ITAT Delhi Judgments — February 2019

The Tribunal held that payments for overseas supply of goods for aircraft maintenance are not subject to TDS under Section 195. It also upheld the CIT(A)'s decision regarding catering services and vehicle maintenance, finding no infirmity. The Tribunal confirmed the disallowance of expenses related to renovation of tenanted premises and gear lock/seat covers as capital expenditure.

The Tribunal held that since the assessment was based on material found in a search of a third party, Section 153C was applicable, which excludes the application of Sections 147 and 148. Therefore, the notice issued under Section 148 and the assessment framed under Section 147 were void ab initio.

The Tribunal held that since the assessment was based on material found in a search of a third party, Section 153C was applicable, which excludes the application of Sections 147 and 148. Therefore, the notice issued under Section 148 and the assessment framed under Section 147 were void ab initio.

The Tribunal held that additions in completed assessments can only be made based on incriminating material pertaining to the relevant assessment year. Since no such material was found for the years 2006-07 to 2010-11, the disallowances were rightly deleted.

The Tribunal held that an assessment order passed against a non-existent company, which has been dissolved due to amalgamation, is not sustainable in law. The notice issued in the name of an erstwhile company after its dissolution is a jurisdictional error, not a procedural lapse.

The Tribunal held that additions in completed assessments can only be made based on incriminating material pertaining to the relevant assessment year. Since no such material was found for the years 2006-07 to 2010-11, the disallowances were rightly deleted.

The Tribunal held that the penalty levied u/s 271(1)(c) by the CIT(A) was not sustainable. The reasoning was that the CIT(A) had enhanced the assessee's income, and it was this enhanced income that formed the basis for initiating penalty proceedings. However, the Tribunal, in its own order for the same assessment years (ITA Nos. 3028 & 3029/Del/2018 dated 06.11.2018), had set aside the CIT(A)'s order of enhancement. The Tribunal noted that the order of the Tribunal was passed after the penalty was levied by the CIT(A). Since the very basis (the CIT(A)'s order of enhancement) on which the penalty was levied did not survive due to the Tribunal's decision, the penalty was directed to be deleted. The Tribunal allowed the grounds raised by the assessee.

The Tribunal allowed the appeals, finding that the AMP expenditure did not constitute an international transaction as envisaged under Section 92F of the Income Tax Act. It also held that the AO/DRP erred in segregating and benchmarking AMP expenses on a standalone basis, especially when closely linked to the main business activity.

The Tribunal held that since the existence of a PE in India was a debatable issue, as evidenced by substantial questions of law framed by the Delhi High Court, the penalty under Section 271(1)(c) was not sustainable. Therefore, the penalty was deleted.

The Tribunal held that since the assessment proceedings under Section 153A were void ab initio and the quantum additions were deleted, the penalties imposed under Section 271(1)(c) did not survive. Consequently, the orders of the CIT(Appeals) were set aside and the penalties were directed to be deleted.

The Tribunal held that the income of a life insurance company must be assessed under Section 44 of the Act, which overrides other provisions. Therefore, the Assessing Officer has no power to disallow depreciation under Section 32.

The Tribunal held that since the assessee did not surrender the seized cash during the search and instead offered it as income in the return which was accepted by the AO without query, the penalty under Section 271AAA was not attracted. The Tribunal relied on previous judgments where penalty was deleted in similar circumstances.

The Tribunal held that the CIT(A) erred in reducing the addition for bogus purchases to 20% when the assessee failed to provide any evidence of genuineness. Regarding the penalty, the Tribunal found that the Assessing Officer failed to record proper satisfaction for initiating penalty proceedings under Section 271(1)(c), making the penalty unsustainable.

The Tribunal upheld the deletion of additions by the CIT(A). It found that the cash credits were adequately explained by the assessee's submissions and supporting documents, and that the sundry creditors were genuine liabilities that had not been written off, thus not falling under Section 41(1) or Section 28(iv).

The Tribunal found merit in the Revenue's contention that the CIT(A) should have first decided whether the assessee had produced books of accounts before the AO. Consequently, the Tribunal set aside the impugned order and remitted the case back to the AO for fresh assessment.

The Tribunal held that since the assessment proceedings under Section 153A were void ab initio and the quantum additions were deleted, the penalties imposed under Section 271(1)(c) did not survive. Consequently, the orders of the CIT(Appeals) were set aside and the penalties were directed to be deleted.

The Tribunal held that the issues concerning accrued interest, guest house repairs, and Section 14A disallowances were covered by its own previous decisions, which were upheld by the High Court. The Tribunal also ruled that Section 115JB is not applicable to insurance companies.

The Tribunal held that an assessment order passed in the name of an entity that has ceased to exist due to amalgamation is invalid. The AO's jurisdiction was not validly assumed after the amalgamation.

The Tribunal held that since the assessment proceedings under Section 153A were void ab initio and the quantum additions were deleted, the penalties imposed under Section 271(1)(c) did not survive. Consequently, the orders of the CIT(Appeals) were set aside and the penalties were directed to be deleted.

The Tribunal held that the AO and CIT(A) failed to bring any specific material or enquiry to controvert the documentary evidence filed by the assessees regarding the purchase and sale of shares. The suspension of trading by SEBI was later revoked, weakening the basis for adverse inference.

The Tribunal, following established precedents, held that an appeal requires effective prosecution and not just filing. Therefore, the appeal was dismissed for non-prosecution.

The Tribunal found that the assessee had indeed filed the appeal fee challan and other necessary documents. Therefore, the CIT(A)'s dismissal of the appeal was erroneous.

The Tribunal dismissed the Revenue's appeal based on CBDT Circular No. 3/2018, which revised the monetary limit for filing appeals to the ITAT at Rs. 20 lakhs. The circular also directed withdrawal or non-pressing of pending appeals below this limit.

The Tribunal held that the AO and CIT(A) failed to bring any specific material or enquiry to controvert the documentary evidence filed by the assessees regarding the purchase and sale of shares. The suspension of trading by SEBI was later revoked, weakening the basis for adverse inference.

The Tribunal found that the assessee was given a very short time to produce records and that the CIT(A) erred in rejecting the application for additional evidence without considering the merits. The matter was remanded to the AO for fresh assessment.

The Tribunal held that the deduction under Section 10B is allowable at the source itself, before computing the Gross Total Income. The Revenue's appeal was dismissed, and the assessee's cross-objection regarding demerger expenses was remanded for fresh verification.

The Tribunal restored both appeals to the file of the CIT(A) to pass fresh orders along with the appeal of the co-owner, Shri Avtar Singh, to maintain consistency. The CIT(A) was directed to decide the issue afresh after giving due opportunity to the assessees.

The Tribunal found that the assessee had indeed filed the appeal fee challan and other necessary documents. Therefore, the CIT(A)'s dismissal of the appeal was erroneous.

The Tribunal held that the loss on forex rate fluctuation on trade advances is an allowable business expenditure under Section 37(1), following the Supreme Court's decision in Woodward Governor India Pvt. Ltd. It also held that interest on loans for assets used for business purposes is deductible, even if shown as investment, especially when consistently allowed in prior years.

The Tribunal upheld the validity of the reassessment proceedings, finding that the assessee had failed to make a full and true disclosure of material facts. The reliance on the statement of Shri S.K. Gupta without cross-examination was also addressed in the context of the reassessment.

The Tribunal held that since the assessment proceedings under Section 153A were void ab initio and the quantum additions were deleted, the penalties imposed under Section 271(1)(c) did not survive. Consequently, the orders of the CIT(Appeals) were set aside and the penalties were directed to be deleted.

The Tribunal allowed the appeals, finding that the AMP expenditure did not constitute an international transaction as envisaged under Section 92F of the Income Tax Act. It also held that the AO/DRP erred in segregating and benchmarking AMP expenses on a standalone basis, especially when closely linked to the main business activity.

The Tribunal found that the assessee had indeed filed the appeal fee challan and other necessary documents. Therefore, the CIT(A)'s dismissal of the appeal was erroneous.

The Tribunal allowed depreciation on the drilling rig, noting it was decided in the assessee's favor in previous years, including High Court confirmation. However, the issue of insurance premium reimbursement was remanded to the AO for fresh examination due to insufficient documentation.

The Tribunal held that the CIT(A) erred in reducing the addition for bogus purchases to 20% when the assessee failed to provide any evidence of genuineness. Regarding the penalty, the Tribunal found that the Assessing Officer failed to record proper satisfaction for initiating penalty proceedings under Section 271(1)(c), making the penalty unsustainable.

The Tribunal held that the Assessing Officer failed to provide the assessee with the material used against it, violating principles of natural justice. Without confronting this material, the addition could not be sustained.

The Tribunal noted that there was no representation from the assessee on the date of hearing and no communication for adjournment was received. Therefore, the Tribunal held that the assessee was not interested in prosecuting the appeal.

The Tribunal restored both appeals to the file of the CIT(A) to pass fresh orders along with the appeal of the co-owner, Shri Avtar Singh, to maintain consistency. The CIT(A) was directed to decide the issue afresh after giving due opportunity to the assessees.

The Tribunal upheld the CIT(A)'s decision, stating that the auditors were satisfied with the accounts and non-furnishing of details is not a prescribed condition for rejection under Section 145(2). The Tribunal also noted the lack of natural justice in the AO's assessment process.

The Tribunal upheld the CIT(A)'s decision, stating that the auditors were satisfied with the accounts and non-furnishing of details is not a prescribed condition for rejection under Section 145(2). The Tribunal also noted the lack of natural justice in the AO's assessment process.

The Tribunal noted the absence of the assessee and the lack of any communication indicating their intent to pursue the appeal. Consequently, the Tribunal decided to dismiss the appeal.

The Tribunal held that the AO and CIT(A) failed to bring any specific material or enquiry to controvert the documentary evidence filed by the assessees regarding the purchase and sale of shares. The suspension of trading by SEBI was later revoked, weakening the basis for adverse inference.

The Tribunal rejected the Revenue's preliminary objection regarding the maintainability of the appeal. However, it found that the CIT had not properly verified the society's objectives or sought explanations regarding surplus funds and diversion of money.