ITAT Delhi Judgments — March 2019

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 held that the Assessing Officer did not record the necessary satisfaction to invoke Section 14A and Rule 8D. The Tribunal noted that the AO himself observed that no term loan money was invested for investment purposes, thus allowing the assessee's appeal.

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 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 observed that the assessee was not interested in prosecuting the appeal. Therefore, the appeal was dismissed in limine.

The Tribunal held that foreign exchange loss related to loan restatement should be excluded when computing the profit level indicator (PLI) for the manufacturing segment. It also directed that TP adjustments for raw material purchases should be restricted to the material consumed during the year.

The Tribunal held that foreign exchange loss related to loan restatement should be excluded when computing the profit level indicator (PLI) for the manufacturing segment. It also directed that TP adjustments for raw material purchases should be restricted to the material consumed during the year.

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 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 failed to fulfill the conditions of Section 54EC by not investing in eligible bonds within the prescribed six-month period from the date of asset transfer. The argument for liberal interpretation was not accepted as it would make the provision redundant.

The Tribunal held that energy meters are eligible for 80% depreciation as per the rules, irrespective of whether they are energy-saving devices. The Assessing Officer erred by re-adjudicating the issue and not following the ITAT's prior directions.

The Tribunal found that the assessee was not adequately given an opportunity to prove the creditworthiness of the creditors and the genuineness of the transactions. Both the assessee and the revenue agreed that the matter should be remanded.

The Tribunal held that the TPO's adjustment was not sustainable as the same methodology for determining ALP was accepted in a subsequent year on identical facts. Furthermore, the Tribunal found that the DRP's adjustments were based on estimates and ad-hoc reasoning, which are not permissible under the Income Tax Act for determining ALP.

The Tribunal held that the assessment framed in the name of a non-existent entity is non-est in law and therefore invalid. The addition made by the AO on account of gross profit was also quashed as the income was already taxed in the hands of the proprietor.

The Tribunal held that energy meters are eligible for 80% depreciation as per the rules, irrespective of whether they are energy-saving devices. The Assessing Officer erred by re-adjudicating the issue and not following the ITAT's prior directions.

The Tribunal held that since the quantum appeals concerning the additions were decided in favor of the assessee by higher authorities, including the High Court, the penalty levied under Section 271(1)(c) was not sustainable. Furthermore, where two views were possible and the issue was debatable, penalty could not be levied.

The Tribunal held that free samples are distinct from gifts and are not prohibited by the relevant regulations. The distribution of samples is considered a form of publicity and sales promotion, making the expense allowable.

The Tribunal held that the CIT(Appeals) was incorrect in disallowing the loans. The lenders had personally appeared before the AO, admitted to advancing the loans, and filed affidavits confirming the same.

The Tribunal inferred that the assessee was not serious in pursuing the appeal due to non-appearance. Consequently, the appeal was dismissed in limine.

The Tribunal held that energy meters are eligible for 80% depreciation as per the rules, irrespective of whether they are energy-saving devices. The Assessing Officer erred by re-adjudicating the issue and not following the ITAT's prior directions.

The Tribunal held that energy meters are eligible for 80% depreciation as per the rules, irrespective of whether they are energy-saving devices. The Assessing Officer erred by re-adjudicating the issue and not following the ITAT's prior directions.

The Tribunal held that energy meters are eligible for 80% depreciation as per the rules, irrespective of whether they are energy-saving devices. The Assessing Officer erred by re-adjudicating the issue and not following the ITAT's prior directions.

The Tribunal held that since the quantum appeals concerning the additions were decided in favor of the assessee by higher authorities, including the High Court, the penalty levied under Section 271(1)(c) was not sustainable. Furthermore, where two views were possible and the issue was debatable, penalty could not be levied.

The Tribunal restored the issue to the Assessing Officer for re-adjudication. This was done by respectfully following a coordinate bench's decision in an identical case involving a related party.

The Tribunal held that the Assessing Officer correctly rejected the Section 154 application as the error was on the assessee's part and not apparent on the record. The proper course for the assessee would have been to file a revised return within the prescribed time.

The Tribunal held that the authorities below erred by considering reserves and surplus as of March 31, 2013, instead of March 31, 2014, which is relevant for the assessment year. Furthermore, the subsidiary had accumulated losses during the relevant period, negating the applicability of deemed dividend provisions.

The Tribunal inferred that the assessee was not interested in pursuing the appeal. Following relevant rules and judicial precedents, the appeal was treated as un-admitted and dismissed.

The Tribunal held that the TPO erred in arbitrarily applying the Comparable Uncontrolled Price (CUP) method when the assessee had used the Transactional Net Margin Method (TNMM) and the TPO had accepted TNMM in subsequent years. The assessee's margin was found to be within the acceptable range.

The Tribunal held that the assessment order was passed against a non-existent entity, which is bad in law. The assessee had also provided sufficient documentation and requested cross-examination.

The Tribunal upheld the addition of Rs. 2,50,000 as unexplained cash credit, finding that the assessee failed to provide sufficient evidence to substantiate the transaction. The addition for commission was also confirmed as reasonably estimated.

The Tribunal held that the appeal was not maintainable due to the low tax effect, as per CBDT Circular No. 3 of 2018. The Learned CIT (DR) did not press the appeal.

The Tribunal found that the CIT(A) passed an ex-parte order without a speaking order and without giving adequate opportunity to the assessee. Therefore, the matter was set aside to the CIT(A) for fresh adjudication.

The Tribunal held that Section 271AAA does not prescribe a specific time limit for paying tax on undisclosed income to avail immunity. The penalty can only be levied on the proportionate sum for which tax and interest remained unpaid up to the date of the assessment order.

The Tribunal admitted additional evidence regarding the interest paid on FCCDs and restored the issue to the AO/TPO for fresh calculation of the arm's length price. The issue of disallowance of legal and professional charges was also restored to the AO for fresh verification.

The Tribunal found that the CIT(A) passed a non-speaking ex-parte order without dealing with the issues on merit, violating principles of natural justice. Both parties agreed to remit the matter back to the CIT(A) for a fresh decision.

The Tribunal held that energy meters are eligible for 80% depreciation as per the rules, irrespective of whether they are energy-saving devices. The Assessing Officer erred by re-adjudicating the issue and not following the ITAT's prior directions.

The Tribunal held that energy meters are eligible for 80% depreciation as per the rules, irrespective of whether they are energy-saving devices. The Assessing Officer erred by re-adjudicating the issue and not following the ITAT's prior directions.

The Tribunal held that the notice under Section 143(2) was issued beyond the prescribed time limit. Following jurisdictional High Court decisions, this delay renders the reassessment order a nullity.

The Tribunal held that energy meters are eligible for 80% depreciation as per the rules, irrespective of whether they are energy-saving devices. The Assessing Officer erred by re-adjudicating the issue and not following the ITAT's prior directions.

The Tribunal found that the assessee's benchmarking analysis was inadequate and the TPO's rejection was also not fully justified. Due to the complexity and lack of complete comparability data, the Tribunal directed a limited remand to the TPO for a fresh examination of the comparability analysis.

The Tribunal held that since the additions forming the basis of the penalty were deleted by the Tribunal and confirmed by the High Court, the penalty is not sustainable. Furthermore, even if two views were possible and the assessee adopted a favourable one, penalty cannot be levied.

The Tribunal noted that the CIT(A)'s order was passed before the enhancement notice was issued. Considering the assessee's age and health, and the procedural irregularity, the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the Assessing Officer should have passed a fresh order in light of the ITAT and Delhi High Court judgments. Since this was not done, the matter was restored to the Assessing Officer for re-decision.

The Tribunal held that since the additions forming the basis of the penalty were deleted by the Tribunal and confirmed by the High Court, the penalty is not sustainable. Furthermore, even if two views were possible and the assessee adopted a favourable one, penalty cannot be levied.

The Tribunal held that the issuance and service of a notice under Section 148 are mandatory. Since the notice was sent to an incorrect address and was not served on the assessee, the reassessment proceedings initiated are void ab initio.

The Tribunal held that since the additions forming the basis of the penalty were deleted by the Tribunal and confirmed by the High Court, the penalty is not sustainable. Furthermore, for later assessment years, the Tribunal noted that the issue was debatable and the assessee had adopted a favourable view, thus penalty was not leviable.

The tribunal held that merely capitalizing expenditure in the books does not change its revenue nature. Expenses like salary, communication, and training are inherently revenue in nature and allowable under Section 37, even if capitalized for accounting compliance.