ITAT Delhi Judgments — July 2018

The Tribunal held that the initiation of proceedings under Section 147 was invalid because the 'reason to believe' was based on an incorrect application of Section 50C, as the circle rate on the date of the agreement to sell should have been considered. Furthermore, the Tribunal found that valid service of the notice under Section 148 was not established.

The Tribunal held that the revised return was validly filed and directed the AO to consider the claims made therein afresh. Regarding the undisclosed income, the Tribunal found no error in the CIT(A)'s directions and allowed the Revenue's appeal on this point to be revisited.

The Tribunal decided to dismiss the appeal as withdrawn, based on the application moved by the appellant, Cancer Awareness Prevention & Early Detection Trust, on 16.07.2018. The Tribunal noted that the appellant had sought to withdraw the appeal challenging the order passed by the Ld. Commissioner of Income Tax (Exemption). The operative direction was to dismiss the appeal. No specific issues regarding the merits of the original assessment or the order of the CIT(Exemption) were decided, as the appeal was withdrawn. The ratio decidendi is that an appellant has the right to withdraw their appeal, and the Tribunal will grant such a request if properly made.

The Tribunal dismissed the Department's appeal as not maintainable because the tax effect was below the monetary limit specified in CBDT Circular No. 3/2018. The assessee's cross-objection was dismissed as time-barred.

The Tribunal held that providing hostel and mess facilities to students is incidental to the main object of providing education and not a separate business activity. It also held that depreciation claimed on assets used for charitable purposes is allowable.

The ITAT noted that CBDT Circular No. 03 of 2018 revised the monetary limit for filing appeals to the Tribunal to Rs. 20,00,000/- with retrospective effect. As the tax effect in these appeals was below this limit, the Tribunal dismissed the appeals.

The ITAT noted that CBDT Circular No. 03 of 2018 revised the monetary limit for filing appeals to the Tribunal to Rs. 20,00,000/- with retrospective effect. As the tax effect in these appeals was below this limit, the Tribunal dismissed the appeals.

The Tribunal held that the CBDT circular has statutory force and instructs the Department not to press appeals with a tax effect below the prescribed limit. Therefore, the appeal was not maintainable.

The Tribunal noted that CBDT Circular No. 03 of 2018 revised the monetary limit for filing appeals to the Tribunal to Rs. 20,00,000/- with retrospective effect. As the tax effect was below this limit, the appeal was dismissed.

The Tribunal dismissed the appeal for non-prosecution, citing the assessee's absence and lack of communication. The assessee was granted liberty to move for recalling the order if they could explain their non-compliance.

The Tribunal held that since no exempt income was earned, Section 14A was not attracted, and the disallowance was deleted. The issue of prior period expenses was remanded for verification.

The Tribunal held that the CIT(A) was correct in observing that the decisions relied upon by the assessee involved reassessment proceedings under Section 147 or 153A, unlike the present case which stemmed from an ITSC order. Therefore, the principle laid down in Hindustan Bulk Carrier was rightly followed.

The Tribunal noted the assessee's absence and lack of communication, deeming it a lack of interest in prosecuting the appeal. Consequently, the appeal was dismissed for want of prosecution.

The Tribunal set aside the issue of notional interest on outstanding receivables to the Assessing Officer/TPO for fresh adjudication, following High Court precedents. The issue of prior period expenses was also remanded to the AO for verification and determination of the correct assessment year for deduction. The levy of interest and penalty were deemed consequential/premature.

The Tribunal held that the CIT(A) was correct in observing that the decisions relied upon by the assessee involved reassessment proceedings under Section 147 or 153A, unlike the present case which stemmed from an ITSC order. Therefore, the principle laid down in Hindustan Bulk Carrier was rightly followed.

The ITAT noted that CBDT Circular No. 03 of 2018 revised the monetary limit for filing appeals to the Tribunal to Rs. 20,00,000/- with retrospective effect. Following this circular, the Tribunal dismissed the Revenue's appeals as the tax effect was below the prescribed limit.

The Tribunal held that Section 14A is attracted only when exempt income is actually earned and not on assumptions. Since the assessee did not earn any dividend income, the disallowance made by the AO and confirmed by the CIT(A) was not sustainable.

The Tribunal held that goodwill qualifies for depreciation under Section 32(1) of the Income Tax Act, following the Supreme Court's decision in CIT vs. Smifs Securities Ltd. However, the specific issue of whether there was a real transfer of goodwill in this case and its valuation was remitted back to the Division Bench.

The Tribunal held that the Chennai unit was indeed involved in manufacturing and processing of non-ferrous metallic slag powder, entitling it to Section 10B deduction. Regarding other expenses, the Tribunal allowed the assessee to produce additional evidence before the AO.

The Tribunal noted a CBDT circular revising the monetary limit for filing appeals to Rs. 20,00,000/-. Since the tax effect was below this limit, the Tribunal dismissed the appeal without delving into the merits.

The Tribunal held that the invocation of jurisdiction under Section 153C was vitiated in law because the seized documents did not relate to the assessment year in dispute. Consequently, the assessment order and the appellate order were cancelled.

The Tribunal followed a co-ordinate bench's decision on identical facts for a previous assessment year. The Tribunal held that disallowing a percentage of operational expenses without specific findings or justification is improper, especially when financial statements are maintained.

The ITAT noted that CBDT Circular No. 03 of 2018 revised the monetary limit for filing appeals to the Tribunal to Rs. 20,00,000/- with retrospective effect. As the tax effect in these appeals was below this limit, the Tribunal dismissed the appeals.

The Tribunal held that the Chennai unit was indeed involved in manufacturing and processing of non-ferrous metallic slag powder, entitling it to Section 10B deduction. Regarding other expenses, the Tribunal allowed the assessee to produce additional evidence before the AO.

The Tribunal held that the CIT(A) was correct in observing that the decisions relied upon by the assessee involved reassessment proceedings under Section 147 or 153A, unlike the present case which stemmed from an ITSC order. Therefore, the principle laid down in Hindustan Bulk Carrier was rightly followed.

The ITAT held that the reopening under Section 147/148 was without proper application of mind by the AO, as it was based solely on information from the Investigation Wing. The Tribunal also found that the assessee had provided sufficient evidence of the share transactions and the identity/genuineness of MKM Finsec (P) Ltd. had been established in previous cases.

The Tribunal held that Apitco Limited and Global Procurement Consultants Limited are functionally dissimilar to the assessee and should be excluded from the list of comparables. The Tribunal emphasized the need for similarity in functions even under the Transactional Net Margin Method (TNMM).

The Tribunal held that since the quantum of additions, which formed the basis for the penalty, was restored to the CIT(A), the penalty issue also needs to be decided afresh by the CIT(A). The assessee should be given a reasonable opportunity of being heard.

The Tribunal restored the quantum appeal issues to the CIT(A)/TPO for fresh adjudication. Consequently, the penalty issue was also restored to the Assessing Officer for a fresh decision after the quantum additions are adjudicated.

The Tribunal held that the proviso to section 2(15) was not applicable as the assessee's dominant activity was promoting sports, not commercial trade. It further held, relying on Supreme Court judgment, that depreciation is allowable even if capital expenditure was treated as application of income.

The Tribunal noted that the tax effect in all three appeals was below Rs. 20,00,000/-. Following the CBDT circular No. 03/2018, which revised the monetary limit for appeals and stated that pending appeals below this limit would be treated as withdrawn, the Tribunal dismissed the revenue's appeals.

The Tribunal held that the Revenue's appeal should have been withdrawn or not pressed, given the low tax effect and the CBDT circular. Consequently, the assessee's cross-objection, being supportive of the Revenue's appeal, was also dismissed.

The Tribunal set aside the issue of notional interest on outstanding receivables to the Assessing Officer/TPO for fresh adjudication, following High Court precedents. The issue of prior period expenses was also remanded to the AO for verification and determination of the correct assessment year for deduction. The levy of interest and penalty were deemed consequential/premature.

The Tribunal noted that the tax effect in all three appeals was below Rs. 20,00,000/-. Following the CBDT circular No. 03/2018, which revised the monetary limit for appeals and stated that pending appeals below this limit would be treated as withdrawn, the Tribunal dismissed the revenue's appeals.

The Tribunal noted that the appeal should have been withdrawn or not pressed by the Revenue as per CBDT Circular No. 21/2015. Consequently, the appeal was dismissed.

The Tribunal noted that the tax effect in all three appeals was below Rs. 20,00,000/-. Following the CBDT circular No. 03/2018, which revised the monetary limit for appeals and stated that pending appeals below this limit would be treated as withdrawn, the Tribunal dismissed the revenue's appeals.

The Tribunal dismissed the Revenue's appeal based on a CBDT circular that revised the monetary limit for filing appeals. The cross-objection was not adjudicated separately as it supported the CIT(A)'s order.

The Tribunal held that the AO was not justified in rejecting the books of accounts. The CIT(A) had rightly accepted the books of accounts after verifying the details and considering the nature of the assessee's business and the audited accounts.

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

The Tribunal held that the CBDT Circular No. 3/2018, which revised the monetary limit for appeals to Rs. 20,00,000/-, has statutory force. As the tax effect was below this limit and no exclusion applied, the appeal was not maintainable.

The Tribunal upheld the CIT(A)'s deletion of the addition, finding no concrete evidence of underreported sales. The reassessment proceedings were also found to be based on a show cause notice that was later set aside by the CESTAT.

The Tribunal held that the appeal filed by the Revenue must be dismissed in light of CBDT Circular No. 3/2018. This circular revised the monetary limit for filing appeals by the department before the ITAT to Rs. 20 lakhs and also applied retrospectively to pending appeals.

The Tribunal held that the appeal was not maintainable due to a low tax effect, as per CBDT Circular No. 3/2018 which mandates not filing appeals below Rs. 20,00,000/-.

The Tribunal directed the exclusion of certain comparable companies from the list used for benchmarking, finding them functionally different or having inconsistent financial data. The Tribunal also noted that the TPO used information not shared with the assessee.

The Tribunal held that the interest income earned on fixed deposits made for opening letters of credit has a direct nexus with the assessee's export business. Therefore, it should be considered part of the business income eligible for deduction under Section 10B.

The Tribunal held that the CBDT circular has statutory force and instructs the Department not to press appeals where the tax effect is below the revised limit. Therefore, the appeal was dismissed without going into the merits.

The Tribunal held that the Chennai unit was indeed involved in manufacturing and processing of non-ferrous metallic slag powder, entitling it to Section 10B deduction. Regarding other expenses, the Tribunal allowed the assessee to produce additional evidence before the AO.

The Tribunal held that Section 194A(3)(v) provides a blanket exemption for interest paid by cooperative societies to their members, without differentiating based on whether they conduct banking business. It also found the non-submission of Forms 15G/15H to the specific CIT(TDS) to be a technical breach, not warranting the levy of demand.

The Tribunal dismissed the Revenue's appeal as per CBDT Circular No. 03 of 2018, which mandates not pressing appeals with a tax effect below Rs. 20,00,000/-. The assessee's appeal was dismissed as withdrawn.

The Tribunal held that the issue was squarely covered in favour of the assessee by previous orders of the Tribunal and the Hon'ble High Court. The High Court had dismissed the Revenue's appeal in similar cases for the assessee.