Delhi High Court Judgments — 2014

The Tribunal correctly allowed the expenditure incurred for sports promotion under Section 57(iii) even though Section 11 exemption was denied due to lack of registration. Taxing gross receipts without allowing legitimate expenses would be impermissible.

The Tribunal held that the assessee's business had commenced in 1994-95, and the interest paid to the Central Government and the professional fees paid for consultancy were allowable as business expenditure. The High Court found no substantial question of law arising from the Tribunal's findings.

The High Court held that the reassessment notice is not vitiated by the belated supply of reasons. While the delay was noted, the Court referred to its previous order in W.P.(C) No. 2155/2012, which permitted the issuance of a fresh notice and clarified that such a notice would not be barred by the earlier issuance or the delay in providing reasons. Regarding the non-disclosure of the DIT (Inv.) report, the Court distinguished the present case from those where privilege is claimed or where only the AO's subjective satisfaction is asserted without supporting material. The Court found that the reasons provided to the assessee were concrete and specific, detailing the alleged undervaluation of shares and the potential income escaping assessment under Section 28(iv). The Court concluded that the ratio of cited judgments (Uma Devi Jhawar, Spacewood Furnishers) is narrower, requiring disclosure only when privilege is claimed or when no material is provided beyond the AO's assertion. Since concrete details were communicated, the non-disclosure of the 2G Spectrum Report did not affect the impugned notice. Therefore, the writ petition was dismissed.

The Tribunal held that the assessee's business had commenced in 1994-95, and the interest paid to the Central Government and the professional fees paid for consultancy were allowable as business expenditure. The High Court found no substantial question of law arising from the Tribunal's findings.

The High Court held that the expenditure incurred for the higher education of the employee had an intimate and direct connection with the company's business of dealing in securities and investments. Therefore, it was appropriately deductible as business expenditure.

The Tribunal held that while some purchases might not be fully verifiable, the goods were used in manufacturing. The disallowance was restricted to 10% of purchases. The High Court further held that the retrospective amendment of Section 40(a)(ia) allowed deduction in the year tax was paid.

The ITAT, in its impugned order, did not decide the merits of the case or the issue of consistency raised by the assessee. Instead, it restored the entire appeal to the file of the Assessing Officer (AO) for reconsideration. The Tribunal noted that the AO's order on remand (dated 27.10.2008) had not discussed the applicability of the decision in CIT v. Shri Ram Honda Power Equipment Ltd., as required. While the CIT (Appeals) had considered this judgment, the ITAT opted for a liberal approach to ensure justice. The Tribunal directed the AO to reconsider the assessment in light of the High Court's decision dated 27.7.2007 (for AY 1998-99) and the judgment dated 19.1.2007 (allegedly for AY 1997-98), as well as the Shri Ram Honda Power Equipment case. The ITAT explicitly refrained from making any observations on whether the Shri Ram Honda decision covered the facts and issues of the case. The High Court, in its subsequent order, found that no substantial question of law arose from the ITAT's order and dismissed the appeal.

The Tribunal held that the assessee failed to discharge its onus to prove the identity, creditworthiness, and genuineness of the share applicants. The court affirmed the Tribunal's view, finding the transaction dubious.

The High Court held that the additional customs duty was a contingent contractual liability, not a statutory one, and thus not deductible. It also upheld the disallowance of foreign exchange loss, referencing a Supreme Court decision.

The Tribunal correctly held that the disputed additional customs duty was a contingent liability and not deductible. It also correctly disallowed the foreign exchange loss as fictitious and notional.

The Delhi High Court held that the notices for reopening assessment under Section 147/148 were valid. However, it ruled that the assessee did not have a 'permanent establishment' in India under the India-US DTAA, and consequently, no income could be attributed or assessed in their hands. The Revenue's appeals were dismissed.

The Delhi High Court held that the notices for reopening assessment under Section 147/148 were valid. However, it ruled that the assessee did not have a 'permanent establishment' in India under the India-US DTAA, and consequently, no income could be attributed or assessed in their hands. The Revenue's appeals were dismissed.

The High Court held that the interpretation of Section 10A by the Tribunal was correct. The proviso to Section 10A(1) and the wording of Section 10A(2)(i) do not support the restrictive interpretation by the Revenue.

The Delhi High Court held that the assessee's job work activity constituted manufacturing for Section 10A purposes, following a previous judgment. It also upheld the lower authorities' decision to allow expenses for designing and fabrication after the assessee provided additional evidence.

The Delhi High Court held that the job work done by the assessee amounts to manufacturing for Section 10A purposes, following a previous judgment. The court also upheld the allowance of design and fabrication expenses, finding no perversity in the concurrent findings of the lower authorities.

The High Court held that the job work done by the assessee amounted to manufacturing for Section 10A purposes, following a previous judgment. It also upheld the CIT(A)'s allowance of design and fabrication expenses after considering additional evidence.

The High Court held that the assessee had not discharged its burden under Section 68, as many investors failed to provide confirmation and their reported income was disproportionately low compared to their investment. The AO's independent inquiries also indicated that the investments were not genuine.

The ITAT held that the statement recorded during a survey under Section 133A has no evidentiary value, especially when retracted. The Tribunal also noted that the assessee provided substantial evidence, including sales tax returns and account details of the supplier, which were not properly considered by the lower authorities.

The Tribunal held that the assessee was entitled to the deduction under Section 80IB(10). The High Court agreed, finding that the stringent conditions regarding the completion certificate, introduced by an amendment effective from April 1, 2005, should not be applied retrospectively to projects approved prior to that date.

The Tribunal erred by not addressing the specific issue of whether the reopening was based on a change of opinion, as directed by the High Court. The matter is remitted back to the Tribunal for fresh consideration on this limited aspect.