ITAT Delhi Judgments — August 2023

The Tribunal held that no addition can be sustained solely on the basis of an unsigned draft agreement found with a third party without corroborative evidence of cash payment. The presumption under Section 292C is rebuttable and cannot be drawn against the assessee for documents found with a third party.

The Tribunal held that the assumption of jurisdiction under Section 147 was without sanction of law due to multiple jurisdictional defects. The reassessment proceedings were initiated without proper application of mind by the AO and the Pr.CIT, and failed to meet the requirements of the first proviso to Section 147.

The Tribunal held that there is no difference between contribution and donation, and the donations made by the assessee out of accumulated funds to other NGOs are hit by Section 11(2) of the Act. Therefore, the assessment order was erroneous and prejudicial to the revenue.

The Tribunal held that depreciation on land is not allowable as it is not an asset eligible for depreciation under Section 32. The issue of carry forward of unabsorbed depreciation was remanded for de-novo adjudication.

The Tribunal held that depreciation on land is not allowable as it is not an asset eligible for depreciation under Section 32. The issue of carry forward of unabsorbed depreciation was remanded for de-novo adjudication.

The Tribunal condoned the delay in filing the appeal before the CIT(A), following precedents that emphasize condoning delays when sufficient cause is shown and the assessee does not benefit from the delay. The appeals were restored to the CIT(A) for adjudication on merits.

The Tribunal found that the assessee was not afforded a reasonable opportunity to be heard and submit evidence. Therefore, the matters were restored to the CIT(Exemption) for fresh consideration.

The Tribunal restored the issue to the Assessing Officer (AO) for factual verification. The AO is to re-compute the disallowance based on the month of actual salary disbursement, in light of the Kanoi Paper and Industries Ltd. judgment.

The Tribunal noted that the issue of calculating the due date based on salary disbursement had not been examined by the lower authorities. Therefore, the matter was restored to the Assessing Officer for fresh examination.

The Tribunal found that the assessee was prevented by sufficient cause from producing the books of account. Therefore, the appeals were restored to the Assessing Officer for a fresh examination of the books.

The Tribunal found that the assessee was prevented by sufficient cause from producing the books of account. Therefore, the appeals were restored to the Assessing Officer for a fresh examination of the books.

The Tribunal held that belated deposit of employee's contribution to ESIC & EPF beyond the due dates prescribed under the respective Acts is not allowable as a deduction. This decision follows the ratio laid down by the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd.

The Tribunal found that the assessee was prevented by sufficient cause from producing the books of account. Therefore, the appeals were restored to the Assessing Officer for a fresh examination of the books.

The Tribunal found that the assessee was prevented by sufficient cause from producing the books of account. Therefore, the appeals were restored to the Assessing Officer for a fresh examination of the books.

The Tribunal held that since the quantum additions, on which the penalty was based, were deleted by a prior order of the Tribunal, the penalty under Section 271(1)(c) would have no basis. Therefore, the penalty was directed to be deleted.

The Tribunal held that ULIPs should be treated akin to mutual funds, and the redemption amount should be taxed under the head 'Capital Gains' after allowing for indexation. The lower authorities erred in taxing it as 'income from other sources'.

The Tribunal noted that the assessee claimed the cash deposits were business receipts and had not been given adequate opportunities to explain. Therefore, the Tribunal set aside the impugned orders and restored the assessment to the Assessing Officer for a fresh decision.

The Tribunal found that the assessee was not afforded a reasonable opportunity to be heard and submit evidence. Therefore, the matters were restored to the CIT(Exemption) for fresh consideration.

The Tribunal set aside the CIT(A)'s findings and confirmed the additions made by the AO. This was done by respectfully following the Supreme Court's decision in the case of Checkmate Services Private Limited.

The Tribunal noted that the assessee claimed the cash deposits were business receipts and had not been given adequate opportunities to explain. Therefore, the Tribunal set aside the impugned orders and restored the assessment to the Assessing Officer for a fresh decision.

The Tribunal noted that the assessee claimed the cash deposits were business receipts and had not been given adequate opportunities to explain. Therefore, the Tribunal set aside the impugned orders and restored the assessment to the Assessing Officer for a fresh decision.

The Tribunal found that the assessee was not afforded a reasonable opportunity to be heard and submit evidence. Therefore, the matters were restored to the CIT(Exemption) for fresh consideration.

The Tribunal set aside the CIT(A)'s findings and confirmed the additions made by the AO. This was done by respectfully following the Supreme Court's decision in the case of Checkmate Services Private Limited.

The Tribunal restored the issue to the file of the Assessing Officer for fresh adjudication. The AO is to examine and verify the assessee's claim that the disallowance is unsustainable due to the actual deposit dates.

The Tribunal held that the assessee had successfully demonstrated the identity, creditworthiness of the lenders, and genuineness of the transactions through documentary evidence. Therefore, no addition was warranted.

The Tribunal agreed that the assessee was not given a proper opportunity to present its case. Therefore, the matter was restored to the CIT(Exemptions) for fresh adjudication.

The Tribunal noted that the assessee claimed the cash deposits were business receipts and had not been given adequate opportunities to explain. Therefore, the Tribunal set aside the impugned orders and restored the assessment to the Assessing Officer for a fresh decision.

The Tribunal held that the AO cannot estimate profit or make additions without rejecting the assessee's books of account. Since the books were not rejected, the addition made by the AO and sustained by the CIT(A) was not justifiable.

The Tribunal condoned the delay in filing the appeal before the CIT(A), following precedents that emphasize condoning delays when sufficient cause is shown and the assessee does not benefit from the delay. The appeals were restored to the CIT(A) for adjudication on merits.

The Tribunal held that incurring expenditure for exploring business expansion, even if it involves venturing into a prohibited area, is for the purpose of business and thus allowable. The authorities below were in error in disallowing the expenditure.

The Tribunal held that since the quantum additions, on which the penalty was based, were deleted by a prior order of the Tribunal, the penalty under Section 271(1)(c) would have no basis. Therefore, the penalty was directed to be deleted.

The Tribunal held that the lower authorities erred by not providing the assessee an opportunity for cross-examination of a key witness. The Tribunal also noted that the AO did not dispute the agreement for sale of land and the advance received, which supported the assessee's explanation.

The Tribunal held that since all the quantum additions, except for depreciation, were deleted by the Tribunal, the penalty levied on those additions had no basis. Regarding depreciation, the issue was set aside to the AO for fresh adjudication.

The Tribunal noted that the assessee denied receiving the income and provided bank statements showing no such receipts. The CIT(A)'s suspicion of other bank accounts lacked basis. Therefore, the issue was remitted to the AO for proper verification.

The Tribunal restored the issue of jurisdiction and merits to the Assessing Officer for fresh adjudication. This was done to allow for proper factual verification and to give the assessee a fair opportunity to be heard.

The Tribunal held that since all the quantum additions, except for depreciation, were deleted by the Tribunal, the penalty levied on those additions had no basis. Regarding depreciation, the issue was set aside to the AO for fresh adjudication.

The Tribunal held that the CIT(A) correctly followed the binding decision of the Delhi High Court. The High Court ruled that when the Revenue makes part payment of a refund, interest under Section 244A should continue to accrue on the unpaid portion, including the interest component.

The Tribunal held that the PCIT wrongly assumed jurisdiction under Section 263 as the issues were already subject to appeal before the CIT(A). The Tribunal found that the Assessing Officer had made proper inquiries and received specific replies from the assessee, thus the assessment order was not erroneous.

The Tribunal found the CIT(A)'s conditional order unsustainable in law. Therefore, the issue was remitted back to the CIT(A) for a fresh, speaking order.

The Tribunal held that the Commissioner (Appeals) had not disposed of the appeal through a speaking order, and his decision was bereft of reasoning, dismissing the appeal solely for non-prosecution. The ITAT found this to be contrary to the mandate of Section 250 read with Section 251 of the Act. Considering that the proceedings before the lower authorities were completed ex parte and the assessee did not get an opportunity to establish her case regarding non-receipt of statutory notices and the actual quantum of investment, the Tribunal set aside the impugned order of the first appellate authority. The issues were restored to the Assessing Officer for de novo adjudication, with a direction to provide the assessee with a due and reasonable opportunity of being heard. The assessee was also directed to appear before the Assessing Officer and cooperate. For ITA No. 2818/Del/2022, concerning the penalty under Section 271(1)(c), the Tribunal held that since the quantum assessment order was set aside, the penalty could not survive at this stage. The imposition of penalty would depend on the final outcome of the assessment proceedings. Therefore, the impugned order of the Commissioner (Appeals) was set aside, with a direction to the Assessing Officer to consider initiating penalty proceedings, if warranted, based on the final assessment outcome. The appeals were allowed for statistical purposes.

The Tribunal held that the Commissioner (Appeals) had not disposed of the appeal through a speaking order, and his decision was bereft of reasoning, dismissing the appeal solely for non-prosecution. The ITAT found this to be contrary to the mandate of Section 250 read with Section 251 of the Act. Considering that the proceedings before the lower authorities were completed ex parte and the assessee did not get an opportunity to establish her case regarding non-receipt of statutory notices and the actual quantum of investment, the Tribunal set aside the impugned order of the first appellate authority. The issues were restored to the Assessing Officer for de novo adjudication, with a direction to provide the assessee with a due and reasonable opportunity of being heard. The assessee was also directed to appear before the Assessing Officer and cooperate. For ITA No. 2818/Del/2022, concerning the penalty under Section 271(1)(c), the Tribunal held that since the quantum assessment order was set aside, the penalty could not survive at this stage. The imposition of penalty would depend on the final outcome of the assessment proceedings. Therefore, the impugned order of the Commissioner (Appeals) was set aside, with a direction to the Assessing Officer to consider initiating penalty proceedings, if warranted, based on the final assessment outcome. The appeals were allowed for statistical purposes.

The Tribunal permitted the assessee to withdraw the appeal. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal upheld the CIT(A)'s decision to delete the addition. It ruled that the assessee's consistent use of the Project Completion Method (PCM), which was accepted in prior years, should be followed based on the rule of consistency. The Tribunal also noted that the Accounting Standard for POCM was not notified under Section 145(2) of the Act.

The Tribunal held that the receipts from sublicensing software cannot be treated as income from other sources under Article 23(3) of the DTAA as they could be classified under other articles (royalty or business income). Since the income is not taxable as royalty and there is no Permanent Establishment for business income, the addition was directed to be deleted.

The Tribunal held that since the initial investment and allotment of shares by the same investing companies were accepted as genuine in the previous assessment year, the call money received in the subsequent year for the same transaction could not be treated as non-genuine. The assessee had also discharged its primary onus of proving the identity, creditworthiness, and genuineness of the transactions.

The Tribunal held that the assessee's claim for treaty benefits was valid. It found that the assessee was a tax resident of Mauritius, holding a valid Tax Residency Certificate and a Global Business Licence, and had obtained necessary regulatory approvals in India for its investments.

The Tribunal held that the sale of shares was an off-market transaction, and the assessee's plea regarding stock exchange transaction limits was not applicable. The AO correctly adopted the quoted rate as the full value of consideration for capital gains calculation.

The Tribunal found merit in the assessee's claim that the receipts were already accounted for at the firm level. To ensure proper verification, the matter was remitted back to the Assessing Officer.

The Tribunal found that the assessee was prevented by sufficient cause from complying with the notice. Therefore, the penalty levied under section 271(1)(b) was directed to be deleted.

The Tribunal held that the reopening of the assessment was bad in law as it was based on a change of opinion, not on new tangible material. Therefore, the consequential assessment order was quashed.