ITAT Delhi Judgments — March 2022

The Tribunal upheld the CIT(A)'s deletion of additions related to deemed dividend under Section 2(22)(e) and the disallowance of interest expenses. The Tribunal found no reason to interfere with the CIT(A)'s findings on these grounds, dismissing the Revenue's appeal.

The Tribunal held that no disallowance is warranted for belated payment of employee's contribution to ESI and EPF if deposited before the due date of filing the Income Tax Return. The amendment by the Finance Act, 2021, was clarified to be effective from April 1, 2021.

The Tribunal, following its own precedent upheld by the High Court, directed the AO to adopt a commission rate of 0.50% instead of 2.25%. The Tribunal also restored the issue of disallowance under Section 14A to the AO for re-computation, considering only investments yielding dividend income.

The Tribunal, following a coordinate bench's decision on identical facts, set aside all the disputed issues to the Assessing Officer for fresh adjudication. The Assessing Officer was directed to pass a fresh order after providing a reasonable opportunity to the assessee.

The Tribunal held that the sanction for issuing the notice under Section 148 was not obtained from the appropriate authority as required by Section 151. Regarding the addition, it found the 30% gross profit rate unjustified without specific findings on the business activity.

The Tribunal held that the payment received for the sale/supply of software does not constitute royalty under the India-Singapore DTAA, following the Supreme Court's decision in Engineering Analysis Centre of Excellence Pvt. Ltd. The Tribunal also dismissed the ground related to the interpretation of DTAA terms using domestic law, as it was conceded by the revenue.

The Tribunal held that the AO had conducted proper inquiry and taken a plausible view. The order was not considered erroneous, thus failing the twin conditions for invoking Section 263.

The Tribunal restored the issue to the CIT(A) with a direction to grant one final opportunity to the assessee to substantiate its case. The assessee was also directed to cooperate with the CIT(A) without seeking unnecessary adjournments.

The Tribunal held that the assessee's non-appearance before the First Appellate Authority meant they failed to rebut the Assessing Officer's findings. Therefore, there was no merit in the appeal.

The Tribunal held that the assessee failed to provide evidence to support her contention that the fair market value of the property was lower than that adopted by the stamp valuation authority. Therefore, the orders of the lower authorities were affirmed.

The Tribunal held that the payment received for the sale/supply of software was not royalty under the India-Singapore DTAA, following the Supreme Court's decision in Engineering Analysis Centre of Excellence Pvt. Ltd. The issue regarding the interpretation of DTAA terms based on domestic law was also decided in favor of the assessee.

The Tribunal held that the AO had not brought any evidence on record to disprove the genuineness of the transactions, other than relying on an investigation report. Considering the assessee's long history of share investments and the fact that gains from other shares were accepted, the Tribunal found no merit in treating these specific gains as bogus.

The Tribunal upheld the CIT(A)'s order sustaining the addition. The assessee had not declared the bank account and could not explain the source of the cash deposit, making the addition under Section 68 valid.

The Tribunal upheld the decision of the CIT(Appeals) that the surplus amounts in the regulatory accounts were not income of the assessee. The assessee was merely overseeing collections, and the funds were diverted at source, preventing the assessee from using them.

The Tribunal found that there was an error in the proceedings by both the AO and CIT(A) regarding the service of notices on the correct postal address and providing adequate opportunity of hearing. The CIT(A)'s order was also flawed for dismissing the appeal for non-prosecution while simultaneously discussing merits.

The Tribunal held that since the additions made by the Assessing Officer in the quantum proceedings were deleted by a prior ITAT order, the penalty order, which was based on those additions, could not be sustained.

The Tribunal upheld the decision of the CIT(Appeals) that the surplus amounts in the regulatory accounts were not income of the assessee. The assessee was merely overseeing collections, and the funds were diverted at source, preventing the assessee from using them.

The Tribunal held that the AO had wrongly assumed jurisdiction under Section 147 as the reasons for reopening were not properly recorded, and the AO did not independently apply his mind to the information. The approval for issuing the notice under Section 148 was also found to be not in accordance with the law.

The Tribunal held that the CIT(A) erred by not adjudicating the additional legal grounds raised by the assessee, which went to the root of the matter. The appeal was restored to the CIT(A) for de novo adjudication of both the additional grounds and the grounds on merits.

The Tribunal held that disallowances for employees' PF and ESI contributions are not warranted when processed under Section 143(1) as the issue is debatable. Furthermore, the Tribunal found that the amendments introduced by the Finance Act, 2021, are prospective and do not apply to the assessment years in question.

The Tribunal held that disallowances for employees' PF and ESI contributions are not warranted when processed under Section 143(1) as the issue is debatable. Furthermore, the Tribunal found that the amendments introduced by the Finance Act, 2021, are prospective and do not apply to the assessment years in question.

The Tribunal, following its own precedent and a High Court decision in similar group cases, directed the AO to adopt a commission rate of 0.50% instead of 2.25%. The addition was to be recalculated based on this lower rate.

The Tribunal upheld the disallowance of depreciation because the assessee failed to furnish cogent evidence to establish the genuineness of the expenditure incurred on fixed assets, even after notices under Section 133(6) were issued.

The Tribunal held that since the quantum additions/disallowances, which formed the basis for the penalty, were already reversed by a coordinate bench, the basis for imposing the penalty ceased to exist. Therefore, the deletion of penalty by the CIT(A) was upheld.

The Tribunal noted that the Chief Commissioner of Income Tax had approved the assessee under Section 10(23C)(vi) from AY 2008-09 onwards. Consequently, the grievance regarding Section 11(2) became otiose, and the Assessing Officer was directed to re-examine the issue in light of the CCIT's order.

The Tribunal held that while non-compete fee is an intangible asset, it is not similar to other specified intangible assets under Section 32(1)(ii) as the right is restricted to the seller (in personem) and not exercisable against the world at large (in rem). Therefore, depreciation on non-compete fee is not allowable.

The tribunal granted the assessee's request to withdraw the appeal. This was due to the matter being settled under the Vivad se Vishwas Scheme, 2020.

The ITAT restored the issue of TDS on payments to non-residents to the Assessing Officer for fresh determination, finding that the AO and CIT(A) had not properly addressed the assessee's core objections. The ITAT deleted the addition for late deposit of PF/ESI, following Delhi High Court precedents.

The Tribunal noted that the core issues of mutuality and diversion by overriding title were settled by the Supreme Court. The remaining issue concerned computational errors regarding excess expenditure over income, which had been corrected in prior assessment years. The Tribunal set aside the issue to the AO for fresh adjudication.

The Tribunal found that the CIT(A) did not decide the appeal on merits as required by law. Therefore, the case was restored to the CIT(A) for a fresh decision after giving the assessee a final opportunity.

The Tribunal upheld the decision of the CIT(Appeals) that the surplus amounts in the regulatory accounts were not income of the assessee. The assessee was merely overseeing collections, and the funds were diverted at source, preventing the assessee from using them.

The Tribunal held that employees' contribution to ESI and EPF, if deposited before the due date of filing the return of income, is allowable as a deduction, even if deposited after the due dates prescribed under the respective laws.

The Tribunal held that since the quantum appeal concerning the Section 54F deduction was allowed by a previous ITAT order, the basis for initiating penalty proceedings was removed. Therefore, the penalty order could not be sustained.

The Tribunal held that since the additions made by the Assessing Officer in the quantum proceedings were deleted by a prior ITAT order, the penalty order, which was based on those additions, could not be sustained.

The Tribunal held that the issue needed to be re-examined by the Assessing Officer to verify if the transaction was indeed an inter-bank transfer between the assessee's own accounts. The assessee was given an opportunity to produce the relevant bank statements.

The Tribunal upheld the decision of the CIT(Appeals) that the surplus amounts in the regulatory accounts were not income of the assessee. The assessee was merely overseeing collections, and the funds were diverted at source, preventing the assessee from using them.

The Tribunal allowed the assessee's request to withdraw the appeal. This was based on the assessee opting for the Vivad Se Vishwas Scheme and paying the due taxes.

The Tribunal held that the payments received by the assessee for the sale of software to Indian resellers/distributors are not in the nature of 'royalty' as per the India-USA DTAA. This decision followed a prior ruling in the assessee's own case for the preceding assessment year.

The Tribunal decided to follow the precedent set in the assessee's own case for other assessment years. It directed the AO to re-compute the addition by taking the profit margin at 0.5% and held that no further expenditure allowance was permissible.

The Tribunal held that since the quantum additions/disallowances, which formed the basis for the penalty, were already reversed by a coordinate bench, the basis for imposing the penalty ceased to exist. Therefore, the deletion of penalty by the CIT(A) was upheld.

The Tribunal held that credit for TDS can be claimed even if the corresponding income is not offered for tax in the current year, provided the income was offered in earlier years. The disallowance of TDS credit and subsequent interest was set aside.

The Tribunal held that disallowances for employees' PF and ESI contributions are not warranted when processed under Section 143(1) as the issue is debatable. Furthermore, the Tribunal found that the amendments introduced by the Finance Act, 2021, are prospective and do not apply to the assessment years in question.

The Tribunal found that the reassessment proceedings were initiated without proper jurisdiction and that the AO's action of taxing the fair market value of properties under Section 28(iv) was not sustainable. The addition on account of cash credit from Dotex Merchandise Pvt. Ltd. was also deleted.

The Tribunal found that the assessee failed to discharge the onus of proving the identity, creditworthiness, and genuineness of transactions related to unsecured loans, particularly from M/s. Hirise Hospitality Pvt. Ltd. The CIT(A)'s order was set aside.

The Tribunal held that the assessee only acquired a right to use the technical know-how during the license period, with no transfer of ownership or enduring benefit. Therefore, the royalty payment was revenue expenditure.

The Tribunal noted that the Chief Commissioner of Income Tax had approved the assessee under Section 10(23C)(vi) from AY 2008-09 onwards. Consequently, the grievance regarding Section 11(2) became otiose, and the Assessing Officer was directed to re-examine the issue in light of the CCIT's order.

The Tribunal held that the CIT(A) did not decide the appeal on merits as required by law. Therefore, the case was restored to the CIT(A) for a fresh decision after granting one final opportunity to the assessee.

The Tribunal upheld the addition of Rs. 2.2 crores as unexplained cash credit. The assessee failed to provide satisfactory evidence for the identity, genuineness, and creditworthiness of the loan creditors, and additional evidence was rightly rejected by the CIT(A).

The Tribunal allowed the assessee's request for withdrawal of the appeal. This was done in the absence of any objection from the Revenue's representative.

The Tribunal held that no disallowance is warranted for belated payment of employee's contribution to ESI and EPF if deposited before the due date of filing the Income Tax Return. The amendment by the Finance Act, 2021, was clarified to be effective from April 1, 2021.