ITAT Delhi Judgments — May 2017

The Tribunal held that the AO made additions without any incriminating material found during the search, relying instead on pre-existing information. The additions were therefore not sustainable in law.

The Tribunal noted that a similar issue for prior assessment years was restored to the CIT(A) for fresh adjudication. Following these precedents, the Tribunal set aside the impugned order and restored the matter to the CIT(A) for re-adjudication.

The Tribunal held that the AO made additions without any incriminating material found during the search, relying instead on pre-existing information. The additions were therefore not sustainable in law.

The Tribunal held that proving the identity and capacity of the creditor is not sufficient under Section 68; the genuineness of the transaction must also be established. Mere documentary evidence like PAN and bank entries does not conclusively prove genuineness, especially when the source is an admitted entry operator.

The Tribunal held that once the AO accepts the revised return filed under section 153A, the original return under section 139 abates. Therefore, concealment for penalty purposes must be assessed with reference to the section 153A return, not the original return.

The Tribunal held that once the AO accepts the revised return filed under section 153A, the original return under section 139 abates. Therefore, concealment for penalty purposes must be assessed with reference to the section 153A return, not the original return.

The Tribunal held that the AO's investigation, including attempts to serve notices and local inquiries, indicated that the share applicants were not available at the given addresses. The assessee failed to provide sufficient evidence to establish the identity, genuineness, and creditworthiness of these parties.

The Tribunal held that the benefit of Section 23(2) for self-occupation was not applicable. However, it found the estimation of rental income by the lower authorities to be arbitrary and lacking documentary evidence.

The Tribunal held that the amount written off constituted a debt due to the assessee from its principals, which was subsequently written off. Therefore, it fulfilled the conditions for deduction as bad debt under the Income Tax Act.

The Tribunal confirmed the disallowance of penalties and fees paid to ROC. For coal washing charges, the matter was remanded to the AO to verify tax deduction and deposit. Similarly, for taxes on closing stock, the issue was remanded to the AO for verification of subsequent payment.

The Tribunal held that the disallowance under Section 14A cannot exceed the exempt income earned. Since the assessee had already disallowed an amount far exceeding the exempt income, no further disallowance could be made.

The Tribunal held that the seized documents did not conclusively identify the assessee as the lender, similar to a prior ruling in a related case. Therefore, the additions made by the Assessing Officer could not be sustained.

The Tribunal held that the addition of Rs. 22,50,000/- (interpreted from Rs. 45 lakhs mentioned in the facts and Rs. 22,50,000/- in the grounds of appeal) as income from undisclosed sources was not justified. The lower authorities relied on photocopies of documents and the statement of the seller without independent verification or allowing cross-examination.

The Tribunal noted that CBDT Circular No. 21 of 2015 mandates withdrawal or non-pressing of appeals with a tax effect below Rs. 10,00,000. Since the tax effect was below this limit, the appeal was dismissed.

The Tribunal had previously deleted the addition that formed the basis for the penalty. Therefore, the penalty could not stand.

The Tribunal held that since the original additions were deleted, the penalty levied under section 271(1)(c) could not survive. Therefore, the penalty was directed to be deleted.

The Tribunal held that the proceedings initiated under Section 153C were invalid because the satisfaction note was not recorded by the Assessing Officer of the searched person, which is a mandatory requirement. Consequently, the assessments were quashed.

The Tribunal held that the assessee was not provided with an opportunity to cross-examine Shri Mahesh Garg, which was a procedural irregularity. The assessment was not quashed but was allowed for statistical purposes to grant this opportunity.

The Tribunal held that the AO is bound to furnish the reasons for reopening the assessment within a reasonable time. Since there was a dispute regarding whether the assessee had requested these reasons, the matter was set aside to the AO for verification.

The Tribunal held that while disallowance under Section 14A read with Rule 8D is applicable, it cannot exceed the amount of exempt income earned. Following the jurisdictional High Court's decision, the disallowance was confirmed at Rs. 264/-.

The Tribunal held that the CIT(Appeals) exceeded his jurisdiction by levying penalty on an addition not made by the Assessing Officer. It also found the transfer pricing adjustment and the disallowance of ROC fees to be unsustainable, thus quashing the penalty on these grounds.

The Tribunal restored the issue to the Assessing Officer to verify if the credits pertained to the current assessment year or earlier years. If they were opening balances from earlier years, no addition could be made in the current year.

The Tribunal held that the proceedings initiated under Section 153C were invalid because the satisfaction note was not recorded by the Assessing Officer of the searched person, which is a mandatory requirement. Consequently, the assessments were quashed.

The Tribunal held that penalty under Section 271(1)(c) cannot be imposed automatically based on quantum additions. The Assessing Officer must independently arrive at satisfaction of concealment, which was not done here. The penalty order was silent on how concealment was established.

The Tribunal held that gains from share transactions, even with a short holding period, should be treated as capital gains, not business income, following precedents from the Delhi High Court and its own coordinate bench. The disallowance under Section 14A was upheld.

The Tribunal upheld the decision of the CIT(A) that the assessment order was barred by time. The period of stay granted by the Allahabad High Court was correctly excluded, but the assessment was still passed beyond the revised limitation.

The Tribunal held that framing an assessment against a non-existent entity is a jurisdictional defect, not a procedural irregularity, and thus Section 292B of the Income Tax Act is not applicable. The assessment order was therefore bad in law.

The Tribunal upheld the CIT(A)'s deletion of the addition, finding that the AO had not rejected the assessee's books of accounts, nor pointed out any suppression of purchases or sales. The addition was considered an arbitrary ad-hoc addition.

The Tribunal inferred that the assessee was not serious about pursuing the appeal. Consequently, the appeal was dismissed in limine.