ITAT Delhi Judgments — August 2017

The Tribunal held that 'link charges' should be adjusted from both export and total turnover, following previous decisions. It also ruled that depreciation on computer peripherals should be allowed at 60% as per High Court rulings. Crucially, the Tribunal decided that Section 10A deduction must be computed before setting off brought forward losses and unabsorbed depreciation.

The Tribunal held that the issue of PE determination was not properly analyzed by the lower authorities and restored it to the Assessing Officer for fresh adjudication. It also directed the AO to examine the TDS credit claim and dismissed the penalty proceedings as premature.

The Tribunal upheld the CIT(A)'s decision, following previous rulings that the assessee was eligible for Section 80IC deduction. The addition on account of cash difference was also deleted as the CIT(A) found the explanation and supporting vouchers to be satisfactory.

The Tribunal condoned the delay in filing the appeal, considering the assessee's bona fide conduct and the circumstances. The Tribunal restored the entire issue of unexplained cash deposits back to the Assessing Officer for fresh adjudication, allowing the assessee to present evidence.

The Tribunal held that the initiation of penalty proceedings under Section 271(1)(c) was bad in law because the Assessing Officer failed to specify the exact charge (concealment or furnishing inaccurate particulars) in the assessment order and the penalty notice. This lack of specificity indicated a non-application of mind.

The Tribunal held that the AO had conducted sufficient enquiry by examining the assessee's books of accounts, bank statements, and other relevant documents. The CIT's assumption that the assessment order was erroneous and prejudicial to revenue was found to be unjustified.