ITAT Delhi Judgments — September 2018

The Tribunal held that the assumption of jurisdiction under Section 153A was not valid in the absence of any incriminating material found during the search. The additions made under Section 68 were also deleted as the assessee had provided sufficient evidence to establish the identity, creditworthiness, and genuineness of the share transactions.

The Tribunal held that the addition of share capital was made without relying on any incriminating material found during the search. Therefore, no addition could have been made in the assessment year.

The Tribunal held that the PCIT's order under Section 263 was illegal and liable to be quashed. It found that the AO had examined the issue of capital gains and that the sale of the entire business as a composite unit likely constituted a slump sale under Section 50B, not subject to Section 50C as directed by the PCIT.

The Tribunal dismissed the appeal filed by the Revenue. This was done in light of a CBDT Circular revising the monetary limit for filing appeals. The circular stated that pending appeals below the specified tax limit should be withdrawn or not pressed.

The Tribunal held that the penalty order, being based on an assessment that was partially deleted, could not sustain in toto. Therefore, the matter was remanded back to the Assessing Officer for fresh consideration.

The Tribunal held that the addition of share capital was made without relying on any incriminating material found during the search. Therefore, no addition could have been made in the assessment year.

The Tribunal noted that the quantum proceedings, which formed the basis for the penalty, had been set aside by the Tribunal itself. Consequently, the penalty was deleted.

The Tribunal held that the addition of share capital was made without relying on any incriminating material found during the search. Therefore, no addition could have been made in the assessment year.

The Tribunal held that the penalty was not sustainable because the show-cause notice issued under Section 274 was vague, failing to specify whether the penalty was for concealment or furnishing inaccurate particulars of income. The Tribunal also noted that the AO had accepted the additional income declared by the assessee without further investigation.

The Tribunal held that the penalty was not sustainable because the show-cause notice issued under Section 274 was vague, failing to specify whether the penalty was for concealment or furnishing inaccurate particulars of income. The Tribunal also noted that the AO had accepted the additional income declared by the assessee without further investigation.

The Tribunal held that the penalty was not sustainable because the show-cause notice issued under Section 274 was vague, failing to specify whether the penalty was for concealment or furnishing inaccurate particulars of income. The Tribunal also noted that the AO had accepted the additional income declared by the assessee without further investigation.

The Tribunal held that the penalty was not sustainable because the show-cause notice issued under Section 274 was vague, failing to specify whether the penalty was for concealment or furnishing inaccurate particulars of income. The Tribunal also noted that the AO had accepted the additional income declared by the assessee without further investigation.

The Tribunal held that since the quantum addition, which formed the basis for the penalty, was set aside, the penalty itself should also be set aside. The matter was remanded to the CIT(A) for a fresh decision.

The Tribunal held that since the additions on which penalty was levied were deleted in the quantum proceedings, the penalty on those additions cannot stand. The revenue's appeal was dismissed on the grounds of monetary limit for appeals.

The Tribunal held that the transaction with M/s Shyam Gopal & Sons was genuine, as evidenced by bank statements showing repayment. The assessee had discharged the onus under Section 68.

The Tribunal held that advances received by the assessee are not taxable until the revenue is recognized as per the percentage of completion method. It also allowed the write-off of certain advances and other expenses as deductions.

The Tribunal held that ad hoc disallowances of conveyance, vehicle running, and business promotion expenses were unsustainable without specific defects in books or corroborative findings. The deletion of additions for undisclosed cash transactions and liquidated damages by the CIT(A) was partly upheld or restored for de novo adjudication.

The Tribunal held that if an assessee has sufficient interest-free funds, no interest should be disallowed on advances to a sister concern. It also ruled that penalty for furnishing inaccurate particulars is not leviable when the claim was based on a prevailing High Court judgment that was later overruled.

The Tribunal held that advances received by the assessee are not taxable until the revenue is recognized as per the percentage of completion method. It also allowed the write-off of certain advances and other expenses as deductions.

The Tribunal held that the penalty was wrongly sustained by the CIT(A). The assessee acted under a bonafide belief and did not act dishonestly or with malafide intention to conceal income or furnish inaccurate particulars.

The Tribunal held that foreign exchange gains/losses on revenue transactions are part of operating profit/cost and remanded the matter for re-computation of ALP. It also ruled in favor of the assessee on advance billing and allowed business promotion expenses as business expenditure.

The Tribunal held that since the additions on which penalty was levied were deleted in the quantum proceedings, the penalty on those additions cannot stand. The revenue's appeal was dismissed on the grounds of monetary limit for appeals.

The Tribunal held that if the payees have already paid tax on the interest income and the assessee has not been treated as an 'assessee in default' under Section 201(1), then penalty under Section 271C cannot be levied. The Tribunal deleted the penalty, citing various judicial precedents.

The Tribunal restored the issue to the file of the Assessing Officer. The AO was directed to dispose of the assessee's objections regarding the initiation of reassessment proceedings by passing a speaking order.

The Tribunal noted that the matter was settled due to the resolution passed. Consequently, the assessee did not wish to pursue the appeal further.

The Tribunal held that the appeal was not maintainable due to the low tax effect, as per the CBDT Circular. The Revenue's Senior DR did not press the appeal.

The Tribunal held that Cosmic Global Ltd. was not a comparable company due to its different business model, which relied heavily on outsourcing, unlike the assessee's in-house service provision. The matter was remitted to the Assessing Officer for fresh determination.

The Tribunal held that if an assessee has sufficient interest-free funds, no interest should be disallowed on advances to a sister concern. It also ruled that penalty for furnishing inaccurate particulars is not leviable when the claim was based on a prevailing High Court judgment that was later overruled.

The Tribunal held that the approval for reassessment by the Additional CIT was mechanical and without application of mind, as it merely stated 'Yes'. Therefore, the reassessment proceedings were vitiated and the assessment order was bad in law.

The Tribunal dismissed the Revenue's appeal as withdrawn/not pressed by the Senior DR. This was in accordance with CBDT Circular No. 3 of 2018, which directs the Department not to file appeals where the tax effect does not exceed Rs. 20 lakhs.

The Tribunal held that ad hoc disallowances of conveyance, vehicle running, and business promotion expenses were unsustainable without specific defects in books or corroborative findings. The deletion of additions for undisclosed cash transactions and liquidated damages by the CIT(A) was partly upheld or restored for de novo adjudication.

The Tribunal held that the CIT(Exemption)'s reasoning based on the non-resident trustees was not a valid ground to invalidate the trust. The Tribunal found that the trust deed's objects were prima facie charitable.

The Tribunal held that generation of power amounts to production of an article or thing, and therefore, the assessee is eligible for additional depreciation. This decision followed previous ITAT rulings on similar issues.

The Tribunal held that if an assessee has sufficient interest-free funds, no interest should be disallowed on advances to a sister concern. It also ruled that penalty for furnishing inaccurate particulars is not leviable when the claim was based on a prevailing High Court judgment that was later overruled.

The Tribunal held that the assessee had discharged its onus under Section 68 by providing cogent evidence, and the Assessing Officer failed to create reasonable doubts. The Tribunal found the CIT(A)'s deletion of additions to be factually and legally correct.

The Tribunal noted that the issue of registration under Section 12AA was decided in favor of the assessee by the Allahabad High Court. Therefore, the matter was set aside to the AO to decide afresh, considering the assessee's non-profit status and its object of providing artificial limbs to the needy.

The ITAT upheld the CIT(A)'s order, finding that the interest income was business income and expenses were allowable. The ITAT also found that the CIT(A) had correctly addressed the issues of bank deposits and unsecured loans based on facts.

The Tribunal held that while the AO erred in not referring the matter to the DVO upon the assessee's request, this procedural lapse was not fatal to the assessment. Such errors can be cured by setting aside the matter for a fresh decision after referring the valuation to the DVO.

The Tribunal held that the AO and CIT(Appeals) erred in levying/enhancing the penalty, finding it unsustainable in law. Regarding the first issue, the Tribunal noted that the penalty notice under section 271(1)(c) did not clearly state whether the assessee had concealed particulars or furnished inaccurate particulars, with a tick mark appearing against multiple options, rendering it invalid. On the second and third issues, the Tribunal relied on the decisions in CIT vs. IFCI Limited, CIT vs. DCM Limited, and Reliance Petro Products Pvt. Ltd. It was held that a bonafide claim, even if not accepted, does not per se amount to furnishing inaccurate particulars or concealment of income. The assessee had made a bonafide claim for website development expenditure and for expenditure on increase in authorized capital, even disallowing a portion suo moto. The Tribunal concluded that these actions did not attract the provisions of section 271(1)(c). Consequently, the appeal filed by the assessee was allowed, and the penalty was ordered to be deleted.

The Tribunal held that advances received by the assessee are not taxable until the revenue is recognized as per the percentage of completion method. It also allowed the write-off of certain advances and other expenses as deductions.

The Tribunal held that the discount received on the flat booking should be treated as a reduction in the cost of acquisition, not as income. However, the sales tax expenses, being penal in nature due to short recovery, were not admissible.

The Tribunal held that the addition of 300 basis points to the SBI PLR was reasonable and permissible, especially considering FCCDs as hybrid instruments. Furthermore, the variance in interest rates did not exceed the permissible limits under Section 92C(2) of the Income Tax Act.

The Tribunal held that the issue was covered by its own previous decisions in the assessee's own case for earlier assessment years (2012-13, 2006-07 to 2009-10), where the revenue's appeals challenging the CIT(A)'s order allowing exemption under Section 11 were dismissed. The Tribunal noted that the CIT(A) in the present case had also followed these earlier decisions. Therefore, in the absence of any contrary material, the Tribunal found no infirmity in the CIT(A)'s order allowing the claim of exemption under Section 11. The decisions relied upon by the revenue were considered distinguishable and not applicable to the facts. The appeal filed by the revenue was dismissed. The Tribunal did not expressly leave any issue undecided.

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

The Tribunal held that if an assessee has sufficient interest-free funds, no interest should be disallowed on advances to a sister concern. It also ruled that penalty for furnishing inaccurate particulars is not leviable when the claim was based on a prevailing High Court judgment that was later overruled.

The Tribunal set aside the transfer pricing additions for software development and ITES, remitting the matter for fresh determination of ALP. It also remitted corporate tax grounds related to foreign exchange fluctuations and rental income for fresh consideration.

The Tribunal noted that the issue of registration under Section 12AA was decided in favor of the assessee by the Allahabad High Court. Therefore, the matter was set aside to the AO to decide afresh, considering the assessee's non-profit status and its object of providing artificial limbs to the needy.

The Tribunal upheld the CIT(A)'s decision regarding capital gains, finding no infirmity in the computation. However, the addition of Rs. 37 lakhs (gift) was set aside and remanded to the AO for further verification of genuineness and occasion.

The Tribunal held that the assessee failed to prove the genuineness of the gift and the creditworthiness of the donor. The Tribunal also dismissed the assessee's appeal on the classification of capital gains.

The Tribunal held that the tax effect was indeed below Rs. 20 lakhs, and therefore, the appeal filed by the Revenue was not maintainable in view of the CBDT Circular. The Revenue was permitted to file a Miscellaneous Application for revival if the case fell under amended provisions of the circular.