ITAT Delhi Judgments — August 2023

The Tribunal held that the AO failed to record objective satisfaction as to why the assessee's voluntary disallowance was incorrect, which is a prerequisite for applying Rule 8D(2). Therefore, the disallowances made by the AO were deleted.

The Tribunal held that the requirement of submitting Form 10B along with the ITR is directive and not mandatory. Considering the assessee had submitted the Audit Report, the matter was restored to the AO for fresh adjudication.

The Tribunal held that the additions made by the AO were devoid of any reference to incriminating material. Therefore, the ratio laid down in the case of Kabul Chawla, which requires incriminating material for additions under Section 153A, was squarely applicable.

The Tribunal held that the deletion of addition on account of interest on loans and advances was justified as the assessee had sufficient interest-free funds. The write-off of share application money was also correctly treated as a capital receipt. The disallowance under Section 14A was deleted as the assessee had no exempt income.

The Tribunal held that the penalty notices were invalid as they failed to specify the exact charge against the assessee. Relying on High Court judgments, the Tribunal directed the deletion of the penalty.

The Tribunal held that the PCIT's order under Section 263 could not be sustained because the PCIT did not provide a clear finding on which specific section (68/69/69A/69B/69C) the surrendered income should have been taxed under. The Tribunal also noted that the applicability of Section 115BBE in such surrender cases is debatable.

The Tribunal held that for a third party, the date of receiving records by the Assessing Officer is considered the date of search for the purpose of Section 153C. Since the search in the main case occurred before the amendment to Section 153C, the six-year period for assessment should be calculated from the date of receiving records, making AY 2014-15 time-barred.

The Tribunal held that the Assessing Officer's disallowance was ad-hoc and lacked cogent material or comparable cases to prove the salary was excessive. Therefore, the disallowance was directed to be deleted.

The Tribunal held that the AO rightly made additions as inquiries established that the entities M/s Meet Exports and M/s Varun Impex did not exist, and the assessee failed to produce them or provide satisfactory explanations. The CIT(A)'s findings were affirmed.

The Tribunal held that the AO failed to record objective satisfaction as to why the assessee's voluntary disallowance was incorrect, which is a prerequisite for applying Rule 8D(2). Therefore, the disallowances made by the AO were deleted.

The Tribunal held that the entertainment tax subsidy is a capital receipt, aligning with previous ITAT and Supreme Court decisions. The Tribunal also affirmed the CIT(A)'s decision regarding the service tax provision and dismissed the assessee's cross-objection regarding the assessment on a non-existent company.

The Tribunal found that the CIT(A)'s order was not sustainable as there was no evidence that the amount was taxed in Shri Rajeev Sharma's hands. The Tribunal also noted the lack of evidence of the assessee company reporting the alleged fraudulent act of Shri Rajeev Sharma.

The Tribunal held that the AO failed to record objective satisfaction as to why the assessee's voluntary disallowance was incorrect, which is a prerequisite for applying Rule 8D(2). Therefore, the disallowances made by the AO were deleted.

The Tribunal held that while the purchases could not be fully verified, only the profit element embedded in them should be taxed. The commission paid to the son was deemed justifiable given the turnover managed by him, and thus allowable.

The Tribunal held that the revenue cannot substitute the DCF method with the NAV method without obtaining a fresh valuation report. Regarding sundry creditors, the Tribunal found that no examination was carried out by lower authorities and restored the issue for de novo adjudication.

The Tribunal held that the TUFS subsidy is in the nature of revenue receipt and invoked Section 2(24)(xviii) of the Income Tax Act. It also directed that depreciation on the block of assets should be allowed on the original value of the asset.

The Tribunal upheld the deletion of additions made by the AO, finding that the CIT(A) had correctly followed previous tribunal orders and that the Revenue had not presented sufficient grounds or factual distinctions to warrant interference. The AO's disallowances were found to be arbitrary or lacking in evidence.

The Tribunal dismissed the Revenue's appeal. It held that the appeal was not maintainable due to the tax effect being less than Rs. 50 lakhs, as per CBDT Circular No. 17/2019.

The Tribunal held that the CIT(A) correctly deleted the additions made by the AO. The grounds raised by the Revenue were found to be covered by previous favorable decisions for the assessee, and no new facts or distinctions were presented by the Revenue.

The Tribunal held that the AO failed to record objective satisfaction as to why the assessee's voluntary disallowance was incorrect, which is a prerequisite for applying Rule 8D(2). Therefore, the disallowances made by the AO were deleted.

The Tribunal found that the assessee should be given an opportunity to comply before the AO. Therefore, the matter was remanded back to the CIT(A) for de novo adjudication on merits.

The Tribunal held that the AO failed to record objective satisfaction as to why the assessee's voluntary disallowance was incorrect, which is a prerequisite for applying Rule 8D(2). Therefore, the disallowances made by the AO were deleted.

The Tribunal held that the AO rightly made additions for unexplained credits as inquiries established that the entities M/s Meet Exports and M/s Varun Impex did not exist, and the assessee failed to produce the parties. The assessee's failure to explain the source and nature of credits led to the additions.

The Tribunal held that the AO failed to record objective satisfaction as to why the assessee's voluntary disallowance was incorrect, which is a prerequisite for applying Rule 8D(2). Therefore, the disallowances made by the AO were deleted.

The Tribunal held that the assessee was not provided with a due opportunity of hearing by the authorities below. Therefore, the matter was restored to the AO for fresh reassessment after providing due opportunity.

The Tribunal held that the penalty notices were invalid as they failed to specify the exact charge against the assessee. Relying on High Court judgments, the Tribunal directed the deletion of the penalty.

The Tribunal upheld the disallowance, agreeing with the CIT(A) that the assessee failed to prove the identity of suppliers and the genuineness of cash purchases. The Tribunal found that the explanation of purchasing frozen meat from illiterate villagers without bank accounts was not credible.

The Tribunal annulled the entire assessment on the grounds that the approval under section 153D was granted mechanically. Consequently, the Revenue's appeal and the assessee's cross-objections became infructuous.

The Tribunal held that while the purchases could not be fully verified, only the profit element embedded in them should be taxed. The commission paid to the son was deemed justifiable given the turnover managed by him, and thus allowable.

The Tribunal found that the CIT(A)'s order was not sustainable as there was no evidence that the amount was taxed in Shri Rajeev Sharma's hands. The Tribunal also noted the lack of evidence of the assessee company reporting the alleged fraudulent act of Shri Rajeev Sharma.

The Tribunal upheld the CIT(A)'s deletion of penalty on cost sharing arrangements as the basis for penalty was removed. For sales commission and foreign travel expenses, the Tribunal agreed that since substantial questions of law were admitted by the High Court, the issues were debatable, and thus penalty could not be sustained.

The Tribunal upheld the CIT(A)'s deletion of penalty on cost sharing arrangements as the basis for penalty was removed. For sales commission and foreign travel expenses, the Tribunal agreed that since substantial questions of law were admitted by the High Court, the issues were debatable, and thus penalty could not be sustained.

The Tribunal held that the AO had conducted sufficient inquiry regarding the cash deposits, as they were directly linked to immediate withdrawals. The fall in GP/NP ratios was also adequately explained by the assessee considering the nature of the business. Therefore, the PCIT's assumption of jurisdiction under Section 263 was not sustainable.

The Tribunal set aside the impugned orders and restored the matters to the Assessing Officer (AO). The AO was directed to verify the dates of deposit for PF and ESI contributions and allow the assessee's claims if payments were made within the due dates or considering holidays.

The Tribunal held that filing Form 67 is a procedural and directory requirement, not mandatory. The delay in filing Form 67 should not lead to the disallowance of FTC, especially when filed before the end of the assessment year.

The Tribunal noted that the additions/disallowances which formed the basis for the penalty levy had been deleted by the same Tribunal in a prior appeal. Therefore, the penalty had no legs to stand.

The Tribunal held that due to the moratorium granted under the IBC, no proceedings could be pending against the corporate debtor. As no representative from the IBC proceedings had impleaded themselves, the appeal was not maintainable in its current format.

The Tribunal found the CIT(A)'s order to be well-reasoned and decided that no interference was warranted. Consequently, both appeals filed by the assessee were dismissed.

The Tribunal held that interest under section 234C should be calculated after reducing the MAT credit, as per the definition of 'tax due on the returned income' in the Act. The action of the lower authorities was found to be in contravention of the law.

The Tribunal held that the services rendered by the assessee, which primarily involved granting access to software over the cloud, did not constitute Fee for Technical Services (FTS) under the India-Netherlands Double Taxation Avoidance Agreement (DTAA) or the Income Tax Act. The key reason was that the technology was not 'made available' to the customer, enabling them to apply it.

The Tribunal set aside the impugned orders and restored the matters to the Assessing Officer (AO). The AO was directed to verify the dates of deposit for PF and ESI contributions and allow the assessee's claims if payments were made within the due dates or considering holidays.

The Tribunal dismissed the Revenue's appeal as not maintainable because the tax effect was below the monetary limit prescribed by CBDT Circular No. 17/2019. The Revenue can approach the Tribunal later if the tax effect is found to be higher or falls under exceptions.

The Tribunal held that the reopening of assessment under Section 147 was valid as the AO had tangible material. The Tribunal also upheld the additions made by the AO, finding that the assessee failed to prove the genuineness of the purchases with credible evidence.

The Tribunal found that the CIT(A) erred in holding that an amount offered to tax cannot be reduced in appeal. It observed that the CIT(A) did not provide any factual findings on the assessee's contentions regarding the nature of the receipt.

The Tribunal restored the matter to the Assessing Officer to provide the assessee with a reasonable opportunity to present their case and file documentary evidence. The Assessing Officer is directed to pass a fresh order after considering the evidence.

The Tribunal restored the matter to the CIT(A) for fresh adjudication. The assessee is to be given a due opportunity of hearing without being influenced by the earlier order.

The Tribunal held that the reopening of assessment under Section 147 was valid as the AO had tangible material. The Tribunal also upheld the additions made by the AO, finding that the assessee failed to prove the genuineness of the purchases with credible evidence.

The Tribunal held that the issue is covered by the Supreme Court's decision in Checkmate Services P. Ltd. vs. CIT, which ruled against the assessee on the timely deposit of employees' contributions.

The Tribunal held that the consultancy services provided were not technical in nature and did not meet the 'make available' condition of the DTAA. Similarly, the reimbursed expenses were found to be cost-to-cost reimbursements for third-party services, not taxable as FIS.

The Tribunal dismissed the Revenue's appeal based on CBDT Circular No. 17/2019, as the tax effect was below the prescribed monetary limit. The cross-objection filed by the assessee was rendered infructuous.