ITAT Delhi Judgments — November 2018

The Tribunal held that the freight payments were reimbursement of expenses and the handling charges were below the TDS threshold, thus no TDS was required. Regarding commission, the Tribunal found the transactions to be genuine as the recipients were assessed to tax and explained the services rendered. The ad-hoc disallowance on vehicle expenses was confirmed.

The Tribunal held that the IT support services provided by the assessee did not meet the 'make-available' criteria under the tax treaty, as the recipient did not gain technical knowledge or skills to perform the functions independently. Additionally, the Tribunal ruled that surcharge and cess should not be applied over and above the treaty's gross tax rate.

The Tribunal held that payments made on bank holidays were not subject to Section 40A(3) as per Rule 6DD(J). It also ruled that payments made to the assessee's agent for purchases on their behalf were not disallowable under Section 40A(3) in view of Rule 6DD(K).

The Tribunal held that Section 11(1)(c) applies only if income is applied outside India. Since the expenditure was found to be incurred in India, the provisions of Section 11(1)(c) were not applicable. Therefore, the addition made by the AO was not sustainable.

The Tribunal held that the assessee achieved its objectives through M/s ASPAM Foundation, which helped in constructing the hospital on the assessee's land for public benefit. The Tribunal found that the litigation concerning the land had attained finality and that the construction of a Satsangh Bhavan and Temple by the assessee was not disputed.

The Tribunal confirmed the addition on account of additional sales, finding no error in the Assessing Officer's observations. However, the addition on account of unsecured loans was deleted as the assessee provided confirmations, bank statements, and affidavits, establishing creditworthiness and genuineness of the transactions.

The Tribunal held that the satisfaction note under Section 153C was not recorded by the AO of the searched person, which is a mandatory condition precedent for initiating proceedings against another person. Therefore, the assumption of jurisdiction under Section 153C was illegal.

The Tribunal upheld the CIT(A)'s order, finding no infirmity in the deletion of the addition beyond Rs. 560,000. The assessee's explanation regarding the source of funds, involving discounting of cheques and cash reconciliation, was found to be plausible.

The Tribunal held that payments made on bank holidays were not subject to Section 40A(3) as per Rule 6DD(J). It also ruled that payments made to the assessee's agent for purchases on their behalf were not disallowable under Section 40A(3) in view of Rule 6DD(K).

The Tribunal held that payments made on bank holidays were not subject to Section 40A(3) as per Rule 6DD(J). It also ruled that payments made to the assessee's agent for purchases on their behalf were not disallowable under Section 40A(3) in view of Rule 6DD(K).

The Tribunal dismissed the appeal concerning training expenses, upholding the CIT(A)'s decision that it was personal in nature, following previous consistent rulings. For foreign travel expenses, the Tribunal set aside the CIT(A)'s order and remanded the issue to the AO for fresh verification.

The Tribunal upheld the CIT(Appeals)'s decision, stating that the assessee's method of accounting, accepted in preceding years, could not be rejected without contrary material. The AO failed to provide sufficient reasons for rejecting the books and making additions.

The Tribunal accepted the Revenue's request to withdraw the appeal due to low tax effect, but allowed them to file a Miscellaneous Application if certain conditions are met. The appeal was dismissed as infructuous.

The Tribunal held that the assessee achieved its objectives through M/s ASPAM Foundation, which helped in constructing the hospital on the assessee's land. The Tribunal also noted that the litigation concerning the land had attained finality and that the construction of a Satsangh Bhavan and Temple by the assessee was not disputed.

The Tribunal held that the consortium did not constitute an AOP, following its own previous orders and a Delhi High Court judgment. Consequently, the departmental appeals were dismissed.

The Tribunal held that the CIT erred in rejecting the applications based on conjectures and surmises without sufficient material. The main objects of the trust were charitable, and the clauses cited by the CIT were for efficient management. The Tribunal found that the assessee had provided evidence of its charitable activities.

The Tribunal held that since the information originated from a search at a third-party institution, Section 153C was applicable, not Section 147. Therefore, the notice issued under Section 148 and the assessment framed under Section 147 were void ab initio.

The Tribunal held that the satisfaction note under Section 153C was not recorded by the AO of the searched person, which is a mandatory condition precedent for initiating proceedings against another person. Therefore, the assumption of jurisdiction under Section 153C was illegal.

The Tribunal held that since the cash was recorded in the cash book of Star Realcon Pvt. Ltd., and the assessees were directors of that company, the cash could not be treated as unexplained money in their hands. Therefore, the addition made under Section 69A was deleted.

The Tribunal upheld the CIT(A)'s order, finding no infirmity as the additions were deleted based on the AO's own remand report which accepted the contributions as genuine. The revenue's grounds of appeal were dismissed.

The Tribunal held that the PCIT could not substitute the full value of consideration received on the sale of shares, as agreed between the parties, under the then existing provisions of law. The assessment order accepting the declared consideration and exemption was not erroneous.

The Tribunal held that the sale deed for the land was void ab initio as it was without consideration and the cheque issued was never encashed. Therefore, there was no violation of the condition to transfer land with permission. The Tribunal found no evidence that the society's activities were not genuine or not in accordance with its objects.

The Tribunal upheld the CIT(A)'s decision, finding that the interest-free loans were advanced from own funds and interest was offered in a subsequent year. It also held that upfront fees for term loans are part of interest and deductible, and data package purchases were revenue in nature.

The Tribunal held that the PCIT could not substitute the full value of consideration received on the sale of shares, as agreed between the parties, under the then existing provisions of law. The assessment order accepting the declared consideration and exemption was not erroneous.

The Tribunal held that the assessee is entitled to deduction for PF and ESI contributions even if deposited after the due dates, provided the deposit is made before the filing of the income tax return. The CIT(A) had rightly deleted the addition.

The Tribunal held that the seized fixed deposits were not incriminating material as they were part of regular books of account and no adverse findings were made during the original assessment on the same set of facts. Therefore, the addition made by the Assessing Officer and sustained by the CIT(A) was not justified.

The Tribunal held that the CIT erred in rejecting the applications based on conjectures and surmises without sufficient material. The main objects of the trust were charitable, and the clauses cited by the CIT were for efficient management. The Tribunal found that the assessee had provided evidence of its charitable activities.

The Tribunal held that the Assessing Officer could not make an addition on the same set of material that was previously examined and accepted during reassessment proceedings, especially when no incriminating material was found during the search. The addition made by the Assessing Officer and sustained by the CIT(A) was deemed unjustified.

The Tribunal held that since the cash was recorded in the cash book of Star Realcon Pvt. Ltd., and the assessees were directors of that company, the cash could not be treated as unexplained money in their hands. Therefore, the addition made under Section 69A was deleted.

The Tribunal upheld the deletion of interest disallowance by following previous year's orders and jurisdictional High Court decisions. For business promotion expenses, the Tribunal found a personal element and directed a disallowance of 10% of the total expenses.

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

The Tribunal upheld the CIT(A)'s decision to delete the addition. It found that the assessee had discharged its initial onus by providing sufficient documentation to prove the identity, creditworthiness, and genuineness of the transactions. The AO failed to make further independent inquiries and relied solely on the Investigation Wing's report.

The Tribunal found that the notice under Section 142(1) was issued with a very short compliance period, suggesting a lack of reasonable opportunity for the assessee. The disallowance of 50% of expenses was made without a scientific basis and without finding that the expenses were not incurred.

The Tribunal held that since the cash was recorded in the cash book of Star Realcon Pvt. Ltd., and the assessees were directors of that company, the cash could not be treated as unexplained money in their hands. Therefore, the addition made under Section 69A was deleted.

The Tribunal held that the issue was covered by a coordinate bench's order and the Delhi High Court's decision, which stated that if the trust has already been assessed to tax on its income, the beneficiary cannot be taxed again on the same income. The addition was deleted.

The Tribunal held that the consortium did not constitute an AOP, following its own previous orders and a Delhi High Court judgment. Consequently, the departmental appeals were dismissed.

The Tribunal held that the rectification order under Section 154 was impermissible as it involved a debatable issue requiring a long drawn process of reasoning. The Tribunal also found that the dismissal of the assessee's appeal against the original assessment as withdrawn was due to miscommunication and not proper instructions, thus warranting a decision on merits.

The Tribunal upheld the CIT(A)'s decision, finding that the AO had not properly examined the genuineness of expenses or the applicability of TDS provisions. The deletion of creditor balances was also justified based on the facts.

The Tribunal held that the provision for warranty was correctly made and deleted the AO's addition. It also held that the construction of a power coating room was revenue expenditure, but other expenses like CNC system, stabilizer, and computer fittings were capital in nature. The disallowance under Section 14A was directed to be limited to the extent of exempt income.

The Tribunal dismissed the Revenue's appeal based on CBDT Circular No. 3/2018, which sets a monetary limit of Rs. 20 lakhs for filing appeals. The assessee's cross-objection was also dismissed due to non-prosecution.

The Tribunal found that the CIT(A) dismissed the appeal without considering the assessee's adjournment application and without affording a reasonable opportunity of being heard. The case was restored to the CIT(A) for a fresh decision.

The Tribunal held that the Assessing Officer (AO) failed to conduct adequate inquiry regarding the quantification and allowability of royalty provisions. This lack of inquiry made the assessment order erroneous and prejudicial to the revenue's interest, thus upholding the CIT's revisionary powers on this issue.

The Tribunal held that Section 69A was not applicable as the assessee was not found in possession of money and the addition was based on presumptions. Regarding share transactions, the Tribunal agreed with the CIT(A) that the sale of shares did not constitute 'cash credits' under Section 68, especially since the initial purchase was accepted.

The Tribunal held that the proceedings initiated under Section 147 were non est in law and without jurisdiction. The Tribunal noted that the Assessing Officer disposed of the assessee's objections and passed the assessment order in a very short period, which is not in accordance with law.

The Tribunal held that bank guarantee commission is not 'commission' as per Section 194H, and CSR expenses incurred prior to April 1, 2013, are allowable as revenue expenditure. The disallowances were based on misinterpretations of the law and CBDT circulars.

The Tribunal noted that the tax effect was below the threshold specified in the CBDT Circular No. 03/2018. Therefore, the appeal filed by the Revenue was dismissed.

The Tribunal held that since no assessment proceedings were pending at the time of the search and no incriminating material was found, the assessment under section 153A was bad in law. Therefore, the appeals related to the validity of section 153A proceedings were allowed in favour of the assessee.

The Tribunal held that the assessment order was neither erroneous nor prejudicial to the interest of the revenue. The PCIT had erroneously assumed jurisdiction under Section 263, as the Assessing Officer had made sufficient enquiries and the assessee had provided explanations.