ITAT Delhi Judgments — October 2018

The Tribunal upheld the deletion of the addition, agreeing with the CIT(A) that an advance cannot be equated with expenditure. Furthermore, the amount was not claimed as an expenditure or routed through the profit and loss account, making Section 40A(3) inapplicable.

The Tribunal held that the amount received by the assessee over and above the advance payment was a capital receipt and not interest income. It further ruled that the AO was not justified in taxing notional income that the assessee had foregone for justifiable reasons as a prudent man.

The Tribunal found that the rejection of additional evidence by the CIT(A) was not tenable. In the interest of justice, the Tribunal directed the AO to admit the additional evidence and any other documents the assessee wished to file.

The Tribunal upheld the order of the CIT(A), finding that the revised return was filed under compulsion due to departmental proceedings. The Tribunal agreed that the disclosure made under such circumstances does not absolve the assessee from penalty proceedings.

The Tribunal found that the rejection of additional evidence by the CIT(A) was not tenable. In the interest of justice, the Tribunal directed the AO to admit the additional evidence and any other documents the assessee wished to file.

The Tribunal upheld the CIT(A)'s decision, finding that the TPO's selected comparables were functionally different and that the assessee's fresh benchmarking was more relevant. The issue regarding provision for expenses was deemed infructuous.

The Tribunal found that the rejection of additional evidence by the CIT(A) was not tenable. In the interest of justice, the Tribunal directed the AO to admit the additional evidence and any other documents the assessee wished to file.

The Tribunal held that the assessment order passed under Section 263 had become infructuous as the revisional jurisdiction under Section 263 could not be sustained. Therefore, the assessment order was quashed.

The Tribunal held that one comparable company (Eclerx Services Ltd.) was functionally dissimilar and should be excluded. It also directed the TPO/AO to verify three other comparables (Omega Healthcare, Zavata India, R Systems International) and consider them for inclusion. The Tribunal further remanded the issue of working capital adjustment for proper adjudication.

The Tribunal found that the assessee was deprived of a reasonable opportunity to present evidence. Therefore, the case was remitted back to the CIT(A) for a fresh decision after considering all evidence and providing adequate opportunity to the assessee.

The Tribunal upheld the deletion of additions related to advertising expenditure and ALP adjustments, noting that similar issues were decided in favour of the assessee in earlier and subsequent assessment years. Consequently, the penalties levied under Section 271AA were also quashed.

The Tribunal upheld the CIT(A)'s decision that lease rental and supervision receipts should be treated as income from other sources, not business income, as the company had ceased its primary business. However, it directed the AO to allow depreciation under Section 32 on the leased assets.

The Tribunal held that the voluntary TP adjustment, disclosed in Form 3CEB and made by the assessee itself, is eligible for deduction under Section 10A. Since the TP officer did not make any adjustment, the proviso to Section 92C(4) is not applicable.

The Tribunal held that the appeal filed by the Revenue was not maintainable due to the low tax effect. Consequently, the appeal was dismissed.

The Tribunal held that the notice issued under Section 148 was time-barred as the alleged escaped income of Rs. 63,600/- was less than Rs. 1 Lakh, and the reassessment proceedings were not tenable. Consequently, the reassessment order was quashed.

The Tribunal upheld the deletion of additions related to advertising expenditure and ALP adjustments, noting that similar issues were decided in favour of the assessee in earlier and subsequent assessment years. Consequently, the penalties levied under Section 271AA were also quashed.

The Tribunal held that the appeal was not maintainable due to the low tax effect, as per the CBDT circular. The Revenue could not demonstrate that the appeal fell under any exceptions to the circular.

The Tribunal found that the Assessing Officer and CIT(A) did not properly consider or rebut the various evidences filed by the assessee. Therefore, the matter was remanded back to the Assessing Officer for a fresh decision.

The Tribunal held that the assessee failed to provide documentary evidence to establish the ownership of the house, the validity of the sale agreement, and the production of the buyer for examination. The explanation regarding the use of the assessee's bank account by a third party for property transactions was also not accepted.

The Tribunal held that the amount received by the assessee over and above the advance payment was a capital receipt and not interest income. It further ruled that the AO was not justified in taxing notional income that the assessee had foregone for justifiable reasons as a prudent man.

The Tribunal held that the Transfer Pricing Officer (TPO) could not question the commercial prudence of the assessee's transactions. The Tribunal found that the evidence provided by the assessee for the services received was sufficient, especially considering the nature of modern business practices and the consistent acceptance of similar arrangements in prior years.

The Tribunal held that the AO failed to establish that the seized documents belonged to the assessee, a prerequisite for invoking Section 153C. The settlement deed, which was the basis of the assessment, was not signed by the key party and thus could not be considered incriminating.

The Tribunal held that the data processing charges were at arm's length as per a transfer pricing study and were not excessive or unreasonable. Therefore, the disallowance made by the AO was not sustainable.

The Tribunal held that the AO failed to establish that the seized documents belonged to the assessee, a prerequisite for invoking Section 153C. The settlement deed, which was the basis of the assessment, was not signed by the key party and thus could not be considered incriminating.

The Tribunal held that the reopening of assessment was valid as the AO had taken steps to verify the deposits before issuing the notice. On merits, the assessee failed to prove the creditworthiness of the creditors for the Rs. 15,00,000 addition.

The Tribunal held that the AO failed to establish that the seized documents belonged to the assessee, a prerequisite for invoking Section 153C. The settlement deed, which was the basis of the assessment, was not signed by the key party and thus could not be considered incriminating.

The Tribunal held that the CIT(A) erred in confirming the AO's action of treating hostel and transport activities as business and not allowing depreciation on capital assets used for charitable purposes. The matter was remanded for fresh adjudication.

The tribunal held that the CIT(A) passed a non-speaking order without considering the facts and principles of natural justice. The order was confirmed in a routine manner without discussing the merits of the case.

The Tribunal restored the matter to the AO, directing him to examine all evidences and ensure proper notice service. If the assessee substantiates the source of cash deposits as student fees, the AO should accept it.

The Tribunal held that the expenditure was incurred in the course of business and should not be disallowed merely because it was paid to a sister concern or due to the service provider's limited fixed assets. The existence of a lease agreement and separate maintenance agreements for the service provider's office was considered sufficient.

The Tribunal held that the revenue model determined by DERC meant that excess receipts over determined profits did not belong to the assessee and could not be reckoned as its income. Consequently, the entire addition of Rs. 91.13 crores was directed to be deleted. The Tribunal also held that Section 115JB was not applicable to the assessee.

The Tribunal allowed the assessee's request to withdraw the appeal. The Department's representative had no objection to the withdrawal.

The Tribunal held that the appeal filed by the Revenue was not maintainable due to low tax effect. The appeal was dismissed on this ground.

The ITAT held that the CIT(A) should not have decided the appeal ex-parte without providing a proper opportunity to be heard, adhering to the principles of natural justice. The matter was set aside to the CIT(A) for fresh adjudication.

The Tribunal upheld the CIT(A)'s decision, finding that the AO had not pointed out specific defects in the books of accounts warranting rejection. The CIT(A) had verified the increased expenses with supporting documents, and the Revenue could not controvert these findings.

The Tribunal noted that CBDT Circular No. 03 of 2018 revised the monetary limit for filing appeals to Rs. 20,00,000/- and is applicable retrospectively. Therefore, the appeal should not have been filed or should have been withdrawn.

The Tribunal admitted the additional evidence, remitting the Section 68 additions back to the AO for fresh adjudication. For the Section 40(a)(ia) issue, the Tribunal allowed part of the expenses as they did not exceed the threshold for TDS deduction.

The Tribunal held that an assessment order passed against a non-existent entity is a nullity and void ab initio. Therefore, the assessment order itself is bad in law, irrespective of the merits of the addition.

The Tribunal found that the CIT(A) dismissed the appeals for non-prosecution without deciding on merits, despite the assessee filing adjournment applications and engaging a representative. Therefore, the appeals were remanded back to the CIT(A) for a decision on merit.

The Tribunal held that the AO had not conducted adequate inquiry or verification regarding the legal and professional charges, as required by Explanation 2 to Section 263. The PCIT's order directing a fresh assessment was deemed legal and valid.

The Tribunal held that the purchase of a license to use software for day-to-day business activities, without conferring enduring rights or being part of the software business, constitutes revenue expenditure. Therefore, the disallowance was deleted.

The Tribunal found that the CIT(A) dismissed the appeals for non-prosecution without deciding on merits, despite the assessee filing adjournment applications and engaging a representative. Therefore, the appeals were remanded back to the CIT(A) for a decision on merit.

The Tribunal found that the CIT(A) dismissed the appeals for non-prosecution without deciding on merits, despite the assessee filing adjournment applications and engaging a representative. Therefore, the appeals were remanded back to the CIT(A) for a decision on merit.

The Tribunal restored both appeals to the file of the CIT(A) for fresh adjudication. The assessee was granted one final opportunity to be heard, with a warning against seeking adjournments.

The Tribunal restored the appeals to the CIT(A) for fresh adjudication, granting one final opportunity to the assessee to be heard. The assessee was directed to appear without adjournment.

The Tribunal found that the CIT(A) dismissed the appeals for non-prosecution without deciding on merits, despite the assessee filing adjournment applications and engaging a representative. Therefore, the appeals were remanded back to the CIT(A) for a decision on merit.

The Tribunal found that the CIT(A) dismissed the appeals for non-prosecution without deciding on merits, despite the assessee filing adjournment applications and engaging a representative. Therefore, the appeals were remanded back to the CIT(A) for a decision on merit.

The Tribunal upheld the CIT(A)'s order, stating that since the quantum addition was quashed, the penalty levied on it must also be deleted. The Tribunal noted that the revenue's appeal against the ITAT's earlier order was dismissed by the High Court, making the ITAT's decision final.