ITAT Delhi Judgments — November 2022

The Tribunal held that an assessment order passed in the name of a non-existent entity is invalid, following the ratio laid down by the Supreme Court in PCIT Vs. Maruti Suzuki India Ltd. Therefore, the assessment order was quashed.

The Tribunal held that the license fee paid for the use of goodwill is an allowable revenue expenditure, following its own previous decisions on similar facts. The ad hoc disallowance of travelling expenses was also found unsustainable as the books of account were not disputed.

The Tribunal held that the additions under Section 68 were unsustainable as the amounts were not credited in the assessee's books. Furthermore, the Revenue failed to provide conclusive evidence or an opportunity for cross-examination of the third-party statements, violating natural justice principles. Ad-hoc disallowances of expenses were also deleted due to lack of valid reasoning.

The Tribunal held that the reasons recorded by the AO for reopening the case were factually incorrect as the audited balance sheet showed no receipt or forfeiture of share application money. Furthermore, the AO recorded single reasons for two separate entities, which was not sustainable. Therefore, the assessment order was vitiated.

The Tribunal held that interest income is taxable only on a payment/receipt basis as per Article 11 of the India-Cyprus DTAA. Notional interest, contingent upon future events that did not occur, cannot be brought to tax.

The Tribunal noted that Form No. 5 was issued to the assessee under The Direct Tax Vivad Se Vishwas Act, 2020. Consequently, the appeal was allowed to be withdrawn.

The Tribunal noted that the assessee had opted for settlement under the Vivad Se Vishwas Scheme and Form No. 5 was issued. Therefore, the appeal was allowed to be withdrawn.

The Tribunal held that the shares were received as a gift and not an investment made in violation of Section 11(5). Furthermore, even if there was a violation, exemption could only be denied for income derived from such investment, which was nil in this case. The modification of objects was also deemed not to warrant denial of exemption.

The Tribunal condoned the delay in filing the appeal. It directed the CIT(Exemptions) to first decide the registration under Section 12AA and then consider the application under Section 80G(5)(vi) after providing an opportunity of being heard.

The Tribunal upheld the CIT(A)'s decision, finding that interest paid was an allowable deduction and that Section 14A disallowances are notional and cannot be added back to book profits under Section 115JB. The revenue failed to provide contrary arguments.

The Tribunal held that an appeal cannot be dismissed without deciding on merits. Therefore, the case was restored to the CIT(A) for fresh consideration, with an opportunity for the assessee to be heard.

The Tribunal accepted the Section 80G deduction issue as an additional ground. Since departmental authorities had not decided the claim and a rectification application was pending, the issue was restored to the Assessing Officer for examination.

The Tribunal affirmed the CIT(A)'s order, finding no material to controvert the findings. The addition of 40% of the unaccounted turnover as profit was upheld, along with the confirmation of unaccounted salary.

The Tribunal held that an assessment order passed in the name of a non-existent entity is invalid, following the ratio laid down by the Supreme Court in PCIT Vs. Maruti Suzuki India Ltd. Therefore, the assessment order was quashed.

The Tribunal held that since the disallowance under Section 40(a)(ia) had been deleted by the Tribunal in the quantum appeal, the penalty imposed based on that disallowance could not survive. Therefore, the deletion of penalty by the CIT(A) was upheld.

The Tribunal noted that the quantum addition, which formed the basis for the penalty, had been deleted by a previous order of the Tribunal. Therefore, the penalty levied by the revenue could not be sustained.

The Tribunal noted that the tax effect of the appeal was below the threshold stipulated by CBDT Circular No. 17 of 2019. Therefore, the appeal was dismissed on this procedural ground.

The Tribunal directed the AO to compute the income based on the revised return. Regarding the Section 80IA deduction and transfer pricing adjustments for interest, the issues were restored to the AO/TPO for fresh determination with specific directions. The disallowance for late EPF contribution was upheld.

The Tribunal held that the payment of TDS relates back to the date of presentation of the cheque to the banker. Therefore, the assessee cannot be penalized for the delay caused by the bank.

The Tribunal noted that this issue was repetitive and had been decided in the assessee's own case for previous assessment years. Based on the prior adjudication, the Tribunal found no reason to interfere with the CIT(A)'s order.

The Tribunal held that the assessee had a bonafide belief that TDS was not required on EDC payments to HUDA, especially considering clarifications from the Directorate of Town and Country Planning (DTCP). Therefore, penalty under Section 271C was not leviable.

The Tribunal held that the PCIT erred in assuming jurisdiction under Section 263. The AO had made inquiries and accepted the assessee's explanations, and the PCIT could not establish that the AO's order was erroneous. The PCIT's attempt to direct a fuller inquiry was not permissible.

The Tribunal held that since the quantum addition was restored to the AO, the penalty levied by the revenue could not sustain at this juncture. The AO was granted liberty to initiate penalty proceedings de novo after finalization of the assessment.

The Tribunal affirmed the CIT(A)'s order, finding no material to controvert the findings. The addition of 40% of the unaccounted turnover as profit was upheld, along with the confirmation of unaccounted salary.

The Tribunal upheld the CIT(E)'s decision, finding that the association's objects were for the welfare of its members and constituted a mutual concern, not a charitable purpose as defined under Section 2(15). Therefore, registration under Section 12A could not be granted.

The Tribunal held that the adjustment made by the CPC under section 143(1)(a)(iv) for late deposit of employee's PF contribution is valid, especially in light of the Supreme Court's decision in Checkmate Services Pvt. Ltd. The issue is no longer debatable.

The Tribunal noted that the rectification application was not properly filed by the assessee. However, to resolve the issue, the Tribunal directed the Assessing Officer to verify the TDS claim and grant credit if admissible, by disposing of the rectification application within three months.

The Tribunal held that the assessee had a bonafide belief that TDS was not required on EDC payments, especially considering clarifications from government authorities. Therefore, the penalty under Section 271C was not leviable.

The Tribunal held that the CIT(E) failed to provide cogent material to demonstrate deviation from the assessee's core charitable objects. The Tribunal also noted the continued registration under Section 12A and 80G, highlighting a dichotomy in the revenue's stand.

The Tribunal held that the Revenue's grievance was misconceived as the assessee had not claimed any depreciation on the sales tax subsidy. The CIT(A)'s finding that no depreciation was claimed was not rebutted by the Revenue.

The Tribunal held that the reassessment made under Section 143(3) read with Section 147 is bad in law and void ab initio because the reasons for reopening were not served on the assessee. The reassessment order was consequently quashed.

The Tribunal held that the transfer of land was completed on the date of the sale deed, by which time its use had been changed to non-agricultural/industrial. Therefore, it qualified as a capital asset, and capital gains were chargeable. The lower authorities' findings were upheld.

The Tribunal held that the appeal was not maintainable as the tax effect was less than the monetary limit prescribed by the CBDT circular. The Revenue could not provide any exceptions to this rule.

The Tribunal upheld the CIT(A)'s decision, finding that the assessee had established the identity and creditworthiness of the creditor. The Revenue failed to provide any contrary evidence to disprove the genuineness of the transaction.

The Tribunal held that the assessee discharged its onus by proving the genuineness of the members' contributions by filing confirmations. The AO cannot demand the assessee to prove the source of the source, which is beyond the scope of Section 68.

The Tribunal upheld the order of the CIT(A) which confirmed the addition made by the AO. The assessee failed to discharge its onus of proving the identity, genuineness, and creditworthiness of the share applicants.

The Tribunal held that the AO failed to provide any material beyond a seized document to conclusively establish the cash payment by the assessee. The builder also denied receiving any cash payment, and a previous deletion of similar on-money additions in the builder's case further weakened the AO's position.

The Tribunal found that a new notification amending Rule 8D came into force before the assessment order was passed. Therefore, the matter was remanded to the AO for re-computation of the disallowance as per the amended rule.

The Tribunal held that the additions under Section 68 were unsustainable as the amounts were not credited in the assessee's books. Furthermore, the Revenue failed to provide conclusive evidence or an opportunity for cross-examination of the third-party statements, violating natural justice principles. Ad-hoc disallowances of expenses were also deleted due to lack of valid reasoning.

The Tribunal found that the difference in amounts confirmed by parties was due to service tax, and that advertisement expenses were adequately supported with TDS details. Therefore, the disallowance was not justified.

The Tribunal held that disallowance under Section 14A is not sustainable if no exempt income is earned. It also upheld the CIT(A)'s proportionate disallowance of interest expenses, finding no error in the method applied.

The Tribunal found that the order was silent on how a crucial notice was served on the assessee. Therefore, to ensure justice, the assessee was granted an opportunity to respond to the notice and present their case.

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

The Tribunal decided in favour of the assessees, following a coordinate bench's order. It directed the Assessing Officer to exclude CSR expenses from book profits for the purpose of computing book profit under Section 115JB.

The Tribunal held that the deduction claimed for lease rentals on assets leased after April 1, 2001, was distinct and separate from lease rentals on assets leased prior to that date. The CIT(A)'s finding that these were separate could not be controverted by the Revenue.

The Tribunal decided in favour of the assessees, following a coordinate bench's order. It directed the Assessing Officer to exclude CSR expenses from book profits for the purpose of computing book profit under Section 115JB.

The Tribunal considered the request for withdrawal of the appeal. In light of the request, the appeal was dismissed as withdrawn.

The Tribunal held that the Assessing Officer failed to provide the assessee with the details of the alleged loss and the beneficiary parties, violating principles of natural justice. The addition was made without substantial basis or positive findings from the AO's inquiry.

The Tribunal decided in favour of the assessees, following a coordinate bench's order. It directed the Assessing Officer to exclude CSR expenses from book profits for the purpose of computing book profit under Section 115JB.

The Tribunal held that the AO exceeded the scope of limited scrutiny by recharacterizing the income without proper approval, rendering the assessment order void. The assessment order was quashed for violating CBDT instructions.