ITAT Delhi Judgments — August 2019

The Tribunal held that the issue of carry forward of excess application of income is covered by the Supreme Court decision in CIT vs. Subros Educational Society. Similarly, the issue of depreciation on assets claimed as application of income is also covered by the Supreme Court in CIT vs. Rajasthan and Gujarati Charitable Foundation Poona.

The Tribunal deleted the penalty related to the Section 40A(3) disallowance, deeming it a debatable issue. However, it sustained the penalty on business promotion expenses, finding that the assessee furnished inaccurate particulars by not disclosing details of gifts despite specific queries.

The Tribunal held that the issue of whether the forfeited security deposit was a revenue or capital expenditure was debatable. Since the assessee had disclosed all material facts and provided a bonafide explanation, penalty under Section 271(1)(c) was not leviable.

The Tribunal held that the grounds raised by the department were identical to those in the assessee's appeal, which had been settled in favour of the assessee. The Tribunal noted that the ITAT's order on this issue was upheld by the Delhi High Court.

The Tribunal rejected the assessee's adjournment application and decided to pass an ex-parte order. The Tribunal found the Assessing Officer's order to be cryptic, lacking details about the investment dates for section 54EC deduction.

The Tribunal restored the issue to the file of the CIT(A) with a direction to grant one final opportunity to the assessee to substantiate its case and explain the delay. The CIT(A) is to decide the issue on merits thereafter.

The Tribunal upheld the CIT(A)'s order, noting that the grounds of appeal were identical to previous years where the Revenue's appeals were dismissed. The Tribunal found no reason to deviate from the established precedent in the assessee's own case.

The Tribunal held that the AO and CIT(A) erred in rejecting the assessee's books of accounts. The reasons cited, such as a fall in profit rates due to a slump sale and alleged discrepancies, were adequately explained by the assessee.

The Tribunal found that the applicability of the proviso to Section 2(15) for the assessment year was not clearly examined by the lower authorities. Therefore, the matters were restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the CIT(A) has the power to entertain additional claims not made before the AO, especially when the AO did not dispute the merit of the claim. The appeal by the Revenue was dismissed.

The Tribunal held that the advance was given in the normal course of business as M/s. Shri Sidhbali Ispat Ltd. was a supplier. Furthermore, the assessee had sufficient surplus funds, making the disallowance unsustainable.

The Tribunal restored the issue to the file of the CIT(A) to grant one final opportunity to the assessee to present their case. The assessee is directed to appear without adjournment.

The tribunal found that the CIT(A) had not followed the principles of natural justice by deciding the appeal ex-parte without giving a proper opportunity. Therefore, the matter was remanded back to the CIT(A) for a fresh decision.

The Tribunal found that the applicability of the proviso to Section 2(15) for the assessment year was not clearly examined by the lower authorities. Therefore, the matters were restored to the Assessing Officer for fresh adjudication.

The Tribunal found that recording the assessee's statement is crucial and decided to give one more opportunity. The issue was set aside to the Assessing Officer for re-adjudication after examining the donors and the assessee.

The Tribunal upheld the CIT(A)'s decision, following its own previous rulings. It concluded that the agreement was for the supply of food (goods), not a works contract, and therefore, TDS under Section 194C was not applicable.

The Tribunal held that payments made for the purchase of the new asset until the due date of filing a belated return under Section 139(4) are eligible for deduction under Section 54F. The Assessing Officer was directed to re-examine the claim based on this interpretation.

The Tribunal held that the AO failed to conduct independent enquiries and corroborate the investigation report's findings. The AO solely relied on pre-existing statements without independent verification, rendering the assessment order devoid of proper inquiry.

The Tribunal held that the assessee was eligible for exemption under Section 54 as the demolition of the old property and construction of new flats constituted reconstruction. The deposit in the Capital Gains Account Scheme was also considered compliant.

The Tribunal held that the AO failed to conduct independent enquiries and corroborate the investigation report's findings. The AO solely relied on pre-existing statements without independent verification, rendering the assessment order devoid of proper inquiry.

The Tribunal restored the issue to the file of the AO, granting the assessee one more opportunity to substantiate her claim with evidence. The appeal was allowed for statistical purposes.

The Tribunal upheld the CIT(A)'s decision, finding that the bonus was paid to employees before the due date of filing the return. It also held that the closing allowance was an ascertained and quantifiable liability, allowable under Section 37(1).

The Tribunal held that the AO failed to conduct independent enquiries and corroborate the investigation report's findings. The AO solely relied on pre-existing statements without independent verification, rendering the assessment order devoid of proper inquiry.

The Tribunal held that the assessee failed to produce the required bills and vouchers for the expenses, even after multiple opportunities. Therefore, the CIT(A) was justified in sustaining the disallowance.

Since the addition on which the penalty was levied has been deleted by the Tribunal in a prior order, there is no basis for levying the penalty. The Tribunal set aside the orders of the lower authorities and cancelled the penalty.

The Tribunal held that for completed assessments, additions under Section 153A/153C can only be made if material is found during the search. Since no such material was found relating to the additions, the CIT(A) was correct in deleting them.

The Tribunal held that the AO failed to conduct independent enquiries and corroborate the investigation report's findings. The AO solely relied on pre-existing statements without independent verification, rendering the assessment order devoid of proper inquiry.

The Tribunal held that the AO failed to conduct independent enquiries and corroborate the investigation report's findings. The AO solely relied on pre-existing statements without independent verification, rendering the assessment order devoid of proper inquiry.

The Tribunal held that the AO failed to conduct independent enquiries and corroborate the investigation report's findings. The AO solely relied on pre-existing statements without independent verification, rendering the assessment order devoid of proper inquiry.

The Tribunal held that the assessee was not liable to deduct tax at source on foreign agency commission paid outside India for promotion of export sales outside India. This was based on previous decisions of the Tribunal in the assessee's own case.

The Tribunal upheld the CIT(A)'s decision, finding that the interest expenses were allowable as business expenditure based on commercial expediency and the ruling in S.A. Builders Ltd. The Tribunal also agreed that the other expenses debited to the P&L account were justified as the assessee was in its fourth year of business and incurring project-related costs.

The Tribunal held that excess expenditure incurred by a trust in an earlier year is allowable for set-off against subsequent year's income as application of income, and is not governed by provisions for carry forward of losses. It also held that depreciation on assets, the cost of which was claimed as application, is allowable.

The Tribunal upheld the CIT(A)'s decision, finding that the interest expenses were allowable as business expenditure based on commercial expediency and the ruling in S.A. Builders Ltd. The Tribunal also agreed that the other expenses debited to the P&L account were justified as the assessee was in its fourth year of business and incurring project-related costs.

The Tribunal held that the notional usance interest and discounting charges were part of the cost of bullion and a business expenditure, not income from other sources. It also noted that such interest was taxable in Australia as per the DTAA.

The ITAT held that due to the moratorium declared under the Insolvency and Bankruptcy Code, 2016, continuation of pending suits is barred. Therefore, the appeals could not be proceeded with until the insolvency proceedings concluded.

The Tribunal held that the assessee failed to provide sufficient evidence to prove that the expenses were incurred wholly and exclusively for business purposes. The expenses were deemed personal in nature.

The Tribunal condoned the delay in filing the appeal and, in the interest of justice, restored the issue to the CIT(A). The CIT(A) was directed to grant one final opportunity to the assessee to present her case and decide it on merits.

The Tribunal restored the issue to the file of the CIT(A) to grant one final opportunity to the assessee to substantiate her case. The assessee was directed to appear before the CIT(A) without seeking adjournments.

The Tribunal dismissed the appeal filed by the Revenue. This was based on a CBDT circular directing the department not to file appeals where the tax effect does not exceed Rs. 20 lakhs.

The Tribunal held that the AO did not conduct a detailed inquiry into the nature of the business and the deposits in joint accounts. Given the assessee's ill-health and inability to produce evidence, the matter was restored to the AO for fresh consideration.

The ITAT held that due to the moratorium declared under the Insolvency and Bankruptcy Code, 2016, continuation of pending suits is barred. Therefore, the appeals could not be proceeded with until the insolvency proceedings concluded.

The Tribunal restored the issue to the Assessing Officer, directing him to grant one final opportunity to the assessee to substantiate her case. The assessee was also directed to appear with requisite documents and details.

The Tribunal held that Section 41(1) is not applicable when no allowance or deduction was made in the assessment of the predecessor (NDDB). The expenditure for tax borne on foreign suppliers' credit was not allowed as business expenditure. The disallowance under Section 14A was also not interfered with.

The Tribunal held that the CIT(A) correctly cancelled the assessment order. There was no justification for parallel proceedings assessing the same loss when an earlier assessment under section 143(3) was already in place.

The CIT(A) allowed the set off, holding that appellate authorities can allow claims based on facts on record even if not initially claimed. The Tribunal upheld this, finding no infirmity in the CIT(A)'s order.

The Tribunal held that Section 41(1) applies only when an allowance or deduction has been made in the assessment of the predecessor. Since NDDB's income was not taxable, no deduction was allowed, and thus Section 41(1) did not apply to the write-back. The Tribunal also held that tax paid on behalf of foreign suppliers cannot be allowed as business expenditure.

The Tribunal held that the forfeiture of the FCDs was not on account of the failure of negotiations for the transfer of a capital asset of the assessee. Therefore, Section 56(2)(ix) was not applicable, and the addition made by the CIT(A) was directed to be deleted.

The Tribunal held that Section 41(1) applies only when an allowance or deduction has been made in the assessment of the predecessor. Since NDDB's income was not taxable, no deduction was allowed, and thus Section 41(1) did not apply to the write-back. The Tribunal also held that tax paid on behalf of foreign suppliers cannot be allowed as business expenditure.

The Tribunal held that Section 41(1) applies only when an allowance or deduction has been made in the assessment of the predecessor. Since NDDB's income was not taxable, no deduction was allowed, and thus Section 41(1) did not apply to the write-back. The Tribunal also held that tax paid on behalf of foreign suppliers cannot be allowed as business expenditure.