ITAT Delhi Judgments — March 2019

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 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 upheld the CIT(A)'s decision, finding that the assessee's activities were primarily aimed at promoting the handloom sector and were not for profit. The fees received were not considered cess or fees for services rendered in trade or business.

The Tribunal held that the AO's assessment order was erroneous and prejudicial to the interest of revenue because it was passed without making necessary inquiries or verifications regarding the taxability of land sale proceeds, especially when sale deeds indicated the land was in an industrial notified area. The Pr. CIT's action under Section 263 was therefore upheld.

The Tribunal held that the agreement to sell was valid and met the conditions of the proviso to Section 56(2)(vii)(b). Therefore, the stamp duty value on the date of the agreement should be considered, not the increased circle rate at the time of registration.

The Tribunal held that the CIT(A) failed to address the assessee's specific ground regarding non-service of notice under Section 148. Section 292BB was not applicable as the assessee did not cooperate. Therefore, the matter was remanded.

The Tribunal held that the AMP expenses incurred by the assessee constituted an international transaction. The Tribunal directed the AO/TPO to determine the Arm's Length Price (ALP) of this international transaction in light of the jurisdictional High Court's decision.

The Tribunal held that the restrictive meaning of 'Fee for Technical Services' from the India-UK DTAA, as per Article 7 of the India-Spain DTAA Protocol, should be applied. Therefore, the payment for fabric testing does not constitute fee for technical services, and Section 195 is not applicable.

The Tribunal held that the services rendered by the foreign entities did not 'make available' technical knowledge or skills to the assessee, which is a prerequisite for classifying them as FTS under the treaty. Therefore, the disallowance under Section 40(a)(i) was not justified.

The Tribunal upheld the CIT(A)'s estimation of net profit at 8% and held that no further additions or disallowances should be made once net profit is estimated as a percentage of sales. The addition on account of low withdrawals was deleted as it was for household expenses.

The Tribunal upheld the CIT's decision, agreeing that the assessee's activities, including the sale and purchase of properties and accumulation of profits, were in the nature of trade or business, thus disqualifying it from charitable status under Section 2(15) of the Act.

The Tribunal upheld the CIT(A)'s decision to delete the additions. The CIT(A) had found that the balances were reconciled, the interest income was offered to tax, and the interest expenses were for business hedging purposes.

The Tribunal held that the assessee-company had discharged its burden under Section 68 of the Income Tax Act, 1961, to prove the identity of the investor, its creditworthiness, and the genuineness of the transaction. The Tribunal found that the assessee had provided all necessary documents, including the investor's incorporation details, tax residency certificate, bank account information, balance sheet, and remittance proofs. The Tribunal noted that similar additions had been deleted by the CIT(A) in the assessee's own case for an earlier assessment year and by the ITAT in the case of Mr. Suresh Nanda, with the latter being confirmed by the Delhi High Court. The Tribunal also referred to the judgment of the Hon'ble Gujarat High Court in Rohini Builders and the Hon'ble Delhi High Court in Dwarakadheesh Investment Pvt. Ltd., emphasizing that the assessee cannot be asked to prove the 'source of the source' and that the investor company was not bogus or non-existent. The Tribunal relied on the Hon'ble Madhya Pradesh High Court's decision in CIT vs. Peoples General Hospital Ltd., which held that if an assessee receives share capital through banking channels and furnishes complete details of shareholders, no addition can be made under Section 68 without positive material indicating benami or fictitious persons. Therefore, the Tribunal found no infirmity in the CIT(A)'s order deleting the addition and dismissed the Revenue's appeals.

The Tribunal held that the commission paid to a foreign agent for procuring export orders outside India is business income and not Fee for Technical Services. Therefore, it is not liable for TDS under Section 195, and consequently, the disallowance under Section 40(a)(i) is not sustainable.

The Tribunal held that the assessee-company had discharged its burden under Section 68 of the Income Tax Act, 1961, to prove the identity of the investor, its creditworthiness, and the genuineness of the transaction. The Tribunal found that the assessee had provided all necessary documents, including the investor's incorporation details, tax residency certificate, bank account information, balance sheet, and remittance proofs. The Tribunal noted that similar additions had been deleted by the CIT(A) in the assessee's own case for an earlier assessment year and by the ITAT in the case of Mr. Suresh Nanda, with the latter being confirmed by the Delhi High Court. The Tribunal also referred to the judgment of the Hon'ble Gujarat High Court in Rohini Builders and the Hon'ble Delhi High Court in Dwarakadheesh Investment Pvt. Ltd., emphasizing that the assessee cannot be asked to prove the 'source of the source' and that the investor company was not bogus or non-existent. The Tribunal relied on the Hon'ble Madhya Pradesh High Court's decision in CIT vs. Peoples General Hospital Ltd., which held that if an assessee receives share capital through banking channels and furnishes complete details of shareholders, no addition can be made under Section 68 without positive material indicating benami or fictitious persons. Therefore, the Tribunal found no infirmity in the CIT(A)'s order deleting the addition and dismissed the Revenue's appeals.

The Tribunal restored the issue to the CIT(A) to grant one final opportunity to the assessee to present their case. The assessee is directed to appear without adjournment, failing which the CIT(A) can pass an order as per law.

The Tribunal restored both appeals to the file of the CIT(A) for fresh adjudication. The assessee was granted an opportunity to present reasons for the delay and argue the case on merits.

The Tribunal held that the penalty under Section 271AAA was not leviable as the assessee had explained the items surrendered and the issue was covered by a previous ITAT decision on identical facts for a group member.

The Tribunal restored both appeals to the file of the CIT(A) for fresh adjudication. The assessee was granted an opportunity to present reasons for the delay and argue the case on merits.

The Tribunal held that the assessee failed to discharge its primary onus under Section 68 of the Act to prove the genuineness of the transaction, the identity of the creditors, and their creditworthiness. The Tribunal relied on Supreme Court decisions emphasizing the need for such proof.

The Tribunal restored the issue to the CIT(A) to grant one final opportunity to the assessee to present her case. The assessee is directed to appear without adjournment, failing which the CIT(A) can pass an order as per law.

The Tribunal held that the assessee failed to discharge its primary onus under Section 68 of the Act to prove the genuineness of the transaction, the identity of the creditors, and their creditworthiness. The Tribunal relied on Supreme Court decisions emphasizing the need for such proof.

The Tribunal held that the penalty notice was bad in law as it did not specify the limb of Section 271(1)(c) under which penalty was initiated. Since the notice was defective, the penalty proceedings were quashed.

The Tribunal upheld the CIT(A)'s estimation of net profit at 8% and held that no further additions or disallowances should be made once net profit is estimated as a percentage of sales. The addition on account of low withdrawals was deleted as it was for household expenses.

The Tribunal held that the AO's assessment order was erroneous and prejudicial to the interest of revenue because it was passed without making necessary inquiries or verifications regarding the taxability of land sale proceeds, especially when sale deeds indicated the land was in an industrial notified area. The Pr. CIT's action under Section 263 was therefore upheld.

The Tribunal held that the assessee's conduct indicated a lack of interest in prosecuting the appeal. Consequently, the appeal was dismissed for want of prosecution.

The Tribunal held that the assessee did not effectively discharge the onus of raising an objection regarding the service of notice under Section 143(2) before the Assessing Officer. However, it agreed with the CIT(A)'s finding that the repair expenses were revenue in nature and qualified for deduction.

The Tribunal held that the penalty notice was bad in law as it did not specify the limb of Section 271(1)(c) under which penalty was initiated. Since the notice was defective, the penalty proceedings were quashed.

The Tribunal observed that the assessee was not interested in prosecuting the appeal. Therefore, in accordance with the provisions of Order V Rule 19A of the ITAT Rules, the appeal was dismissed in limine.

The Tribunal inferred that the assessee was not interested in pursuing the appeal due to non-appearance and the returned notice. Consequently, the appeal was treated as unadmitted and dismissed.

The Tribunal found it surprising that the AO made an addition under Section 68 when the assessee claimed the amount was a repayment of an advance and not a loan received in the current year. The Tribunal directed the deletion of the addition.

The Tribunal held that the AO failed to conduct proper inquiry to disprove the evidence provided by the assessee regarding share application money. The Tribunal found that the assessee had discharged its initial onus, and in the absence of any material or inquiry by the AO, the additions made under Section 68 were unsustainable.

The Tribunal partly allowed the assessee's appeal by deleting certain additions, particularly concerning year-end provisions and disallowances related to expatriate employees. The Department's appeal concerning taxes deposited on behalf of expatriate employees was dismissed.

The Tribunal held that the Assessing Officer had conducted sufficient inquiry and verification regarding the deduction under Section 80IA and the applicability of Section 14A. The CIT's revisionary order was found to be lacking in specific findings and a prima-facie inquiry, thus setting aside the CIT's order.

The tribunal observed that the assessee was not interested in prosecuting the appeal. Therefore, in accordance with the relevant rules and precedents, the appeal was dismissed.

The Tribunal held that the receipts from satellite transmission services cannot be taxed as royalty in India. This decision followed the consistent view of the jurisdictional High Court in similar cases, even after amendments to Section 9(1)(vi).

The Tribunal remanded the issue of duty drawback for fresh adjudication. It allowed the sale of scrap to be reduced from the cost of sale, following a High Court decision. The Revenue's appeal regarding constructive exports was dismissed, upholding the CIT(A)'s decision based on consistency and a High Court ruling.

The Tribunal held that the AO failed to conduct proper inquiry to disprove the evidence provided by the assessee regarding share application money. The Tribunal found that the assessee had discharged its initial onus, and in the absence of any material or inquiry by the AO, the additions made under Section 68 were unsustainable.

The Tribunal held that profit on sale/redemption of investments is not taxable for insurance companies for the period in question, following a jurisdictional High Court decision. It also held that Section 40(a)(ia) does not apply to short deduction of tax, and Section 115JB is not applicable to insurance companies.

The Tribunal held that the assessee had a reasonable and bonafide belief that she was not violating the law by not signing the consent form for an account she denied holding, especially when acting on legal advice. The penalty was not leviable as there was no non-compliance with the notice.

The Tribunal held that the assessee had a reasonable and bonafide belief that she was not violating the law by not signing the consent form for an account she denied holding, especially when acting on legal advice. The penalty was not leviable as there was no non-compliance with the notice.

The Tribunal held that the assessee had a reasonable and bonafide belief that she was not violating the law by not signing the consent form for an account she denied holding, especially when acting on legal advice. The penalty was not leviable as there was no non-compliance with the notice.

The Tribunal held that the assessee had a reasonable and bonafide belief that she was not violating the law by not signing the consent form for an account she denied holding, especially when acting on legal advice. The penalty was not leviable as there was no non-compliance with the notice.

The Tribunal directed the exclusion of certain companies from the comparable set and remanded the issue of inclusion of two other companies back to the TPO/AO for fresh consideration. The disallowance of medical insurance expenditure was also set aside for fresh adjudication.

The Tribunal upheld the CIT(A)'s decision that the assessment proceedings were void due to the notice under Section 143(2) being issued beyond the prescribed limitation period. The issuance of the notice on 21.01.2014 was beyond the statutory deadline of 30.09.2013.

The Tribunal remanded the issue of duty drawback for fresh adjudication. It allowed the sale of scrap to be reduced from the cost of sale, following a High Court decision. The Revenue's appeal regarding constructive exports was dismissed, upholding the CIT(A)'s decision based on consistency and a High Court ruling.