Jyoti Traders Vs DCIT (ITAT Mumbai )- In our view the conditions precedent for passing an order u/s.142(2A) of the Act directing the Assessee to get its account audited by a special auditor viz., the satisfaction of the AO having regard to the nature and complexity of the accounts of the assessee and the interest of the revenue, that is necessary get the assessee’s account audited by a special auditor is not fulfilled in the present case and therefore the reference to special audit is held to be invalid.
ACIT Vs M/s JPS Associates (ITAT Mumbai)- Revenue has raised a grievance against the finding of the Ld. CIT (A) that hire charges received on account of hiring of the motor-cars, office equipment, computer, furniture and fixture is to be treated as a business income. The Ld. D.R. vehemently argued that the assessee has not carried out any activity and hence, the same is to be treated as income from other sources. Per contra, Ld. Counsel submitted that the said income has been accepted by the A.O. as business income in the preceding assessment years.
Hindustan Platinum Pvt. Ltd. Vs ACIT (ITAT Mumbai)- Statement given u/s 131 cannot be the only basis for disallowing the claim of depreciation when it is shown with documentary evidence that the admission made in the statement recorded was under a mistake or misapprehension. Assessee is not entitled to claim loss u/s 28 on account bad debt of the advance given as inter corporate deposit without establishing the fact that it was a trade advance
Hemant Mangaldas Bhanushali Vs ITO (ITAT Mumbai)- The main ground on which the CIT exercised jurisdiction under section 263 of the Act, was the failure on the part of the Assessing Officer to make enquiries with regard to the applicability of the provisions of section 194C to the payments made by the assessee to other truck owners in the course of his business of transportation of cargo and the consequent dis-allowance that could be made under the provisions of section 40(a)(ia) of the Act. In para 3.1 of the impugned order of the CIT, the CIT has concluded that the order was erroneous and prejudicial to the interest of the revenue because of the lack of enquiry and application of mind by the Assessing Officer on the above aspect.
ACIT Vs. H.K. Imp ex Pvt. Ltd.(ITAT Mumbai)- The dispute is regarding addition of Rs. 4.85 crores being the share application money invested by the two directors who were holding 50% share in the company. We find from the records that the assessee vide letter dated 17.9.09 addressed to AO had given full details such as name, address, PAN of the two directors. The source of the money had been explained as the money withdrawn from the capital account in the firm M/s. S.G. Enterprises.
Echjay Forgings P. Ltd. Vs. ITO (ITAT Mumbai)- As observed by Honourable Supreme Court, in the case of Chainrup Sampatram vs CIT, 24 ITR 481, “while anticipated loss is thus taken into account, anticipated profits…is not brought into account, as no prudent trader would care to show increased profit before it’s actual realization”. The underlying principle is the theory of conservation in accounting which has the sanction of Honourable Courts above. In view of these discussions, as also bearing in mind the entirety of the case, we deem it fit and proper to direct the Assessing Officer to delete the impugned dis-allowance of t. 1,07,83,402 The assessee gets relief accordingly.
ITO Vs M/s Dresdner Kleinwort Wasserstein Sec (I) Ltd. (ITAT Mumbai)- Assessee has incurred an expenditure towards the service charges of the shared premises to its group concern which has taken the same on leave and license. As per leave and license agreement, the sharing of the premises with group concern is allowed as contemplated in clause 11 of the agreement.
Deepak Fertilisers & Petrochemicals Corporation Ltd. Vs. DCIT (ITAT Mumbai)- Whether the assessee is entitled to claim expenses for obsolete stores/ spares on provisional basis or it will be allowed in the year in which it is sold
Cherokee India Pvt. Ltd. Vs ITO (ITAT Mumbai)- Though, the assessee claimed that it has applied a mark-up of 6% on the costs, as per TNMM and should not have been doubted merely because the net result was a loss in the year under consideration. Whether such mark-up can be based on an estimated cost is required to be proved by referring to the agreement whereas the assessee could not furnish the agreement and did not place sufficient proof to support his logic of arriving at “standard cost” and in the absence of proving the same by producing any document/agreement with its principal highlighting the contractual terms of sharing cost, the learned CIT(A) was correct in holding that the special provisions of the Act have to be construed strictly and the method adopted by the tax authorities for making transfer pricing adjustments is reasonable in the circumstances of the case.
ITO Vs Basic Chemicals & Allied Industries Pvt. Ltd (ITAT Mumbai)- There is a wide variation between value of TDR and value of fully constructed industrial building and the two values are not comparable. As rightly pointed out by the Ld. CIT(A), the AO’s letter dt. 18.12.2008 shows that while examining the AIR transaction of . two crores, the AO has mixed up the AIR transaction of two crores with purchase of TDR of Rs. 1,43,04,413/- and consequently made erroneous conclusion that there is undisclosed investment within the meaning of Sec. 69B.
