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735 orders · Page 13 of 15
The Tribunal found that the facts of the appeal were not fully available to the lower authorities. The assessee contended that Arihant Exports provided an affidavit confirming the loan, but the AO and CIT(A) did not acknowledge its receipt. The Tribunal deemed it proper to set aside the CIT(A)'s order and restore the matter for fresh adjudication.
The Tribunal noted that the assessee's claim of receiving Rs. 5 Lakh from a UAE account was not sufficiently substantiated with supporting documents. The Tribunal found that the assessee had made a payment of Rs. 5,02,774 from their SBI NRE account during the assessment year, while the rest was from an HDFC loan which was not disputed.
The Tribunal held that the Assessing Officer cannot make an addition on an issue not forming the basis of the reassessment notice, if the original reasons for reopening are not sustained. The addition made by disallowing Section 54F exemption was quashed.
The Tribunal noted that the assessee had suo motu offered capital gains, which was the basis for reopening. The addition of interest income was also questioned as it was allegedly received in a fiduciary capacity for another company that had already offered the interest income. The Tribunal found substance in the submission to restore the matter to the AO.
The Tribunal held that the block of assets did not cease to exist as a new building was added before the end of the previous year, thus Section 50 was not attracted. Depreciation and interest disallowances were also deleted. Regarding Section 14A, the AO mechanically applied Rule 8D without recording satisfaction, and the assessee had sufficient interest-free funds.
The Tribunal noted that the addition for interest income mismatch was sustained due to the assessee's failure to provide documentary evidence. However, the assessee had provided reconciliation statements and credit notes explaining the timing difference. Similarly, the addition for sale of services was based on doubts regarding reimbursement of salary expenses without thorough verification.
The Tribunal held that the PCIT erred in invoking section 263 as the premise for revision was based on the non-consideration of a non-existent TPO order. The reassessment order was not erroneous, and no prejudice was caused to the revenue. Therefore, the PCIT's assumption of jurisdiction was invalid.
The Tribunal partly allowed the appeal, providing relief on the unexplained income addition by identifying certain entries. The addition for godown rent was deleted, as the net income was considered offered for taxation. The ad-hoc disallowance on business expenses was reduced from 25% to 10%.
The Tribunal noted that a mistake in selecting the sub-clause in the application is not fatal. Following previous decisions, the Tribunal held that the application should be restored to the CIT(E) for reconsideration on merits. The registration under Section 12AB is a prerequisite for approval under Section 80(G).
The Tribunal held that once the provisions for expenses were disallowed under section 40(a)(i) and 40(a)(ia) of the Act, they could not be subjected to TDS provisions under section 201. The Tribunal relied on its previous decisions in the assessee's own case for similar assessment years. Consequently, the grounds of appeal raised by the Revenue were dismissed, and the cross-objection by the assessee was allowed.
The Tribunal held that the transaction between the assessee and its stockists was on a principal-to-principal basis, making Section 194H TDS provisions not applicable. For ESOPs, tax liability arises only when the benefit is exercised and availed, not at the stage of grant.
The Tribunal held that the deduction under Section 80P(2)(d) can be claimed even if the return is filed belatedly, citing a previous ITAT decision and a CBDT circular. It further held that Saraswat Co-operative Bank, despite being a bank, is still a co-operative society and the interest income earned from it is eligible for the deduction.
The Tribunal held that the disallowance of deduction under Section 80P(2)(d) made during the processing of the return under Section 143(1) and the subsequent rejection of the rectification application under Section 154 were not in accordance with settled principles of law. The Tribunal found substance in the assessee's contentions. Firstly, it was held that the deduction under Section 80P(2)(d) could be claimed even if the return was filed belatedly for the AYs 2012-13, 2013-14, and 2014-15, referencing the ITAT Mumbai decision in Sterling Court E Wing and CBDT Circular No. 13/2023. Secondly, regarding the status of Saraswat Co-operative Bank, the Tribunal held that even if it is a co-operative bank, it continues to be a co-operative society, making the interest income received from it eligible for deduction under Section 80P(2)(d), as per the decision in Shree Raj Crystal Co-operative Housing Society Ltd. The Tribunal directed the AO to allow the deduction under Section 80P(2)(d). The ratio decidendi is that a co-operative bank remains a co-operative society for the purpose of Section 80P(2)(d) and that the precondition of filing returns by the due date for claiming such deductions was not applicable for the relevant assessment years.
The Tribunal held that the notice issued under section 148 dated 29.07.2022 is barred by limitation and without jurisdiction. The Tribunal relied on the binding principles laid down by the Hon'ble Supreme Court in Union of India v. Rajeev Bansal, which clarified that the legal fiction created in Ashish Agarwal did not revive or enlarge limitation but merely stopped the clock, and the Revenue could only proceed within the time that was still surviving under the Income-tax Act read with TOLA. The Court held that the surviving or balance time-limit can be calculated by computing the number of days between the date of issuance of the deemed notice and June 30, 2021, with exclusions for time allowed to the assessee to respond. In the present case, the Assessing Officer passed the order under section 148A(d) on 28.07.2022 and issued the notice under section 148 on 29.07.2022, both of which were beyond the last permissible date of 20.06.2022. Consequently, the reassessment proceedings and the assessment order were quashed. The grounds raised on merits were rendered academic and left open.
The Tribunal noted that the assessee had a reasonable cause for not being able to make an effective representation before the CIT(A). Therefore, the Tribunal decided to provide one more opportunity to the assessee.
The Tribunal held that the assessee had furnished comprehensive documentary evidence for the purchases, including invoices, confirmations, bank statements, and affidavits. The assessee also provided a quantitative statement mapping purchases with sales and exports, which was not disputed by the Revenue. The Tribunal noted that no independent inquiry was conducted by the Assessing Officer and mere suspicion could not replace proof.
The Tribunal noted that a mistake in selecting the sub-clause in the application is not fatal. Following previous decisions, the Tribunal held that the application should be restored to the CIT(E) for reconsideration on merits. The registration under Section 12AB is a prerequisite for approval under Section 80(G).
The Tribunal held that the disallowance of deduction under Section 80P(2)(d) made during the processing of the return under Section 143(1) and the subsequent rejection of the rectification application under Section 154 were not in accordance with settled principles of law. The Tribunal found substance in the assessee's contentions. Firstly, it was held that the deduction under Section 80P(2)(d) could be claimed even if the return was filed belatedly for the AYs 2012-13, 2013-14, and 2014-15, referencing the ITAT Mumbai decision in Sterling Court E Wing and CBDT Circular No. 13/2023. Secondly, regarding the status of Saraswat Co-operative Bank, the Tribunal held that even if it is a co-operative bank, it continues to be a co-operative society, making the interest income received from it eligible for deduction under Section 80P(2)(d), as per the decision in Shree Raj Crystal Co-operative Housing Society Ltd. The Tribunal directed the AO to allow the deduction under Section 80P(2)(d). The ratio decidendi is that a co-operative bank remains a co-operative society for the purpose of Section 80P(2)(d) and that the precondition of filing returns by the due date for claiming such deductions was not applicable for the relevant assessment years.
The Tribunal held that the block of assets did not cease to exist as a new building was added before the end of the previous year, thus Section 50 was not attracted. Depreciation and interest disallowances were also deleted. Regarding Section 14A, the AO mechanically applied Rule 8D without recording satisfaction, and the assessee had sufficient interest-free funds.
The Tribunal held that the CIT(A)'s partial disallowance under Section 36(1)(iii) was unsustainable as it was based on presumption rather than evidence, especially given the availability of interest-free funds and the charging of interest from partners.
The Tribunal found that the assessee failed to discharge the primary onus of proving the identity, creditworthiness of parties, and genuineness of transactions. The assessee's claim of ignorance and reliance on a third party's statement was not sufficient. Following the decision in Pr. CIT Vs. Buniyad Chemicals Ltd., the Tribunal held that in the absence of beneficiary details, the entire sum can be added.
The Tribunal held that the transaction was substantially concluded on the date of the agreement, and the delay in registration was not within the assessee's control. The first and second provisos to Section 50C were satisfied, allowing the use of the consideration as per the agreement date.
The Tribunal condoned the delay of 47 days in filing the renewal application and set aside the order of the Ld. CIT(E). The matter was restored to the Ld. CIT(E) for fresh consideration.
The Tribunal found the delay of 1114 days to be inordinate and unexplainable by any sufficient cause. Citing numerous Supreme Court judgments, the Tribunal emphasized that a liberal approach to condoning delay cannot be used to defeat the law of limitation and that a sufficient cause is a prerequisite for condonation.
The Tribunal directed the Assessing Officer to recompute the Section 14A disallowance based on correct figures for interest expenses and total assets. It also deleted the disallowance of motor car expenses, depreciation, and interest on car loan, finding that the cars were registered in the company's name and there was no basis for ad-hoc disallowance.
The Tribunal found that while the assessee provided purchase invoices and paid through banking channels, the genuineness of purchases from NSG Metal Trading and Octogen Trading Co. was not sufficiently proven to the AO's satisfaction, as these entities were identified as paper entities. The Tribunal directed a reasonable disallowance of 10% of the impugned purchases.
The Tribunal held that based on previous decisions in the assessee's own case and other relevant judgments, interest paid by a co-operative bank to other co-operative societies is not subject to TDS. However, for one of the parties (Mulchand Lalji & Co.), the assessee failed to provide sufficient evidence to establish its status as a co-operative society, hence the default was upheld for this part.
The tribunal held that the issuance of notices and orders under Section 148, particularly after 3 years from the end of the relevant assessment year, without the mandatory sanction from the Ld. PCCIT, violated statutory provisions. This violation was confirmed by judicial pronouncements.
The Tribunal held that based on previous decisions in the assessee's own case and other relevant judgments, interest paid by a co-operative bank to other co-operative societies is not subject to TDS. However, for one of the parties (Mulchand Lalji & Co.), the assessee failed to provide sufficient evidence to establish its status as a co-operative society, hence the default was upheld for this part.
The Tribunal held that the AO erred in rejecting the assessee's documents solely based on the retracted statement of a third party without conducting independent inquiry. The assessee had discharged the initial onus to prove the genuineness of the loan.
The Tribunal held that a penalty levied on an estimated addition is not sustainable in law. This position is well-settled and has been consistently held by the ITAT Mumbai Benches. The present case was squarely covered by a previous decision of a coordinate bench.
The Tribunal upheld the CIT(A)'s decision, finding that the assessee had not traded in the shares of Bakra Pratisthan Ltd. and had not claimed any capital gains from it. The Tribunal noted discrepancies in the AO's orders and a lack of evidence to support the addition.
The Tribunal noted that the assessee had opted to settle the dispute under the Direct Tax Vivad Se Vishwas Scheme, 2024 and had taken steps towards that. The Department had no objection to the withdrawal of the appeal. Therefore, the Tribunal found no issues contested in the appeal that needed to be decided on merits.
The Tribunal held that a substantial portion of the loans were opening balances from prior years, not subject to Section 68 in the current year. For loans received during the year, the assessee had discharged its onus by proving the identity, creditworthiness, and genuineness of lenders through documentary evidence. The AO's addition was found to be made mechanically without proper verification.
The Tribunal held that if an Indian AE, acting as a DAPE, is remunerated at an arm's length price, no further profit can be attributed to the permanent establishment in India. The AO's ad-hoc addition was not justified.
The Tribunal condoned the delay in filing the appeals, finding no mala fide intent on the part of the assessee, and decided to remand the matters back to the Assessing Officer for de novo consideration. However, the assessee was directed to pay costs for each assessment year.
The Tribunal condoned the delay in filing the appeals, recognizing it was due to negligence rather than mala fide intent. However, to ensure diligence, costs were levied on the assessee, and the appeals were remanded for fresh adjudication after providing the assessee a final opportunity to be heard.
The Tribunal condoned the delay in filing the appeal. New documents were submitted before the Tribunal explaining the source of investment. Both parties agreed to remand the matter to the Assessing Officer for fresh adjudication, with the condition that the AO would provide a fair opportunity to the assessee and consider all evidence.
The ITAT held that the depreciation on goodwill arising from amalgamation is allowable. This decision was based on the Supreme Court's ruling in CIT vs. Smifs Securities Ltd. and a coordinate bench's decision in the assessee's own case for AY 2016-17.
The Tribunal held that the assessee is entitled to credit for TDS deducted by the employer, even if the employer failed to deposit it with the government. The assessee had offered the income to tax and provided evidence of TDS deduction.
The Tribunal noted that the assessee claimed to have provided documents and submissions to the lower authorities, but these were allegedly not examined. The Tribunal restored the matter back to the CIT(A) for fresh adjudication.
The Tribunal, without going into the merits of the case, decided to give the assessee one more opportunity to represent their case before the CIT(A). This was subject to a cost of Rs. 10,000/- imposed on the assessee for non-appearance and non-cooperation.
The Tribunal held that the reassessment notice was issued after 01/04/2021, and following the Supreme Court's concession in the case of Union of India Vs. Rajeev Bansal, such notices for AY 2015-16 should be dropped. The Bombay High Court's decision in Cherian Nallathu Abraham Annamma was also considered and followed.
The Tribunal held that the stamp duty valuation as on the date of allotment, which was 21.04.2016 (Rs. 4,19,98,028), should be considered as the basis for valuation, as the consideration was paid through banking channels and the allotment occurred in an earlier year than the agreement for sale.
The Tribunal confirmed the disallowance, finding that the political party's modus operandi involved receiving donations and then routing them back to donors after deducting a commission, constituting a tax fraud. The Tribunal emphasized that fraud vitiates all proceedings and renders transactions void ab initio.
The Tribunal held that the Indian branch did not constitute a Permanent Establishment (PE) of the assessee as per the India-US DTAA. The Tribunal found that the assessee had no presence in India in the form of an office or branch, and the key elements of agency and control were missing.
The Tribunal held that the delay in filing Form No. 10AB was due to a bona fide belief and the CBDT circulars, and the assessee had taken steps to rectify the objectionable clause. The Tribunal also noted that the assessee was already enjoying provisional registration.
The Tribunal held that Rule 128(9) of the Income-tax Rules, 1962, requiring the filing of Form-67 before the due date for furnishing the return of income, is procedural and directory, not mandatory. The denial of FTC solely on the ground of delay in filing Form-67 would lead to unjust double taxation, contrary to the DTAA and Section 90 of the Act.
The Tribunal noted that the assessee provided all documentary evidence for the transactions and that the very same issue for the same scrip (SRK) and assessment year was decided in favor of the assessee's HUF by a Coordinate Bench. The Tribunal followed the precedent.
The Tribunal allowed the assessee's appeals and dismissed the revenue's appeals. It held that the profit declared in the audited books of account already includes commission income, and no further addition is warranted, especially in the absence of evidence of cash payments or identification of counterparties.