ITAT Delhi Judgments — July 2019

The Tribunal held that RPM is the most appropriate method for benchmarking the import of crystal goods and components, following a consistent view from earlier years. It also ruled that software and EDP charges are revenue in nature and allowable, and advertisement and publicity expenses are also revenue expenditure.

The Tribunal held that the assessment order on which the penalty was based had been set aside by a coordinate bench of the Tribunal. Therefore, the penalty was not sustainable and was also set aside to be decided afresh after the assessment is framed.

The Tribunal held that the assessee is not entitled to a deduction under Section 36(1)(va) for employee contributions to PF & ESI if they are not deposited by the due date as per the relevant Acts. The decision of the Delhi High Court in CIT vs. Bharat Hotels Ltd. was followed.

The Tribunal upheld the CIT(A)'s decision, stating that royalty payments cannot be determined solely on the assessee's profitability, especially when know-how and technical information were provided. The TPO's use of a 'benefit test' for benchmarking was deemed incorrect.

The Tribunal noted that the tax effect of the disputed addition was below the prescribed monetary limit of Rs. 20 lac for filing appeals by the Department. Therefore, the appeal was dismissed.

The Tribunal held that the assessee failed to prove the genuineness of the share transactions, citing overwhelming evidence collected by the Revenue indicating accommodation entries. The astronomical growth in share value and lack of knowledge about brokers further supported this conclusion.

The Tribunal held that the Revenue failed to prove any investment outside the books of accounts. The Tribunal found no merit in the addition as the seized document's entries were not substantiated by other evidence, especially after the third party confirmed no such transaction.

The Tribunal held that the reassessment proceedings initiated under Section 147 were not in accordance with law and were without jurisdiction. The Tribunal quashed the reassessment, finding that the Assessing Officer had not conducted independent inquiries and had not properly applied his mind.

The Tribunal held that the CIT(A) restricted the addition based on an order from the Commissioner of Central Excise without ascertaining if that order had attained finality. Therefore, the matter was remanded to the AO to decide afresh after verifying the status before CESTAT.

The Tribunal held that RPM is the most appropriate method for benchmarking the import of crystal goods and components, following a consistent view from earlier years. It also ruled that software and EDP charges are revenue in nature and allowable, and advertisement and publicity expenses are also revenue expenditure.

The Tribunal held that RPM is the most appropriate method for benchmarking the import of crystal goods and components, following a consistent view from earlier years. It also ruled that software and EDP charges are revenue in nature and allowable, and advertisement and publicity expenses are also revenue expenditure.

The Tribunal held that RPM is the most appropriate method for benchmarking the import of crystal goods and components, following a consistent view from earlier years. It also ruled that software and EDP charges are revenue in nature and allowable, and advertisement and publicity expenses are also revenue expenditure.

The Tribunal held that RPM is the most appropriate method for benchmarking the import of crystal goods and components, following a consistent view from earlier years. It also ruled that software and EDP charges are revenue in nature and allowable, and advertisement and publicity expenses are also revenue expenditure.

The Tribunal upheld the CIT(A)'s order, agreeing that the addition rightly belonged to a different entity. Both the Revenue and the assessee accepted the facts presented.

The Tribunal held that the assessee cannot be remediless and directed the CIT(A) to entertain the claim, considering the long period of exemption enjoyed and the fact that the department also could not trace the original record.

The Tribunal held that income from the sale of shares should be taxed as capital gains, not business income, following a co-ordinate bench's decision. It also ruled that rental income should be treated as income from house property and allowed deductions. Disallowances for prior period expenses and under Section 14A were also deleted.

The Tribunal held that the sale proceeds were accounted for by the developer (M/s Vikas Buildmart P. Ltd.) in their profit and loss account and offered to tax. Therefore, there was no avoidance or deferment of tax by the assessee.

The Tribunal held that income from the sale of shares should be taxed as capital gains, not business income, following a co-ordinate bench's decision. It also ruled that rental income should be treated as income from house property and allowed deductions. Disallowances for prior period expenses and under Section 14A were also deleted.

The Tribunal held that income from the sale of shares should be taxed as capital gains, not business income, following a co-ordinate bench's decision. It also ruled that rental income should be treated as income from house property and allowed deductions. Disallowances for prior period expenses and under Section 14A were also deleted.

The Tribunal held that TDS provisions were not applicable to the advertisement expenses as it was in the nature of purchase. Regarding sundry creditors, the Tribunal confirmed the CIT(A)'s deletion based on the AO's remand report accepting the genuineness of transactions after further inquiries.

The Tribunal held that income from the sale of shares should be taxed as capital gains, not business income, following a co-ordinate bench's decision. It also ruled that rental income should be treated as income from house property and allowed deductions. Disallowances for prior period expenses and under Section 14A were also deleted.

The Tribunal held that income from the sale of shares should be taxed as capital gains, not business income, following a co-ordinate bench's decision. It also ruled that rental income should be treated as income from house property and allowed deductions. Disallowances for prior period expenses and under Section 14A were also deleted.

The Tribunal found that the CIT(A)'s decision to uphold the reassessment proceedings was correct, considering the assessee had two PANs. However, regarding the addition, the Tribunal held that the AO erred in not considering the opening cash balance and earlier withdrawals, and thus the addition was not warranted.

The Tribunal held that the investment made by the assessee is presumed to be out of interest-free funds available with the bank. Following a coordinate bench decision and Punjab & Haryana High Court precedents, the addition was deleted.

The Tribunal dismissed the appeal filed by the Revenue. This decision was based on a CBDT Circular revising the monetary limit for filing appeals before the ITAT to Rs. 20 lakhs. The Circular also allowed for retrospective withdrawal of pending appeals below this limit.

The Tribunal found no evidence of actual service of the order and demand notice. Condoning the delay would allow the case to be decided on merits, furthering the cause of justice.

The Tribunal held that the gains from share transactions should be treated as short-term capital gains, allowing the assessee's appeal on this ground. However, the Tribunal upheld the lower authorities' finding that the copper transactions were speculative and the losses could not be set off against normal income.

The Tribunal dismissed the appeal based on a CBDT Circular revising the monetary limit for filing appeals. The circular allows for withdrawal or not pressing of pending appeals below the specified tax limit.

The Tribunal noted that the quantum addition itself was set aside by a previous ITAT order and remanded to the Assessing Officer for fresh adjudication. Therefore, the penalty, which was consequential to the addition, could not sustain.

The Tribunal held that there was no principal-agent relationship between the assessee and the banks, and the banks did not render services to the assessee. Therefore, the provisions of Section 194H were not applicable to the charges retained by the banks.

The Tribunal held that the assessee was not liable to deduct TDS as the hospital directly engaged the professionals and recovered the payments from the assessee's fees. Therefore, the disallowance made by the AO was not sustainable.

The Tribunal held that the outstanding creditors were not a ceased liability as they were pending settlement of a contract. The disallowance of festival expenses was not legally sustainable due to lack of evidence. The disallowance on account of legal and professional expenses due to non-deduction of TDS was limited to the sum chargeable to tax.

The Tribunal held that when the revenue relies heavily on statements to implicate an assessee, the principle of cross-examination must be followed. Failure to provide this opportunity renders the addition unsustainable.

The Tribunal held that the additional ground raised by the assessee was purely legal and did not require fresh facts. The Tribunal admitted the additional ground and set aside the matter to the CIT(A) to decide the revised grounds of appeal.

The Tribunal admitted additional evidence and found that the assessee was prevented by sufficient reasons from appearing before the CIT. The difference in the date of receipt of the notice was considered trivial, and the order was passed ex-parte without adequate opportunity.

The Tribunal held that the addition of Rs. 1.5 crores was not sustainable as the dispute revolved around stock valuation, not excess stock. The assessee provided sufficient material to support their valuation, while the revenue's valuation was based solely on the opinion of workers.

The Tribunal held that the transport and hostel facilities provided by the assessee to its students and staff are incidental to and subservient to the main object of providing education. Relying on the coordinate bench decision in Krishna Charitable Society vs. Additional Commissioner of Income Tax, which in turn relied on High Court decisions including Karnataka High Court in CIT vs. Karnataka Lingayat Education Society and Allahabad High Court in IIT vs. State of UP, the Tribunal reversed the lower authorities' findings. It ruled that these facilities cannot be considered business income and the surplus derived from them should not be taxed as business income. Regarding depreciation, the Tribunal followed the Bombay High Court's decision in CIT vs. Framjee Cawasjee Institute, holding that normal depreciation is a legitimate deduction in computing the real income of a trust under Section 11(1)(a) on commercial principles, even if the assets are not business assets and capital expenditure was treated as application of income. The Tribunal directed the AO to grant the disallowed depreciation deduction. Grounds 1 and 2 were allowed, and Ground 3, being supportive, was also allowed.

The Tribunal held that the outstanding creditors were not a ceased liability as they were pending settlement of a contract. The disallowance of festival expenses was not legally sustainable due to lack of evidence. The disallowance on account of legal and professional expenses due to non-deduction of TDS was limited to the sum chargeable to tax.

The Tribunal considered the request for withdrawal of the appeal. Since the revenue representative had no objection, the Tribunal allowed the withdrawal of the appeal.

The Tribunal directed the AO to re-determine the commission income by adopting a rate of 0.50% and to exclude intra-group transactions, following previous coordinate bench decisions. The matter was remanded back to the AO for fresh adjudication.

The Tribunal held that the assessment completed under section 143(3)/147 without issuing a mandatory notice under section 143(2) is void ab initio. The Tribunal emphasized that section 292B cannot cure a jurisdictional defect.

The Tribunal held that the assessee's 90-year leasehold rights in the property are a capital asset, not mere tenancy rights, and are eligible for valuation based on Fair Market Value (FMV) as on 01.04.1981 for computing capital gains. The AO is directed to re-examine the brokerage expense claim.

The Tribunal noted that the appeal should have been withdrawn or not pressed by the Revenue as per CBDT Circular No. 3/2018, as it did not fall under any exceptions. Therefore, the appeal was dismissed in limine.

The Tribunal confirmed the disallowance made by the Assessing Officer, relying on the Supreme Court decision in Maxopp Investment Ltd. The disallowance under Section 14A is applicable even if shares are held for controlling stake, based on the principle of apportionment.

The Tribunal deleted the addition on account of scrap valuation, following a precedent. For other expenses, the Tribunal found the disallowance justified but reduced the amount on an ad hoc basis.