The issue was whether the entire amount of alleged bogus purchases could be disallowed under Section 69C. ITAT Mumbai held that in the absence of corroborative evidence, only the profit element can be taxed, restricting the addition to 6%.
The case examined taxability of stamp duty differential in the hands of a housewife joint owner. The Tribunal ruled that absence of financial contribution bars addition under Section 56(2)(vii)(b).
The Tribunal held that an enforceable agreement to sell, supported by advance consideration, constitutes transfer under Section 2(47), entitling the assessee to Section 54 relief.
The Tribunal examined whether a single satisfaction note could sustain reassessment proceedings for multiple years under section 153C. It held that a composite satisfaction is valid when based on common seized material spanning several assessment years.
The Tribunal held that reassessment fails when the show-cause notice is issued on an incorrect factual premise. Jurisdiction under section 147 collapses if the foundation under section 148A is flawed.
The Tribunal confirmed that only ₹10 lakh received by the assessee could be taxed. Addition based on total sale value was held unsustainable.
The Tribunal restored the Assessing Officers action after finding clear admission of issuing accommodation bills. Commission at 1% was rightly taxed on both bogus purchases and bogus sales.
ITAT Mumbai held that where segmental accounts are not available, then proportionate adjustments have to be made only in respect of the international transactions with associated enterprises [AE]. Thus, TPO directed to compute the transfer pricing [TP] adjustment, restricting it to the international transactions undertaken with associated enterprises.
The issue involved purchases routed through entry providers to regularise grey-market transactions. The Tribunal held that taxing the whole purchase amount is incorrect; only excess profit may be assessed.
The Tribunal found that the assessee was penalized without substantive evidence or effective cross-examination. Holding this contrary to principles of natural justice, the penalty was deleted. The case highlights procedural fairness in penalty matters.
