ITAT Delhi Judgments — February 2017

The Tribunal held that Section 40A(2)(b) pertains to disallowance of expenses and not to the estimation of income that the assessee ought to have earned. Therefore, the invocation of this section by the AO was incorrect.

The Tribunal restored the issue of disallowance of interest on borrowed capital back to the Assessing Officer for de novo examination. This was done in light of a previous ITAT decision in the assessee's own case for AY 2008-09, which followed the Supreme Court's ruling in Chennai Properties.

The Tribunal held that the job work expenses were verifiable as TDS was deducted and similar expenses were allowed in the preceding year. The addition on account of sundry creditors was deleted as payments were made as per the BIFR scheme or written off and offered as income.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when the addition is made solely based on the deeming provision of Section 50C, without questioning the actual consideration received. Furthermore, the penalty under Section 271(1)(b) was deleted due to a non-specific charge in the notice and unintentional non-compliance.

The Tribunal held that the tax effect in the Revenue's appeal was below the monetary limit prescribed by CBDT Circular No. 21/2015. Therefore, the appeal was not maintainable and should have been withdrawn or not pressed.

The Tribunal admitted additional evidence regarding sundry creditors and set aside the issue to the CIT(A) for re-examination. The Tribunal deleted the addition on account of low household withdrawals as it lacked basis. The disallowance of a portion of expenses due to potential personal element was upheld.

The Tribunal held that mere confirmation of an addition does not automatically lead to the levy of penalty under Section 271(1)(c). The assessee's explanations were not found to be false or mala fide, and the circumstances did not indicate conscious concealment.

The Tribunal held that the payments received were for an outright sale of designs and drawings, constituting business income, and were not taxable in India as royalty due to the absence of a Permanent Establishment (PE).

The Tribunal noted that the facts were similar to a previous case where a property was sold for a higher amount than stated, and the excess was deposited in the bank. Following that precedent, the Tribunal ordered the deletion of the addition.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when the addition is made solely based on the deeming provision of Section 50C, without questioning the actual consideration received. Furthermore, the penalty under Section 271(1)(b) was deleted due to a non-specific charge in the notice and unintentional non-compliance.

The Tribunal held that the assessee had complied with the notices by responding and denying ownership of the account. Since the assessee denied ownership, furnishing a consent form was not possible, and thus the penalty under section 271(1)(b) was not justified.

The Tribunal held that the interest income earned from fixed deposits, even if out of business funds, is not directly derived from the housing project. Therefore, it does not qualify for deduction under Section 80IB(10).

The Tribunal found that the assessee was non-cooperative throughout the proceedings and that crucial information regarding the fate of the original addition was missing. Therefore, the Tribunal set aside the issue to the AO for fresh adjudication after providing a reasonable opportunity of hearing to the assessee.

The Tribunal held that when an assessment order is set aside and a fresh assessment is made, interest under Section 220(2) can only be charged after 35 days from the service of the demand notice pursuant to the fresh assessment order. The AO's levy of interest from the original demand notice was incorrect.

The Tribunal noted that the original assessment order, which formed the basis for the penalty, had been set aside by a previous order of the Tribunal. Consequently, the penalty has no foundation and is deleted.

The Tribunal, following its previous decisions, allowed exemption in respect of arrears of gratuity. The assessee was entitled to the benefit of exemption under Section 10(10)(i).

The Tribunal held that the deduction under Section 54B cannot be allowed when the new property is purchased in the name of the assessee's wife, following the Punjab & Haryana High Court's decision.

The Tribunal noted that the issue for assessment year 2006-07, which was foundational to the current appeals, had been set aside to the CIT(A) for fresh adjudication. Therefore, to serve the ends of justice, the present appeals were also set aside to the CIT(A) for fresh consideration.

The Tribunal held that Section 68 of the Income Tax Act is not applicable to amounts credited in a bank account, as a bank passbook is not considered an account book of the assessee. The Tribunal also noted that the CIT(A) incorrectly applied Section 69 when it was not part of the grounds of appeal.

The Tribunal held that the appeal filed by the Revenue was not maintainable as the tax effect was less than Rs. 10 lakhs, as per CBDT Circular No. 21/2015. The circular's instructions are binding on the department.

The Tribunal held that the deduction under Section 54B cannot be allowed when the new property is purchased in the name of the assessee's wife, following the Punjab & Haryana High Court's decision.

The Tribunal held that the issue of whether the agricultural land was a capital asset needed verification of distance from the municipal limits. The issue of Rs. 25,81,033/- being agricultural income or income from other sources and the Rs. 1,20,000/- addition for agricultural income were restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the amount written off could not be treated as a bad debt under Section 36(2) as the conditions were not satisfied. However, it was allowed as a business loss since it was incidental to the purchase of stock-in-trade.

The Tribunal held that Section 56(2)(viii) was not applicable as it was inserted w.e.f. 01.04.2010, and the assessment year was 2007-08. The land was used for agricultural purposes and located in Delhi, thus fulfilling the conditions for exemption under Section 10(37).

The Tribunal found that if all grounds raised by the Revenue were decided against the assessee, the transaction would still be at arm's length. Therefore, the matter was remitted to the AO/TPO for re-examination. The assessee's cross-objection was dismissed as not maintainable.

The Tribunal held that the issue of bogus purchases and bogus expenses payable required fresh adjudication by the AO due to insufficient verification by the lower authorities. The addition on account of prior period expenses was deleted as the material was accounted for in the correct period.

The Tribunal held that the holding period for computing capital gains should relate back to the date of the transfer letter, not the date of the conveyance deed. It also upheld the disallowance of Rs. 18,00,000 claimed as dispute settlement charges due to lack of evidence.

The Tribunal held that the Department's appeal was not maintainable due to the low tax effect, as per CBDT Circular No. 21/2015. The Department should have withdrawn or not pressed the appeal.

The Tribunal held that the CBDT circular is binding on the Revenue authorities. Therefore, the appeal was not maintainable as the tax effect was below the prescribed monetary limit.

The Tribunal held that the assessee failed to provide complete addresses and justifications for purchases on credit from small farmers, and failed to substantiate the genuineness of sundry creditors. The Commissioner (Appeals) also upheld the addition for similar reasons.

The Tribunal held that the appeal was not maintainable as the tax effect was below the monetary limit prescribed by the CBDT circular. The circular's instructions are binding on the revenue authorities.

The Tribunal held that the assessee was imparting valuable services in cyber security, which is in the interest of the general public. The predominant object of the assessee, which is registered under Section 25 of the Companies Act, is to be examined, and incidental surplus generation does not prejudice its charitable claim.

The Tribunal found that for assessment years 2003-04 and 2004-05, additions were made without sufficient evidence, leading to the allowance of the assessee's appeal. For subsequent years, the Tribunal was directed to examine the source of credit entries.

The Tribunal found that for assessment years 2003-04 and 2004-05, additions were made without sufficient evidence, leading to the allowance of the assessee's appeal. For subsequent years, the Tribunal was directed to examine the source of credit entries.

The Tribunal found that the CIT(A) admitted additional evidence without providing a finding on its admissibility as per Rule 46A. Therefore, the matter was restored to the CIT(A) for a fresh decision after considering the admissibility of evidence and hearing both parties.

The Tribunal found the appeal to be technical in nature, requiring verification and correction by ITD system personnel. As the CIT(A) had already directed rectification, the Tribunal deemed it unnecessary to adjudicate further.