ITAT Delhi Judgments — December 2015

The Tribunal held that Section 80-IA(2A) uses the phrase "profits and gains of eligible business" and not "profits and gains derived from", and this sub-section starts with a non-obstante clause. Therefore, the interpretation of the Revenue was found to be in violation of statutory interpretation principles.

The Tribunal held that the CBDT Circular No. 21/2015 was squarely applicable to the pending appeals. Consequently, the appeals were dismissed based on the low tax effect.

The Tribunal held that the CBDT Circular No. 21/2015 was squarely applicable to the pending appeals. Consequently, the appeals were dismissed based on the low tax effect.

The Tribunal held that the CBDT Circular, which mandates withdrawing or not pressing appeals where the tax effect is below a specified limit (Rs. 10,00,000/-), is binding on the Revenue. Consequently, the appeals filed by the Revenue were dismissed without going into the merits of the cases.

The Tribunal quashed the reassessment proceedings due to invalid notice and non-disposal of objections by a speaking order. The assessment was also found to be bad in law due to the delayed issuance of notice under Section 143(2).

The Tribunal held that since the Hon'ble High Court later ruled the business was set up from April 1, 2004, the basis for the penalty no longer existed. The Tribunal also noted that penalty cannot be levied on debatable disallowances and the revenue did not prove the assessee's explanation was not bona fide.

The Tribunal held that the AO failed to conduct a proper inquiry by not summoning the loan creditors, despite the assessee providing documentary evidence like confirmations, ITRs, and bank statements. The Tribunal found that the AO rejected the assessee's claim based on suspicion rather than concrete findings, and thus the additions were not sustainable.

The Tribunal held that for an investment/service company, setting up the business involves establishing infrastructure and appointing staff. Since the assessee had completed these prerequisites and obtained necessary approvals, its business was considered set up at the beginning of the financial year, making the expenses allowable.

The Tribunal held that since no incriminating material was unearthed during the search operations, the completed assessment could not be interfered with. The addition made by the CIT(A) was therefore unsustainable.

The Tribunal held that the addition made by the Assessing Officer could not be sustained, following a co-ordinate bench's decision. The Tribunal found that the information regarding the donor engaging in hawala transactions was general in nature and not specific enough to disprove the genuineness of the credit in the assessee's account. Consequently, the penalty levied under Section 271(1)(c) was also cancelled.

The Tribunal held that the Assessing Officer had not established a nexus between interest-bearing funds and non-interest-bearing advances. Since the assessee had sufficient interest-free funds available, it was presumed that the advances were made from these funds.

The Tribunal held that penalty proceedings under Section 271(1)(c) must be initiated in the assessment order in respect of the specific income sought to be penalized. Since the Assessing Officer explicitly initiated penalty proceedings only for the Rs. 3,50,00,000 addition and not for the Rs. 39,40,500 addition, the penalty sustained by the CIT(A) on the latter amount was not justified.

The Tribunal held that the CBDT circular dated 10.12.2015, which sets a monetary limit for filing appeals, is binding on the Department. As the tax effect was below the prescribed limit, the appeal was not maintainable.

The Tribunal held that the appeal filed by the Revenue was not maintainable as the tax effect was below the monetary limit prescribed by the CBDT, and the Instruction was applicable retrospectively to pending appeals.

The Tribunal held that the appeal of the Revenue was not maintainable as the tax effect was below the prescribed monetary limit. The CBDT Instruction was applicable retrospectively to pending appeals.