ITAT Delhi Judgments — July 2023

The Tribunal held that the Assessing Officer (AO) had made sufficient inquiries and verified documents, including those from creditors, before passing the assessment order. Therefore, the PCIT's order under Section 263 was not justified as the AO's order was not erroneous or prejudicial to revenue.

The Tribunal held that the CIT(A) was justified in deleting the addition on unexplained liabilities as the assessee provided sufficient evidence. The enhancement for non-deduction of TDS was also upheld as it was not considered a new source of income.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal held that the addition of Rs. 5.50 crores was based on presumption without supporting evidence, as the cheques were not encashed and the loan was not advanced. The addition for unexplained cash was also deleted as the cash balance was duly reflected in the seized cash books.

The Tribunal upheld the CIT(A)'s decision to reject the books of account and estimate net profit. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business's working capital, should also be subjected to the same estimation rate.

The Tribunal held that the assessee should not be deprived of filing an appeal due to non-service of the intimation. The Assessing Officer was directed to grant credit for the TDS as reflected in Form 26AS.

The Tribunal held that payments made towards EDC to DGTCP through HUDA are effectively payments to the State Government. Therefore, TDS provisions are not applicable on such payments, and the assessee is not liable for TDS deduction.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal upheld the findings of the lower authorities, concluding that the transactions were sham and colorable. The assessee failed to provide any evidence to rebut the findings that the share price rise was rigged and the LTCG was fictitious.

The Tribunal held that since the quantum addition for the interest on foreign currency loan was deleted by the Tribunal itself, the penalty on that addition cannot survive. For the excess claim under Section 35(2AB), the Tribunal noted that the assessee made a bonafide claim and promptly informed the AO about the DSIR's lower approval, accepting the disallowance as the return could not be revised.

The Tribunal found merit in the assessee's submission that the TDS remittances were made before the due date of filing the return, and the disallowance was due to incorrect column filling. The matter was restored to the Assessing Officer for re-examination.

The Tribunal held that the Assessing Officer should have referred the property valuation to the Valuation Officer as the assessee disputed the circle rate. Regarding the cash advance, since it was accepted in the husband's assessment, no separate addition was warranted in the assessee's case.

The Tribunal held that a penalty notice must clearly specify the charge for which it is issued, and an omnibus notice without striking off the irrelevant limb is vague and vitiates the penalty proceedings. Following the Bombay High Court's decision, the penalty order was quashed.

The Tribunal held that an addition on account of share capital in an unabated assessment year cannot be made under Section 153A without incriminating material found during the search. A statement recorded under Section 132(4) alone, especially from a third party not associated with the assessee company, does not constitute incriminating material.

The Tribunal noted that the assessee's representative had not been heard by the CIT(A) before the ex-parte order was passed. Therefore, the matter was restored to the CIT(A) for de-novo adjudication after hearing the assessee.

The Tribunal held that employee's contribution to PF/ESI remitted beyond the due dates specified under the PF/ESI Act are not allowable as deduction under section 36(1)(va) of the Act. The Hon'ble Supreme Court's decision in Checkmate Services P. Ltd. Vs. CIT was followed.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal held that the CIT(A) should have admitted the additional evidence produced by the assessee regarding the eligibility of income for deduction under section 80IB. The matter was remanded to the CIT(A) for fresh consideration after admitting the evidence.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal held that the CIT(A) should have admitted the additional evidence produced by the assessee regarding the eligibility of income for deduction under section 80IB. The matter was remanded to the CIT(A) for fresh consideration after admitting the evidence.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal held that the CIT(A) should have admitted the additional evidence produced by the assessee regarding the eligibility of income for deduction under section 80IB. The matter was remanded to the CIT(A) for fresh consideration after admitting the evidence.

The Tribunal quashed the reassessment proceedings, finding that the reasons recorded by the AO were vague and lacked a live link to form a reasonable belief of escaped income. The Tribunal also noted that fictitious losses, if any, could not be added to book profits under Section 115JB.

The Tribunal upheld the CIT(A)'s decision, emphasizing the rule of consistency. The AO had accepted similar income as short-term capital gains in previous and subsequent assessment years.

The Tribunal upheld the CIT(A)'s decision, emphasizing the rule of consistency. The AO had accepted similar income as short-term capital gains in previous and subsequent assessment years.

The Tribunal held that the addition of profit on sale of plant and machinery as business income by the CPC was erroneous. It would result in double addition as depreciation was already claimed on the reduced WDV. The Ld. CIT(A) also failed to appreciate this fact.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The CIT(A) deleted the additions, holding that there was no remission or cessation of liability as required by Section 41(1). The CIT(A) considered the evidence of continued liability, subsequent settlements, and payments made by the assessee.

The Tribunal held that sales-related expenses need to be excluded from AMP expenses. For the remaining AMP expenses, the Tribunal found that the issue of transfer pricing adjustment on a protective basis by applying the Bright Line Test (BLT) was covered in favour of the assessee by previous orders. However, the issue of the TPO taking suo moto cognizance of AMP expenditure was dismissed.

The Tribunal held that the CIT(A) was justified in deleting the addition on unexplained liabilities as the assessee provided sufficient evidence. The enhancement for non-deduction of TDS was also upheld as it was not considered a new source of income.

The Tribunal upheld the CIT(A)'s decision to delete the addition on account of disallowance of expenses, finding that the assessee had provided details and supporting documents. The Tribunal also upheld the deletion of the depreciation disallowance, relying on the Delhi High Court's decision in DIT(Exemption) Vs. Indraprastha Cancer Society.

The Tribunal restored the issue to the Assessing Officer (AO) for factual verification. The AO is to re-compute the disallowance based on whether deposits were made within the due date from the close of the month of actual salary disbursement.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal, considering the assessee's illiteracy and lack of representation before lower authorities, set aside the assessment order in the interest of natural justice. The case was restored to the AO for fresh assessment with an opportunity for the assessee to be heard.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal held that the revision order passed by the PCIT under Section 263 was invalid as the AO had made adequate inquiries, and the issue had already been decided by the CIT(A) based on the Settlement Commission's order. Therefore, the revision was an invalid assumption of jurisdiction.

The Tribunal held that the CIT(A) should have admitted the additional evidence produced by the assessee regarding the eligibility of income for deduction under section 80IB. The matter was remanded to the CIT(A) for fresh consideration after admitting the evidence.

The Tribunal upheld the CIT(A)'s decision to estimate net profit at 10% of gross receipts after rejecting the assessee's books. However, it directed that interest income from fixed deposits and discount credits, considered integral to the business, should also be subject to the same estimation rate.

The Tribunal held that the delay in filing the audit report was due to a reasonable cause, specifically the insolvency proceedings of the holding company which hindered the collation of evidence. Therefore, the penalty imposed was deleted.

The Tribunal held that jewellery found within the permissible limits as per CBDT circular for family members should not be treated as unexplained, following various High Court and Tribunal judgments. Consequently, the addition made by the Assessing Officer was deleted.

The Tribunal held that for AY 2011-12, no CG or SBLC was intended or given before March 31, 2011, thus no international transaction occurred. For AY 2012-13, the entities were not AEs until their acquisition in AY 2013-14. Regarding outstanding receivables, the matter was remanded for recomputation of interest.

The Tribunal held that the cash sales were not verifiable due to lack of buyer details, but this was a consistent practice and not a requirement for sales below Rs. 2 lakhs. The Tribunal also found that the differences in sundry creditors' balances were either opening balance differences, amounts where the assessee's books showed lower liability, or rectifiable accounting errors.

The Tribunal held that disbelieving a transaction based on doubts about a witness's veracity does not automatically constitute furnishing inaccurate particulars without affirmative evidence. The penalty order was quashed as the AO did not bring evidence to disprove the particulars stated by the assessee.

The Tribunal held that the Assessing Officer (AO) was not given an opportunity to cross-examine the directors whose statements were recorded by the CIT(Appeals). Therefore, the AO deserves an opportunity to rebut these statements.

The Tribunal upheld the CIT(A)'s decision, finding that the land sold was indeed agricultural land and its sale proceeds were exempt. Similarly, the sale of shares held for a long period was correctly treated as capital gains, not business income.

The Tribunal held that the approval granted by the Additional CIT under Section 153D was mechanical and without due application of mind, rendering the assessment proceedings illegal. Consequently, the entire search assessment was quashed.

The Tribunal held that the CIT(E) erred in treating the application as a fresh one and not considering the existing registration. It was also noted that the CIT(E) had difficulty ascertaining if the old and new entities were the same.

The Tribunal held that since the quantum additions were confirmed by higher authorities, the deletion of penalty by the CIT(A) was unjustified. Consequently, the penalty levied under Section 271(1)(c) was confirmed.