ITAT Delhi Judgments — November 2019

The Tribunal held that the penalty proceedings were not validly initiated as the Assessing Officer failed to record the necessary satisfaction regarding the specific limb of Section 271(1)(c) that was violated. Consequently, the penalty order was quashed.

The Tribunal held that the levy of late filing fee under Section 234E was not permissible for periods prior to June 1, 2015, as the relevant amendment to Section 200A enabling such levy came into effect from that date. Therefore, the late filing fee and consequential interest were cancelled.

The Tribunal held that the assessee was not entitled to depreciation on the inflated portion of capital asset costs. However, due to incorrect computation of the quantum by lower authorities, the issue was restored to the Assessing Officer for fresh adjudication.

The Tribunal allowed the assessee's application to withdraw the appeals. The Revenue had no objection to the withdrawal.

The ITAT held that the CIT(A) must decide appeals after hearing parties and providing reasoned orders, and cannot dismiss appeals for non-prosecution without considering merits. Decisions made without affording reasonable opportunity violate principles of natural justice.

The Tribunal held that the levy of late filing fee under Section 234E was not permissible for periods prior to June 1, 2015, as the relevant amendment to Section 200A enabling such levy came into effect from that date. Therefore, the late filing fee and consequential interest were cancelled.

The Tribunal allowed the assessee's grounds regarding the exclusion of certain comparable companies in the transfer pricing analysis. It also remanded the issues of liquidated damages and prior period expenditure back to the Assessing Officer for fresh adjudication.

The ITAT held that the CIT(A) must decide appeals after hearing parties and providing reasoned orders, and cannot dismiss appeals for non-prosecution without considering merits. Decisions made without affording reasonable opportunity violate principles of natural justice.

The Tribunal held that there was a reasonable cause for the assessees' non-appearance on the appointed date, considering the circumstances and the subsequent compliance. Therefore, the penalty levied was not justified.

The Tribunal held that the CIT(A) erred in deciding the appeal ex parte without providing an adequate opportunity to be heard. The matter was set aside to the CIT(A) for a fresh decision.

The Tribunal held that payments made under the ESOP scheme, representing reimbursement to the parent company for stock options granted to employees, are in the nature of employee compensation and deductible as business expenditure. The Tribunal also deleted transfer pricing adjustments on interest on receivables, following similar reasoning from prior years.

The Tribunal held that the Commissioner of Income Tax (Appeals) had not decided the appeal on its merits, despite stating so. The CIT(A) had merely confirmed the AO's findings without any discussion.

The ITAT held that the CIT(A) must decide appeals after hearing parties and providing reasoned orders, and cannot dismiss appeals for non-prosecution without considering merits. Decisions made without affording reasonable opportunity violate principles of natural justice.

The Tribunal held that a reasonable opportunity of hearing should be provided to the assessee as per the principles of natural justice. Therefore, the matter was set aside to the AO for fresh adjudication.

The Tribunal found that the CIT(A) had not properly considered the assessee's evidence regarding purchases and had applied Section 14A and Rule 8D mechanically without proper findings. Therefore, the matters were remitted back to the CIT(A) for fresh adjudication.

The Tribunal found the facts and circumstances of the present case to be identical to the case of the assessee's wife. Following the precedent set by the previous ITAT order, the addition in dispute was deleted.

The Tribunal held that Eureka Outsourcing Solutions Pvt. Ltd. should be included as a comparable. It also directed the TPO to verify the functional comparability of five other companies rejected solely on an export turnover filter.

The Tribunal held that the Commissioner erred in exercising jurisdiction under Section 263 as the Assessing Officer had applied his mind and passed a speaking order. The Tribunal found no merit in the Commissioner's view that the assessment order was erroneous and prejudicial to the revenue.

The Tribunal held that the CIT(A) must decide appeals after hearing parties and providing reasons, and cannot dismiss appeals for non-prosecution without considering merits. Orders passed without reasonable opportunity of hearing violate principles of natural justice.

The Tribunal held that there was a reasonable cause for the assessees' non-appearance on the appointed date, considering the circumstances and the subsequent compliance. Therefore, the penalty levied was not justified.

The Tribunal held that the CIT(A) has a duty to decide appeals on merits after hearing parties and providing reasons. Dismissing appeals for non-prosecution without considering merits is infirm. The matter was set aside to the CIT(A) for a reasoned decision after affording a reasonable opportunity of hearing.

The Tribunal noted that the quantum issue had been remitted back to the AO for de novo decision. Consequently, the penalty levied on the original additions does not survive and is cancelled.

The Tribunal found that the CIT(A) had not properly considered the assessee's evidence regarding purchases and had applied Section 14A and Rule 8D mechanically without proper findings. Therefore, the matters were remitted back to the CIT(A) for fresh adjudication.

The Tribunal restored the issue of penalty levy back to the file of the CIT(A). The CIT(A) was directed to decide the penalty under section 271(1)(c) after providing the assessee with a reasonable opportunity to be heard.

The Tribunal held that payments made under the ESOP scheme, representing reimbursement to the parent company for stock options granted to employees, are in the nature of employee compensation and deductible as business expenditure. The Tribunal also deleted transfer pricing adjustments on interest on receivables, following similar reasoning from prior years.

The Tribunal held that no disallowance under Section 14A can be made if the assessee has not earned any exempt income (like dividend) and has not incurred any expenditure for earning such income. The disallowance was based on presumption and not on actual facts.

The Tribunal set aside the order of the CIT(A) and remanded the matter back to the CIT(A) to decide afresh. This was due to the assessee's failure to appear and present its case, necessitating an opportunity to be heard.

The Tribunal held that the penalty notices issued under Section 274 read with Section 271(1)(c) were bad in law because they did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. Therefore, the penalty was not sustainable.

The Tribunal held that the penalty notices issued under Section 274 read with Section 271(1)(c) were bad in law because they did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. Therefore, the penalty was not sustainable.

The Tribunal held that the assessee was not entitled to depreciation on the inflated portion of capital asset costs. However, due to incorrect computation of the quantum by lower authorities, the issue was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the DRP was empowered to entertain additional evidence and call for a remand report as proceedings before the DRP are a continuation of assessment proceedings. The DRP's decision to delete the addition was found to be legal and not perverse.

The Tribunal found that the CIT(A) had not properly considered the assessee's evidence regarding purchases and had applied Section 14A and Rule 8D mechanically without proper findings. Therefore, the matters were remitted back to the CIT(A) for fresh adjudication.

The Tribunal noted that the CBDT Circular No. 17/2019 revised the monetary limit for filing appeals to Rs. 50 Lacs and this applied to pending appeals. Therefore, the appeal was not maintainable due to low tax effect.

The Tribunal held that the CIT(A) erred by admitting additional evidence without following Rule 46A and by not giving the AO an opportunity to examine fresh claims. The Tribunal also found that the CIT(A) overlooked the unserved summonses for cash deposit verification.

The Tribunal held that no disallowance under Section 14A can be made if the assessee has not earned any exempt income (like dividend) and has not incurred any expenditure for earning such income. The disallowance was based on presumption and not on actual facts.

The Tribunal held that the penalty notices issued under Section 274 read with Section 271(1)(c) were bad in law because they did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. Therefore, the penalty was not sustainable.

The Tribunal found that the CIT(A) had not properly considered the assessee's evidence regarding purchases and had applied Section 14A and Rule 8D mechanically without proper findings. Therefore, the matters were remitted back to the CIT(A) for fresh adjudication.

The Tribunal held that payments made under the ESOP scheme, representing reimbursement to the parent company for stock options granted to employees, are in the nature of employee compensation and deductible as business expenditure. The Tribunal also deleted transfer pricing adjustments on interest on receivables, following similar reasoning from prior years.

The Tribunal found that the CIT(A) had not properly considered the assessee's evidence regarding purchases and had applied Section 14A and Rule 8D mechanically without proper findings. Therefore, the matters were remitted back to the CIT(A) for fresh adjudication.

The Tribunal restored the issue to the file of the CIT(E) with a direction to grant one final opportunity to the assessee to provide the requisite details and substantiate its claim.

The Tribunal held that payments made under the ESOP scheme, representing reimbursement to the parent company for stock options granted to employees, are in the nature of employee compensation and deductible as business expenditure. The Tribunal also deleted transfer pricing adjustments on interest on receivables, following similar reasoning from prior years.

The Tribunal recalled its earlier order and agreed that the appeal should not have been dismissed in limine. However, considering a later CBDT circular that raised the monetary limit for appeals to Rs. 50 lakhs, the Tribunal held that the current appeal was not maintainable.

The Tribunal found that the CIT(A) should have decided the appeals on merits even in the absence of the assessee. The Tribunal set aside the CIT(A)'s orders to allow the assessee an opportunity to be heard.

The Tribunal allowed the assessee's request to withdraw the appeal. Since the CIT(A) had already adjudicated in favour of the assessee by withdrawing the additions, the present appeal became infructuous.

The Tribunal found that the CIT(A) should have disposed of the appeals on merits even without the assessee's appearance. Therefore, the appeals were set aside to the CIT(A) for a fresh decision after providing an opportunity of being heard.

The Tribunal held that when the assessee provided identity, creditworthiness, and genuineness documents for gifts from close relatives, and supported agricultural income claims with revenue records and past acceptance, the AO's additions were unsubstantiated.

The Tribunal held that the provisions of Section 56(2)(vii) are not applicable to the receipt of bonus shares. Bonus shares represent a capitalization of profits by the company and do not result in an increase in the shareholder's wealth or a receipt of new property.

The Tribunal held that the addition of Rs. 53,00,000/- on account of advances was not justified. While the AO rejected the refund claim due to lack of bank statements for the subsequent year, the Tribunal noted that the availability of funds was not disputed and the revenue did not allege misappropriation, which would have led to disallowance of exemption under Section 11/12. The Tribunal restored the issue to the AO with a direction to verify the assessee's bank account for the subsequent year and delete the addition if refunds are proven. The Tribunal distinguished the Kerala High Court's decision in CIT vs. Shree P. Subramoniam Religious Trust, stating that in this case, advances were returned immediately, unlike the siphoning of funds in the cited case. The Tribunal also held that corpus donations from members cannot be treated as income but need substantiation. This issue was restored to the AO with a direction to grant an opportunity to the assessee to file confirmations from donors, and if furnished, the AO should consider their allowability as per law. Other grounds were dismissed.

The Tribunal upheld the classification of income as 'income from other sources' as accepted by the assessee. However, it modified the disallowance of expenses, restricting it to 10% of certain expenditures.

The ITAT held that the CIT(A) must decide appeals after hearing parties and providing reasoned orders, and cannot dismiss appeals for non-prosecution without considering merits. Decisions made without affording reasonable opportunity violate principles of natural justice.