ITAT Delhi Judgments — July 2023

The Tribunal held that since the notices were issued to a deceased person, they were invalid. Consequently, the assessment completed based on these invalid notices was also considered invalid.

The Tribunal noted that the dispute had been settled under the Vivad se Viswas Scheme and the assessee prayed for withdrawal. The Revenue had no objection to the withdrawal.

The Tribunal held that the assessment order was illegal due to the non-issuance of a notice under Section 143(2) of the Income Tax Act, which is a mandatory requirement. Additionally, the addition made by the AO was based on estimation without proper verification and was therefore deleted.

The Tribunal considered the application filed by the assessee seeking withdrawal of the appeal. The assessee's application stated that a subsequent assessment order had been passed by the NFAC on 27.03.2023 under Section 143(3) read with Section 263 and 144B of the Act. Furthermore, an appeal against this new assessment order had been filed before the CIT(Appeals) on 24.05.2023 and was pending. In light of these developments, the assessee requested to withdraw the present appeal filed before the ITAT. The Tribunal, after considering the application, allowed the withdrawal. The operative direction was to dismiss the appeal as withdrawn. No specific issue was left undecided; the entire appeal was disposed of based on the withdrawal request.

The Tribunal found no prejudice to the revenue in giving the assessee an opportunity to be heard. Therefore, the matter was remanded to the CIT(A) for fresh adjudication.

The Tribunal, following its own previous decision in the assessee's case for an earlier assessment year, allowed the claim for business expenses. The second ground of appeal was rendered academic and left open.

The Tribunal accepted the assessee's request for withdrawal of the appeal. The appeal was dismissed as withdrawn in view of the settlement under the Vivad Se Vishwas Scheme.

The Tribunal noted that as per Section 275(1A) of the Act, the due date for levying the penalty was 30.09.2021. Since no order had been passed by the AO till the date of the Tribunal's decision, the penalty order became infructuous and was dismissed.

The Tribunal held that the assessee had furnished Form 10 during the assessment proceedings before completion of assessment. Following various High Court and ITAT precedents, the Tribunal directed the Assessing Officer to allow the claim after verification.

The Tribunal held that the CIT(A) granted relief without properly controverting the AO's allegations. The assessee failed to provide evidence of the lender's financial capacity and creditworthiness, and there was no proof of interest payment or loan repayment.

The Tribunal found no error in the CIT(A)'s findings and dismissed the assessee's appeal. The disallowance of interest expenses was upheld.

The Tribunal found no legal error in the CIT's order refusing the approval. Therefore, the denial of exemption under Section 80G was affirmed.

The Tribunal noted that the due date for filing the Income Tax Return (ITR) was extended due to the COVID-19 pandemic. Therefore, the matter was referred back to the Assessing Officer to consider the extended due date and grant the credit for taxes paid.

The Tribunal held that depreciation on trademark is allowable as per earlier decisions. It also upheld the transfer pricing adjustment on deferred shares, stating they carried rights convertible to ordinary shares. The addition of notional interest on interest-free advances was set aside for fresh examination by the AO.

The Tribunal held that the AO should have provided a finding regarding the purchases made by the assessee for the items claimed to have been sold. The Tribunal also noted the assessee's contention that the parties might have claimed set off of TCS in their returns.

The Tribunal held that while the expenses were not allowable as revenue expenditure, they should be treated as project work-in-progress, as the assessee's sole activity was construction of a project. Ground 1 was dismissed, and Ground 2 was allowed.

The Tribunal held that the lease income was not taxable as royalty because the assessee had not actually received any payment during the year, as required by the definition of royalty under the DTAA. Therefore, the addition made by the lower authorities was directed to be deleted.

The Tribunal held that the assessee failed to discharge the onus cast upon them under Section 68 of the Income Tax Act. The repeated failure to appear before the authorities indicated a lack of evidence to support the claim of unsecured loans.

The Tribunal found that the assessee had demonstrated reasonable cause for non-attendance. The CIT(A) had proceeded ex-parte without considering the circumstances and the assessee's request for adjournment. Therefore, the order of the CIT(A) was set aside.

The Tribunal held that the AO's additions were beyond the purview of limited scrutiny and no approval was obtained to convert it to complete scrutiny. Therefore, the additions made by the AO were directed to be deleted.

The Tribunal held that the assessee is a housing cooperative society, not a cooperative bank, and the interest earned from deposits with a cooperative bank is deductible under Section 80P(2)(d). Therefore, the assessment order was not erroneous.

The Tribunal found that the assessee had sufficient cash available from various sources, including opening balance, bank withdrawals, milk sales, and agricultural income, to explain the cash deposits. Therefore, no addition was warranted.

The Tribunal found that the Assessing Officer (AO) had applied his mind and raised relevant queries, and the assessee had provided satisfactory explanations. The PCIT's observations were not substantiated by the facts on record.

The Tribunal permitted the assessee to withdraw its appeal. The appeal was dismissed as withdrawn.

The Tribunal held that the CIT(A) erred in dismissing the appeal solely on the ground of delay, emphasizing that substantial justice should be preferred over technical considerations. The matter was restored to the CIT(A) for a decision on merits.

The Tribunal found that there was a reasonable cause for the non-compliance of the notice due to the COVID-19 pandemic. Therefore, the penalty levied under Section 271(1)(b) was deleted.

The Tribunal held that the assessment was completed ex-parte without sufficient opportunity and that the tax deducted at source exceeded the tax liability. Therefore, the penalty imposed under Section 271(1)(c) was directed to be deleted.

The Tribunal condoned the delay in filing the appeal. It found that the impugned order lacked details regarding notices issued and information examined, and was not properly communicated to the assessee.

The Tribunal passed a corrigendum order to address the un-adjudicated cross-objection. Both the Revenue's appeal and the Assessee's cross-objection were dismissed in limine for statistical purposes.

The Tribunal held that depreciation on trademark is allowable as per earlier decisions. It also upheld the transfer pricing adjustment on deferred shares, stating they carried rights convertible to ordinary shares. The addition of notional interest on interest-free advances was set aside for fresh examination by the AO.

The Tribunal upheld the CIT(A)'s decision to delete the addition, finding that the assessee had subsequently produced directors of the investing companies and provided explanations and evidence for the source of funds, including dividend income and land sale proceeds. The AO did not counter these submissions in the remand report.

The Tribunal held that the CIT(A) erred in dismissing the appeal solely on the ground of delay, emphasizing that substantial justice should be preferred over technical considerations. The matter was restored to the CIT(A) for a decision on merits.

The Tribunal held that the expenses incurred for professional services in facilitating the transfer of shares were allowable as they were supported by documentary evidence. Regarding the Rs. 7.2 crore, the Tribunal found that the assessee's claim of it being part of sale consideration for shares was not adequately addressed by the AO. On the FMV of shares, the Tribunal found the AO's method of valuation flawed and upheld the CIT(A)'s decision to consider a higher FMV.

The Tribunal held that the expenses incurred for professional services in facilitating the transfer of shares were allowable as they were supported by documentary evidence. Regarding the Rs. 7.2 crore, the Tribunal found that the assessee's claim of it being part of sale consideration for shares was not adequately addressed by the AO. On the FMV of shares, the Tribunal found the AO's method of valuation flawed and upheld the CIT(A)'s decision to consider a higher FMV.

The Tribunal observed that the lower authorities did not consider cash withdrawals made by the assessee. Considering the totality of facts and to serve the interest of justice, the addition was restricted to 20% of the amount made by the AO.

The Tribunal held that the assessee failed to provide any supporting evidence for its claim. It was also noted that the assessee claimed TDS credit for income not recognized, which lacked substance.

The Tribunal upheld the addition made by the Assessing Officer, finding no mistake in the factual matrix or legal proposition. The assessee failed to prove the genuineness of the transactions.

The Tribunal held that the penalty was initiated and levied by the competent authority within the time prescribed under Section 275(1). The assessee's failure to deduct tax at source was established, and the penalty was rightly imposed.

The Tribunal restored the matter to the file of the AO to decide the issue afresh. The assessee will be given a reasonable opportunity to present documentary evidence and be heard.

The Tribunal held that the amounts collected from the sale of fly ash and its products, when kept in a separate account and utilized as per the notification for development activities, do not form part of the assessee's income. Therefore, no addition was warranted.

The Tribunal held that the payment was a compensation for breach of contractual obligations, arising from commercial expediency and not a penalty for violating law. The CIT(A)'s deletion of the addition was upheld.

The Tribunal held that the earlier order of the CIT(A), which established the assessee as a trustee and not the owner of the property, had attained finality. Therefore, no error was committed in deleting the capital gains addition.

The Tribunal held that the Supreme Court's decision in Checkmate Services Pvt. Ltd. mandates that employee's contribution to PF/ESI must be deposited on or before the due date to be eligible for deduction. Therefore, the disallowance made by the lower authorities was upheld.

The Tribunal found that the assessee was not given a proper opportunity to produce evidence of the joint venture agreement. Therefore, the case was remitted back to the AO to allow the assessee to submit the relevant documents.

The Tribunal held that the assessee is not liable for interest under Section 201(1A) as the TDS was deposited within the due date. Any delay in updating the OLTAS by the RBI system due to a technical glitch at the bank's end, acting as the department's agent, cannot be attributed as a default by the assessee.

The Tribunal found that similar issues had been decided in favor of the assessee in earlier assessment years by a coordinate bench. The Tribunal directed the AO to verify STT payment for Section 10(38) exemption and to re-compute book profits under Section 115JB after affording an opportunity to the assessee.

The Tribunal held that the CIT(A) was correct in deleting the addition. The additional evidence filed by the assessee, along with the AO's remand report, established the identity, capacity, and creditworthiness of the lender, as well as the genuineness of the transaction.

The Tribunal held that since the original assessment order was quashed and the Revenue did not appeal that decision, the AO in the 153A assessment should have considered the appeal effect. The Tribunal noted that the CIT(A) correctly directed the AO to adopt the income after appeal effect, but also acknowledged a minor suo motu enhancement by the assessee that was overlooked.

The Tribunal held that the assessee had discharged its primary onus by providing sufficient documentary evidence, including confirmations, PAN, ITRs, financial statements, and bank statements of the lenders. The Tribunal also noted that the CIT(A) had made incorrect factual findings and failed to provide an opportunity for cross-examination.

The Tribunal held that LTC exemption is only for travel within India. Travel involving a foreign leg, even if the origin and destination are in India, does not qualify for exemption under Section 10(5) read with Rule 2B.