ITAT Delhi Judgments — January 2016

The Tribunal upheld the deletion of additions related to sales and commission, finding that the amounts were already included in the assessee's total turnover. The addition for technical fees was set aside and remanded to the AO for fresh adjudication. The addition for royalty payments was also upheld, finding it to be an arm's length transaction.

The Tribunal held that the CBDT circular, with retrospective effect, mandates that appeals with a tax effect below Rs. 10,00,000/- should not be pressed or withdrawn. Therefore, the instant appeals are not maintainable.

The Tribunal held that expenses incurred by the VCF should be considered on a net basis when calculating the investor's income. It also ruled that income received from a VCF is taxable in the hands of the investor in the same manner as if the investment was made directly in the venture capital undertaking.

The Tribunal dismissed the Revenue's appeal as it was not maintainable due to the tax effect being below the prescribed monetary limit. The Revenue can file a miscellaneous application if there is a mistake.

The Tribunal held that the deletion of the addition under Section 68 by the CIT(A) was not proper as the assessee was not fully confronted with the evidence. The Tribunal set aside this issue to the AO for fresh adjudication with directions to confront the assessee with all material. Regarding Section 14A, the Tribunal agreed with the CIT(A) on interest expenditure but allowed an ad-hoc disallowance of Rs. 1 lakh for administrative expenses.

The Tribunal held that the Assessing Officer exceeded his powers by making a new addition and that material seized from a third party could not be used without affording an opportunity of being heard. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the CBDT Circular No. 21/2015, which revised the monetary limit for filing departmental appeals to Rs. 10 lac, is binding on the Revenue. Since the tax effect in this case was admittedly below Rs. 10 lac, the appeal was dismissed.

The Tribunal held that for a penalty under Section 271(1)(c) to be imposed, there must be a positive finding of concealment or furnishing of inaccurate particulars, which was absent. Furthermore, the conflicting reasons provided by the AO and CIT(A) for levying the penalty rendered it unjustified.

The Tribunal held that the CIT(A) was correct in deleting the addition based on the 10% net profit rate as the assessee consistently followed the mercantile system of accounting and percentage completion method. It was also held that bank guarantee commission paid to a foreign bank without a PE in India is not interest and not subject to TDS.

The Tribunal dismissed the Revenue's appeal as it did not meet the monetary limit prescribed by the CBDT circular for filing appeals. The Tribunal noted that if there was a mistake, the Revenue could file a miscellaneous application.

The Tribunal upheld the CIT(Appeals)'s decision, stating that Section 2(22)(e) is not applicable to companies in which the public is substantially interested. It also noted that the lender companies were NBFCs and engaged in lending as a substantial part of their business, further excluding them from the deeming provision.

The Tribunal held that the CIT(A) erred in quashing the Assessing Officer's action under Section 145 without considering that the AO did not provide sufficient opportunity to the assessee. The matter was restored to the AO for fresh adjudication.

The Tribunal held that the service of notice under Section 143(2) is mandatory and the assessment made without proper service is invalid. Since the notice was sent to a wrong address despite the assessee intimating the correct address in the return, the assessment order was set aside.

The Tribunal held that the withdrawals were not deemed dividends under Section 2(22)(e). The advances were given in lieu of the assessee providing personal guarantees to the company for bank loans, which constituted a reciprocal business arrangement and not a gratuitous loan.

The Tribunal upheld the CIT(A)'s decision to split the compensation between the assessee and his son, finding the AO's assessment based on surmises. It also upheld the deletion of interest addition, following Supreme Court judgments on accrual basis taxation.

The Tribunal held that the addition made by the AO was not sustainable as the seized documents had no bearing on the assessee's income for the relevant assessment year. The Tribunal also found that the declared net profit rate was sufficient.

The Tribunal held that the CBDT's instructions regarding monetary limits for filing appeals are binding. Since the tax effect was below the prescribed limit, the Revenue's appeal should not have been filed or should have been withdrawn.

The Tribunal held that the proviso to Section 36(1)(iii) was not attracted as the property was purchased for the existing business and not for extension. The AO's disallowance was deleted.

The Tribunal held that the disallowance was unjustified. Following the Delhi High Court's decision in CIT vs. Naresh Kumar, the amendment to Section 40(a)(ia) allowing deduction if tax is paid before the due date for filing the return is retrospective.

The Tribunal held that as per Section 268A of the Income Tax Act and CBDT Circular No. 21 of 2015, appeals with a tax effect below Rs. 10,00,000/- should not be filed or should be withdrawn.

The Tribunal held that the income, though shown as rent, was actually freezing charges for processing vegetables. This activity is an integral part of the eligible business and thus eligible for deduction under Section 80-IC.

The Tribunal held that the Department's appeal was not maintainable due to the low tax effect, as per the binding instructions of the CBDT. Consequently, the assessee's cross-objection was dismissed as infructuous.

The Tribunal held that as per CBDT Circular No. 21 of 2015, issued under Section 268A of the Income Tax Act, appeals with a tax effect below Rs. 10,00,000/- should not be filed or should be withdrawn. Therefore, the appeal filed by the Revenue was dismissed on this ground.

The Tribunal held that CBDT Circular No. 21/2015, which revised the monetary limit for departmental appeals to Rs. 10 lac, is binding on the Revenue. Since the tax effect was admittedly below this limit, the appeal was dismissed.

The Tribunal held that the share transactions should be treated as investments and the gains as capital gains, not business income. It also upheld the CIT(A)'s decision to allow depreciation on computer accessories based on precedent.

The Tribunal held that CBDT Circular No. 21/2015, issued under Section 268A of the Income Tax Act, mandates that appeals with a tax effect below Rs. 10,00,000/- should not be filed or should be withdrawn. Therefore, the appeal was dismissed.

The Tribunal held that the reassessment was invalid as it was based on a change of opinion and lacked tangible material, violating Section 147. Consequently, the disallowance of expenses was also set aside.

The Tribunal held that the CBDT circular is binding on the revenue authorities and that the appeal is not maintainable as the tax effect is below the prescribed monetary limit.

The Tribunal held that the assessee appeared to be not interested in prosecuting its appeal due to repeated non-appearance. The appeal was dismissed for non-prosecution.

The Tribunal held that the Revenue's appeals were not maintainable due to the low tax effect, following the CBDT circular. The Cross Objection was dismissed as it was not pressed.

The Tribunal held that as per CBDT Circular No. 21 of 2015 and Section 268A of the Income Tax Act, appeals with a tax effect below the prescribed monetary limit should not be filed or should be withdrawn. Therefore, the appeals filed by the Revenue were dismissed on this ground.

The Tribunal held that as per CBDT Circular No. 21 of 2015 and Section 268A of the Income Tax Act, appeals with a tax effect below the prescribed monetary limit should not be filed or should be withdrawn. Therefore, the appeals filed by the Revenue were dismissed on this ground.

The Tribunal held that the appeal filed by the Department was not maintainable as the tax effect was below the prescribed monetary limit of Rs. 10 lakhs as per CBDT Circular No. 21/2015. Consequently, the assessee's cross-objection was dismissed as infructuous.

The Tribunal held that the CBDT circular, issued under Section 268A, mandates that appeals with a tax effect below Rs. 10,00,000/- should not be filed or should be withdrawn. Therefore, the appeal was dismissed on this ground.

The Tribunal upheld the CIT(A)'s decision to treat the gains from share transactions as short-term capital gains, as the assessee's primary business was not share trading. However, the disallowance under Section 14A was remanded for fresh consideration.

The Tribunal held that the Department's appeal was not maintainable due to the low tax effect, as per the binding CBDT circular. Consequently, the assessee's cross-objection was dismissed as infructuous.

The Tribunal found that the AO and CIT(A) had not properly verified crucial aspects of the lease agreement, particularly the role of WGF Securities Ltd. and whether the lease was financial or operational. Therefore, the matter was remanded back to the AO for fresh verification.

The Tribunal found that the assessee was not given an adequate opportunity of hearing before the assessment order was passed. Therefore, the matter was set aside to the AO to provide the assessee with another opportunity to represent its case.

The Tribunal held that HPL only took over liability to the extent of current assets, and the remaining loan liability remained with the assessee. Therefore, interest on this remaining liability was deductible as it was incurred for business purposes.

The Tribunal dismissed the Revenue's appeal as the tax effect was below the monetary limit prescribed by the CBDT circular. The Tribunal clarified that this dismissal would not set a precedent for subsequent years with a higher tax effect.

The Tribunal dismissed the appeal filed by the Revenue, noting that it was covered by the CBDT circular regarding low tax effect. The dismissal was without prejudice to the Revenue's right to appeal in subsequent years with a higher tax effect.

The Tribunal held that the CIT's revision was bad in law. It found that the CIT's grounds regarding depreciation and creditors/loans were factually incorrect or lacked specific findings of prejudice to the revenue. The rejection of books of accounts was also deemed incorrect as Section 44AA and Rule 6F(3) apply to professionals, not companies.