ITAT Delhi Judgments — October 2017

The Tribunal held that the penal interest was not deductible as it was in the nature of a penalty for infraction of law. However, following jurisdictional High Court decisions, it allowed netting off of interest income earned on funds linked to project setting up against interest expenditure.

The Tribunal held that the penal interest was not deductible as it was in the nature of a penalty for infraction of law. However, following jurisdictional High Court decisions, it allowed netting off of interest income earned on funds linked to project setting up against interest expenditure.

The Tribunal held that Section 43B(d) does not apply to interest payable to the Government of India and the State Government. Previous ITAT orders on identical facts for the same assessee had also dismissed departmental appeals on this issue.

The Tribunal held that the order passed by the Assessing Officer was indeed barred by limitation as per the amended provisions of Section 201(3) of the Income Tax Act. The amendment effective from April 1, 2010, applied to the order passed in January 2012.

The Tribunal held that the AO erred in invoking Rule 8D without recording satisfaction regarding the incorrectness of the assessee's suo motu disallowance. The addition to book profit for MAT was also deleted, following a Special Bench decision.

The Tribunal held that a mere difference of opinion regarding the nature of an expenditure (revenue vs. capital) does not automatically imply concealment of income or furnishing of inaccurate particulars. The penalty was deleted as there was no charge of mala fide intent.

The Tribunal held that penalty cannot be automatically imposed merely because a quantum addition is sustained. The Assessing Officer must demonstrate satisfaction that the assessee concealed income or furnished inaccurate particulars, which was not adequately done in this case.

The Tribunal held that receipts from equipment rental from non-PSC partners are eligible for treatment under Section 44BB, even for 'second leg' contractors. Furthermore, interest under Section 234B is not chargeable in this case, following previous Tribunal decisions.

The Tribunal held that the depreciation claim was allowable as per the High Court's decision in the assessee's own case for earlier years. It also held that ESOP expenses are revenue in nature, following a Special Bench decision.

The Tribunal held that the penalty order was passed beyond the limitation period prescribed under Section 275(1)(c) of the Income Tax Act. Therefore, the penalty order was quashed without going into the merits of the case.

The Tribunal held that penalty cannot be levied solely on the basis of reasons given in the original assessment order, especially when the additions were based on human probability. Overwhelming documentary evidence and donor statements supported the genuineness of the gifts, thus the assessee did not furnish inaccurate particulars or conceal income.

The Tribunal held that no addition could be made without incriminating material found during the search. Since the AO did not refer to any such material and the facts leading to the addition were noticed during assessment proceedings, the additions were deleted.

The Tribunal held that the assessee had sufficient cash available, as evidenced by a withdrawal and deposit statement that was disregarded by the lower authorities. Therefore, the addition for cash payments was also directed to be deleted.

The Tribunal held that the annual value of a second house property is chargeable to tax irrespective of whether it is vacant or let out. Therefore, the addition of notional rental income was upheld.

The Tribunal held that the AO erred in invoking Rule 8D without recording satisfaction regarding the incorrectness of the assessee's suo motu disallowance. The addition to book profit for MAT was also deleted, following a Special Bench decision.

The ITAT directed the AO to restrict disallowances on communication and vehicle expenses to 10% of the total expenses. The issue of shortage and excess was restored to the AO for fresh adjudication.

The Tribunal held that the assessment framed under section 153A is bad in law if no incriminating material was found during the search. Following jurisdictional High Court precedents, the assessee's appeal on this legal ground was allowed.

The Tribunal held that the issue was covered in favour of the assessee by previous ITAT orders which had dismissed the department's appeals for earlier assessment years. Therefore, the assessee was entitled to the deduction under Section 80IB(10).

The Tribunal held that the CIT(A) should have decided all issues, including the merits of the additions, and not just the jurisdictional aspect. The matter was remanded back to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee's omission to account for accrued interest was due to an incorrect TDS certificate from the bank and not mala fide intention. Following the Apex Court's ruling in CIT vs. Reliance Petroproducts Pvt. Ltd., the Tribunal found no concealment or furnishing of inaccurate particulars.

The Tribunal upheld the deletion of the share capital addition, finding that the money was received in a prior year and not the year under consideration. However, the disallowance of expenses was restored to the Assessing Officer for de novo examination due to lack of evidence.

The Tribunal held that the initiation of proceedings under Section 153C was bad in law as no incriminating material belonging to the assessee was found during the search. The Tribunal also noted that the assessee had provided evidence of identity, creditworthiness, and genuineness of the transaction.

The Tribunal held that Section 10A is essentially an exemption provision and that the unabsorbed depreciation from non-exemption years (1993-94 to 1995-96) could be set off against the income of the assessment year under consideration. The assessee was not claiming any double benefit.

The Tribunal dismissed the Revenue's appeal, following the Delhi High Court's decision in DIT (E) Vs. Indraprastha Cancer Society. The High Court held that depreciation is allowable on assets whose cost was previously allowed as application of income, and the amendment prohibiting this is not applicable to the assessment year in question.

The Tribunal held that no addition could be made without incriminating material found during the search. Since the AO did not refer to any such material and the facts leading to the addition were noticed during assessment proceedings, the additions were deleted.

The Tribunal held that the assessment framed under section 153A is bad in law if no incriminating material was found during the search. Following jurisdictional High Court precedents, the assessee's appeal on this legal ground was allowed.

The Tribunal held that the assessee failed to provide sufficient documentary evidence to prove that the sub-agent actually rendered the services for which commission was paid. Merely providing agreements, bills, or bank statements is not enough to establish the genuineness of services rendered.

The ITAT found that the CIT(A) relied on documents not presented to the AO and failed to obtain a remand report. Therefore, the issue was restored to the AO for a fresh examination.

The Tribunal held that the reassessment proceedings were valid. It remanded the issue of interest income to the AO for verification of actual receipt and taxability. The disallowance of foreign exchange fluctuation loss was deleted, finding it to be an accrued and subsisting liability.

The Tribunal held that the addition made by the Assessing Officer was bad in law. The CIT(A) had rightly deleted the addition, considering that the survey report was not confronted to the assessee and the Assessing Officer had not pointed out any deficiencies in the books of accounts or post-survey receipts.

The Tribunal held that for the Assessment Year 2013-2014, the assessee is entitled to depreciation. The reasoning was that the insertion of Section 11(6) of the Income Tax Act, 1961, which denies depreciation as an expense for trusts, was effective from April 1, 2015 (Assessment Year 2015-2016) onwards. Therefore, for the assessment year under appeal, depreciation was allowable. The CIT(A) had correctly allowed the depreciation after appreciating the facts and considering various judicial pronouncements. The Revenue's counsel did not point out any infirmity in the CIT(A)'s order. The Tribunal also referred to the Delhi High Court's decision in DIT vs M/s Indraprasth Cancer Society, ITA no. 240/2014, dated 18.11.2014, where departmental appeals were dismissed on this issue. The appeal was dismissed.

The Tribunal found that the assessee had provided evidence for the services rendered and that similar services had been accepted as at arm's length in previous years and for group companies. The Tribunal directed the TPO to re-examine the issue of ALP for time writing charges in light of the evidence and previous rulings.

The Tribunal held that the addition made by the Assessing Officer was bad in law. The CIT(A) had rightly deleted the addition, considering that the survey report was not confronted to the assessee and the Assessing Officer had not pointed out any deficiencies in the books of accounts or post-survey receipts.

The Tribunal held that the assessee was not given sufficient opportunity to object to the DVO's report before the assessment order was passed. Therefore, the matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the law aids the vigilant and not those who sleep on their rights. Following established precedents, the Tribunal dismissed the appeals for non-prosecution.

The Tribunal found that the CIT(A) passed the order without proper service of notice on the assessee. Therefore, the matter was set aside and restored to the CIT(A) for re-adjudication.

The Tribunal held that the law aids the vigilant and not those who sleep on their rights. Following established precedents, the Tribunal dismissed the appeals for non-prosecution.

The Tribunal held that a mere disallowance of an expense does not automatically attract penalty under Section 271(1)(c). Following its own previous decision in a similar case for an earlier assessment year, the Tribunal deleted the penalty.

The Tribunal held that the CIT(A)'s order regarding the disallowance of interest on loans was not infirm, particularly in light of Supreme Court and High Court decisions. The grounds raised by both the assessee and the Revenue on this issue were dismissed.

The Tribunal held that the CIT(A)'s order regarding the disallowance of interest on loans was not infirm, particularly in light of Supreme Court and High Court decisions. The grounds raised by both the assessee and the Revenue on this issue were dismissed.

The Tribunal held that the penalty orders were not properly served on the assessee, making the appeals filed after receiving them through RTI within the period of limitation. Therefore, the CIT(A)'s dismissal on grounds of delay was incorrect.

The Tribunal noted that the tax effect was below the monetary limit specified by the CBDT circular. Consequently, the Revenue's representative did not press the appeal.