ITAT Delhi Judgments — May 2023

The Tribunal upheld the additions made by the departmental authorities on account of unexplained share application money and commission paid thereon. The assessees failed to furnish evidence to establish the source and genuineness of the share capital introduced.

The tribunal held that the ex-parte order and the dismissal for non-prosecution without adjudication were improper. To avoid multiplicity of proceedings, the matter was restored to the AO for a fresh assessment.

The Tribunal held that the assessment order passed under Section 153C was invalid as the search date preceded the amendment to Sections 153A and 153C, making the amended provisions inapplicable. Consequently, the assessment order was quashed.

The Tribunal held that the CIT(A) incorrectly applied the CUP method based on incomplete data and aggregated transactions inappropriately. The Tribunal also found that the additional evidence admitted by the CIT(A) did not help the assessee.

The Tribunal upheld the additions made by the departmental authorities on account of unexplained share application money and commission paid thereon. The assessees failed to furnish evidence to establish the source and genuineness of the share capital introduced.

The Tribunal held that the remaining Rs. 1,17,710/- of expenses for helpers and guards was allowable as business expenditure. It also directed the deletion of disallowances made on account of business promotion expenses, finding them to be routine business activities.

The Tribunal condoned the delay, finding sufficient cause. The Tribunal set aside the orders of the lower authorities and restored the matter to the Assessing Officer for de novo assessment, allowing the assessee an opportunity of hearing.

The Tribunal held that once the original Section 263 proceedings were quashed by the ITAT, any consequential proceedings would have no legal standing. Therefore, the CIT(A)'s decision to quash the assessment order was correct.

The Tribunal held that the Chartered Engineer's certificate of commissioning, along with the fact that the pilot project was in the premises of an existing factory, was sufficient to establish the use of the plant and machinery. The disallowance was deemed unsustainable.

The Tribunal held that the employee's contribution to PF and ESI, if deposited after the statutory due date, is not allowable as a deduction. This is in line with the Supreme Court's decision in Checkmate Services Pvt. Ltd.

The Tribunal upheld the CIT(A)'s decision, noting that the assessee's Section 12AA registration was restored by a prior ITAT order, entitling it to Section 11 exemptions. The Tribunal also found no infirmity in the deletion of the addition related to income booked twice.

The Tribunal held that the provision for unsettled claims is an ascertained liability as it is based on actual communication from policyholders. Similarly, the provision for IBNR claims, made according to IRDA regulations and actuarial valuation, is also an ascertained liability.

The Tribunal held that the AO failed to record objective satisfaction for rejecting the assessee's suo moto disallowance. Therefore, the disallowance made under Section 14A was not sustainable.

The Tribunal held that the provision for unsettled claims is an ascertained liability as it is based on actual communication from policyholders. Similarly, the provision for IBNR claims, made according to IRDA regulations and actuarial valuation, is also an ascertained liability.

The Tribunal noted that the CBDT Circular revising the monetary limit for appeals to Rs. 50 Lacs was applicable to pending appeals. Therefore, the appeal filed by the Revenue was not maintainable.

The Tribunal held that the provision for unsettled claims is an ascertained liability as it is based on actual communication from policyholders. Similarly, the provision for IBNR claims, made according to IRDA regulations and actuarial valuation, is also an ascertained liability.

The Tribunal upheld the disallowance of the impairment loss, agreeing with the lower authorities that the assessee failed to discharge the onus of proving the bona fides of the claim and the genuineness of the transaction.

The Tribunal held that the assessee failed to discharge the initial burden under Section 68 to prove the identity, creditworthiness, and genuineness of the share transactions. The Tribunal found no merit in the grounds challenging the invocation of Section 144 and the validity of the Inspector's report.

The Tribunal held that the orders passed by the TDS officer under Section 201(1)/201(1A) were barred by limitation as per Section 201(3) of the Act, following the jurisdictional High Court's decision.

The Tribunal held that the penalty notice issued under Section 271(1)(c) was invalid because it did not specify the exact charge against the assessee, i.e., whether it was for concealment of income or furnishing inaccurate particulars. Following established precedents, the Tribunal set aside the orders of the authorities below.

The Tribunal held that the assessee had sufficiently proved the identity, creditworthiness, and genuineness of the unsecured loan transactions. Regarding the cost of construction, the Tribunal's decision in the lead case for AY 2008-09 was to apply mutatis mutandis to the other assessment years.

The Tribunal held that the penalty notice issued under Section 271(1)(c) was invalid because it did not specify the exact charge against the assessee, i.e., whether it was for concealment of income or furnishing inaccurate particulars. Following established precedents, the Tribunal set aside the orders of the authorities below.

The Tribunal held that the assessee had sufficiently proved the identity, creditworthiness, and genuineness of the unsecured loan transactions. Regarding the cost of construction, the Tribunal's decision in the lead case for AY 2008-09 was to apply mutatis mutandis to the other assessment years.

The Tribunal held that the penalty imposed under Section 271(1)(c) does not survive as the quantum appeal has been restored to the AO for rectification. The AO is at liberty to initiate penalty proceedings after the rectification order if deemed necessary.

The Tribunal held that the assessee had sufficiently proved the identity, creditworthiness, and genuineness of the unsecured loan transactions. Regarding the cost of construction, the Tribunal's decision in the lead case for AY 2008-09 was to apply mutatis mutandis to the other assessment years.

The Tribunal held that the penalty notice issued under Section 271(1)(c) was invalid because it did not specify the exact charge against the assessee, i.e., whether it was for concealment of income or furnishing inaccurate particulars. Following established precedents, the Tribunal set aside the orders of the authorities below.

The Tribunal held that the penalty notice issued under Section 271(1)(c) was invalid because it did not specify the exact charge against the assessee, i.e., whether it was for concealment of income or furnishing inaccurate particulars. Following established precedents, the Tribunal set aside the orders of the authorities below.

The Tribunal held that the grounds raised by the assessee deserve to be sustained. The Tribunal observed that there was no determination of the nature of the assessee's rights by the Civil Courts, and therefore, no opinion against the assessee could be made on that basis. It was noted that there was no encumbrance on the premises in favor of the assessee after vacating the premises in furtherance of the Delhi High Court's orders. The Tribunal opined that the tax authorities were intrigued to tax the heavy receipt but failed to examine the reasons for receipt beyond the right of preemption and the suit filed by the assessee. The preface to the settlement indicated that the amount received was to make the premises free of litigation and avoid costs of protracted civil litigation. Once the assessee had parted with possession in favor of the purchaser, any cloud over the title and rights of the purchaser due to pending suits made the property lose its prospective value. The purchaser's consideration to buy peace and make the property clean by paying Rs. 20,40,00,000/- might have other taxability incidences, but certainly not Capital Gains. Furthermore, the Tribunal noted that for capital gains tax to arise, the cost of acquisition must be established. The AO himself considered the cost of acquisition of the so-called right of preemption to be Nil, which meant the computation provisions failed, and therefore, capital gains could not have been calculated. This reinforced the view that a mere right to sue in regard to immovable property cannot be subject to Income Tax under the head 'Capital Gains' as restricted by Section 6(e) of the Transfer of Property Act, 1882. Accordingly, the appeal of the assessee was allowed, and the impugned orders of the tax authorities below were quashed.

The Tribunal found that the issue of challenging the suo motu disallowance and the additional grounds raised were not considered by the lower authorities. Therefore, in the interest of justice, the matter was remitted back to the Assessing Officer for fresh adjudication.

The Tribunal held that the orders passed by the TDS officer under Section 201(1)/201(1A) were barred by limitation as per Section 201(3) of the Act, following the jurisdictional High Court's decision.

The Tribunal held that shifting assets to 'held for sale' under current assets, based on an agreement for sale that did not materialize, does not constitute a transfer under the Income Tax Act. Therefore, the AO's action of treating it as a transfer, calculating capital gains, and disallowing depreciation was incorrect.

The Tribunal held that the orders passed by the TDS officer under Section 201(1)/201(1A) were barred by limitation as per Section 201(3) of the Act, following the jurisdictional High Court's decision.

The Tribunal held that the AO had made adequate inquiries regarding the cash deposits, examining the provided cash book, sales details, and bank statements. The Tribunal found that the PCIT's assumption of revision jurisdiction was not justified as the AO had taken a plausible view based on the information available.

The Tribunal held that the addition of disputed TDS amount to the income of the concerned previous year was not justified. However, it remanded the issue to the AO to verify if the deferred revenue was offered for tax in future years.

The Tribunal held that while the entire purchases might not be added back as revenue neutral, the assessee must have paid a commission for accommodation bills. Therefore, the AO was directed to restrict the addition to 1% of the purchases.

The assessee company, through its authorized representative, submitted a letter expressing its willingness to withdraw the appeal. Consequently, the ITAT accepted the withdrawal request.

The Tribunal held that no additions can be made under Section 153C without incriminating material found during a search. Since the Assessing Officer's order lacked such observations and the Revenue failed to provide evidence, the deletion of additions by the CIT(A) was upheld.

The Tribunal held that the AO's action of imposing penalty on a different ground than the one for which satisfaction was drawn is untenable in law. The continuity in the AO's satisfaction from the assessment stage to the penalty stage is crucial.

The Tribunal upheld the deletion of the addition made by the AO. It found that the AO's addition was primarily based on retracted statements of entry operators and directors, and the assessee had provided documentary evidence to prove the identity, creditworthiness, and genuineness of the transactions.

The Tribunal upheld the deletion of the addition made by the AO. It found that the AO's addition was primarily based on retracted statements of entry operators and directors, and the assessee had provided documentary evidence to prove the identity, creditworthiness, and genuineness of the transactions.

The Tribunal upheld the deletion of the addition made by the AO. It found that the AO's addition was primarily based on retracted statements of entry operators and directors, and the assessee had provided documentary evidence to prove the identity, creditworthiness, and genuineness of the transactions.

The Tribunal upheld the deletion of the addition made by the AO. It found that the AO's addition was primarily based on retracted statements of entry operators and directors, and the assessee had provided documentary evidence to prove the identity, creditworthiness, and genuineness of the transactions.

The Tribunal condoned the delay in filing the appeal, acknowledging the assessee's medical condition as a sufficient cause. The matter was then restored to the Assessing Officer for de novo assessment.

The Tribunal upheld the deletion of additions for unexplained cash deposits, finding that the assessee had provided confirmations from debtors for cash sales. Regarding sundry creditors, the Tribunal agreed with the CIT(A) that the increase was genuine as the assessee had provided purchase invoices and supplier confirmations, and the AO had not rejected the books of account.

The Tribunal dismissed the assessee's appeal, upholding the disallowance of long-term capital loss due to the failure to provide evidence of share acquisition year and value. The addition on account of notional interest was also confirmed as the assessee failed to establish the business necessity of the interest-free advance.

The Tribunal noted the assessee's submission regarding the Vivad se Vishwashh Scheme, which was not disputed by the Revenue. Consequently, the appeal was dismissed as withdrawn.

The CIT(Appeals) deleted the addition without examining the business exigency of the loan swapping. The Tribunal held that this was an error and set aside the CIT(Appeals)'s order.

The Tribunal held that the assessee had reasonable cause for not responding to notices, as the email of the advocate was used and the assessee was unaware of the proceedings. The non-compliance was not deliberate, and the assessee was entitled to immunity under Section 273B.

The Tribunal held that the appellate authority should have decided the appeal on merits. Therefore, the case was restored to the CIT(A)/NFAC for a decision on merits after affording a proper opportunity of hearing to the assessee.

The Tribunal upheld the lower authorities' findings that the investment and returns lacked logic and human probability, concluding it was a method to convert unaccounted money. The grounds of appeal were found to be without substance.