ITAT Delhi Judgments — February 2019

The Tribunal held that the eligibility for deduction under Section 80IC, once established in the initial year, cannot be disturbed in subsequent years unless the initial claim is challenged. The classification of the product under Chapter 7607, as per Board Circulars, was also upheld.

The Tribunal held that Kerala State Industrial Enterprises Ltd. was not a comparable company due to its involvement in air cargo complex operations and trading activities, which differed significantly from the assessee's services. The TPO was directed to exclude this comparable.

The Tribunal held that the addition made by the AO and confirmed by the CIT(Appeals) was bad in law due to violations of the principles of natural justice. Specifically, the failure to provide the assessee with the investigation wing reports and to allow cross-examination of witnesses rendered the entire proceedings and the resulting addition a nullity.

The Tribunal held that the failure to issue a notice under Section 143(2) after the return was filed in response to a Section 148 notice is fatal to the reassessment order. Section 292BB, which presumes service of notice, does not cure the failure to issue the notice itself.

The Tribunal noted that the issue was squarely covered by the decisions of a coordinate bench in the assessee's own case for earlier assessment years. Following these precedents, the Tribunal dismissed the appeal.

The Tribunal held that the forfeiture of the security deposit was revenue in nature as it did not confer any enduring benefit and was incurred for the purpose of business. The loss crystallized during the year.

The Tribunal held that the TPO did not properly consider the assessee's segmental bifurcation of revenues and expenses and re-characterized the services without sufficient reason. The issue of provision for warranty was also not properly considered by the AO.

The Tribunal directed the AO to exclude interest from the Section 14A disallowance computation and to consider average investment as per the Supreme Court's decision in Maxopp Investments. The Tribunal also upheld the CIT(A)'s deletion of the addition on sale of investment, following its own prior decisions.

The Tribunal held that the eligibility for deduction under Section 80IC, once established in the initial year, cannot be disturbed in subsequent years unless the initial claim is challenged. The classification of the product under Chapter 7607, as per Board Circulars, was also upheld.

The Tribunal held that the CIT(A) has the power under Section 150(1) to direct taxation in a different year if facts justify. The Tribunal found no infirmity in the CIT(A)'s direction to tax the amounts in the respective earlier years.

The Tribunal upheld the CIT(A)'s decision to confirm the additions. The assessee failed to provide sufficient evidence to substantiate the genuineness of the creditors and the transactions, leading to the disallowance.

The Tribunal directed the AO to exclude interest from the Section 14A disallowance computation and to consider average investment as per the Supreme Court's decision in Maxopp Investments. The Tribunal also upheld the CIT(A)'s deletion of the addition on sale of investment, following its own prior decisions.

The Tribunal held that the appeal was not maintainable due to the low tax effect, as per the CBDT circular. Consequently, the appeal was dismissed without examining the merits of the case.

The Tribunal remanded the issue of sundry creditors back to the AO for verification of documents, stating the assessee had not discharged its onus. For claims and discounts, capital expenditure, entertainment expenses, and business promotion expenses, the Tribunal upheld the CIT(A)'s deletion of additions.

The Tribunal held that the assessee appeared to be uninterested in pursuing the appeal. Therefore, the appeal was liable to be un-admitted and dismissed for non-prosecution.

The Tribunal held that the CIT(A)'s deletion of the addition was not justified as the reasoning that bogus purchases would be offset by bogus sales was fallacious and did not address the genuineness of the transactions. The matter was set aside to the CIT(A) for proper adjudication.

The Tribunal held that the Assessing Officer had made sufficient inquiries during the assessment proceedings. Therefore, the PCIT's invocation of Section 263 was not justified as the assessment order was not erroneous.

The Tribunal held that the assessee's failure to appear or prosecute the appeal indicates a lack of interest. Therefore, the appeal is liable to be dismissed for non-prosecution.

The Tribunal held that the appeal is not maintainable as the tax effect is less than Rs. 20 lakhs, as per CBDT Circular No. 03/2018. The Department should have withdrawn or not pressed the appeal.

The Tribunal held that the AO invoked Section 68 without the assessee having books of account, which is a prerequisite for this section. Furthermore, the Tribunal found a violation of the principles of natural justice due to the non-confrontation of investigation wing reports and the denial of cross-examination.

The Tribunal held that since the Supreme Court had not suspended the operation of the Delhi High Court's order, the jurisdictional High Court's decision must be followed. Therefore, the CIT(A)'s order was upheld.

The Tribunal held that an appeal requires effective prosecution, not just filing. Since the assessee failed to appear or provide reasons for absence, the appeal was dismissed for non-prosecution.

The tribunal held that the interest income earned on funds temporarily placed in fixed deposits, which were inextricably linked to the setting up of the project, is a capital receipt. This income should be capitalized and set off against pre-operative expenses.

The Tribunal held that the assessee failed to provide sufficient evidence, such as an affidavit or confirmation from the original counsel, to corroborate the claim of a clerical error in the turnover. The Tribunal upheld the CIT(A)'s decision, finding no basis to interfere with the AO's findings.

The assessee's Director filed an application to withdraw the appeals, citing High Court decisions on the validity of Section 234E and late fees. The Tribunal accepted the withdrawal application.

The Tribunal held that the assessment orders framed in the names of non-existent entities, despite the AO being informed of the amalgamation, are bad in law and void ab initio. The assessment orders were consequently quashed.

The Tribunal held that notional interest cannot be charged when interest-free loans are given out of the assessee's own funds, especially when no interest or other benefit was received by the assessee from the sister concerns. The Tribunal relied on its previous decision for an earlier assessment year.

The Tribunal held that the consideration for the supply of software was not taxable as royalty, following jurisdictional High Court decisions. It also ruled that interest under Section 234B should be charged from assessment year 2013-14 onwards as per amended provisions.

The Tribunal dismissed the Revenue's appeal, upholding the DRP's directions regarding the exclusion of certain comparables and the treatment of legal/professional and website designing fees. The assessee's appeal was partly allowed by remanding issues concerning the inclusion/exclusion of specific comparables and the application of filters back to the TPO/AO for fresh adjudication.

The Tribunal restored the issue to the Assessing Officer to allow the assessee an opportunity to prove that the payees offered the income to tax. If substantiated, the disallowance is to be deleted based on the second proviso to Section 40(a)(ia).

The Tribunal upheld the CIT(A)'s decision, agreeing that the AO did not conduct sufficient inquiry to establish that the payments were excessive or unreasonable. The Tribunal found that the assessee had provided evidence of services rendered through an MOU and had earned income from projects where these services were utilized.

The assessee's Director filed an application to withdraw the appeals, citing High Court decisions on the validity of Section 234E and late fees. The Tribunal accepted the withdrawal application.

The Tribunal held that the consideration for the supply of software was not taxable as royalty, following jurisdictional High Court decisions. It also ruled that interest under Section 234B should be charged from assessment year 2013-14 onwards as per amended provisions.

The Tribunal held that the consideration for the supply of software was not taxable as royalty, following jurisdictional High Court decisions. It also ruled that interest under Section 234B should be charged from assessment year 2013-14 onwards as per amended provisions.

The Tribunal restored the depreciation issue to the Assessing Officer for fresh adjudication. Regarding the cash loans, the Tribunal held that the addition could only be made in the hands of the partner, not the firm, if the partner had sufficient means.

The Tribunal held that the assessee had discharged its onus by providing sufficient documentary evidence. The AO failed to conduct proper inquiries or gather cogent material to doubt the genuineness of the transactions.

The Tribunal found that the DRP had not properly examined the documentary evidence submitted by the assessee. Therefore, the issue was restored to the DRP for fresh adjudication after considering the evidence and providing a hearing.

The Tribunal held that expenses on software licenses, if not conferring enduring benefit, are revenue in nature and deductible under Section 37(1). It also ruled that POS terminals and UPS are akin to computers and eligible for higher depreciation rates, following jurisdictional High Court precedents.

The Tribunal held that the consideration for the supply of software was not taxable as royalty, following jurisdictional High Court decisions. It also ruled that interest under Section 234B should be charged from assessment year 2013-14 onwards as per amended provisions.

The Tribunal held that the consideration for the supply of software was not taxable as royalty, following jurisdictional High Court decisions. It also ruled that interest under Section 234B should be charged from assessment year 2013-14 onwards as per amended provisions.

The Tribunal held that the bright-line test has no mandate under the Income Tax Act and cannot be used to infer the existence of an international transaction for AMP expenses. The existence of an international transaction must be established independently.

The Tribunal held that the assessment orders framed in the names of non-existent entities, despite the AO being informed of the amalgamation, are bad in law and void ab initio. The assessment orders were consequently quashed.

The Tribunal held that the consideration for the supply of software was not taxable as royalty, following jurisdictional High Court decisions. It also ruled that interest under Section 234B should be charged from assessment year 2013-14 onwards as per amended provisions.

The assessee's Director filed an application to withdraw the appeals, citing High Court decisions on the validity of Section 234E and late fees. The Tribunal accepted the withdrawal application.

The Tribunal held that the assessment orders framed in the names of non-existent entities, despite the AO being informed of the amalgamation, are bad in law and void ab initio. The assessment orders were consequently quashed.

The Tribunal held that the consideration for the supply of software was not taxable as royalty, following jurisdictional High Court decisions. It also ruled that interest under Section 234B should be charged from assessment year 2013-14 onwards as per amended provisions.

The Tribunal held that expenses on software licenses, if not conferring enduring benefit, are revenue in nature and deductible under Section 37(1). It also ruled that POS terminals and UPS are akin to computers and eligible for higher depreciation rates, following jurisdictional High Court precedents.

The Tribunal held that the consideration for the supply of software was not taxable as royalty, following jurisdictional High Court decisions. It also ruled that interest under Section 234B should be charged from assessment year 2013-14 onwards as per amended provisions.