ITAT Delhi Judgments — January 2020

The Tribunal held that the AO incorrectly applied Section 68 of the Income Tax Act to previous year's credits. The Tribunal found that the revenue authorities had not appreciated the settled legal position regarding such credits.

The Tribunal held that the utilization of borrowed funds for business purposes and the use of a newly acquired premises for business require factual verification. The Tribunal also noted that the assessee did not press one of the grounds regarding interest disallowance.

The ITAT found that the previous appellate orders did not discuss whether the seized documents were incriminating. Therefore, the ITAT set aside the previous orders and restored the issues to the Commissioner of Income Tax (Appeals) for a fresh decision.

The ITAT found that the previous appellate orders did not discuss whether the seized documents were incriminating. Therefore, the ITAT set aside the previous orders and restored the issues to the Commissioner of Income Tax (Appeals) for a fresh decision.

The ITAT found that the previous appellate orders did not discuss whether the seized documents were incriminating. Therefore, the ITAT set aside the previous orders and restored the issues to the Commissioner of Income Tax (Appeals) for a fresh decision.

The Tribunal held that since fresh penalty proceedings were initiated after the MAP resolution was given effect to, the penalty levied based on the previous order becomes infructuous. Therefore, the Revenue's appeal becomes infructuous.

The Tribunal found that the CIT(A)'s order was non-speaking on crucial aspects, particularly regarding the allowability of land development cost and the nature of bank guarantee commission as revenue or capital expenditure. Therefore, both issues were set aside to the CIT(A) for fresh adjudication.

The Tribunal noted that the assessee wished to withdraw the current appeal as it had become infructuous due to subsequent adjudication of the electronically filed appeal. The Department did not object to the withdrawal.

The Tribunal held that the Assessing Officer had recorded detailed satisfaction for invoking Rule 8D, which was sufficient compliance with Section 14A(2). The partial relief granted by the CIT(A) was also deemed appropriate.

The Tribunal held that the Assessing Officer had recorded detailed satisfaction for invoking Rule 8D, which was sufficient compliance with Section 14A(2). The partial relief granted by the CIT(A) was also deemed appropriate.

The Tribunal held that the amendment to Section 200A was procedural, and the Assessing Officer was not empowered to charge fees under Section 234E for periods prior to June 1, 2015. Therefore, the demand raised was invalid.

The Tribunal held that the Resale Price Method (RPM) is the most appropriate method for benchmarking international transactions in the distribution segment. It also decided that subvention income should be considered part of the operating margin. Corporate issues for AY 2011-12 were dismissed due to lack of details.

The Tribunal deleted the disallowance of interest paid on share application money, holding that Section 36(1)(iii) does not restrict such deductions. The issue of consultancy charges was set aside to the Assessing Officer for fresh consideration.

The Tribunal held that the Resale Price Method (RPM) is the most appropriate method for benchmarking international transactions in the distribution segment. It also decided that subvention income should be considered part of the operating margin. Corporate issues for AY 2011-12 were dismissed due to lack of details.

The Tribunal held that the Resale Price Method (RPM) is the most appropriate method for benchmarking international transactions in the distribution segment. It also decided that subvention income should be considered part of the operating margin. Corporate issues for AY 2011-12 were dismissed due to lack of details.

The Tribunal, following its co-ordinate bench's decisions for earlier years, found merit in the assessee's contentions. It directed the TPO/AO to reconsider TNMM as the MAM and conduct a fresh analysis of comparables for benchmarking the international transaction.

The Tribunal held that disallowance of interest on loans to related parties was unjustified as the assessee had sufficient interest-free funds. For Section 14A, the Tribunal ruled that no disallowance can be made in the absence of exempt income earned during the assessment year.

The Tribunal held that the assessee had successfully discharged the initial onus cast upon it under Section 68 of the Income Tax Act, 1961. The Tribunal noted that the Assessing Officer was heavily influenced by the statement of Shri Sampat Sharma, who admitted to being a dummy director. However, the Tribunal found that the AO did not take steps to lift the corporate veil and identify the ultimate beneficiary of the transactions. The Tribunal observed that the assessee had provided various documents, including confirmations, bank statements, ITRs, balance sheets, MOA, AOA, director details, share allotment advice, board resolutions, and assessment orders of the investor companies. Furthermore, the Tribunal noted that directors of some investor companies were produced for verification, and the net worth of most of the share applicant companies was available, with directors of the remaining companies appearing in compliance with summons. The Tribunal concluded that considering the facts and the evidence produced, the assessee had prima facie discharged its onus.

The Tribunal held that the assessee had successfully discharged the initial onus cast upon it under Section 68 of the Income Tax Act, 1961. The Tribunal noted that the Assessing Officer was heavily influenced by the statement of Shri Sampat Sharma, who admitted to being a dummy director. However, the Tribunal found that the AO did not take steps to lift the corporate veil and identify the ultimate beneficiary of the transactions. The Tribunal observed that the assessee had provided various documents, including confirmations, bank statements, ITRs, balance sheets, MOA, AOA, director details, share allotment advice, board resolutions, and assessment orders of the investor companies. Furthermore, the Tribunal noted that directors of some investor companies were produced for verification, and the net worth of most of the share applicant companies was available, with directors of the remaining companies appearing in compliance with summons. The Tribunal concluded that considering the facts and the evidence produced, the assessee had prima facie discharged its onus.

The Tribunal held that the scheme of amalgamation, approved by the High Court, could not be considered a sham transaction. The manufacturing unit at Parwanoo continued to belong to the assessee, and the name change did not alter the ownership or management of the eligible unit.

The Tribunal upheld the CIT(A)'s decision to delete the disallowance. The Tribunal found that the Assessing Officer failed to cite any specific section requiring TDS deduction on a slump sale transaction, and the CIT(A) correctly accepted the assessee's contention that no TDS was deductible as it was a slump sale and not a purchase of individual items.

The Tribunal found that the lower authorities did not adequately address the explanations and supporting documents provided by the assessee regarding the nature of transactions with RCI Industries & Technology Ltd. Therefore, the issue was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that CBDT Circular No. 17/2019 applies to pending appeals and enhances the monetary limit for filing appeals. Therefore, the appeal filed by the Revenue is not maintainable due to the low tax effect.

The Tribunal held that a draft assessment order, being tentative and subject to DRP review, cannot be revised under Section 263. The PCIT's order was quashed as it was passed without jurisdiction.

The Tribunal held that disallowance of interest on loans to related parties was unjustified as the assessee had sufficient interest-free funds. For Section 14A, the Tribunal ruled that no disallowance can be made in the absence of exempt income earned during the assessment year.

The Tribunal found that the Assessing Officer and CIT(A) did not properly adjudicate the issue of rejected books of accounts and the applicable rates for construction cost. Therefore, the matter was remanded back to the Assessing Officer for fresh adjudication, with an opportunity for the assessee to be heard.

The Tribunal held that disallowance of interest on loans to related parties was unjustified as the assessee had sufficient interest-free funds. For Section 14A, the Tribunal ruled that no disallowance can be made in the absence of exempt income earned during the assessment year.

The Tribunal upheld the addition, finding that the contractor admitted to receiving cash from the assessee during cross-examination, and the assessee failed to provide evidence to disprove the fictitious liability. The AO discharged the onus of proving the fictitious liability.

The Tribunal held that the amendment to Section 200A was procedural, and the Assessing Officer was not empowered to charge fees under Section 234E for periods prior to June 1, 2015. Therefore, the demand raised was invalid.

The Tribunal held that the amendment to Section 200A was procedural, and the Assessing Officer was not empowered to charge fees under Section 234E for periods prior to June 1, 2015. Therefore, the demand raised was invalid.

The Tribunal held that the penalty was levied on an estimation basis without any adverse evidence against the assessee's submissions. The AO did not specifically point out any defect in the return regarding concealment or inaccurate particulars. Therefore, the penalty was not sustainable.

The Tribunal held that the reopening of assessment was bad in law because the reasons recorded were not based on independent application of mind by the AO and the approval granted by the Pr. CIT was invalid due to lack of application of mind. Consequently, the reopening and all additions were quashed.

The Tribunal upheld the validity of reopening the assessment. However, it found that since sales were accepted and the assessee could have purchased goods from the grey market in cash, the addition should be restricted to the suppression of gross profit.

The Tribunal held that a difference of opinion on whether expenditure is capital or revenue does not automatically amount to furnishing inaccurate particulars or concealment of income. All details were provided to the Assessing Officer.

The Tribunal held that indirect expenses incurred by the branch office should be allocated based on the commission income and other income earned, as these expenses are directly related to the provision of services leading to such income. The method of allocation based on sales ratio adopted by the AO was deemed incorrect.

The Tribunal held that the addition was beyond the scope of Section 153C as the seized documents did not conclusively belong to the assessee and were found during a survey at a third party's premises. The CIT(A)'s deletion of the addition was upheld.

The Tribunal held that disallowance under Section 14A cannot exceed the exempt income and cannot be added for computing book profits under Section 115JB. It also ruled on specific disallowances related to depreciation.

The Tribunal held that disallowance under Section 14A cannot exceed the exempt income and cannot be added for computing book profits under Section 115JB. It also ruled on specific disallowances related to depreciation.

The Tribunal found that the CIT(A) had dismissed the appeal in default without considering the assessee's written submissions. Therefore, the Tribunal remanded the matter back to the CIT(A) for a fresh decision on merits.

The Tribunal held that the assessee is entitled to deduction under section 80G for donations if proper documentation is provided, and allowed exemption for dividend income under section 10(34). The Tribunal also ruled that profit on sale of investments should be treated as income from life insurance business and upheld the deletion of disallowance for provision for bad debts.

The Tribunal held that the amount received was in the ordinary course of business for land purchase and assignment of development rights, and therefore, Section 2(22)(e) was not applicable. The transaction benefited both payer and payee companies.

The Tribunal found that the assessee had submitted affidavits from sellers explaining the cash payments. Since these affidavits were not examined by the lower authorities, the matter was remanded back to the Assessing Officer to verify the affidavits and Rule 6DD applicability. The Section 80C issue was also remanded for examination of the tuition fee certificate.

The Tribunal held that the Assessing Officer failed to establish the link between the seized documents and the assessee's income. The AO also did not provide sufficient evidence to prove that the share transactions were not genuine.

The Tribunal found that the assessee's contention regarding non-service of notice was uncontroverted and the explanation for non-response was reasonable. Therefore, the appeals were remanded back to the CIT(A) for a fresh decision on merits.

The Tribunal found that the facts of the current assessment year were distinguishable from the previous year. It noted that the AO did not provide separate findings on whether income accrued to the liaison office in the current year and remanded the issue back to the AO for fresh adjudication.

The Tribunal held that a charitable trust is not eligible for the standard deduction under Section 24(a) on rental income as its income is governed by Section 11. However, the excess expenditure over income is allowable to be carried forward for set off against income of subsequent years.

The Tribunal held that since the loan agreement was found during a search in another person's case, the assessment proceedings should have been initiated under Section 153C, not Section 147/148. The reassessment proceedings under Section 147/148 were therefore invalid.

The Tribunal held that the payments made for exhibition purposes, including fair fees, marketing fees, and services like electricity and water, were not in the nature of 'fees for technical services' as defined in the Act or the India-Germany DTAA. Therefore, TDS was not required, and the disallowance under Section 40(a)(i) was deleted.

The Tribunal held that the assessee is entitled to deduction under section 80G for donations if proper documentation is provided, and allowed exemption for dividend income under section 10(34). The Tribunal also ruled that profit on sale of investments should be treated as income from life insurance business and upheld the deletion of disallowance for provision for bad debts.