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594 orders · Page 11 of 12
The Tribunal, respectfully following the decision of its Coordinate Bench in ITA Nos. 237, 238, 230, 240/Mum/2016 dated 09/02/2017, held that the payments received by the assessee from Standard Chartered Bank (through Atos India) do not fall within the ambit of 'Fees for Technical Services' as defined under Section 9(1)(vii) of the Act. The Tribunal reasoned that the assessee provided a standard facility for data processing without significant human intervention, citing the Supreme Court's decision in M/s. Kotak Securities Ltd. and the Tribunal's own decision in Siemens Limited. The judgment states that the assessee's services were not special, exclusive, or customized to cater to the specific needs of the client, but rather a facility available to all. Consequently, the payment was held not taxable in India as 'Fees for Technical Services'. The Tribunal also noted that the impugned quarrel was no longer res integra, having been decided by the Coordinate Bench. As the appeal was decided on merits, the legal issues raised by the assessee were left open. The appeal of the assessee was allowed.
The Tribunal held that the assessee had substantially explained the cash deposit during the demonetization period by providing sufficient evidence of cash withdrawal from her Korean bank account. The lower authorities did not give any adverse comments on this evidence.
The Tribunal held that a trust registered under Section 12A and eligible for Section 11 benefits can still claim exemptions under Sections 10(34) and 10(35). The Tribunal also allowed deductions under Sections 80G and 80GGA.
The Tribunal held that no further addition was warranted on estimated commission as the profit declared by the assessee in its audited books likely included commission. The Tribunal also found that the bad debts written off by the assessee met the conditions under Section 36(1)(vii) of the Act.
The Tribunal held that the claim of exemption under Sections 10(34) and 10(35) of the Act for dividend income and income from units was allowable for assessment years prior to AY 2015-16, as the amendment restricting such claims was effective from AY 2015-16. This finding was based on a Coordinate Bench decision. Regarding the alleged violation of Section 13(1)(d) and 13(2)(h) of the Act due to investment in Tata Sons Ltd. shares, the Tribunal found that the investment was an accretion of bonus shares, which is exempt under Section 13(1)(d). Therefore, the exemption under Section 11 was upheld. For AY 2015-16, the assessee's appeal concerning the denial of exemptions under Sections 10(34) and 10(35) was allowed, aligning with the reasoning for earlier years. The Tribunal also allowed the assessee's claim for deduction under Sections 80G and 80GGA, following a Coordinate Bench decision that addressed the technical difficulty in claiming deductions not explicitly provided for in the return form. The Tribunal dismissed the Revenue's appeals for AYs 2016-17 and 2017-18, stating that the issues raised were decided in favour of the assessee in a previous ruling. The ratio decidendi is that investments in bonus shares do not violate Section 13(1)(d), and claims under Section 10(34) and 10(35) are permissible prior to AY 2015-16. Technical difficulties in filing returns should not bar legitimate deductions.
The Tribunal upheld the CIT(A)'s decision that bonus shares are not hit by Section 13(1)(d) and that exemptions under Section 10(34) and 10(35) were allowable prior to AY 2015-16. It also allowed deductions under Sections 80G and 80GGA, following a coordinate bench decision.
The Tribunal upheld the CIT(A)'s decision that bonus shares are not hit by Section 13(1)(d) and that exemptions under Section 10(34) and 10(35) were allowable prior to AY 2015-16. It also allowed deductions under Sections 80G and 80GGA, following a coordinate bench decision.
The Tribunal decided the core issue regarding the admissibility of exemptions under Section 10(34) and 10(35) in favour of the assessee. It noted that an identical issue had arisen in the assessee's own case for AY 2012-13, where a coordinate bench had held that a charitable trust registered under Section 12A and eligible for exemption under Section 11 can claim exemption under Sections 10(34) and 10(35). The Tribunal found this decision to be squarely applicable. Therefore, the Tribunal held that the assessee is eligible to claim exemption under Section 10(34) and 10(35) of the Act, reversing the findings of the lower authorities on this point. The reasoning was that the prohibition under Section 13(1)(d) and 13(2)(h) does not automatically disentitle the assessee from claiming exemptions specifically provided under Section 10(34) and 10(35). The Tribunal also addressed other grounds related to AY 2017-18, allowing the assessee's appeals concerning the validity of its Section 12A registration and the denial of deductions under Sections 80G and 80GGA, by applying its earlier decisions on similar grounds. Revenue's appeals were dismissed as misconceived. The operative direction was to allow the assessee's appeals except for one specific appeal (ITA No. 4727/Mum/2024), which was dismissed as infructuous, and to dismiss the Revenue's appeals.
The Tribunal dismissed the revenue's appeals regarding bad debt deductions, upholding the CIT(A)'s decision based on previous rulings. For the lease premium issue, the Tribunal remitted the matter back to the AO for reconsideration based on a declaration filed by the assessee.
The Tribunal held that the assessee's contention regarding the search being bad in law was not substantiated. The Tribunal noted that the AO had found evidence of the assessee being involved in providing purchase and sales accommodation bills and LC funding facilities to specific groups of companies. The AO had rejected the assessee's books of account under Section 145 of the Act due to lack of correctness and completeness. The Tribunal observed that the AO had made an addition of Rs. 28,26,61,860/- by considering the income at 7% of the turnover related to LC funding, while the assessee had offered income at 1.42%. The addition of bad debts amounting to Rs. 1,92,99,910/- was also confirmed by the AO. The Learned CIT(A) had reduced the commission on circular trading from 7% to 0.5%. The Tribunal, in its decision, did not explicitly state its finding on the validity of the search or the quantum of addition for commission. However, the operative directions indicate a partial allowance or dismissal of the appeals, suggesting a re-examination of the quantum of additions.
The Tribunal held that the reassessment proceedings initiated by issuing a notice under Section 148 were invalid. The Tribunal reasoned that when a valid return of income is filed, the AO has the option to select it for scrutiny under Section 143(2). The time limit for issuing a notice under Section 143(2) for AY 2009-10 was September 30, 2011. Since the Section 148 notice was issued on November 24, 2010, before the expiry of this time limit, the AO could not assume income had escaped assessment. The Tribunal relied on the decisions of the Madras High Court in CIT vs. K.M. Pachayappan and CIT v. Qatalys Software Technologies Ltd., and the Bombay High Court in Smt. Suman, which held that reassessment proceedings under Section 147/148 cannot be initiated so long as the assessment proceedings based on the filed return are pending or the time to issue a notice under Section 143(2) has not expired. The Tribunal distinguished the Apex Court's decision in Rajesh Jhaveri Stock Brokers (P.) Ltd. by noting that in that case, the time to issue a notice under Section 143(2) had expired. The Tribunal set aside the Section 148 notice and quashed the resultant assessment order, not delving into other grounds.
The Tribunal noted that the appeals were defective and the assessee had not complied with previous directions. Therefore, the appeals were dismissed in limine.
The Tribunal held that the assessee had discharged its initial onus of proving the identity, genuineness, and creditworthiness of the loan creditors by submitting the required documents. The AO failed to bring any contrary evidence on record, and since the loans were repaid with interest, the addition made by the AO was not justified.
The tribunal held that there was a reasonable cause for the assessee's non-appearance before the Ld. Commissioner due to the incorrect email communication. Therefore, the case was remanded for a fresh decision.
The Tribunal held that the assessee did not press grounds related to the validity of notice under Section 143(2) and the company being struck off, thus dismissing those additional grounds. Regarding jurisdiction, the Tribunal noted that the assessee failed to raise objections within the prescribed time limit under Section 124(3)(a) and had participated in assessment proceedings without questioning jurisdiction. The Revenue's contention that the PAN was consistently under the AO's jurisdiction was accepted, dismissing the assessee's jurisdictional challenge. The Tribunal upheld the CIT(A)'s decision to restrict the commission income addition to 3% of the total credits, finding it reasonable and fair, and noting the Revenue's failure to provide substantial arguments or contrary decisions. The addition of Rs. 26,84,000/- for cash deposits was deleted by the CIT(A) as it related to the accommodation entry business for which commission was already taxed. The Tribunal found this conclusion fair and judicious. The Tribunal also held that the invocation of Section 115BBE for taxing unexplained income under Section 68 is a natural corollary and a complete code in itself, citing the Gujarat High Court decision in Fakir Mohmed Haji Hasan v. CIT. Therefore, the grounds challenging the applicability of Section 115BBE were dismissed. The appeals of both the assessee and the Revenue were dismissed.
The tribunal held that the Commissioner (Appeals) cannot dismiss an appeal for non-prosecution without applying his mind to the issues raised in the appeal, as per the judgment of the jurisdictional High Court. Notices were sent to the wrong email address, thus the appeal was not prosecuted due to this error.
The Tribunal noted the Assessee's non-compliance and the ex-parte nature of the impugned order. It decided to remand the case to the Commissioner for a fresh adjudication.
The Tribunal held that the assessee is entitled to deduction under section 80P(2)(d) of the Income Tax Act, 1961, for interest income derived from deposits with Co-operative Banks. The Tribunal noted that the Co-ordinate Bench has consistently held this view, citing cases like Pathare Prabhu Co-operative Housing Society Ltd. vs ITO and Kaliandas Udyog Bhavan Premises Co-op Society Ltd. v. ITO. The Tribunal distinguished the applicability of section 80P(4) by referring to the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd. v. CIT, which clarified that section 80P(4) excludes only Co-operative Banks licensed by the RBI to conduct banking business, not all co-operative banks. The Tribunal also addressed the divergent views of the Karnataka High Court on the issue and, following the principle laid down in CIT v. Vegetable Products Ltd., adopted the construction favouring the assessee. The Tribunal further stated that substantial justice should be preferred over technical considerations, referencing Collector, Land Acquisition v. Mst. Katiji and Ors. Therefore, the Tribunal directed the AO to allow the deduction claimed by the assessee and set aside the impugned order. The issue of delay was implicitly addressed by allowing the appeal on merits, implying that the technicality of delay was overcome by the substantial issue.
The Tribunal held that the assessee, being a trader, had provided documentary evidence to prove the genuineness of the transactions. The AO did not establish the assessee's connection to price rigging, nor did the SEBI report indicate any adverse findings against the assessee within the relevant period.
The Tribunal held that the assessee challenged the AO's jurisdiction late, and Section 124(3)(a) precluded questioning it after participation. Regarding commission, the Tribunal upheld the CIT(A)'s reduction to 3% but found the initial 5% and the assessee's claim of 1% to be unsupported by facts. The addition of Rs. 26,84,000/- for cash deposits was deleted as the CIT(A) found it explained.
The Tribunal held that the revisionary proceedings initiated by the CIT(E) under section 263 were not sustainable. The Tribunal noted that the AO had issued specific queries to the assessee regarding its business income and whether its activities were hit by the proviso to section 2(15). The assessee had provided detailed submissions and documentary evidence in response to these queries. The AO, after considering these submissions, passed the assessment order accepting the exemption claim. The Tribunal found that the AO had applied his mind to the issues raised and had not merely accepted the return without inquiry. The CIT(E) had based his revisionary power on the fact that for earlier assessment years (2017-18 to 2019-20), the assessee was held to be hit by the proviso to section 2(15). However, the Tribunal observed that the AO in the current assessment year had examined the issue and accepted the assessee's submissions. Therefore, the assessment order could not be considered erroneous and prejudicial to the interest of the Revenue solely on the ground that the AO did not follow the view taken in earlier years without considering the specific facts and submissions for the current year. The Tribunal quashed the order passed by the CIT(E).
The Tribunal noted that the appeals were defective and the assessee had not complied with previous directions. Therefore, the appeals were dismissed in limine.
The Tribunal held that dismissing an appeal for non-prosecution without considering the merits is not permissible as per law and the provisions of Section 251(1)(a) and (b) of the Act. The Tribunal set aside the impugned order and remanded the case back to the Commissioner for a fresh decision on merits.
The Tribunal held that the appellant is eligible for deduction under Section 54F. It was observed that the appellant is the owner of only one flat, and the other portions were occupied by his brothers. Previous decisions by the ITAT in similar cases of the appellant's brothers were relied upon.
The Tribunal held that since the assessee provided explanations for the sources of cash deposits, and the CIT(A) accepted these explanations at an overall level, sustaining an ad-hoc addition solely due to a lack of one-to-one correlation was not tenable under Section 69A of the Act. Therefore, the addition was directed to be deleted.
The Tribunal held that the assessment order is bad in law and liable to be quashed. The first notice under Section 143(2) dated 02/02/2011 was premature and non-est because no return of income was available with the Assessing Officer (AO). A valid return was filed on 03/03/2011. The time limit for issuing a notice under Section 143(2) after the filing of the return was until 30/09/2011. However, the second notice under Section 143(2) was issued on 10/07/2012, which is beyond the prescribed limitation period. The Tribunal relied on the Supreme Court's decision in ACIT vs. Hotel Blue Moon, which established that an assessment order is vitiated if no valid notice under Section 143(2) is issued. The Tribunal also followed a co-ordinate bench decision in M/s. U.S. Roofs Ltd. on identical facts. Since the assessment was completed without issuing a valid notice under Section 143(2), the entire assessment proceedings under Section 143(3) read with Section 147 were rendered null and void. Consequently, the Tribunal found no need to delve into the merits of the case.
The Tribunal held that for unabated assessments, additions under section 153A can only be made if based on incriminating material found during the search. Since no such material was found, the assessment under section 153A was void. The CIT(A)'s order deleting the additions was upheld.
The Tribunal noted that the appeals were defective and the assessee had not complied with previous directions. Therefore, the appeals were dismissed in limine.
The Tribunal condoned the delay, finding sufficient cause. It held that the CIT(A) erred in dismissing the appeal ex parte for non-appearance without deciding on merits, citing a High Court precedent. Consequently, the CIT(A)'s order was set aside, and the matter was restored for de novo adjudication on merits after providing a reasonable opportunity of hearing.
The Tribunal restored the issue to the file of the CIT(E), directing the assessee to furnish all necessary documents and the CIT(E) to decide the issue afresh after providing an opportunity of being heard.
The Tribunal held that the 10% tolerance band introduced in the first proviso to Section 43CA, similar to Section 50C, is curative and has retrospective applicability. Therefore, no addition under Section 43CA was warranted as the difference was within the tolerance limit.
The Tribunal held that disallowance under Section 14A cannot exceed the amount of exempt income. It also held that disallowances made under Section 14A cannot be applied while computing book profit under Section 115JB.
The Tribunal considered the peculiar facts and circumstances, noting that the Assessee did provide some documents. The Tribunal decided to remand the case to the Assessing Officer for a fresh decision after providing a reasonable opportunity of being heard.
The Tribunal held that the Pr. CIT erred in invoking Section 263 and directing the AO to initiate penalty proceedings when the AO had chosen not to. The Tribunal quashed the revision order, following precedent.
The Tribunal held that the Principal Commissioner of Income-tax erred in invoking jurisdiction under Section 263 of the Income Tax Act, 1961. The Tribunal found that the Assessing Officer had applied his mind to the issues during the assessment proceedings. Citing judicial precedents, including the Bombay High Court in CIT vs. Nirav Modi and the Delhi High Court in PCIT vs. Clix Finance India (P) Ltd., the Tribunal emphasized that the AO's view, if it is a possible view arrived at after due inquiry, cannot be interfered with under Section 263 merely because the CIT believes another view is correct. The Tribunal noted that the PCIT had not pointed out any definite or specific error in the assessment order and that the issues raised were duly examined by the AO. Therefore, the twin conditions for invoking Section 263 were not met. Consequently, the Tribunal set aside the order of the PCIT and restored the original assessment order passed by the AO.
The Tribunal decided to delete the addition of Rs. 90,87,025. The Tribunal found that the assessee had discharged the primary onus to substantiate the transactions by furnishing relevant material evidence. The AO had merely doubted the transactions based on an investigation wing report without conducting independent inquiries. It was noted that all derivative transactions occurred on a recognized stock exchange through a registered broker, with payments made/received through banking channels. The assessee regularly undertook such transactions, and they were duly accounted for. The CIT(A) had upheld the AO's action without appreciating the assessee's contentions and cited decisions. The Tribunal relied on coordinate bench decisions that held trading losses on derivatives on recognized stock exchanges could not be denied without specific AO findings or independent analysis. The Tribunal also noted that the assessee HUF had declared a returned loss of Rs. 10,70,573, negating the possibility of profit shifting for tax reduction. Furthermore, the income of Mrs. Jalpa Doshi from F&O trading was below the taxable limit, indicating no gain from shifting profits. Therefore, the addition was deleted. Since the addition was deleted on merits, grounds relating to the validity of the notice under Section 143(2) and Section 292BB were rendered academic and not adjudicated.
The Tribunal first condoned the delay of 26 days in filing the appeal, finding that the assessee had explained the delay with sufficient cause, citing lack of awareness of the CIT(A)'s order due to no SMS or email alerts and immediate filing upon discovering the dismissal on the ITBA portal. On the validity of reopening (Ground No. 1(a) & 1(b)), the Tribunal held that the reasons recorded were vague and lacked independent application of mind by the AO. The reasons merely stated information received from the Insight Portal regarding fictitious profits without detailing how the assessee's income escaped assessment or providing any tangible material. The Tribunal relied on the Supreme Court's decision in ITO vs. Lakhmani Mewal Das (103 ITR 437 SC), emphasizing that reopening under Section 147 requires 'reasons to believe' and not 'reasons to suspect,' necessitating cogent materials and a nexus between the materials and the belief of escaped income. The Tribunal found no reflection of definite application of mind by the AO. Consequently, the reassessment proceedings initiated on such vague reasons were deemed invalid, and the assessment order void ab initio. As the legal ground was allowed, adjudication on merits became academic. The appeal was allowed.
The Tribunal held that disallowance under Section 14A cannot exceed the amount of exempt income. It also held that disallowances made under Section 14A cannot be applied while computing book profit under Section 115JB.
The Tribunal found that the appellate order was passed ex parte, primarily due to the assessee's lack of proper compliance during the appeal proceedings. Consequently, the issues were not properly adjudicated due to the absence of a reply from the assessee. In the substantial interest of justice, the Tribunal set aside the appellate order and restored the entire matter back to the Assessing Officer (AO) for passing a fresh assessment order. The AO was directed to provide the assessee with an adequate opportunity of hearing to present its case. The assessee was cautioned against seeking frivolous adjournments and was expected to remain cooperative. The issue of penalty under Section 271(1)(c) was implicitly part of the de novo assessment, as the entire matter was restored to the AO. No specific finding was given on the merits of the disallowance or the penalty invocation, as the case was remanded.
The Tribunal, following a coordinate bench's decision in a similar case involving a group entity (Duli Trade & Commodities Pvt. Ltd.), upheld the CIT(A)'s findings. The Tribunal noted that the CIT(A) had correctly identified the transactions as circular trading, not for suppressing income but for increasing turnover and availing bank credit. Crucially, the CIT(A) found that the assessee had duly reflected the profits earned from these circular transactions in its books. The Tribunal agreed with the CIT(A)'s reasoning that since profit is estimated on sales, and there were no bogus sales, no addition was warranted. Furthermore, the Tribunal upheld the deletion of indirect expenses, agreeing that expenses incurred to earn disclosed income are allowable. The Tribunal also found that the AO's addition was based on conjecture without concrete evidence of cash receipts, and that the payer of the alleged excess consideration was not identified. The Tribunal concluded that the profit disclosed by the assessee in its audited books of accounts already included the commission income earned, and no further addition was warranted, especially in the absence of evidence of cash payments. The grounds of appeal raised by the revenue were dismissed.
The Tribunal upheld the findings of the CIT(A) and dismissed the Revenue's appeals. The Tribunal noted that a coordinate bench, in a similar case involving a group entity (Duli Trade & Commodities Pvt. Ltd.) from the same search proceedings, had held that the transactions were 'circular trading' aimed at increasing turnover and availing bank credit facilities, not for suppressing income. The coordinate bench also found that the profit earned from such transactions was duly reflected in the books of accounts. Furthermore, the Tribunal observed that the AO made additions on a presumptive basis without concrete evidence of cash receipts or identification of the payer. The Tribunal also considered that the profit margin on genuine wholesale trading is significantly lower than the 5% estimated by the AO. It was held that the profit disclosed in the audited books of accounts includes the commission earned, and no further addition is warranted, especially in the absence of evidence of cash payments. Therefore, the additions made by the AO were deleted, and the disallowance of indirect expenses was also upheld. The assessee's cross-objections were rendered infructuous.
The Tribunal upheld the CIT(A)'s decision, finding that the transactions were circular trading aimed at increasing turnover and availing bank credit, not for suppressing income. The Tribunal agreed that no further addition was warranted as the disclosed profits included commission income, and there was no evidence of cash transactions.
The Tribunal condoned the delay, acknowledging the assessee's bonafide reasons for non-appearance due to the company being struck off and notices not being received. The case was remanded to the Assessing Officer for fresh adjudication.
The Tribunal condoned the delay of 770 days in filing the appeal before the ITAT, subject to payment of cost. The issue was remitted back to the CIT(A) to provide one more opportunity to the appellant to present their case.
The Tribunal upheld the CIT(A)'s decision to quash the assessment order. The primary issue revolved around the validity of the notice issued under section 148 and the preceding order under section 148A(d), particularly concerning the requirement of sanction under section 151 of the Act. The Tribunal noted that the period of three years from the end of Assessment Year 2016-17 expired on 31st March 2020. Due to the time extension provided by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA), the authority specified under section 151(i) could grant sanction until 30th June 2021. However, the order under section 148A(d) was passed on 31.07.2022, and the notice under section 148 was issued on the same date. At this point, the reassessment proceedings fell under the new regime where, if the income escaping assessment is more than Rs. 50 lakhs, prior approval of the Principal Chief Commissioner or Chief Commissioner (specified under section 151(ii)) was required. The sanction obtained was from the Principal Commissioner of Income Tax (specified under section 151(i)). The Tribunal, following the Supreme Court's decision in UPI v. Rajeev Bansal, held that the approval was obtained from the wrong authority, thus vitiating the jurisdiction to issue the notice under section 148. Consequently, the order under section 148A(d) and the notice under section 148 were quashed as bad in law. The other grounds raised by the Revenue were rendered academic and left undecided.
The Tribunal held that the addition of Rs. 7,00,00,000/- under Section 68 was not sustainable as the assessee provided evidence of receiving the amount through banking channels and accounted for it in its financial statements. The Tribunal also noted that the assessee had offered a portion of the sum for taxation in a subsequent AY.
The Tribunal held that dismissing an appeal for non-prosecution without deciding on merits is not permissible under Section 251 of the Act. The Tribunal remanded the case back to the Commissioner for a fresh decision.
The Tribunal observed that while the Assessee's conduct was not up to par, and her son faced similar additions, the circumstances, including receiving a new flat in exchange for an old one and the assessment during Covid-19, warranted consideration. The issue seemed to be covered by the jurisdictional High Court's judgment.
The Tribunal condoned the delay in filing the appeal. It was held that the CIT(A) had not decided the appeal on merits and had passed a non-speaking order, failing to adjudicate the issues properly.
The Tribunal held that the addition of Rs. 7,00,00,000/- under Section 68 was not sustainable as the assessee provided evidence of receiving the amount through banking channels and accounted for it in its financial statements. The Tribunal also noted that the assessee had offered a portion of the sum for taxation in a subsequent AY.