ITAT Delhi Judgments — November 2018

The Tribunal held that the assessment order passed by the AO under section 143(3) was erroneous insofar as it was prejudicial to the interests of the revenue. The primary reason for this finding was that the AO had failed to examine the computation of 'Book Profit' under section 115JB of the Income-tax Act, 1961. The Tribunal noted that no Form No. 29B was filed by the assessee, indicating a lack of inquiry by the AO into this aspect. The Tribunal agreed with the PCIT that the AO had not applied his mind to the computation of Book Profit. While the PCIT also looked into other aspects like capital gains computation and the nature of amalgamation, the Tribunal focused on the AO's failure to examine the 115JB computation as the basis for deeming the order erroneous and prejudicial. Consequently, the Tribunal confirmed the PCIT's finding and upheld the revisionary order. The appeal of the assessee was dismissed.

The Tribunal held that the AO's attempt to disallow expenses for the residential house under Section 154 was incorrect as it was not a mistake apparent from the record. The issue of what constitutes the cost of a residential house for exemption purposes is debatable.

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 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 The Tribunal also found that the dismissal of the assessee's appeal against the original assessment as withdrawn was due to miscommunication and not proper instructions, thus warranting a decision on merits.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 held that the addition was made on the basis of material collected behind the assessee's back without an opportunity to cross-examine, which is a violation of natural justice. Following a similar ITAT decision and Supreme Court precedent, the addition was deleted.

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 CIT(A) correctly distinguished the case from the cited precedent and noted that the same income was added twice. The Tribunal upheld the CIT(A)'s decision, finding no illegality.

The Tribunal held that in cases of unaccounted turnover, only the profit embedded therein can be added, not the entire turnover or stock. They upheld the CIT(A)'s decision to limit the addition to the GP on unaccounted sales, citing relevant case law.

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.

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 held that Section 43B is not applicable as the assessee's income is computed on commercial principles under Section 11, not under the head 'business income'. Following the rule of consistency from earlier years, the provision for gratuity and leave encashment was allowed.

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 reassessment was based on a false premise as a completed assessment under Section 143(3) already dealt with the capital gains from the property. The Assessing Officer failed to consider the prior assessment and wrongly assumed the assessee was the sole owner.

The Tribunal allowed the appeal regarding Section 14A disallowance, following the Supreme Court's decision in Maxopp Investment. For leave encashment, the Tribunal directed the AO to allow the claim in the year of payment and disallow it in the year of provision.

The Tribunal noted that the assessee was duly served with the notice of hearing and their absence indicated a lack of interest in pursuing the appeal. Therefore, the appeal was dismissed.

The Tribunal held that the CIT(A) erred in disallowing the revenue expenditure and in denying the deduction under Section 80IB(8A). It found that the provisions of Section 80IA(10) were not triggered as the income earned from connected companies was not less than ordinary profits. Consequently, the penalty appeals were also allowed.

The Tribunal held that the AO failed to provide evidence that the rent paid was excessive compared to market rates. Considering similar deletions in subsequent years and by the DRP, the disallowance was not sustainable.

The Tribunal held that the Revenue's appeal was not maintainable as it was filed against the CBDT Circular No. 3/2018, which stipulated a monetary limit of Rs. 20 lakhs for filing appeals before the ITAT. Consequently, the assessee's cross-objection was dismissed as infructuous.

The Tribunal upheld the CIT(A)'s decision to partly allow the appeal, confirming an addition of Rs. 6,60,000/-. The Tribunal found that the assessee did not provide proper explanation or evidence for the entire amount found in the joint locker.

The Tribunal held that the CIT(A) erred in disallowing the revenue expenditure and in denying the deduction under Section 80IB(8A). It found that the provisions of Section 80IA(10) were not triggered as the income earned from connected companies was not less than ordinary profits. Consequently, the penalty appeals were also allowed.

The Tribunal held that the principle of mutuality applies to the interest income earned by the association from its members' contributions, as the funds were utilized exclusively for the members' benefit. Consequently, the interest income is not taxable.

The Tribunal held that the CIT(A) erred in disallowing the revenue expenditure and in denying the deduction under Section 80IB(8A). It found that the provisions of Section 80IA(10) were not triggered as the income earned from connected companies was not less than ordinary profits. Consequently, the penalty appeals were also allowed.

The Tribunal held that the CIT(A) erred in disallowing the revenue expenditure and in denying the deduction under Section 80IB(8A). It found that the provisions of Section 80IA(10) were not triggered as the income earned from connected companies was not less than ordinary profits. Consequently, the penalty appeals were also allowed.

The Tribunal held that the CIT(A) should have granted sufficient time to the assessee to present his case and file supporting details. Therefore, the matter was set aside back to the CIT(A) for a proper opportunity.

The Tribunal held that the non-service of notice was solely attributable to the assessee's conduct. Since the assessee was absent and not interested in prosecuting the appeal, it was liable to be dismissed for non-prosecution.

The Tribunal held that the CIT(A) erred in disallowing the revenue expenditure and in denying the deduction under Section 80IB(8A). It found that the provisions of Section 80IA(10) were not triggered as the income earned from connected companies was not less than ordinary profits. Consequently, the penalty appeals were also allowed.

The Tribunal found that the cash deposited in the savings bank account on 01.04.2009 and 04.04.2009 (totaling Rs. 5.20 lacs) must have come from the opening cash in hand of Rs. 5.20 lacs as per the cash flow statement.

The Tribunal held that the appellant was not interested in prosecuting the appeal. Therefore, the appeal was dismissed for want of prosecution.

The ITAT set aside the appeal and remanded it back to the CIT(A). The CIT(A) was directed to decide the issues on merits after providing the assessee with a proper opportunity to be heard and to furnish relevant evidence.

The Tribunal held that the twin conditions of an order being erroneous and prejudicial to the interest of the revenue were not satisfied. The AO had considered quantitative details, and even if books were rejected, the net addition would have been the same, causing no prejudice to the revenue.

The Tribunal held that the CIT(A) erred in disallowing the revenue expenditure and in denying the deduction under Section 80IB(8A). It found that the provisions of Section 80IA(10) were not triggered as the income earned from connected companies was not less than ordinary profits. Consequently, the penalty appeals were also allowed.

The Tribunal upheld the CIT(A)'s decision to allow sugarcane development expenses, following the principle of consistency and CBDT circulars. The Tribunal also dismissed the Revenue's grounds regarding late deposit of employees' contribution to PF/ESI, relying on Supreme Court decisions.

The Tribunal held that disallowance under Section 14A cannot exceed the exempt income, upholding the CIT(A)'s deletion. For the sales promotion expenses, the Tribunal followed its own coordinate bench's decision in the assessee's own case for earlier years and deleted the disallowance.

The CIT(A) deleted the addition made by the AO, holding that the assessee had correctly computed the book profit. The tribunal's decision is not explicitly stated in the provided text, but the appeal is by the Revenue against the CIT(A)'s deletion.

The Tribunal held that the CIT(A) erred in disallowing the revenue expenditure and in denying the deduction under Section 80IB(8A). It found that the provisions of Section 80IA(10) were not triggered as the income earned from connected companies was not less than ordinary profits. Consequently, the penalty appeals were also allowed.

The Tribunal upheld the CIT(A)'s deletion of the addition, finding that the AO failed to discharge the onus of proving the diary belonged to the assessee. The assessee had rebutted the presumption under Section 132(4A) by providing evidence that the diary belonged to his daughter.

The Tribunal held that the principle of mutuality applies to the interest income earned by the association from its members' contributions, as the funds were utilized exclusively for the members' benefit. Consequently, the interest income is not taxable.

The Tribunal held that the issue in dispute has already been adjudicated and decided in favour of the assessee by various judgments and orders. The Tribunal noted that the lower authorities' view was based on suspicion and probabilities, without sufficient evidence. The Tribunal found that the transactions were carried out through recognized stock exchanges and routed through banks, supported by contract notes and bills. The Tribunal distinguished the case laws relied upon by the Revenue, finding them not useful to support the impugned order. Respectfully following the judgments cited by the assessee, including those from the Hon'ble Punjab & Haryana High Court, Calcutta High Court, Rajasthan High Court, and Delhi High Court (e.g., Pr. CIT vs. Prempal Gandhi, CIT vs. Vishal Holding and Capital Pvt. Ltd., Pr. CIT vs. Jatin Investment Pvt. Ltd.), the Tribunal deleted the addition in dispute. The grounds raised by the assessee were allowed. The operative direction is the deletion of the addition. No issue was expressly left undecided.

The Tribunal held that the assessee's activities were not hit by the proviso to section 2(15) and confirmed the CIT(A)'s order allowing exemption. The Tribunal relied on the jurisdictional High Court's decision in ICAI vs DGIT (Exemption).

The Tribunal held that the CIT(A) erred in disallowing the revenue expenditure and in denying the deduction under Section 80IB(8A). It found that the provisions of Section 80IA(10) were not triggered as the income earned from connected companies was not less than ordinary profits. Consequently, the penalty appeals were also allowed.

The Tribunal held that advances to suppliers are normal business transactions and not interest-free loans. It also found that a loan given was out of the assessee's own interest-free funds. The ad-hoc disallowance was deleted as no specific defects were pointed out.

The Tribunal admitted the additional grounds as they were purely legal and based on existing facts. Following a previous decision in the assessee's own case, the Tribunal held that the disallowance of depreciation leads to enhanced profits on which Section 80IC deduction is admissible.

The Tribunal held that the withdrawal of exemption under Section 11 and 12 was not justified as the assessee's registration under Section 12AA was not cancelled. Regarding depreciation, the Tribunal followed the Supreme Court's decision allowing depreciation even if the asset cost was claimed as application of income.

The Tribunal held that the assessment order was passed on an amalgamated company, making it invalid. Following precedent, the Tribunal confirmed that assessment on a dissolved or amalgamated company is invalid and cannot cure jurisdictional defects.

The Tribunal held that penalty is not leviable at this stage as the entire assessment order was set aside. No foundation was left for the penalty, and the Assessing Officer was at liberty to initiate penalty proceedings after passing a fresh assessment order.

The Tribunal held that since the search and seizure operation occurred between June 1, 2007, and July 1, 2012, the AO should have initiated penalty proceedings under Section 271AAA, not Section 271(1)(c). Consequently, the penalty proceedings were quashed.

The Tribunal held that the addition was made on presumptions and surmises without pointing out specific defects in the documentary evidence provided by the assessee. It also noted the violation of natural justice by not allowing cross-examination of the key witness.

The Tribunal held that for levying penalty under Section 271C, contumacious conduct on the part of the assessee must be established. Since the lower authorities did not find any such conduct, the penalty was deleted.