ITAT Delhi Judgments — March 2019

The Tribunal condoned the delay in filing the assessee's cross-objections. It held that the base figure for computing assessable income should start from the declared loss for AY 2007-08. The disallowance of interest was deleted due to the assessee having surplus funds. Depreciation on site offices was to be allowed after verification of business use.

The Tribunal held that disallowing expenses merely because business activities were not functional in a particular period is incorrect if the business was not completely abandoned. For AY 2013-14, the ex-parte dismissal by CIT(A) was set aside due to lack of proper opportunity for the assessee to be heard.

The Tribunal held that the adjustment for delayed receivables was not justified due to the principle of consistency and lack of adjustment in preceding years, and also because the adjusted margin was lower than comparables. The disallowance under Section 14A was directed to be restricted to the extent of exempt income earned.

The Tribunal held that no income accrued to the assessee on account of delayed payments as there was no corresponding liability on debtors nor entitlement claimed by the assessee. It further followed previous Special Bench decisions, concluding that a fixed place PE was not established.

The Tribunal held that at the stage of granting registration under Section 12AA, the CIT(E) should not examine the application of income or the genuineness of the trust's activities in detail. The CIT(E) erred in rejecting the application on the grounds cited.

The Tribunal held that no income accrued to the assessee on account of delayed payments as there was no corresponding liability on debtors nor entitlement claimed by the assessee. It further followed previous Special Bench decisions, concluding that a fixed place PE was not established.

The Tribunal held that the CIT(A) erred in confirming the additions without providing the assessee with an opportunity to be heard. The matter was remanded back to the AO for fresh adjudication after providing the assessee with proper opportunity.

The Tribunal allowed the appeal regarding catering expenses, relying on a CBDT circular. It confirmed the addition for brokerage, but remanded the issues of rent and professional fees to the AO for further evidence. The issue of notional interest was also remanded to the AO for substantiation of business advances or sufficient capital.

The Tribunal held that no income accrued to the assessee on account of delayed payments as there was no corresponding liability on debtors nor entitlement claimed by the assessee. It further followed previous Special Bench decisions, concluding that a fixed place PE was not established.

The Tribunal held that disallowing expenses merely because business activities were not functional in a particular period is incorrect if the business was not completely abandoned. For AY 2013-14, the ex-parte dismissal by CIT(A) was set aside due to lack of proper opportunity for the assessee to be heard.

The CIT(A) correctly reduced the quantum of purchases by rectifying arithmetical mistakes and held that entire purchases could not be added. Instead, an initial investment of Rs. 10 lacs and a 7.8% gross profit on the modified turnover was sustained.

The Tribunal held that waiver of working capital loans is not a remission of trading liability and thus not taxable under Section 41(1). It also ruled that Section 14A is not attracted when no exempt income is earned by the assessee.

The Tribunal held that capital introduced by partners should be taxed in the hands of the partners, not the firm, and restored the loan issue to the AO for further verification. The addition of Rs. 4 lakhs in the hands of the firm was deleted.

The Tribunal held that the bonus paid to partners was in accordance with the partnership deeds and reversed the disallowance. However, the issue regarding the capital receipt versus business income was not fully resolved in the provided text, suggesting a partial allowance.

The Tribunal held that interest on income tax refund should be taxed at 15% on a gross basis as per Article 12(2) of the India-UK DTAA, following its own previous decisions in similar cases involving the same assessee. The AO was directed to accept this contention.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was invalid because the inappropriate words were not struck off, making it unclear which limb of the section the penalty was being levied under. Therefore, the penalty was not sustainable.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was invalid because the inappropriate words were not struck off, making it unclear which limb of the section the penalty was being levied under. Therefore, the penalty was not sustainable.

The Tribunal held that year-end accruals are permissible under the matching principle and accounting standards. It also ruled that no mark-up should be charged on support services to an affiliate if both entities are profit-making and there's no tax incentive. Finally, it found that TDS was not applicable on reimbursements for salaries paid to seconded employees who were effectively employees of the assessee.

The Tribunal held that the difference in SAR price represents employee benefit allowable under Section 37(1) or a business loss under Section 28. The Tribunal followed its own prior decision and a High Court ruling which allowed similar claims.

The Tribunal held that income from interest on employee loans, machine hire charges, rent receipts, and sundry receipts are not 'derived from' the eligible business of power generation, as they do not have a direct and immediate nexus. However, income from excess provision written back and late payment surcharge was allowed for deduction.

The Tribunal noted discrepancies in the vehicle registration numbers mentioned in the bills, which were found to be scooters or cars instead of trucks for transporting goods. The Tribunal restored the issue to the CIT(A) for further inquiries to verify the genuineness of the purchases and the actual receipt of goods.

The Tribunal held that Section 14A applies only when there is an actual receipt of exempt income during the relevant previous year. Following the Delhi High Court's decision in Chem Investment Ltd. vs CIT, the Tribunal ruled that disallowance under Section 14A is not tenable in the absence of exempt income.

The Tribunal held that Section 14A applies only when there is an actual receipt of exempt income during the relevant previous year. Following the Delhi High Court's decision in Chem Investment Ltd. vs CIT, the Tribunal ruled that disallowance under Section 14A is not tenable in the absence of exempt income.

The Tribunal held that income from interest on employee loans, machine hire charges, rent receipts, and sundry receipts are not 'derived from' the eligible business of power generation, as they do not have a direct and immediate nexus. However, income from excess provision written back and late payment surcharge was allowed for deduction.

The Tribunal found that the AO committed a factual mistake by not considering the details of the plastic division as per the tax audit report and audited annual accounts. The CIT(A) had deleted the additions related to the plastic division, trade discount, and closing stock shortage, but sustained the addition for shipping expenses.

The Tribunal upheld the deletion of additions related to depreciation, loss on sale of assets, and provisions for gratuity/leave encashment, following jurisdictional High Court precedents and commercial principles. The issue of advances paid was remanded to the AO for verification.

The Tribunal held that the accrued incentive provision was made on a year-to-year basis based on employee performance and had sufficient supporting details, thus allowing the claim. However, the disallowance of depreciation on OB vans was upheld due to insufficient evidence of their business use.

The Tribunal noted that the CIT(A) had dismissed the appeal for non-prosecution, not on merits. Therefore, the case was set aside to the CIT(A) for a fresh decision on merits after the assessee presents their case.

The Tribunal held that the accrued incentive provision was made on a year-to-year basis based on employee performance and had sufficient supporting details, thus allowing the claim. However, the disallowance of depreciation on OB vans was upheld due to insufficient evidence of their business use.

The Tribunal upheld the deletion of additions related to depreciation, loss on sale of assets, and provisions for gratuity/leave encashment, following jurisdictional High Court precedents and commercial principles. The issue of advances paid was remanded to the AO for verification.

The Tribunal held that for the excess contribution receipts, although the claim was rejected by various authorities, the assessee had made a complete disclosure. Furthermore, the penalty was initiated for furnishing inaccurate particulars but levied for concealment, rendering it unsustainable. For the preliminary expenses, the penalty was cancelled for similar reasons.

The Tribunal held that since the quantum appeal was set aside and remitted, the penalty appeal should also be set aside and remitted to the CIT(A) for fresh consideration. The CIT(A) was directed to pass a fresh speaking order after giving the assessee an adequate opportunity of being heard.

The Tribunal held that the reasons provided by the assessee for the delay did not constitute 'sufficient cause'. The assessee had made a conscious decision not to pursue further appeals against the quantum additions.

The Tribunal found that the additional evidence, though not admitted by the CIT(A), prima facie indicated the existence of a constructed property. Therefore, the matter was remanded back to the AO for re-examination.

The Tribunal held that the notice under section 143(2) was issued beyond the prescribed time limit for the assessment year 2013-14. Therefore, the assessment proceedings for that year were without jurisdiction.

The Tribunal held that the notice under section 143(2) of the Income Tax Act was issued beyond the prescribed period of limitation for assessment year 2013-14. Therefore, the assessment proceedings for that year were without jurisdiction.

The Tribunal held that the accrued incentive provision was made on a year-to-year basis based on employee performance and had sufficient supporting details, thus allowing the claim. However, the disallowance of depreciation on OB vans was upheld due to insufficient evidence of their business use.

The Tribunal held that the disallowance under Section 14A cannot exceed the actual exempt income received. For vehicle expenses, it was held that an ad hoc disallowance without specific instances of personal use is not permissible for a company.

The Tribunal held that the notice under section 143(2) was issued beyond the prescribed time limit for the assessment year 2013-14. Therefore, the assessment proceedings for that year were without jurisdiction.

The Tribunal held that for the excess contribution receipts, although the claim was rejected by various authorities, the assessee had made a complete disclosure. Furthermore, the penalty was initiated for furnishing inaccurate particulars but levied for concealment, rendering it unsustainable. For the preliminary expenses, the penalty was cancelled for similar reasons.

The Tribunal held that the notice under section 143(2) was issued beyond the prescribed time limit for the assessment year 2013-14. Therefore, the assessment proceedings for that year were without jurisdiction.

The Tribunal held that the accrued incentive provision was made on a year-to-year basis based on employee performance and had sufficient supporting details, thus allowing the claim. However, the disallowance of depreciation on OB vans was upheld due to insufficient evidence of their business use.

The Tribunal upheld the deletion of additions related to interest on advances, marriage gifts, subscription expenses, consultancy, advertisement, glow shine boards, worker welfare, entertainment, and prize/rewards. However, it upheld the addition for un-vouched sales promotion expenses.

The Tribunal found that the AO committed a factual mistake by not considering the details of the plastic division as per the tax audit report and audited annual accounts. The CIT(A) had deleted the additions related to the plastic division, trade discount, and closing stock shortage, but sustained the addition for shipping expenses.