ITAT Delhi Judgments — August 2019

The Tribunal found that the matter required reconsideration at the CIT(A)'s level due to the assessee's medical condition and the denial of receiving the defect notice. The CIT(A)'s order was set aside, and the appeal was restored for fresh adjudication.

The Tribunal held that the penalty was not leviable. The assessee had disclosed all transactions, and the show cause notice for penalty was invalid as it did not specify the limb of Section 271(1)(c) under which proceedings were initiated.

The Tribunal held that the CIT(A) correctly deleted the addition related to interest disallowance, finding no nexus between borrowed funds and interest-free advances, and that the assessee had sufficient interest-free funds. The Tribunal also deleted additions for car and telephone expenses, except for one ground which was not pressed.

The Tribunal held that the reopening of assessment was invalid because the AO's reasons were based on incorrect facts regarding the amount of deposits. Furthermore, the AO's inquiry letter was deemed invalid as no proceedings were pending at the time, and the assessees were not obligated to respond.