ITAT Delhi Judgments — September 2018

The Tribunal held that the advances were made for business purposes and commercial expediency. Following previous judgments, it was determined that the Assessing Officer had not discharged the onus to prove the funds were used for non-business purposes.

The Tribunal set aside the issue of expenses to the AO for verification, directing the assessee to produce lease agreements and bills. For cash deposits, the Tribunal directed the assessee to produce parties for verification of cancelled deals and reconcile withdrawals with deposits. The addition under Section 69 for term deposits was dismissed as the initial deposit was accepted in a prior year.

The Tribunal noted that the CIT(A) dismissed the appeal without deciding on merit. Considering the interest of justice and the assessee's non-appearance, the issue was restored to the CIT(A) for one final opportunity.

The Tribunal confirmed the estimated net profit rate of 5.2% as reasonable. However, it held that once net profit is estimated, no further disallowances should be made from the profit and loss account, and directed deletion of additions on account of disallowances under Section 43B and 40(a)(ia), as well as provisions for bad debts.

The Tribunal held that the assessee's failure to appear and pursue the appeal indicates a lack of interest. Following established precedents, the appeal was dismissed for want of prosecution.

The Tribunal upheld the Commissioner (Appeals)'s order, stating that the sale of the building, being part of a block of depreciable assets, should be adjusted against the Written Down Value (WDV) of the block, not subject to capital gains tax as the block had not ceased to exist. The appeal by the Revenue was dismissed.

The Tribunal held that the reopening of assessments was invalid due to a lack of independent application of mind by the Assessing Officer. Consequently, the reassessment proceedings and the subsequent orders were quashed.

The Tribunal found that the assessment order was ex-parte and the CIT(A) did not give the assessee an opportunity to be heard or consider the evidence. The Tribunal held that the Assessing Officer had the onus to prove the assessee's beneficiary status and remanded the issue back to the Assessing Officer for a fresh hearing.

The Tribunal upheld the Commissioner (Appeals)'s order, stating that the sale of the building, being part of a block of depreciable assets, should be adjusted against the Written Down Value (WDV) of the block, not subject to capital gains tax as the block had not ceased to exist. The appeal by the Revenue was dismissed.

The Tribunal held that the reopening of assessments was invalid due to a lack of independent application of mind by the Assessing Officer. Consequently, the reassessment proceedings and the subsequent orders were quashed.

The Tribunal held that the appeal of the Revenue deserved to be dismissed in limine due to the low tax effect, as per CBDT Circular No. 3/2018. The circular was found to be binding on tax authorities and applicable retrospectively to pending appeals.

The Tribunal held that the Revenue's appeal should have been withdrawn or not pressed, as it did not fall under any of the exceptions to the CBDT circular regarding monetary limits. Consequently, the appeal was dismissed in limine.

The Tribunal held that the appeal was not covered by any of the exceptions listed in the CBDT circular for contesting appeals below the monetary limit. Therefore, the appeal was dismissed in limine.

The Tribunal held that AMP expenses cannot be treated as an international transaction under Section 92B of the Income Tax Act. Therefore, the TPO was not justified in making any transfer pricing adjustment on account of AMP expenditure.

The Tribunal held that the appeal by the Revenue should have been withdrawn or not pressed as per CBDT Circular No. 3/2018, as it did not fall under any of the exceptions. Therefore, the appeal was dismissed in limine.

The Tribunal upheld the disallowance of interest expenses under Section 36(1)(iii) as the assessee failed to demonstrate commercial expediency for advancing interest-bearing funds to sister concerns without charging interest. The disallowance under Section 14A was restricted to the amount of exempt income earned, as per High Court precedents.

The Tribunal held that the AO had made out a prima facie case of manipulation and that the assessee had not discharged the initial burden of proving the genuineness of the transactions. The assessee's claim for exemption was therefore disallowed.

The Tribunal held that additions based on seized sale transactions should not be the entire turnover but a reasonable gross profit. For a jeweler, a 2% gross profit margin was deemed appropriate, considering the nature of the business and the lack of specific data.

The Tribunal held that the disallowance made under Section 40A(2)(b) regarding lease rental payments was made mechanically without proper justification or comparable analysis. Following the jurisdictional High Court's decision, the addition was deleted.

The Tribunal restored the issue of unexplained stock to the AO for fresh consideration. It deleted the addition for unexplained expenditure due to lack of corroboration and allowed the appeal regarding salary disallowance, following a previous decision in the assessee's own case.

The Tribunal held that additions based on seized sale transactions should not be the entire turnover but a reasonable gross profit. For a jeweler, a 2% gross profit margin was deemed appropriate, considering the nature of the business and the lack of specific data.

The Tribunal upheld the CIT(A)'s decision, finding that the Assessing Officer had not properly considered the revised returns filed by the assessee which claimed the deduction. The Tribunal also noted that the assessee was eligible for the deduction on merits.

The Tribunal upheld the disallowance of interest expenses under Section 36(1)(iii) as the assessee failed to demonstrate commercial expediency for advancing interest-bearing funds to sister concerns without charging interest. The disallowance under Section 14A was restricted to the amount of exempt income earned, as per High Court precedents.

The Tribunal held that the AO had made out a prima facie case of manipulation and that the assessee had not discharged the initial burden of proving the genuineness of the transactions. The assessee's claim for exemption was therefore disallowed.

The Tribunal dismissed the appeal in limine, citing CBDT Circular No. 3/2018 which mandates withdrawal of appeals below the monetary limit unless specific exceptions apply. The Revenue's appeal did not fall under any of the stated exceptions.

The Tribunal held that the AO had made out a prima facie case of manipulation and that the assessee had not discharged the initial burden of proving the genuineness of the transactions. The assessee's claim for exemption was therefore disallowed.

The Tribunal held that the AO had made out a prima facie case of manipulation and that the assessee had not discharged the initial burden of proving the genuineness of the transactions. The assessee's claim for exemption was therefore disallowed.

The Tribunal held that the AO had made out a prima facie case of manipulation and that the assessee had not discharged the initial burden of proving the genuineness of the transactions. The assessee's claim for exemption was therefore disallowed.

The Tribunal held that the AO had made out a prima facie case of manipulation and that the assessee had not discharged the initial burden of proving the genuineness of the transactions. The assessee's claim for exemption was therefore disallowed.

The Tribunal held that the AO had made out a prima facie case of manipulation and that the assessee had not discharged the initial burden of proving the genuineness of the transactions. The assessee's claim for exemption was therefore disallowed.

The Tribunal held that the AO had made out a prima facie case of manipulation and that the assessee had not discharged the initial burden of proving the genuineness of the transactions. The assessee's claim for exemption was therefore disallowed.

The Tribunal upheld the CIT(A)'s decision, finding that the Assessing Officer had not properly considered the revised returns filed by the assessee which claimed the deduction. The Tribunal also noted that the assessee was eligible for the deduction on merits.

The Tribunal partly allowed the Revenue's appeal, remanding one issue regarding disallowances for expenses back to the AO for fresh examination. The Tribunal dismissed the assessee's cross-objections.

The Tribunal upheld the CIT(A)'s decision, stating that interest expenses should be considered net of interest income for Section 14A disallowance and that SEZ income can be reduced from book profit without affecting Section 80IAB deductions. Additions under Section 14A for book profit computation were also disallowed following a Special Bench decision.

The Tribunal held that the corpus fund received by the assessee society should be treated as a capital receipt and not as income. It also directed the AO to re-examine the depreciation claim and the addition of interest income.

The Tribunal observed that the assessee was not present for the hearing and had not sought an adjournment. Therefore, it was concluded that the assessee was not interested in pursuing the appeal.

The Tribunal held that additions based on presumptions and conjectures are not sustainable. The CIT(A) was correct in deleting the additions as there was no concrete evidence to justify them, especially since the property sale was later cancelled.

The Tribunal held that the appeals filed by the Revenue were not maintainable as the tax effect was below the revised monetary limit of Rs. 20,00,000/- stipulated by CBDT Circular No. 3/2018. The circular has statutory force and applies to pending appeals.

The Tribunal found that the CIT(A) had passed the impugned orders ex-parte. Upholding the principles of natural justice, the Tribunal set aside the orders and remanded the cases back to the CIT(A) for fresh adjudication.

The tribunal acknowledged the assessee's instruction not to press the appeal. The revenue did not object to the dismissal.

Since the basis for the penalty (quantum addition) was nullified, the penalty order was also set aside. The matter was remanded back to the AO.

The Tribunal held that 'services' under Section 10AA, when read with the SEZ Act and Rules, includes trading in the nature of re-export of imported goods. Therefore, the assessee is eligible for the deduction.

The Tribunal held that the appeal was not being prosecuted by the assessee. Citing previous judgments, the Tribunal dismissed the appeal for non-prosecution.