ITAT Delhi Judgments — August 2018

The ITAT found that the CIT(A) should have decided the appeal on merits. Therefore, the tribunal restored the matter to the CIT(A) to decide the appeal on merits after giving the assessee a reasonable opportunity of being heard.

The Tribunal held that while the addition was justified due to a computation error, the penalty was not leviable. The assessee had disclosed the particulars of the loans in its audit report and balance sheet, indicating a bona fide and inadvertent error, not concealment or furnishing of inaccurate particulars.

The Tribunal held that the consideration for embedded software in telecom equipment supplies is not royalty but business income, following the precedent set by the Delhi High Court in similar cases. The software was considered an integral part of the goods supplied and not independently usable.

The tribunal held that the benefit of peak credit for bogus share capital cannot be given due to lack of evidence. However, the unsecured loans repaid in subsequent years were restored to the AO for fresh examination. The commission addition by CIT(A) was deleted as it was made without proper opportunity.

The Tribunal held that while bogus bills were procured, the AO's estimation of 25% profit was excessive. Following a coordinate bench decision, the Tribunal directed that the addition should be restricted to 3% of the disputed purchases over and above the GP rate already declared by the assessee.

The Tribunal held that in the interest of justice, the matter should be restored to the CIT(A) to be decided afresh. The assessee was directed to ensure due compliance on future dates.

The Tribunal affirmed the CIT(A)'s deletion of the addition, following its own consistent precedents in the assessee's own cases for multiple assessment years on identical facts and issues.

The Tribunal held that for completed assessments, additions under Section 153A are only permissible if incriminating material is unearthed during the search. For assessment year 2004-05, the appeal was dismissed as the assessee conceded that the CIT(A)'s order needed no interference.

The Tribunal restored the issue of disallowance of Rs. 6,50,000/- towards construction in the new house to the Assessing Officer for a final opportunity to the assessee to substantiate the expenditure. The addition of Rs. 1,01,430/- was upheld.

The Tribunal held that the reopening of the assessment was barred by limitation as it was done after four years from the end of the relevant assessment year, and there was no failure on the part of the assessee to disclose material facts during the original assessment. Therefore, the reassessment proceedings were quashed.

The Tribunal held that the issue had been decided against the assessee in earlier years by the jurisdictional High Court. Therefore, the rental income was to be treated as income from house property, not business income.

The Tribunal held that the appeal did not appear to fall under any of the exceptions to the CBDT circular. Therefore, delaying the disposal by waiting for a report was not justified.

The Tribunal held that since the reassessment proceedings, on which the penalty was based, were quashed by a coordinate bench in the assessee's own case, the penalty would not survive. Therefore, the penalty was deleted.

The Tribunal held that the Revenue's appeal did not appear to fall under any of the exceptions to the CBDT circular. Therefore, delaying disposal by waiting for a report was not in the spirit of the circular.

The tribunal held that the benefit of peak credit for bogus share capital cannot be given due to lack of evidence. However, the unsecured loans repaid in subsequent years were restored to the AO for fresh examination. The commission addition by CIT(A) was deleted as it was made without proper opportunity.

The Tribunal noted that the quantum additions, on which the penalty was based, had been set aside by a coordinate bench to the CIT(A) for fresh adjudication. Therefore, the penalty in dispute was also set aside to the CIT(A) for a fresh decision.

The Tribunal followed a co-ordinate bench's decision which held that authorities constituted by a State Act are entitled to exemption from TDS under Section 194A. Therefore, the Revenue's appeal was dismissed.

The Tribunal held that while bogus bills were procured, the AO's estimation of 25% profit was excessive. Following a coordinate bench decision, the Tribunal directed that the addition should be restricted to 3% of the disputed purchases over and above the GP rate already declared by the assessee.

The Tribunal restored the matter to the Assessing Officer for fresh adjudication. The assessee was directed to furnish evidence, and the Assessing Officer was instructed to provide a reasonable opportunity of being heard.

The Tribunal held that for completed assessments, additions under Section 153A are only permissible if incriminating material is unearthed during the search. For assessment year 2004-05, the appeal was dismissed as the assessee conceded that the CIT(A)'s order needed no interference.

The Tribunal held that for completed assessments, additions under Section 153A are only permissible if incriminating material is unearthed during the search. For assessment year 2004-05, the appeal was dismissed as the assessee conceded that the CIT(A)'s order needed no interference.

The Tribunal held that as the tax effect in the appeals was below the revised monetary limit prescribed by the CBDT circular, the appeals were not maintainable. Consequently, the appeals were dismissed without going into the merits of the cases.

The Tribunal held that the CIT(Appeals) dismissed the appeals without providing adequate opportunity of being heard to the assessees. Therefore, the matter was remanded back to the CIT(Appeals) for a fresh decision.

The Tribunal, following the co-ordinate bench's order, restored both appeals to the Assessing Officer for a fresh decision on the Section 80IC deduction and the addition of Rs. 26 lakhs.

The Tribunal, following the co-ordinate bench's order, restored both appeals to the Assessing Officer for a fresh decision on the Section 80IC deduction and the addition of Rs. 26 lakhs.

The Tribunal held that since the addition on which the penalty was levied was restored back to the Assessing Officer in quantum proceedings, the penalty could not survive. Therefore, the penalty was cancelled.

The Tribunal held that the CIT(Appeals) dismissed the appeals without providing adequate opportunity of being heard to the assessees. Therefore, the matter was remanded back to the CIT(Appeals) for a fresh decision.

The Tribunal held that the CIT(A) is required to pass an order on merits, even if the assessee defaults in appearance. Dismissing the appeal solely on default without considering the merits is not sustainable in law.

The Tribunal held that a significant portion of the cash found in the lockers belonged to Dr. M.V. Rao and was taxable in his hands. However, a portion of the cash and jewelry found could not be satisfactorily explained by the assessee and was confirmed as her undisclosed income.

The assessee sought permission to withdraw the present appeal as they intended to press their Cross Objection. The Tribunal granted permission to withdraw the appeal.

The Tribunal held that a portion of the cash found in the lockers was unexplained and confirmed additions to that extent. For penalty proceedings, the Tribunal confirmed the penalty on the unexplained cash amount, directing re-computation.

The Tribunal held that the CBDT circular, with retrospective effect, mandated that appeals with a tax effect below Rs. 20,00,000/- should not be filed or pressed. Since the tax effect in this appeal was below the limit, it was dismissed.

The Tribunal held that a significant portion of the cash found in the lockers belonged to Dr. M.V. Rao and was taxable in his hands. However, a portion of the cash and jewelry found could not be satisfactorily explained by the assessee and was confirmed as her undisclosed income.

The Tribunal held that the appeal did not appear to fall under any of the exceptions to the CBDT circular. Therefore, delaying disposal by waiting for a report was not in the spirit of the circular.

The Tribunal held that the appeal did not appear to fall under any of the enumerated exceptions. Delaying disposal to await a report would not be in the spirit of the circular.

The Tribunal held that the reopening of assessment under Section 147 was illegal and bad in law. This was because the approval for reopening by the Additional Commissioner of Income-tax was mechanical and lacked application of mind, as evidenced by the brief approval note.

The Tribunal held that credit of TDS should be given in the hands of the deductee (assessee) from whose income the tax was deducted, and not restricted based on the income offered. The full TDS credit of Rs. 4,62,231/- is allowable to the assessee.

The Tribunal found that the AO had botched up the inquiry by relying solely on the Investigation Wing's report without affording the assessee an opportunity to cross-examine witnesses or conduct independent verification. The AO failed to gather sufficient evidence to support the addition.

The Tribunal held that the reassessment order was bad in law because the AO did not grant the assessee the mandatory four weeks' time to seek legal remedies after disposing of objections, as per Supreme Court and High Court precedents.

The Tribunal held that Section 131(1A) empowers officers to exercise powers under Section 131(1), making non-compliance subject to penalty under Section 272A(1)(c). The assessee's refusal to provide information was considered deliberate defiance, not a reasonable cause.

The Tribunal held that a significant portion of the cash found in the lockers belonged to Dr. M.V. Rao and was taxable in his hands. However, a portion of the cash and jewelry found could not be satisfactorily explained by the assessee and was confirmed as her undisclosed income.

The Tribunal held that the investment in the joint venture was made in furtherance of the assessee's business objects and for commercial expediency. Following the Bombay High Court's decision in a similar case, the write-off was considered a business loss.

The Tribunal held that the appeal was not covered by any exceptions to the CBDT circular regarding low tax effect appeals. Therefore, delaying disposal by waiting for a report was not in the spirit of the circular.

The Tribunal accepted the assessee's request for withdrawal of the appeal. The appeal was dismissed as withdrawn by the Tribunal.

The Tribunal held that no disallowance under Section 36(1)(iii) is warranted if the assessee has sufficient own funds to cover the interest-free advances and the Revenue has not proved diversion of specific interest-bearing funds.

The Tribunal held that the proceedings initiated under Section 263 of the Act were bad in law and quashed them. Consequently, the consequential assessment proceedings were rendered infructuous.

The Tribunal held that the notices under Section 148 of the Income-tax Act, 1961, were issued to a non-existent person, as both companies, Optimed Private Ltd and Olympus Infrastructure Pvt Ltd, had their names struck off and were dissolved by the Registrar of Companies prior to the issuance of the notices. The Tribunal reasoned that no assessment can be framed on a dead person. Therefore, the assessments framed in the case of the appellants were considered bad in law and deserved to be quashed. The ratio decidendi is that a legal entity that has been dissolved and struck off the register ceases to exist, and any subsequent legal proceedings, including income tax assessments, initiated against it are void ab initio. The operative direction was to quash the assessments.

The Tribunal held that the Assessing Officer had made detailed inquiries and verified the assessee's claims regarding exempt income and expenditure disallowance. Merely because the assessment order was silent, it could not be considered erroneous and prejudicial to revenue.