ITAT Delhi Judgments — May 2019

The Tribunal held that the fit-out hire charges were rightly treated as business income, as there were separate agreements for rent and fit-out, and the assessee had disclosed all relevant materials. The Tribunal upheld the CIT(A)'s order.

The Tribunal quashed the penalty order because the Assessing Officer initiated penalty proceedings for furnishing inaccurate particulars but levied it for concealment of income. This discrepancy in the charge makes the penalty order legally unsustainable.

The Tribunal quashed the penalty order because the Assessing Officer initiated penalty proceedings for furnishing inaccurate particulars but levied it for concealment of income. This discrepancy in the charge makes the penalty order legally unsustainable.

The Tribunal held that the interest earned on fixed deposits, purchased from the cash credit account on which interest was paid, is eligible to be set off against the interest paid to the bank on the cash credit account. This was decided by following the rule of consistency with previous and subsequent years.

The Tribunal held that the CIT(A) had accepted that the assessee substantiated the manner of earning the income. Furthermore, the assessee had paid the taxes due on the surrendered income prior to filing the return of income.

The Tribunal found that the lower authorities did not comment on the merits of the documents furnished by the assessee. Therefore, the issue was remitted back to the CIT(A) to decide in view of the documents and the Supreme Court judgment in Tejua Rohit Kumar Kapadia.

The Tribunal held that certain comparables used by the TPO for benchmarking IT-enabled services were not appropriate, following previous decisions. For the purchase of fixed assets, the Tribunal directed the TPO to re-determine the Arm's Length Price (ALP) based on functional analysis and contemporaneous documents, as a markup of 'zero' was incorrect.

The Tribunal directed that the ALV of the house property be taken at the figure declared by the assessee, as the AO's estimation lacked basis. For business income, the matter was restored to the AO to adjudicate in light of the ITAT's previous decision for identical issues.

The Tribunal found that the lower authorities did not comment on the merits of the documents furnished by the assessee. Therefore, the issue was remitted back to the CIT(A) to decide in view of the documents and the Supreme Court judgment in Tejua Rohit Kumar Kapadia.

The Tribunal admitted the additional grounds, noting a High Court precedent and the nature of the challenge to jurisdiction. It found that the assessee was not given a sufficient opportunity to be heard before the special audit order.

The Tribunal found that the lower authorities did not comment on the merits of the documents furnished by the assessee. Therefore, the issue was remitted back to the CIT(A) to decide in view of the documents and the Supreme Court judgment in Tejua Rohit Kumar Kapadia.

The Tribunal found that the lower authorities did not comment on the merits of the documents furnished by the assessee. Therefore, the issue was remitted back to the CIT(A) to decide in view of the documents and the Supreme Court judgment in Tejua Rohit Kumar Kapadia.

The Tribunal held that the CIT(A) erred in disallowing the deduction under Section 80P. It was noted that the issue was covered by a previous decision of the Tribunal in the assessee's own case, and the CIT(A) had misconstrued financial documents.

The Tribunal found that the lower authorities did not comment on the merits of the documents furnished by the assessee. Therefore, the issue was remitted back to the CIT(A) to decide in view of the documents and the Supreme Court judgment in Tejua Rohit Kumar Kapadia.

The Tribunal held that the CIT(A) erred in disallowing the deduction under Section 80P. It was noted that the issue was covered by a previous decision of the Tribunal in the assessee's own case, and the CIT(A) had misconstrued financial documents.

The Tribunal held that the penalty levied under Section 271(1)(c) was not valid. The assessee's claim, though disallowed, was not found to be mala fide or based on inaccurate particulars.

The Tribunal found that the assessee had filed a license for dealing in fertilizers and insecticides, which was not before the lower authorities. Therefore, the issue was remanded to the AO for fresh adjudication, considering the new evidence and the declared agricultural income.

The Tribunal held that the CIT(A) erred in disallowing the deduction under Section 80P. It was noted that the issue was covered by a previous decision of the Tribunal in the assessee's own case, and the CIT(A) had misconstrued financial documents.

The Tribunal quashed the penalty order because the Assessing Officer initiated penalty proceedings for furnishing inaccurate particulars but levied it for concealment of income. This discrepancy in the charge makes the penalty order legally unsustainable.

The Tribunal held that the TDS recoverable, if duly accounted for in the profit and loss account, should be remanded for fresh consideration. Security deposit rent written off due to non-refund after vacating properties was allowed as revenue expenditure. Advances given for services, written off due to non-provision of services or forfeiture, were also allowed.

The Tribunal admitted the additional grounds, noting a High Court precedent and the nature of the challenge to jurisdiction. It found that the assessee was not given a sufficient opportunity to be heard before the special audit order.

The Tribunal found that the lower authorities did not comment on the merits of the documents furnished by the assessee. Therefore, the issue was remitted back to the CIT(A) to decide in view of the documents and the Supreme Court judgment in Tejua Rohit Kumar Kapadia.

The Tribunal held that the CIT(A) erred in disallowing the deduction under Section 80P. It was noted that the issue was covered by a previous decision of the Tribunal in the assessee's own case, and the CIT(A) had misconstrued financial documents.

The Tribunal upheld the CIT(A)'s order, dismissing the revenue's grounds of appeal. It found that the excess depreciation was justified, interest-free loans to the subsidiary were for business expediency, detention charges were compensatory, and technical fees were revenue in nature.

The Tribunal held that the addition on account of sundry creditors was not justified as the liabilities were paid in subsequent years through banking channels and the AO's notices were not returned unserved. The disallowance of expenses was reduced from 10% to 7.5%.

The Tribunal upheld the CIT(A)'s decision to delete the disallowances. It found no infirmity in the CIT(A)'s order, concluding that the commission agents' services were rendered outside India and did not constitute technical, managerial, or consultancy services taxable in India.

The Tribunal partly allowed the appeal on the ALP adjustment, following previous orders for similar issues. For Section 14A disallowance and ESI payment, the Tribunal dismissed the Revenue's grounds, upholding the CIT(A)'s decision.

The Tribunal held that RRPL did have a PE in India. However, it found the blanket profit attribution by the authorities to be unsound and reduced the attributed profit from 75% to 35%, subject to certain rectifications.

The Tribunal upheld the CIT(A)'s decision to delete the disallowances. It found no infirmity in the CIT(A)'s order, concluding that the commission agents' services were rendered outside India and did not constitute technical, managerial, or consultancy services taxable in India.

The Tribunal held that RRPL did have a PE in India. However, it found the blanket profit attribution by the authorities to be unsound and reduced the attributed profit from 75% to 35%, subject to certain rectifications.

The Tribunal upheld the CIT(A)'s decision to delete the addition. It was held that service tax liability under Section 43B arises only when the sum becomes payable, which, in this case, was upon receipt of payment from customers. Since the service tax was not debited to the P&L account, no deduction was claimed, and thus Section 43B was not applicable.

The Tribunal, in view of the MAP settlement and the assessee's request, dismissed both the appeals as withdrawn. The stay application, being consequential, was also dismissed as infructuous.

The Tribunal upheld the CIT(A)'s decision to delete the addition. It was held that service tax liability under Section 43B arises only when the sum becomes payable, which, in this case, was upon receipt of payment from customers. Since the service tax was not debited to the P&L account, no deduction was claimed, and thus Section 43B was not applicable.

The Tribunal held that the explanation to Section 73 does not apply to the assessee. The Tribunal reversed the orders of the lower authorities, finding that the assessee's share transactions were for investment and not speculative business.

The Tribunal noted that identical issues for a prior assessment year were remanded by the Delhi High Court to the AO for re-examination. Therefore, the Tribunal set aside its own order and remanded both appeals to the AO to decide them in accordance with the High Court's directions.

The Tribunal held that the CIT(A) was justified in deleting the addition. The liability to pay service tax arose only upon receipt of payment from service recipients, and since the assessee neither debited the amount to the P&L account nor claimed it as a deduction, Section 43B was not applicable.

The Tribunal held that the property was inherited, and the cost of acquisition should be based on the previous owner's cost or the fair market value as of April 1, 1981, at the assessee's option. The approved valuer's report for the fair market value was accepted as un-rebutted.

The Tribunal held that the issue of taxability of income and existence of a PE was debatable, especially since the High Court had admitted substantial questions of law. Therefore, penalty under Section 271(1)(c) could not be levied. The deletion of penalty by the CIT(A) was confirmed.

The Tribunal held that training expenses should be treated as revenue expenditure, following a previous decision in the assessee's own case. The issue of depreciation on goodwill was restored to the AO for fresh adjudication after providing an opportunity of being heard.

The Tribunal held that the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, were invalid. The Tribunal found that the reasons recorded by the AO were vague and did not demonstrate a tangible link between the material received and the formation of a belief that income had escaped assessment. The AO appeared to have mechanically accepted the information without applying his own mind independently, akin to a 'fishing enquiry'. The Tribunal relied on the decision in Signature Hotels (P.) Ltd. and Bir Bahadur Singh Sijwali vs. ITO, which emphasized that reassessment proceedings require a 'reason to believe', not merely a 'reason to suspect', and that the AO must apply his own mind to the material. Since the reopening proceedings were found to be invalid, the Tribunal held that it was not necessary to delve into the merits of the addition made under Section 68 or the charging of interest under Section 234B. The appeal was allowed on legal grounds.

The Tribunal held that RRPL did have a PE in India. However, it found the blanket profit attribution by the authorities to be unsound and reduced the attributed profit from 75% to 35%, subject to certain rectifications.

The Tribunal held that the property was inherited, and the cost of acquisition should be based on the previous owner's cost or the fair market value as of April 1, 1981, at the assessee's option. The approved valuer's report for the fair market value was accepted as un-rebutted.

The Tribunal held that since the additions made by the AO, which formed the basis for the penalty, were subsequently deleted by a coordinate bench of the Tribunal, the penalty was not sustainable. Therefore, the penalties were ordered to be deleted.

The Tribunal held that the holding period of the property should be reckoned from the date of allotment, not possession, thus treating it as a long-term capital asset. Certain expenses were allowed as cost of improvement, while others were disallowed as they were for upkeep.

The Tribunal held that since the additions made by the AO, which formed the basis for the penalty, were subsequently deleted by a coordinate bench of the Tribunal, the penalty was not sustainable. Therefore, the penalties were ordered to be deleted.