ITAT Mumbai Judgments — June 2026

The Tribunal dismissed the assessee's appeal ex-parte due to the consistent non-appearance of the assessee or their representative. The Tribunal found no reason to continue proceedings given the lack of assistance and representation from the assessee.

The Tribunal restored the assessee's grounds related to Section 32AC to the CIT(A) for fresh adjudication. The Revenue's appeal regarding Section 14A disallowance was dismissed, upholding the CIT(A)'s view that disallowance cannot exceed exempt income.

The Tribunal held that disallowances of contingent liabilities, if not debited to the profit and loss account and not claimed as expenditure, cannot be added back. However, it directed the AO to verify the financial statements and obtain a certificate from the auditor.

The Tribunal condoned the delay, acknowledging the sufficient cause presented by the assessee. It was held that the penalty order should be set aside and the matter remanded to the AO for fresh consideration.

The Tribunal noted that the CA certificates did not clearly reconcile the amounts paid by the assessee with the amounts offered as income by the payees. Therefore, the matter was set aside to the AO for further examination.

The Tribunal restored the assessee's grounds related to Section 32AC to the CIT(A) for fresh adjudication. The Revenue's appeal regarding Section 14A disallowance was dismissed, upholding the CIT(A)'s view that disallowance cannot exceed exempt income.

The Tribunal held that the disallowance was not justified as the assessee had already added back the impugned sum in its returned income. This resulted in a double addition, which is not permissible.

The Tribunal held that the reopening of assessment under Section 147 was invalid as the AO lacked a valid reason to believe income had escaped assessment due to the assessee's failure to disclose material facts. The Tribunal also found merit in the assessee's explanation for the investment and loan repayment.

The Tribunal held that the assessee's method of calculating ALP using TNMM for export of water-based paint was appropriate, and the TPO's use of CUP was incorrect. The disallowance under Section 14A was restored to the AO for fresh examination, considering the assessee's own funds and judicial precedents.

The Tribunal found that the assessee had a genuine and bona fide reason for not appearing before the lower authorities. Therefore, the assessee should be granted another opportunity to present his case.

The Tribunal held that the addition towards interest income was not supported by substantial evidence. It noted that Shri Rajeev Bhale was in financial difficulty and settled the loan by adjusting against property purchase, suggesting no interest was likely received.

The Tribunal held that the assessee's method of using the TNMM with contribution margin as the PLI for benchmarking export of water-based paint to its AE was appropriate. The Tribunal noted that domestic and export sales operate under different commercial and economic circumstances, and the CUP method adopted by the TPO was not suitable without comparable export transactions. The Tribunal relied on its own coordinate bench's decision in the assessee's case and the case of Dow Chemicals International (P) Ltd. Accordingly, the addition of Rs. 8,88,796/- made by the TPO was deleted. Regarding the royalty received from the AE, the Tribunal held that the addition of Rs. 11,22,762/- was unsustainable and directed its deletion. For the issue of disallowance under Section 14A, the Tribunal restored the issue to the file of the Ld. AO for fresh computation. The AO was directed to consider the judicial rulings, including the Supreme Court's decision in South Indian Bank Ltd. vs. CIT and the Delhi High Court's ruling in Punjab National Bank, and to provide the assessee with an opportunity to present its working of expenses relating to exempt income. The Tribunal noted that the assessee's interest-free funds were higher than investments, but disallowance might be called for from administrative expenses.

The Tribunal held that the assessee's method of using the TNMM with contribution margin as the PLI for benchmarking export of water-based paint to its AE was appropriate. The Tribunal noted that domestic and export sales operate under different commercial and economic circumstances, and the CUP method adopted by the TPO was not suitable without comparable export transactions. The Tribunal relied on its own coordinate bench's decision in the assessee's case and the case of Dow Chemicals International (P) Ltd. Accordingly, the addition of Rs. 8,88,796/- made by the TPO was deleted. Regarding the royalty received from the AE, the Tribunal held that the addition of Rs. 11,22,762/- was unsustainable and directed its deletion. For the issue of disallowance under Section 14A, the Tribunal restored the issue to the file of the Ld. AO for fresh computation. The AO was directed to consider the judicial rulings, including the Supreme Court's decision in South Indian Bank Ltd. vs. CIT and the Delhi High Court's ruling in Punjab National Bank, and to provide the assessee with an opportunity to present its working of expenses relating to exempt income. The Tribunal noted that the assessee's interest-free funds were higher than investments, but disallowance might be called for from administrative expenses.

The Tribunal condoned the delay of 294 days, citing the liberal interpretation of 'sufficient cause' and the need to advance substantial justice. The matter was remitted back to the CIT(A) for de novo adjudication on merits.

The Tribunal held that Section 14A requires the existence of expenditure claimed by the assessee in relation to exempt income. Since the assessee had not claimed any such expenditure, the disallowance under Section 14A and Rule 8D was not sustainable.

The Tribunal held that the authorities below erred in rejecting the valuation reports and the claim for transfer premium without proper verification. The matter was restored to the Assessing Officer for recomputation.

The Tribunal held that additions cannot be sustained solely on the basis of information from an electronic database without independent corroborating evidence. The AO's own inquiry, which contradicted the initial information, further weakened the Revenue's case.

The Tribunal held that the difference between the stamp duty value and the consideration paid was only 8.29%, which is below the 10% tolerance band. Therefore, the addition made under Section 56(2)(vii)(b) was directed to be deleted.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on additions made purely on an estimate basis or guesswork. Following the jurisdictional High Court's decision, the penalty was deleted.

The Tribunal held that the absence of an explicit irrevocability clause is not a ground for rejection, as a public charitable trust is deemed irrevocable by operation of law. The dissolution aspect is adequately covered by the Maharashtra Public Trust Act. The CIT(E)'s rejection was set aside.

The Tribunal held that the CIT(E) erred in rejecting the application. The assessee had complied with reporting requirements under the Maharashtra Public Trusts Act, and there was no statutory provision mandating prior approval for such conversion. The absence of a response from the Charity Commissioner could not be used against the assessee.

The Tribunal confirmed the 50% disallowance for electricity, society charges, and depreciation on TV due to lack of substantiation for exclusive business use. The disallowance for car expenses was also upheld. The issues regarding credit card expenses and brokerage were restored to the AO for verification.

The Tribunal affirmed the CIT(A)'s decision, holding that the interest on funds held for government schemes was not taxable in NABARD's hands as it acted as a nodal agency. It also held that promotional expenses were allowable as NABARD was notified under Section 36(1)(xii) for the relevant assessment year.

The Tribunal upheld the CIT(A)'s decision, finding that the reassessment notice dated 28.07.2022 was issued beyond the 'surviving time limit' calculated as per the Supreme Court's ruling in Union of India v. Rajeev Bansal. Consequently, the reassessment proceedings were annulled.

The Tribunal held that the absence of an explicit irrevocability clause is not a ground for rejection, as a public charitable trust is deemed irrevocable by operation of law. The dissolution aspect is adequately covered by the Maharashtra Public Trust Act. Therefore, the rejection by the CIT(E) was set aside.

The Tribunal condoned the delay in filing the appeal before the CIT(A), citing sufficient cause and violation of natural justice. The Tribunal held that the CIT(A) should have adjudicated the appeal on merits rather than dismissing it solely on the ground of delay.

The Tribunal held that the assessee's method of calculating ALP using TNMM for export of water-based paint was appropriate, and the TPO's use of CUP was incorrect. The disallowance under Section 14A was restored to the AO for fresh examination, considering the assessee's own funds and judicial precedents.

The Tribunal held that the addition should be restricted to the profit element embedded in the alleged non-genuine purchases, following the jurisdictional High Court's decisions. The AO was directed to compute this difference.

The Tribunal found that the assessee had made submissions before the Assessing Officer and that the CIT(A) had not considered them. In the interest of justice, the matter was remitted back to the CIT(A) for de novo adjudication.

The Tribunal held that the approval obtained by the Assessing Officer for issuing the reassessment notice under Section 148 was not in accordance with Section 151 of the Act. This was because the notice was issued beyond three years from the relevant Assessment Year, requiring approval from a higher authority than what was obtained.

The Tribunal upheld the CIT(A)'s deletion of additions. It found that the Assessing Officer failed to conduct independent inquiries and relied on borrowed satisfaction, not fulfilling the requirements of Section 68 for the unsecured loan.

The Tribunal held that the income from leasing the commercial complex is to be taxed under the head 'business income' and not 'income from house property'. This decision was based on the assessee's agreement and its business of commercial exploitation of the property.

The Tribunal held that the CIT(A) was justified in deleting the disallowance. The assessee demonstrated that the liabilities corresponding to the prior period expenses had crystallized during the relevant previous year, and this was supported by detailed factual explanations and judicial precedents.

The Tribunal found that the assessee had made submissions before the Assessing Officer and that the CIT(A) had not considered them. In the interest of justice, the matter was remitted back to the CIT(A) for de novo adjudication.

The Tribunal held that the AO failed to specify the relevant clause under Section 270A under which the penalty was initiated. Therefore, the penalty notice and consequential order were invalid.

The Tribunal upheld the CIT(A)'s deletion of additions. It found that the Assessing Officer failed to conduct independent inquiries and relied on borrowed satisfaction, not fulfilling the requirements of Section 68 for the unsecured loan.