ITAT Delhi Judgments — March 2019

The Tribunal dismissed the Revenue's appeal. This was done in light of CBDT Circular No. 3/2018, which revised the monetary limit for filing appeals by the department to Rs. 20 lakhs.

The Tribunal held that an order passed under Section 263 against a non-existent entity is void ab-initio and a nullity, as it is a jurisdictional defect and not a procedural irregularity. The Tribunal quashed the order passed by the Principal Commissioner.

The Tribunal held that the satisfaction note recorded by the AO for initiating proceedings under Section 153C was invalid as it was unsigned, undated, and lacked the assessment year. Therefore, the assumption of jurisdiction under Section 153C was bad in law.

The Tribunal held that the transfer of the property was completed in 1991 as per Section 2(47)(v) of the Income Tax Act, as possession was transferred in part performance of the contract. Therefore, the capital gain should not be taxed in the year of the sale deed execution.

The Tribunal held that a portion of the salary paid to the MD for the pre-operative period was not necessarily capital expenditure. It also addressed various other disallowances related to repairs, maintenance, and recruitment expenses, largely upholding the CIT(A)'s findings.

The Tribunal held that the CIT(A) erred in admitting additional evidence without providing the AO an opportunity to rebut it, violating Rule 46A. Therefore, the issue of the addition's merit was restored to the CIT(A) for fresh adjudication. The cross-objection regarding the validity of reassessment proceedings was dismissed.

The Tribunal held that a portion of the salary paid to the MD for the pre-operative period was not necessarily capital expenditure. It also addressed various other disallowances related to repairs, maintenance, and recruitment expenses, largely upholding the CIT(A)'s findings.

The Tribunal, in accordance with Rule 19(2) of the ITAT Rules and relevant case law, considered the appeal un-admitted. The Tribunal inferred that the assessee was not interested in pursuing the appeal.

The Tribunal held that the addition of notional interest was squarely covered by previous decisions of the Tribunal and the Supreme Court, and thus should be deleted. For AY 2011-12, the Tribunal also allowed the appeal concerning Section 14A disallowance, finding that interest income exceeded interest paid and there was a direct nexus.

The Tribunal held that the addition of notional interest was squarely covered by previous decisions of the Tribunal and the Supreme Court, and thus should be deleted. For AY 2011-12, the Tribunal also allowed the appeal concerning Section 14A disallowance, finding that interest income exceeded interest paid and there was a direct nexus.

The Tribunal found that the CIT(A) considered evidence filed after the assessment order without giving the AO an opportunity to comment, thus violating the principle of natural justice. The matter was remanded to the AO for fresh consideration.

The Tribunal upheld the CIT(A)'s decision to sustain commission income at 0.80%, finding no material to justify the AO's higher estimation. It also upheld the deletion of a significant portion of unexplained credits, as the assessee provided explanations and audited accounts for those transactions.

The Tribunal held that the addition based on a seized document was unsustainable as the document pertained to a different assessment year. For other years, the Tribunal upheld the deletion of additions made by the Assessing Officer regarding estimated gross profit on cash sales, finding them arbitrary and lacking evidence.

The Tribunal held that additions made under section 153A are only valid if based on incriminating material found during the search. In the absence of such material, the additions are beyond jurisdiction.

The Tribunal found that the AO made the addition without appreciating the facts and evidence provided by the assessee, and the CIT(A) confirmed it mechanically. The Tribunal decided to remit the case back to the AO for fresh assessment after examining the trade payables claim with supporting evidence.

The Tribunal upheld the CIT(A)'s decision to sustain commission income at 0.80%, finding no material to justify the AO's higher estimation. It also upheld the deletion of a significant portion of unexplained credits, as the assessee provided explanations and audited accounts for those transactions.

The Tribunal upheld the CIT(A)'s decision to sustain commission income at 0.80%, finding no material to justify the AO's higher estimation. It also upheld the deletion of a significant portion of unexplained credits, as the assessee provided explanations and audited accounts for those transactions.

The Tribunal held that Wipro Technology Services Limited should be excluded as a comparable due to high related party transactions, and similarly, other comparables were excluded due to lack of segmental data or extraordinary events. The Tribunal also found that management fees were apportioned correctly and directed deletion of the transfer pricing adjustment for intra-group services.

The Tribunal held that the CIT(A) exceeded its jurisdiction by introducing new sources of income and making additions on issues not considered by the AO. The CIT(A)'s order was set aside as it was without jurisdiction.

The Tribunal held that the addition based on a seized document was unsustainable as the document pertained to a different assessment year. For other years, the Tribunal upheld the deletion of additions made by the Assessing Officer regarding estimated gross profit on cash sales, finding them arbitrary and lacking evidence.

The Tribunal restored the issue of AMP expenses to the Assessing Officer for fresh verification, directing him to examine the documentary evidence provided by the assessee and, if necessary, verify transactions with recipient parties. The penalty proceedings were dismissed as premature.

The Tribunal held that the amount received by the assessee was for a bonafide business transaction, not a loan or advance. The explanation was supported by documentary evidence, and therefore, Section 2(22)(e) was not applicable.

The Tribunal held that the assessee had substantiated the fair market value of the shares through a valuation report and other factors, making the premium received justifiable. Therefore, the addition made by the AO and confirmed by the CIT(A) was deleted.

The Tribunal upheld the CIT(A)'s decision to sustain commission income at 0.80%, finding no material to justify the AO's higher estimation. It also upheld the deletion of a significant portion of unexplained credits, as the assessee provided explanations and audited accounts for those transactions.

The Tribunal upheld the CIT(A)'s decision, finding the reassessment proceedings void and illegal. The reasons for reopening were considered vague, lacking independent application of the Assessing Officer's mind and specific evidence against the assessee.

The Tribunal held that the assessee had substantiated the fair market value of the shares through a valuation report and other factors, making the premium received justifiable. Therefore, the addition made by the AO and confirmed by the CIT(A) was deleted.

The Tribunal held that the reopening of assessment was invalid due to mechanical approval. Regarding the addition, it was held that the cash credits represented capital receipts for setting up the manufacturing unit, considering the firm's recent establishment and lack of business activity, and therefore, the addition was deleted.

The Tribunal held that the addition was not justified because the CIT(A) confirmed the addition based on information not present in the AO's reasons for reopening. Furthermore, the amount in question pertained to a different assessment year.

The Tribunal condoned the delay in filing the e-appeal and set aside the CIT(A)'s order. The issues were remitted back to the CIT(A) to decide the appeal afresh on merits after providing an opportunity of being heard to the assessee.

The Tribunal admitted an additional ground raised by the assessee regarding capacity utilization adjustment and restored it to the AO for adjudication. The Tribunal also restored the issue of treating foreign exchange gain as operating income to the DRP for a speaking order.

The Tribunal held that trade advances in the nature of commercial transactions do not fall within the ambit of 'advance' as per Section 2(22)(e). Relying on CBDT Circular and High Court decisions, the Tribunal found merit in the assessee's argument that the amounts were trade advances.

The Tribunal restored the issue to the Assessing Officer for fresh adjudication, noting that one co-owner's return was accepted without additions and the status of other co-owners was unknown. The penalty was deleted as the quantum appeal was set aside.

The Tribunal held that the interest rate applied by the assessee, which included 300 basis points over SBI PLR, was reasonable and at arm's length. The variance in interest rates did not exceed the permissible limits under Section 92C(2) of the Income-tax Act.

The Tribunal set aside the issue regarding the determination of ALP for business support services back to the TPO for fresh adjudication with directions. The ground related to the incorrect computation of set-off of brought forward losses and unabsorbed depreciation was allowed with directions for verification.

The Tribunal held that the interest rate applied by the assessee, which included 300 basis points over SBI PLR, was reasonable and at arm's length. The variance in interest rates did not exceed the permissible limits under Section 92C(2) of the Income-tax Act.

The Tribunal set aside the issue regarding the determination of ALP for business support services back to the TPO for fresh adjudication with directions. The ground related to the incorrect computation of set-off of brought forward losses and unabsorbed depreciation was allowed with directions for verification.

The Tribunal held that the assessee had entered into a genuine transaction for the purchase of debentures, supported by documentary evidence. The subsequent arbitration award against the assessee justified the sale of shares at a lower price, leading to a short-term capital loss.

The Tribunal held that the addition of notional interest was squarely covered by previous decisions of the Tribunal and the Supreme Court, and thus should be deleted. For AY 2011-12, the Tribunal also allowed the appeal concerning Section 14A disallowance, finding that interest income exceeded interest paid and there was a direct nexus.

The Tribunal held that the CIT(A) exceeded its jurisdiction by introducing new sources of income and making additions on issues not considered by the AO. The CIT(A)'s order was set aside as it was without jurisdiction.

The Tribunal admitted an additional ground raised by the assessee regarding capacity utilization adjustment and restored it to the AO for adjudication. The Tribunal also restored the issue of treating foreign exchange gain as operating income to the DRP for a speaking order.

The Tribunal held that the addition based on a seized document was unsustainable as the document pertained to a different assessment year. For other years, the Tribunal upheld the deletion of additions made by the Assessing Officer regarding estimated gross profit on cash sales, finding them arbitrary and lacking evidence.

The Tribunal upheld the CIT(A)'s decision to sustain commission income at 0.80%, finding no material to justify the AO's higher estimation. It also upheld the deletion of a significant portion of unexplained credits, as the assessee provided explanations and audited accounts for those transactions.

The Tribunal held that the addition based on a seized document was unsustainable as the document pertained to a different assessment year. For other years, the Tribunal upheld the deletion of additions made by the Assessing Officer regarding estimated gross profit on cash sales, finding them arbitrary and lacking evidence.

The Tribunal held that the addition for gift expenses was not sustainable as the gift deed indicated the donor bore the expenses. However, additions for household expenses were upheld, while issues of unexplained investment, deemed dividend, and undisclosed rent were remanded for fresh adjudication.

The Tribunal upheld the CIT(A)'s decision to sustain commission income at 0.80%, finding no material to justify the AO's higher estimation. It also upheld the deletion of a significant portion of unexplained credits, as the assessee provided explanations and audited accounts for those transactions.

The Tribunal held that additions made under section 153A are only valid if based on incriminating material found during the search. In the absence of such material, the additions are beyond jurisdiction.

The Tribunal upheld the exclusion of government companies and the non-profit organization, following precedents that such entities are not comparable due to profit motive and social obligations. The Tribunal also noted the Assessing Officer's failure to properly investigate the AIR/CIB information for the assessee's appeal.