ITAT Delhi Judgments — April 2019

The Tribunal upheld the DRP's decision to exclude Eclerx Services Ltd. and Acropetal Technologies Ltd. as comparables, citing functional dissimilarity and high-end services. It also confirmed the DRP's direction to restrict transfer pricing adjustments to the margin retained by the AE.

The Tribunal held that the assessee's non-appearance indicated a lack of interest in prosecuting the appeal. Therefore, the appeal was dismissed for non-prosecution.

The Tribunal held that the income received by the assessee from the projects was its business profit and not royalty. Since the assessee had a Permanent Establishment (PE) in India, the entire profit was attributable to the PE and taxable as business profit. The Tribunal also ruled that interest under Section 234B was not chargeable.

The Tribunal held that the AO failed to discharge the onus of proving that payments to related entities were not at arm's length. The CIT(A)'s deletion of additions related to sales promotion expenses was upheld. The Tribunal also directed that if any disallowance is made on eligible units, the resultant enhanced profit should be considered for Section 80IC deduction.

The Tribunal held that the AO failed to discharge the onus of proving that payments to related entities were not at arm's length. The CIT(A)'s deletion of additions related to sales promotion expenses was upheld. The Tribunal also directed that if any disallowance is made on eligible units, the resultant enhanced profit should be considered for Section 80IC deduction.

The Tribunal held that the income received by the assessee from the projects was its business profit and not royalty. Since the assessee had a Permanent Establishment (PE) in India, the entire profit was attributable to the PE and taxable as business profit. The Tribunal also ruled that interest under Section 234B was not chargeable.

The Tribunal held that the AO failed to discharge the onus of proving that payments to related entities were not at arm's length. The CIT(A)'s deletion of additions related to sales promotion expenses was upheld. The Tribunal also directed that if any disallowance is made on eligible units, the resultant enhanced profit should be considered for Section 80IC deduction.

The Tribunal held that notice period pay received by the assessee is to be treated as income derived from the eligible undertaking for the purpose of Section 10B deduction. It also held that Stup Consultants Pvt. Ltd. is not a suitable comparable for transfer pricing analysis due to functional dissimilarity and failing export filters.

The Tribunal held that notice period pay received by the assessee is to be treated as income derived from the eligible undertaking for the purpose of Section 10B deduction. It also held that Stup Consultants Pvt. Ltd. is not a suitable comparable for transfer pricing analysis due to functional dissimilarity and failing export filters.

The Tribunal held that the AO failed to discharge the onus of proving that payments to related entities were not at arm's length. The CIT(A)'s deletion of additions related to sales promotion expenses was upheld. The Tribunal also directed that if any disallowance is made on eligible units, the resultant enhanced profit should be considered for Section 80IC deduction.

The Tribunal held that the AO failed to discharge the onus of proving that payments to related entities were not at arm's length. The CIT(A)'s deletion of additions related to sales promotion expenses was upheld. The Tribunal also directed that if any disallowance is made on eligible units, the resultant enhanced profit should be considered for Section 80IC deduction.

The Tribunal held that Modicare Ltd. was not an appropriate comparable due to significant differences in product portfolio, functional differences, and accounting treatment. Consequently, the matter was remanded to the TPO to apply the Transactional Net Margin Method (TNMM) to the comparables selected by the assessee, with appropriate working capital adjustments.

The Tribunal held that the AO failed to discharge the onus of proving that payments to related entities were not at arm's length. The CIT(A)'s deletion of additions related to sales promotion expenses was upheld. The Tribunal also directed that if any disallowance is made on eligible units, the resultant enhanced profit should be considered for Section 80IC deduction.

The Tribunal held that if an assessee has sufficient interest-free funds available, a presumption arises that any investments or advances made are out of these interest-free funds. Therefore, the interest paid on borrowed funds used for such advances is deductible.

The Tribunal held that Modicare Ltd. was not an appropriate comparable due to significant differences in product portfolio, functional differences, and accounting treatment. Consequently, the matter was remanded to the TPO to apply the Transactional Net Margin Method (TNMM) to the comparables selected by the assessee, with appropriate working capital adjustments.

The Tribunal held that Modicare Ltd. was not an appropriate comparable due to significant differences in product portfolio, functional differences, and accounting treatment. Consequently, the matter was remanded to the TPO to apply the Transactional Net Margin Method (TNMM) to the comparables selected by the assessee, with appropriate working capital adjustments.

The Tribunal held that Modicare Ltd. was not an appropriate comparable due to significant differences in product portfolio, functional differences, and accounting treatment. Consequently, the matter was remanded to the TPO to apply the Transactional Net Margin Method (TNMM) to the comparables selected by the assessee, with appropriate working capital adjustments.

The Tribunal held that the appeal was not maintainable due to the low tax effect as per CBDT Circular No. 3 of 2018. The appeal was dismissed as withdrawn/not pressed by the Revenue.

The Tribunal held that the Principal CIT erred in assuming jurisdiction u/s 263 and setting aside the assessment order. The Tribunal found that the Assessing Officer had conducted a proper inquiry, and the PCIT's directions to re-examine issues not raised in the show cause notice violated principles of natural justice.

The Tribunal held that the assessee was not interested in prosecuting the appeal. Therefore, the appeal was liable to be dismissed for non-prosecution.

The Tribunal set aside the CIT(A)'s order and remanded the matter back for fresh adjudication. The CIT(A) was directed to admit the appeal if the assessee establishes a loss, and otherwise decide on merits.

The Tribunal held that the assessee's claim of business income was not substantiated as the properties were declared as capital assets and no books of accounts were maintained for property sales. The Tribunal also found that the assessee did not claim before the AO that the stamp duty valuation exceeded the fair market value, thus the AO was not obligated to refer the matter to the Valuation Officer under Section 50C(2).

The Tribunal held that the Assessing Officer erred by taxing the entire sale consideration as short-term capital gain without accounting for the cost of acquisition. The matter was set aside to the Assessing Officer to correctly calculate the capital gain.

The Tribunal upheld the addition of Rs. 1,15,00,000/- as unexplained cash credit. The assessee failed to discharge its onus under Section 68 by not proving the identity, creditworthiness, and genuineness of the share transactions.

The Tribunal held that the addition cannot be sustained solely on the basis of a retracted surrender made during a survey without any supporting material or inquiry. The Assessing Officer failed to provide any evidence of undisclosed investment in furniture and fixtures.

The Tribunal held that the payments were indeed made to two distinct parties, as evidenced by separate ledger accounts and GRs with different addresses and PANs. Regarding Section 43A(3), the Tribunal found that most payments did not exceed Rs. 20,000, and those that did were made by cheque.

The Tribunal held that the AO must independently examine information received from the Investigation Wing and apply their mind before issuing a notice under Section 148. Since this was not done, the notice was deemed invalid.

The Tribunal held that 'Global Procurement Consultants Limited' was functionally dissimilar to the assessee and directed its exclusion from the set of comparable companies. The Tribunal also noted that if all the remaining comparables were excluded, the matter might need to be remanded.

The Tribunal noted that the assessee did not appear for the hearing and had not filed any request for adjournment, despite due notice. Therefore, the Tribunal concluded that the assessee was not interested in pursuing the appeal.

The Tribunal found that while the assessee was non-responsive, the CIT(A) had not dismissed the appeal in limine on earlier occasions. Therefore, the Tribunal restored the appeal to the CIT(A) for a decision on merits after providing a proper opportunity of hearing.

The Tribunal held that the reopening of the assessment was valid as the Assessing Officer had independently examined the records. However, the disallowance of interest was restricted to Rs. 4,00,500/-, as certain interest payments like those on property loans, car loans, and bill discounting were not considered for diversion of funds.

The Tribunal found that a bona fide mistake occurred in issuing the notice to the wrong address. Therefore, the impugned order was set aside and the case was remanded back to the CIT(A) for disposal on merits.

The Tribunal held that the second proviso to Section 40(a)(ia) is curative and retrospective, following Delhi High Court and Supreme Court precedents. The matter was remanded to the AO for verification of conditions under the proviso.

The tribunal allowed the assessee's application for withdrawal of the appeal. The appeal was dismissed as withdrawn by the tribunal.

The Tribunal held that the renovation expenses were revenue in nature as they did not create a new capital asset but enhanced the utility of existing leased premises. Regarding the cash payments, the Tribunal acknowledged the genuineness of invoices but noted the assessee's responsibility to comply with the law, thus partly allowing the appeal.

The Tribunal upheld the CIT(A)'s decision, finding no error in confirming the addition only for the expenses that were specifically reported as unvouched in the remand report. The remaining deleted disallowance was sustained.

The Tribunal held that the CIT(Exemption) passed the order without confronting the assessee with his objections, violating principles of natural justice. The Tribunal also noted that the CIT(Exemption) is primarily to examine the objects and genuineness of activities.

The Tribunal held that the issue was covered by a previous appellate order for AY 2010-11, where the Departmental appeal was dismissed. Therefore, the Revenue's appeal had no merit.

The Tribunal held that since the parties mutually agreed to waive interest on the loans through an addendum signed before the assessment years, no interest accrued to the assessee. Therefore, the addition of notional interest was deleted.

The Tribunal permitted the assessee to withdraw the appeal. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal followed a precedent where it was held that surrendering an exemption during assessment proceedings, after initially claiming it as per law, does not amount to furnishing inaccurate particulars. Therefore, no penalty is leviable.

The Tribunal set aside the CIT(A)'s order and remanded the matter back. The CIT(A) was directed to admit the appeal and decide it on merits after considering if the assessee incurred a loss and if Section 249(4)(b) was applicable.

The Tribunal set aside the CIT(Appeals) order and remanded the matter back. The CIT(Appeals) is directed to admit the appeal if the assessee establishes a loss and is not liable to pay advance tax, deciding the appeal on merits thereafter.

The Tribunal found that the AO's reasoning for disallowing the high sea sales was flawed, particularly the application of Section 68 to sales and the lack of proper opportunity for the assessee. The Tribunal also noted issues with the disallowance of petty cash expenses under Section 69C, as the AO doubted the incurring of expenditure itself rather than its source.

The Tribunal held that the AO's reasons for reopening were merely a 'reason to suspect' and not a 'reason to believe' as required by law. There was no material to show that the CCM was malafide or that the assessee received cash in lieu of the modification.

The Tribunal held that since substantial questions of law were framed by the High Court on the quantum additions, the issues were debatable. Therefore, the penalties levied under Section 271(1)(c) were not sustainable and were cancelled.

The Tribunal held that since substantial questions of law were framed by the High Court on the quantum additions, the issues were debatable. Therefore, the penalties levied under Section 271(1)(c) were not sustainable and were cancelled.

The Tribunal upheld the CIT(A)'s computation of profit attribution for direct sales at 1.34% and for consignment sales at 10%, finding no justification to interfere. The Tribunal also allowed the assessee's cross-objection regarding the levy of interest under sections 234B and 234C.