ITAT Delhi Judgments — September 2016

The Tribunal noted the assessee's lack of representation and the significant delay in filing the appeal. It was presumed that the assessee was not serious about pursuing the appeal.

The Tribunal held that the expenditure incurred by the assessee was in pursuance of an agreement and supported by credit facilities and bills. It also noted that the issue of admitting additional evidence by the CIT(A) was decided in favour of the assessee.

The Tribunal held that the assessee's activities, including the use of predictive dialler software and computer systems for debt collection, qualified as export of computer software eligible for Section 10A deduction. It also ruled that telecommunication and insurance expenses should not be excluded from export turnover.

The Tribunal held that no additions could be made as the basis for the additions was a third-party statement and not incriminating material found during the search belonging to the assessee. The assessment proceedings for the year were also deemed completed before the search.

The Tribunal held that the AO wrongly changed the method of stock valuation by adding interest to closing stock and that interest on loans for business purposes is allowable under Section 36(1)(iii). It also held that grants received from the Government of Uttar Pradesh for infrastructure development were not taxable income, following jurisdictional High Court decisions.

The Tribunal noted the consistent absence of the assessee and the failure to cure the defect. It was presumed that the assessee was not serious in pursuing the appeal.

The Tribunal found that the CIT(A) erred in brushing aside the jurisdictional issue of non-communication of reasons for reassessment as academic. The matter was restored to the CIT(A) to first decide the jurisdictional issue and then proceed to the merits if necessary.

The Tribunal held that the assessee's activities, including the use of predictive dialler software and computer systems for debt collection, qualified as export of computer software eligible for Section 10A deduction. It also ruled that telecommunication and insurance expenses should not be excluded from export turnover.

The Tribunal upheld the CIT(A)'s decision to include stock adjustment as an operating expense and treat miscellaneous income/expenses and finance charges as operating in nature. The Tribunal dismissed the Revenue's appeal.

The Tribunal found that the CIT(A) erred in brushing aside the jurisdictional issue of non-communication of reasons for reassessment as academic. The matter was restored to the CIT(A) to first decide the jurisdictional issue and then proceed to the merits if necessary.

The Tribunal held that no additions could be made as the basis for the additions was a third-party statement and not incriminating material found during the search belonging to the assessee. The assessment proceedings for the year were also deemed completed before the search.

The Tribunal held that the primary prayer to quash the assessment due to lack of cross-examination opportunity could not be accepted. However, following judicial precedents, the case was set aside to the Assessing Officer to provide an opportunity for cross-examination.

The Tribunal noted that CBDT Circular No. 21 of 2015 revised the monetary limit for filing appeals before the Tribunal to Rs. 10,00,000/-. Since the tax effect was below this limit, the appeal was dismissed.

The Tribunal held that the expenditure incurred by the assessee was in pursuance of an agreement and supported by credit facilities and bills. It also noted that the issue of admitting additional evidence by the CIT(A) was decided in favour of the assessee.

The Tribunal held that since the loan was not shown as income and the cost of assets acquired with the loan was already claimed as application of income, allowing repayment of the loan would amount to double deduction. The CBDT circular allowing loan repayment as application of income was also distinguished.

The Tribunal held that the AO wrongly changed the method of stock valuation by adding interest to closing stock and that interest on loans for business purposes is allowable under Section 36(1)(iii). It also held that grants received from the Government of Uttar Pradesh for infrastructure development were not taxable income, following jurisdictional High Court decisions.

The Tribunal held that the gains from mutual funds and shares should be treated as capital gains, not business income. It emphasized that the assessee consistently treated these as investments in its balance sheets and had a history of similar treatment being accepted in previous years.

The Tribunal held that expenditure on licenses and permits necessary to run the business is revenue in nature and should not be deferred. It also directed a fresh consideration of Section 10A exemption in light of the TEI Technologies case, stating that business losses of non-eligible units cannot be set off against profits of eligible units.

The Tribunal held that the AO of Ward-19(1) lacked jurisdiction to issue the notice under Section 148 as there was no order under Section 127 of the Act transferring the assessee's case. Consequently, the assessment proceedings were rendered a nullity.

The Tribunal held that the AO of Ward-19(1) lacked jurisdiction as there was no order under Section 127 of the Act transferring the assessee's case. Therefore, the assessment proceedings were a nullity.

The Tribunal held that the assessee's absence and lack of communication indicated a lack of interest in pursuing the appeal. Therefore, the appeal was dismissed for non-prosecution.

The Tribunal upheld the CIT(A)'s decision, finding that the community centre receipts were from members and thus covered by mutuality. The transfer from Chandigarh was also held to be non-taxable, following a precedent.

The Tribunal upheld the CIT(A)'s deletion of disallowance for the amount paid to M/s Prakash Freight, as this amount was included in their income. The Tribunal followed the Delhi High Court's decision in CIT vs. Ansal Landmark Township (P) Ltd., which held the second proviso to Section 40(a)(ia) to be retrospective.

The Tribunal held that the disallowance under Section 14A cannot exceed the exempt income. Since the suo motu disallowance exceeded the dividend income, it was not sustainable.

The Tribunal set aside the order and remanded the case back to the CIT(A) to provide the assessee with a reasonable opportunity of being heard. The CIT(A) was directed to pass a speaking order after considering the assessee's submissions.

The Tribunal held that the AO erred in adding the transfer pricing adjustment to the book profits under Section 115JB of the Income Tax Act. Such an adjustment is not permitted by Explanation 1 to Section 115JB.

The Tribunal held that the AO's disallowance of one-third of expenses was arbitrary and lacked a rationale basis. The Tribunal also allowed the assessee an opportunity to file supporting evidence for deductions claimed under Chapter VIA.

The Tribunal held that the CIT(A) erred in not admitting the additional evidence without considering the reasonable cause for not producing them before the AO. The matter was set aside to the CIT(A) for fresh adjudication after providing a reasonable opportunity to the assessee.

The Tribunal held that the Assessing Officer (AO) failed to ascertain the dates of borrowing and asset usage, which are crucial for applying the proviso to Section 36(1)(iii). Therefore, the issue of interest capitalization was remanded back to the AO for fresh adjudication.

The Tribunal held that the Rs. 6 crore income could not be taxed twice, as it had already been taxed in the hands of the holding company and its assessment had attained finality. The Tribunal also found that the 'store deposit' compensation was an advance and not business income, thus deserving deletion.

The Tribunal held that the assessee's failure to appear and prosecute the appeal indicates a lack of interest. Therefore, the appeal is liable to be dismissed for non-prosecution.

The Tribunal held that the mere receipt of fees or other amounts does not automatically classify the assessee's activities as trade, commerce, or business. The assessee's activities promoting Indian classical music and culture are for general public utility and do not fall under the mischief of the proviso to Section 2(15).

The Tribunal held that the reassessment proceedings were invalid because the AO failed to dispose of the assessee's objections by passing a speaking order, as mandated by the Supreme Court in GKN Driveshaft. Consequently, other grounds challenging the additions became academic.

The Tribunal held that the payments for technical know-how and trademarks were revenue expenditures, not capital. Therefore, the disallowance made by the AO was deleted. The issue of Section 14A disallowance was restored to the AO for re-computation.

The Tribunal admitted fresh evidence and remitted the transfer pricing issue back to the TPO for a fresh determination. The disallowance of interest on late TDS deposit was upheld based on precedent.

The Tribunal held that the addition based solely on the statements of third parties, without providing an opportunity for cross-examination, is unsustainable. The assessee had discharged the burden of proof by providing supporting documents for the purchases, which were also reflected in their sales.

The Tribunal held that the increase in salary was justified due to the shift from trading to manufacturing. It also found the fashion designer fees to be reasonable given the nature of the business and the designer's other income, which was not disputed.