ITAT Delhi Judgments — February 2023

The Tribunal partly allowed the appeals concerning unverified purchases, remanding the issue for further verification. The addition for unexplained jewellery was upheld, while the disallowance of interest deduction was deleted.

The Tribunal found that the CIT(E)'s reason for rejection was incorrect and that the assessee had since been granted registration under Section 12A(1)(ac)(i). The matter was remanded to the CIT(E) to re-examine the objects and pass a speaking order.

The Tribunal noted that the CBDT circular mandates that appeals with a tax effect below Rs. 50 lakhs should not be filed or pressed. Therefore, the Revenue's appeal was not maintainable.

The Tribunal held that it is inconceivable for the assessee to receive commission from itself for purchases made on its own behalf. Therefore, the addition on account of commission was ill-conceived.

The Tribunal upheld the penalty, finding that the assessee failed to provide sufficient documentary evidence to support claims that cash repayments were for medical purposes or were proprietor's drawings. The Tribunal noted that the auditor's report explicitly mentioned cash repayments exceeding the specified limit.

The Tribunal held that even without definitively deciding on the applicability of the principle of mutuality, the addition was not sustainable. This was because the assessee had already included the rental and interest income in its income and expenditure account, and there was no surplus left to be taxed.

The Tribunal held that domestic PLR cannot be applied to benchmark interest on foreign currency loans to AEs, upholding the CIT(A)'s deletion. It also upheld the deletion of interest expenditure disallowance based on consistency with a prior year's decision. However, it allowed the Revenue's ground regarding delayed ESIC payment disallowance, reversing the CIT(A)'s order.

The Tribunal held that the penalty was wrongly levied under Section 271(1)(c) instead of Section 271AAA. Therefore, the penalty was liable to be dismissed.

The Tribunal upheld the concurrent findings of the lower authorities that expenses can only be claimed after business commencement. Income earned before business setup is to be treated as income from other sources.

The Tribunal allowed the deletion of addition for commission paid to Shri Mrigank Singh, finding the payment genuine based on evidence. It also directed deletion of salary disallowance, stating that non-production of an employee is not a ground for disallowance. The issue of rebate and discount was restored to the AO for fresh examination, and car expense disallowance was reduced.

The Tribunal held that the payments received for accessing the database do not constitute royalty as there was no transfer of copyright or right to use copyright. The assessee merely provided access to collated information, not the underlying copyright.

The Tribunal found that the CIT(E)'s reason for rejection was incorrect and that the assessee had since been granted registration under Section 12A(1)(ac)(i). The matter was remanded to the CIT(E) to re-examine the objects and pass a speaking order.

The Tribunal partly allowed the appeals concerning unverified purchases, remanding the issue for further verification. The addition for unexplained jewellery was upheld, while the disallowance of interest deduction was deleted.

The ITAT held that the CIT(A) erred in not passing a speaking order explaining the rejection of additional evidence. The tribunal set aside the CIT(A)'s order and restored the issue to the CIT(A)'s file for a fresh decision after considering the admissibility of the additional evidence.

The Tribunal noted that the facts were identical to a previous case involving a co-owner and brother of the assessee. Following the precedent, the Tribunal set aside the assessment order and directed the AO to re-assess the case.

The Tribunal upheld the Commissioner (Appeals)'s decision to delete the penalties. It reasoned that transfer pricing adjustments based on changes in filters and comparables are debatable, and the disallowance of doubtful debts was either self-disallowed by the assessee or deleted by the Dispute Resolution Panel.

The Tribunal held that penalties cannot be imposed on transfer pricing adjustments arising from changes in filters and comparables, as these are debatable issues. Similarly, penalties on additions that were subsequently deleted or did not survive appellate orders were also deemed unjustified.

The tribunal held that the CIT(A) erred in dismissing the appeal summarily without deciding on merits, as per Section 250(6) of the Income Tax Act. The impugned order was set aside, and the CIT(A) was directed to pass a fresh order after providing an opportunity to the assessee.

The Tribunal followed a co-ordinate bench's decision for a prior assessment year in the assessee's own case. It held that the AO erred in making additions for alleged unexplained purchases when no deduction was claimed for them. The Tribunal also found no substance in the grounds related to additional evidence and the Section 36(1)(va) issue.

The Tribunal held that a bona fide belief, even if based on an auditor's report or a judicial opinion, cannot be a smokescreen to avoid penalty when the action is contrary to well-known principles. The penalty was affirmed.

The Tribunal dismissed the Revenue's appeals, following a coordinate bench's decision where the commission income from accommodation entries was accepted by Shri Pradeep Kumar Jindal. The dismissal is subject to the condition that if additions are deleted in Shri Jindal's hands, the Revenue can revive these appeals.

The Tribunal found that the assessee had a reasonable cause for non-representation before the CIT(Appeals) due to the death of the original assessee. Therefore, the impugned order was set aside to ensure principles of natural justice were followed.

The Tribunal held that the reassessment proceedings were initiated legally after following due procedure, including obtaining necessary approvals and serving notices. The disallowance of Section 54F exemption was also upheld.

The Tribunal held that the AO's finding that all notices, including the assessment order, were sent to the same address and were not returned undelivered was not rebutted by the assessee. Therefore, the assessee's contention of non-receipt was not tenable.

The Tribunal dismissed the Revenue's appeals, following a coordinate bench's decision where the commission income from accommodation entries was accepted by Shri Pradeep Kumar Jindal. The dismissal is subject to the condition that if additions are deleted in Shri Jindal's hands, the Revenue can revive these appeals.

The Tribunal set aside the CIT(A)'s order and restored the issues to the Assessing Officer for a fresh assessment. Both parties agreed that there were factual gaps in the previous orders.

The Tribunal condoned the delay in filing the appeal as an exceptional case, subject to a cost deposit. Subsequently, the Tribunal quashed the assessment order itself, finding that the additions were already considered in the hands of other family members and that the reassessment proceedings were not justified.

The Tribunal held that the levy of late fee under Section 234E is not tenable for defaults committed prior to the amendment of Section 200A of the Act, which came into effect from June 1, 2015. Therefore, the impugned late fee requires to be deleted.

The Tribunal held that the authorities below ought to have considered the assessee's claim for exemption under Section 54. The matter was restored to the Assessing Officer to verify the claim and allow exemption in accordance with law.

The Tribunal upheld the findings of the lower authorities, stating that the assessee failed to provide contrary material to rebut the AO's finding of bogus LTCG. The appeal grounds raised by the assessee were dismissed.

The Tribunal held that the reassessment order was bad in law due to the absence of a mandatory notice under Section 143(2). It also found that the disallowances made under Section 40A(3) and for interest on late payments were not justified.

The Tribunal held that the assessee had a bona fide reason beyond its control for not submitting relevant documents. Therefore, the matter was restored to the Assessing Officer for fresh adjudication after allowing the assessee a proper opportunity to present its case.

The Tribunal upheld the order of the CIT(A), confirming the addition made by the Assessing Officer. The assessee failed to provide satisfactory explanation for the cash deposits, and the grounds of appeal were dismissed.

The Tribunal acknowledged the assessee's difficulty in producing documents due to the company's liquidation. It directed the AO to consider the bank statements of Tulip Telecom Limited, which showed payments towards credit card bills, and decide the issue afresh after providing an opportunity to the assessee.

The Tribunal held that commission income earned from arranging international travel, including domestic legs booked by the assessee, is directly connected to the operation of aircraft in international traffic and thus exempt under Article 8 of the DTAA. However, collection charges received for timely payment of airport charges were not considered directly connected to international traffic operations and were upheld as taxable.

The Tribunal restored the appeal to the CIT(A) for adjudication on merits. The CIT(A) was directed to provide the assessee with an adequate opportunity of being heard.

The Tribunal held that the CIT(A) erred in rejecting the assessee's application for admission of additional evidence without sufficient reason. The Tribunal admitted the additional evidence and restored the matter to the CIT(A) for fresh adjudication.

The Tribunal agreed with the CIT(A) that the assessee had successfully rebutted the presumption of income. The addition made by the Assessing Officer was deleted.

The Tribunal held that mere delay in filing Form No. 67 does not preclude the assessee from claiming foreign tax credit. The rules cannot override the Act, and filing of Form No. 67 is directory, not mandatory.

The Tribunal confirmed the addition made by the Assessing Officer and upheld by the CIT(A). This decision was based on the jurisdictional High Court's order in the assessee's own case, which had not been reversed.

The Tribunal held that commission income earned from arranging international travel, including domestic legs booked by the assessee, is directly connected to the operation of aircraft in international traffic and thus exempt under Article 8 of the DTAA. However, collection charges received for timely payment of airport charges were not considered directly connected to international traffic operations and were upheld as taxable.

The Tribunal upheld the CIT(A)'s decision, stating that additions under Section 153A must be based on incriminating material found during the search. Since no such material was found, the assessment was not justified.

The Tribunal held that the addition made by the AO was liable to be deleted. This decision was based on similar matters adjudicated by the Tribunal and PCIT, where the additions were not sustained.

The assessee's counsel fairly submitted that the issue is covered against the assessee by a Supreme Court decision. Therefore, the appeal deserves to be dismissed.

The Tribunal held that the CIT(A) erred in dismissing the appeal on grounds of delay without proper verification. The issue of gratuity provision was set aside to the AO for verification. The disallowance of employee PF/ESI contributions was sustained following the Supreme Court's decision in Checkmate Services P. Ltd.

The Tribunal agreed with the CIT(A) that the assessee had successfully rebutted the presumption of income. The addition made by the Assessing Officer was deleted.

The Tribunal held that ESOP expenses are allowable as a business expenditure under Section 37(1) of the Income Tax Act. The Revenue did not provide any material to contradict the CIT(A)'s findings.

The Tribunal agreed with the CIT(A) that the assessee had successfully rebutted the presumption of income. The addition made by the Assessing Officer was deleted.

The Tribunal held that Section 56(2)(viib) is not applicable to non-resident investors. For resident investors, the valuation report based on the DCF method cannot be rejected merely because future projections differ from actual sales.

The Tribunal held that commission income earned from arranging international travel, including domestic legs booked by the assessee, is directly connected to the operation of aircraft in international traffic and thus exempt under Article 8 of the DTAA. However, collection charges received for timely payment of airport charges were not considered directly connected to international traffic operations and were upheld as taxable.