunal noted that the Assessee was willing to amend clauses to comply with section 11 of the Act. Given this willingness and the peculiar facts, the Tribunal set aside the Commissioner's order.

The Tribunal held that the appeals were not maintainable in law due to fundamental defects in their filing, specifically the absence of the assessee's signature and a valid Power of Attorney for the person signing on their behalf. Despite repeated opportunities, these defects were not rectified.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient documentary evidence to prove the genuineness of the sub-contracting transactions. Regarding out-of-book purchases, the Tribunal found the AO's reliance on the input-output ratio to be speculative and lacking a scientific basis.

The tribunal noted that the Ld.CIT(A) acknowledged the submissions but failed to consider them before confirming the AO's order, especially given the Section 144 assessment. The tribunal held that the additional evidences should have been properly considered, potentially with a remand report. Therefore, the matter was remitted back to the Ld.CIT(A) for fresh adjudication on merits after examining the admissibility of additional evidences and providing a reasonable opportunity to the assessee.

The Tribunal held that interest income earned by a co-operative society from its investments with other co-operative societies is eligible for deduction under Section 80P(2)(d). The Tribunal followed its own previous decisions and Supreme Court pronouncements.

The Tribunal held that the CIT(A) erred in passing a hurried order without providing a proper opportunity of being heard and without considering the principle of substance over legal form. The matter was remanded back to the CIT(A) for fresh adjudication.

The Tribunal condoned the delay in filing the appeals. Observing that the applications for registration were not properly processed due to lack of documents and time constraints, the Tribunal set aside the impugned orders.

The Tribunal held that the CIT(A)'s action violated the principles of natural justice by not allowing the assessee a reasonable opportunity to respond. Therefore, the impugned orders were set aside.

The Tribunal held that the adjustment made by the CPC under section 143(1) was beyond the scope of permissible adjustments and was made without giving the assessee an opportunity. On merits, the issue of deduction under section 80P(2)(d) has been decided in favour of cooperative housing societies by coordinate benches.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had discharged its onus by submitting proof of identity, creditworthiness, and genuineness of the capital introduced. The revenue failed to counter the evidence or disprove the documents filed by the assessee.

The Tribunal held that the disallowance was unsustainable as there was no evidence of penal action or conviction under the Insurance Act against the assessee for violating its provisions. Therefore, Explanation-1 to Section 37(1) was not attracted. The Tribunal also noted that the disallowance was based on a report from Central Excise authorities, which was not sufficient grounds for disallowance under the Income Tax Act.

The Tribunal condoned the delay in filing the appeal, considering the medical reasons provided and the supporting documents as bonafide. The Tribunal further decided to remand the case to the AO for a fresh decision.

The Tribunal held that penalty cannot be sustained for disallowances of interest and depreciation as the Assessing Officer did not establish these as undisclosed income or provide clear findings unearthed during the search. However, for other disallowances, the penalty was confirmed as the expenses were found to be paid to shell companies and not disclosed by the assessee.

The Tribunal observed that the CIT(A) did not grant sufficient opportunity to the assessee, who is a senior citizen. Therefore, the matter was restored to the CIT(A) for fresh adjudication after providing proper opportunity.

The Tribunal held that the Rs. 3 crore loan waiver, while not qualifying as a bad debt, could be treated as a business loss since the assessee is in the money lending business. The disallowance under Section 14A was upheld to the extent of exempt income earned.

The Tribunal held that Section 234B(2) of the Act was not applied properly and directed the AO to levy interest up to the date of tax payment. The Tribunal also directed the AO to levy additional tax as per Explanation (iii) to Section 234B.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had provided sufficient documentary evidence to prove the genuineness of the sub-contracting transactions. Regarding out-of-book purchases, the Tribunal found the AO's reliance on the input-output ratio to be speculative and lacking a scientific basis.

The Tribunal held that the disallowance of packaging expenses amounting to Rs. 1,08,47,654/- paid to Shri Dhyaneshwar Tukaram Kamble was unwarranted and deleted the addition. The CIT(A) had found that the assessee provided exhaustive documentary evidence, including contractual agreements, invoices, payment proofs, registration certificates, licenses, inspection reports, movement registers, TDS compliance, and correspondence. The contractor had also responded to notices and provided annual accounts, with cash withdrawals explained as for labour payments. The CIT(A) concluded that the assessee had discharged its onus to prove the expenditure was wholly and exclusively for business purposes. Similarly, for payments to M/s. S. M. Enterprises amounting to Rs. 96,37,831/-, the CIT(A) found the contractual arrangement to be genuine, supported by PAN, tax audit reports, invoices, TDS certificates, bank statements, and detailed transaction records. The contractor's non-submission of certain documents due to business winding up did not invalidate the substantial evidence provided by the assessee. Therefore, the addition made by the AO was deleted. The Tribunal did not decide the second issue regarding additions under section 69C as the arguments for the revenue on this point were not recorded in the provided excerpt.

The Tribunal dismissed Ground No.1 challenging the assumption of jurisdiction by the Ld.PCIT u/s 263. Grounds No. 2 & 3 were dismissed finding that the assessee was provided reasonable opportunity by the AO. Ground No.4 was set aside to the file of the Ld.CIT(A) for re-examination. Ground No.5 was set aside to the file of the Ld.CIT(A) for necessary verification. Ground No.6 was remitted to the Ld.CIT(A) for verification.

The Tribunal held that the AO issued the notice for reopening without proper application of mind, as the assessment records already contained all relevant details. The reasons recorded did not establish a bonafide belief that income had escaped assessment or that there was a lack of full disclosure.

The Tribunal held that the appeals were not maintainable in law due to fundamental defects in their filing, specifically the absence of the assessee's signature and a valid Power of Attorney for the person signing on their behalf. Despite repeated opportunities, these defects were not rectified.