ITAT Delhi Judgments — September 2021

The Tribunal found that the assessee was not given a proper opportunity to present its case on merit before the CIT(A). Therefore, the matter was remanded back to the CIT(A) for proper adjudication.

The Tribunal held that the TPO's domain is restricted to determining the Arm's Length Price and not to scrutinize the business needs or merits of expenditure. The Tribunal found that the adjustments for royalty and commission were beyond the TPO's scope and were covered by a previous order in the assessee's own case. Similarly, the adjustment for interest on receivables was deleted based on the assessee's consistent policy and the High Court's decision in Kusum Health Care Pvt. Ltd.

The Tribunal noted that the assessee had opted for the Vivad se Vishwas scheme. Consequently, the appeal was dismissed as infructuous.

The Tribunal noted that the assessee's representative had resigned, and the assessee was unaware of the hearing dates, preventing proper representation. Therefore, the case was remanded back to the CIT(A) for a fresh adjudication.

The Tribunal held that training charges were included in the sale price of offshore equipment and thus taxable in India. However, the issue of defect liability and liquidated damages required further examination by the AO.

The Tribunal held that the reference to the DVO was made without proper verification of the assessee's declared costs and without establishing that the assessee had incurred additional expenditure not recorded in books. The Tribunal found that the assessee had incurred costs equal to or more than the DVO's estimate after adjustments.

The Tribunal held that the reference to the DVO was made without proper verification of the assessee's declared costs and without establishing that the assessee had incurred additional expenditure not recorded in books. The Tribunal found that the assessee had incurred costs equal to or more than the DVO's estimate after adjustments.

The Tribunal dismissed the Revenue's appeal due to the tax effect being below the monetary limit prescribed by CBDT Circular No. 17/2019. Consequently, the assessee's cross-objection became otiose.

The Tribunal held that the amendment to Section 54 of the Income Tax Act, 1961, by the Finance Act, 2014, which specifically mandates the purchase or construction of a residential house 'in India', is prospective in nature and effective from April 1, 2015 (Assessment Year 2015-16). Therefore, for the assessment year in question (2014-15), where the investment in a residential house in the UK was made in July 2013, the claim for exemption under Section 54 for investment outside India is allowable. The Tribunal dismissed the Department's appeal, upholding the CIT(A)'s decision on this issue, relying on various High Court judgments, including the jurisdictional Delhi High Court. Regarding the cross-objection, the Tribunal held that expenses such as stamp duty, registration charges, and professional fees incurred for the sale of the property, including conversion from leasehold to freehold, are inextricably linked to the property and are essential for obtaining legal title and enhancing its sale value. These were considered legitimate costs of improvement. The Tribunal set aside the CIT(A)'s order on this point and directed the AO to allow the assessee's claim. The cross-objection was allowed.

The Tribunal held that since incriminating material belonging to the assessee was found during a search of a third party, the assessment should have been made under Section 153C, not Section 143(3) r.w.s 147. Therefore, the assessment order was quashed for lack of jurisdiction.

The Tribunal held that since incriminating material belonging to the assessee was found during a search of a third party, the assessment should have been made under Section 153C, not Section 143(3) r.w.s 147. Therefore, the assessment order was quashed for lack of jurisdiction.

The Tribunal dismissed the assessee's appeal as withdrawn, subject to the condition that if the dispute is not resolved under the VSV scheme, the assessee can seek reinstitution of the appeal.

The Tribunal held that since incriminating material belonging to the assessee was found during a search of a third party, the assessment should have been made under Section 153C, not Section 143(3) r.w.s 147. Therefore, the assessment order was quashed for lack of jurisdiction.

The Tribunal held that the penalty order was bad in law because the AO's satisfaction recorded during assessment was for concealment of income, but the penalty was levied for furnishing inaccurate particulars of income. This discrepancy, coupled with the lack of a proper show cause notice, invalidated the penalty.

The Tribunal condoned the delay of 437 days, citing the COVID-19 pandemic as a valid reason. However, the appeal was dismissed with liberty to revive it if the assessee's fresh application under the Vivad se Vishwas Scheme is rejected.

The Tribunal held that a significant portion of the cash deposits did not fall within the assessment year and directed its deletion. For the remaining deposits, the Tribunal found no evidence that the earlier cash withdrawals were spent or invested, thus allowing the assessee's explanation and directing deletion of the addition.

The Tribunal upheld the CIT(A)'s decision to delete the addition, finding that the AO had rejected the assessee's explanation based on surmises without sufficient inquiry. The CIT(A) had considered various evidences provided by the assessee to prove the genuineness of the loans.

The Tribunal held that the sale of recharge coupon vouchers and starter kits to distributors on a principal-to-principal basis, with the discount offered not constituting commission, did not attract TDS provisions under Section 194H. Consequently, the assessee could not be held in default under Section 201(1).

The Tribunal held that the assessee's activity of publishing and selling textbooks constitutes education, and the surplus generated is not a reason to deny exemption. Following previous High Court and ITAT decisions, the assessee is entitled to exemption under Section 11.

The Tribunal held that the sale of recharge coupon vouchers and starter kits to distributors on a principal-to-principal basis, with the discount offered not constituting commission, did not attract TDS provisions under Section 194H. Consequently, the assessee could not be held in default under Section 201(1).

The Tribunal held that no disallowance under Section 14A can be made when the assessee has not claimed any exempt income. The Assessing Officer failed to establish a nexus between any expenditure and exempt income.

The Tribunal held that the reference to the DVO was made without proper verification of the assessee's declared costs and without establishing that the assessee had incurred additional expenditure not recorded in books. The Tribunal found that the assessee had incurred costs equal to or more than the DVO's estimate after adjustments.

The Tribunal held that the reference to the DVO was made without proper verification of the assessee's declared costs and without establishing that the assessee had incurred additional expenditure not recorded in books. The Tribunal found that the assessee had incurred costs equal to or more than the DVO's estimate after adjustments.

The Tribunal held that the reference to the DVO was made without proper verification of the assessee's declared costs and without establishing that the assessee had incurred additional expenditure not recorded in books. The Tribunal found that the assessee had incurred costs equal to or more than the DVO's estimate after adjustments.

The Tribunal held that the reference to the DVO was made without proper verification of the assessee's declared costs and without establishing that the assessee had incurred additional expenditure not recorded in books. The Tribunal found that the assessee had incurred costs equal to or more than the DVO's estimate after adjustments.

The Tribunal held that since incriminating material belonging to the assessee was found during a search of a third party, the assessment should have been made under Section 153C, not Section 143(3) r.w.s 147. Therefore, the assessment order was quashed for lack of jurisdiction.

The Tribunal upheld the CIT(A)'s decision, finding no error in allowing the carry forward of deficit for a charitable trust. The Revenue failed to present any contrary binding decisions.

The Tribunal held that BTIN was not a fixed place PE as the assessee had no place of disposal in India. It also held that the managerial services did not qualify as FTS as they did not satisfy the 'Make Available' clause.

The Tribunal held that BTIN was not a fixed place PE as the assessee had no place of disposal in India. It also held that the managerial services did not qualify as FTS as they did not satisfy the 'Make Available' clause.

The Tribunal held that BTIN was not a fixed place PE as the assessee had no place of disposal in India. It also held that the managerial services did not qualify as FTS as they did not satisfy the 'Make Available' clause.

The Tribunal held that since incriminating material belonging to the assessee was found during a search of a third party, the assessment should have been made under Section 153C, not Section 143(3) r.w.s 147. Therefore, the assessment order was quashed for lack of jurisdiction.

The Tribunal held that based on previous High Court and ITAT decisions concerning the assessee's predecessor, attributing 15% of gross revenue less expenses to India results in no taxable income. Therefore, no income is taxable in India.

The Tribunal found that the assessee was not properly heard by the CIT(A) and that the reasons for non-appearance were not controverted by the Revenue. Granting one more opportunity, the Tribunal restored the matter to the file of the AO for a fresh decision.

The Tribunal admitted additional evidence, including a statement confirming the gift and an order exonerating the assessee from employer charges. The Tribunal restored the issue to the AO for a fresh decision in light of the new evidence.

The Tribunal held that bad debts written off, which were previously offered to income, are allowable under Section 36(2). It also ruled that expenses incurred by the assessee as a contractor for land acquisition and project execution, which did not create any asset in its hands, were revenue in nature. Regarding provisions written back, the Tribunal directed verification by the AO to ensure they were not allowed in earlier years.

The Tribunal held that the penalty proceedings initiated for disallowance of property tax was based on an incorrect charge, as it should have been for furnishing inaccurate particulars, not concealment. However, the penalty for the Rs. 50 Lakhs addition based on surrendered income was upheld as the charge was clear and known to the assessee.

The Tribunal held that the disallowance made on an ad hoc basis under Section 40A(2)(b) is not sustainable, especially when there is no attempt to evade tax and the directors have already paid tax at the highest rate. Following a coordinate bench's decision, the addition was deleted.

The Tribunal held that since the interest subsidy and excise duty refund were capital receipts and not income, they could not be included in the book profit computation under Section 115JB. The order of the CIT(A) was set aside.

The Tribunal, following the jurisdictional High Court's decision in ZTE Corporation and other precedents, held that the consideration received for software supply was for a copyrighted article and not royalty. Therefore, it should be treated as business income.

The Tribunal held that while the amendment to Section 200A empowering the levy of late fees under Section 234E is prospective, the delay in filing the TDS return continued after the amendment. Therefore, the late fee is leviable for the period of delay from 01.06.2015 onwards.

The Tribunal restored the issue to the AO to provide the assessee with one more opportunity to substantiate its case, considering the grievance regarding lack of proper opportunity and non-service of notice.

The ITAT held that disallowances under Section 14A could not be made without incriminating material found during a search, as the assessment was unabated. It also found that the disallowance under Section 14A could not exceed the exempt income earned. The tribunal dismissed the Revenue's grounds related to bogus expenses and product development expenses, upholding the CIT(A)'s deletion of these additions.

The Tribunal dismissed the Revenue's ground regarding unexplained cash sales, finding that the addition would amount to double taxation as the sales were already accounted for in the profit and loss account. The Tribunal also dismissed the Revenue's ground regarding product development/sampling expenses, relying on its own previous orders and a High Court order in the assessee's own case.

The ITAT allowed the assessee's appeal on grounds 11-14, deleting additions related to bogus purchases from specific vendors, finding the assessee had discharged its burden of proof. The Tribunal dismissed the assessee's appeal on ground 15 regarding Section 14A disallowance, upholding the CIT(A)'s order to the extent of exempt income.

The ITAT held that disallowances under Section 14A could not be made without incriminating material found during a search, as the assessment was unabated. It also found that the disallowance under Section 14A could not exceed the exempt income earned. The tribunal dismissed the Revenue's grounds related to bogus expenses and product development expenses, upholding the CIT(A)'s deletion of these additions.

The Tribunal held that expenses incurred to keep the corporate entity alive and maintain infrastructure for future business revival are allowable, even if no business income was earned in the current year. The assessee's intention to revive the business was considered sufficient.

The Tribunal dismissed the Revenue's ground regarding unexplained cash sales, finding that the addition would amount to double taxation as the sales were already accounted for in the profit and loss account. The Tribunal also dismissed the Revenue's ground regarding product development/sampling expenses, relying on its own previous orders and a High Court order in the assessee's own case.

The Tribunal allowed the assessee's appeal regarding bogus purchases, deleting the addition. It also allowed the deletion of addition on account of unexplained cash by telescoping it against cash scrap sales. The disallowance under Section 14A was upheld to the extent of exempt income earned.

The Tribunal held that the management support services provided by the assessee did not 'make available' technical knowledge, experience, skill, or know-how to the recipient in a manner that would allow them to apply it independently. Therefore, the services did not qualify as FTS under Article 12(4) of the DTAA.

The Tribunal held that the notice u/s 143(2) was not issued within the statutory time limit. Consequently, the assessment order was deemed null and void ab initio.