ITAT Delhi Judgments — August 2023

The Tribunal restored the issue of disallowance of employee's ESI contribution to the AO for verification of the assessee's claim of suo motu disallowance. The Tribunal also set aside the issue of disallowance of NPA provision to the AO for verification and to grant adequate opportunity to the assessee.

The Tribunal held that the assessee, holding a valid Tax Residency Certificate (TRC), is entitled to treaty benefits. The Assessing Officer's allegations of the assessee being a shell company were not supported by cogent evidence. The DRP's application of Article 27A was also found to be a misinterpretation as the assessee's investments predated the relevant treaty provisions.

The Tribunal noted that the assessee had opted for the Vivad se Vishwas scheme. Consequently, the appeal was dismissed as infructuous.

The Tribunal held that the assessee, holding a valid Tax Residency Certificate (TRC), is entitled to treaty benefits. The Assessing Officer's allegations of the assessee being a shell company were not supported by cogent evidence. The DRP's application of Article 27A was also found to be a misinterpretation as the assessee's investments predated the relevant treaty provisions.

The Tribunal held that the 5% net profit rate estimated by the Assessing Officer was ad-hoc and lacked basis. It directed the Assessing Officer to adopt the net profit rate of 2.35%, as declared by the assessee in assessment year 2017-18, for the current assessment year.

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was bad in law because it was a stereotyped notice without specifying the exact charge (concealment or inaccurate particulars) against the assessee. Following various High Court judgments, the Tribunal quashed the penalty order.

The Tribunal found that the CIT(A) did not properly examine the service of the notice under section 143(2) from the assessment records. The case was set aside to the CIT(A) for a fresh adjudication, including consideration of additional evidence.

The Tribunal noted that the assessment order, which formed the basis for the CIT's rejection, was subsequently set aside by the NFAC. Therefore, the matter was remitted to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee had a reasonable cause for non-compliance as the notice was not received. Therefore, the penalty imposed under Section 271(1)(b) was deleted.

The Tribunal upheld the CIT(A)'s decision, stating that the enhanced compensation is exempt under Section 10(37) of the Income Tax Act. Since the assessee had no taxable income, the penalty under Section 270A was rightly deleted.

The Tribunal held that the reassessment order was bad in law because the Assessing Officer failed to provide legible reasons for reopening the assessment, violating the procedure laid down by the Supreme Court in GKN Driveshafts (India) Ltd. Consequently, the reassessment order was quashed.

The Tribunal dismissed the ground regarding the validity of the assessment order. It partly allowed the appeal by restoring the issue of admitting additional evidence for Future & Options loss set-off to the CIT(A) for fresh consideration.

The Tribunal set aside the impugned order and restored the issue to the Assessing Officer for verification. The AO is directed to allow the claim if the employee contributions were deposited within the prescribed period.

The Tribunal found that the source of the cash deposits was sufficiently proved by the assessee's business operations and supporting documentation. The cash was generated from sales made before demonetization and deposited in tranches for safety reasons.

The Tribunal held that the CIT(Appeals) does not have the power to set aside issues to the AO as per Section 251 of the Income Tax Act. Therefore, the matters remanded by the CIT(Appeals) to the AO, except for the delay in deposit of employee's contribution, were set aside.

The Tribunal restored the issue of disallowance under Section 40(a)(i) to the first appellate authority to examine compliance with the provisos to Section 143(1)(a). The Tribunal also directed the Assessing Officer to verify TDS credit claims after providing an opportunity of hearing to the assessee.

The Tribunal held that the denial of exemption without proper intimation violated principles of natural justice. It also noted that while the return was belated, it was filed under Section 139(4), making the assessee eligible for exemption as per the law.

The Tribunal held that the penalty was unsustainable because the AO's notice was vague and the quantum addition was significantly altered to an estimated basis. The fact that substantial questions of law were admitted by the High Court on the estimated addition also made the issue debatable.

The Tribunal restored the issue to the Assessing Officer (AO) for factual verification. The AO is to re-compute the disallowance based on the due date of deposit from the close of the month of actual salary disbursement, as interpreted in the Kanoi Paper and Industries Ltd. case.

The Tribunal held that the assessee, possessing a valid Tax Residency Certificate (TRC), is a tax resident of Mauritius and eligible for DTAA benefits. It further ruled that capital gains from the sale of shares acquired before April 1, 2017, including converted preference shares, are exempt under Article 13(4) of the treaty.

The Tribunal held that the Assessing Officer's approach of restricting TDS credit based on the profit and loss account was incorrect. The assessee is entitled to TDS credit for the amount actually deducted, provided the corresponding income is offered to tax.

The Tribunal held that the CIT(A) erred in deleting the addition by ignoring substantial evidence, including an excel sheet recovered during a search, which detailed cash payments. The Tribunal found the AO's assessment, based on this evidence and the assessee's non-compliance, to be justified.

The Tribunal held that the Pr. CIT's revision on the grounds of non-initiation of penalty under Section 271B and non-disallowance of capital loss based on audit objections was not sustainable. However, the revision was sustained on the issue of non-disallowance of unpaid statutory dues as the assessee conceded this point.

The Tribunal held that merely because a claim is not accepted by tax authorities does not automatically warrant a penalty under Section 271(1)(c). There was no concrete evidence to prove the assessee furnished inaccurate particulars or concealed income.

The Tribunal held that the assessee cannot be held responsible for the delay caused by technical glitches on the EPFO portal, especially when the payment was initiated well before the due date and funds were available. Therefore, the disallowance made by the Assessing Officer and upheld by the CIT(A) was deleted.

The Tribunal held that the penalty was unsustainable because the AO's notice was vague and the quantum addition was significantly altered to an estimated basis. The fact that substantial questions of law were admitted by the High Court on the estimated addition also made the issue debatable.

The Tribunal held that the penalty was unsustainable because the AO's notice was vague and the quantum addition was significantly altered to an estimated basis. The fact that substantial questions of law were admitted by the High Court on the estimated addition also made the issue debatable.

The Tribunal restored the issue to the Assessing Officer (AO) for factual verification and redetermination. The AO is to re-compute the disallowance based on the due date from the close of the month of actual salary disbursement, as per a co-ordinate bench ruling.

The Tribunal upheld the Commissioner (Appeals)'s decision to delete the addition. It noted that the issue was covered in favour of the assessee by the Supreme Court's decision in Engineering Analysis Centre of Excellence Pvt. Ltd. and previous Tribunal orders in the assessee's own case.

The Tribunal noted that the assessee had filed a fresh application under section 154 of the Act, and the CPC had subsequently rectified the mistake and allowed the carry forward of the long-term capital loss. Therefore, the appeal had become infructuous.

The Tribunal held that the assessee is indeed a superannuation trust recognized under the relevant rules and that the exemption claim under Section 10(25)(iii) was valid. The error was in the filing of the return form, not in the entitlement to exemption.

The Tribunal held that the assessee is indeed a superannuation trust recognized under the relevant rules and that the exemption claim under Section 10(25)(iii) was valid. The error was in the filing of the return form, not in the entitlement to exemption.

The Tribunal dismissed the revenue's grounds of appeal concerning the disallowance of selling expenses and notional interest. It followed its own coordinate bench's decision in the assessee's own case for a prior assessment year, finding no merit in the revenue's contentions.

The Tribunal dismissed the revenue's grounds of appeal concerning the disallowance of selling expenses and notional interest. It followed its own coordinate bench's decision in the assessee's own case for a prior assessment year, finding no merit in the revenue's contentions.

The Tribunal dismissed the revenue's grounds of appeal concerning the disallowance of selling expenses and notional interest. It followed its own coordinate bench's decision in the assessee's own case for a prior assessment year, finding no merit in the revenue's contentions.

The Tribunal found that the assessee had provided sufficient evidence and explanations regarding cash sales and deposits, and the Assessing Officer's comparison of cash sales with cash deposits during demonetization was illogical. The Tribunal also noted that the CIT(A) had rightly deleted a portion of the addition. Consequently, the Tribunal allowed the assessee's appeal and dismissed the Revenue's appeal.

The Tribunal held that the buyback scheme payments were eligible business expenditure under Section 37(1) as the assessee earned a profit on the transaction. The Tribunal also found that the CIT(A) rightly deleted the addition on account of unexplained credit as the assessee proved the identity, creditworthiness, and genuineness of the transactions.

The Tribunal found that the CIT(Appeals) enhanced the income significantly without giving the assessee a proper opportunity to be heard. The matter was restored to the CIT(Appeals) for fresh adjudication.

The Tribunal directed the AO to verify the vouchers for expenses and make a decision based on tangible material, not on an ad-hoc basis. Ground No. 2 regarding EPF/ESI was dismissed as not pressed.

The Tribunal held that the appeals filed by the Revenue were not maintainable due to the low tax effect, as per the CBDT Circular No.17/2019. The circular mandates a minimum tax effect of Rs. 50,00,000/- for appeals to the Tribunal.

The Tribunal noted that the issue of taxability of belated employee contributions is settled by the Supreme Court. However, it also acknowledged a co-ordinate bench's view that the month of salary disbursement is relevant for determining the due date.

The Tribunal held that the buyback scheme payments were eligible business expenditure under Section 37(1) as the assessee earned a profit on the transaction. The Tribunal also found that the CIT(A) rightly deleted the addition on account of unexplained credit as the assessee proved the identity, creditworthiness, and genuineness of the transactions.

The Tribunal dismissed the revenue's grounds of appeal concerning the disallowance of selling expenses and notional interest. It followed its own coordinate bench's decision in the assessee's own case for a prior assessment year, finding no merit in the revenue's contentions.

The Tribunal held that the final assessment order was passed beyond the time limit prescribed under Section 144C(13) of the Income Tax Act, 1961. Therefore, the assessment order was quashed as being time-barred and void ab initio.

The Tribunal held that since the substantive additions made in the hands of M/s. Orient Craft Ltd. were deleted by a co-ordinate bench, the protective additions in the assessee's hands were not sustainable. Consequently, the additions on account of alleged commission/brokerage were also deleted.

The Tribunal held that since the substantive additions made in the hands of M/s. Orient Craft Ltd. were deleted by a co-ordinate bench, the protective additions in the assessee's hands were not sustainable. Consequently, the additions on account of alleged commission/brokerage were also deleted.

The Tribunal upheld the CIT(A)'s deletion of disallowances. It found that the rental expenses were supported by a revised lease agreement and were incurred for business purposes. The write-off of CENVAT credit was also deemed allowable based on judicial consensus, and the finance cost disallowance was considered arbitrary.

The Tribunal found merit in the assessee's request for a proper opportunity, especially since additional evidence was rejected by the CIT(A). The issue was therefore remitted back to the AO for fresh consideration.

The Tribunal held that the appeals filed by the Revenue were not maintainable due to the low tax effect, as per the CBDT Circular No.17/2019. The circular mandates a minimum tax effect of Rs. 50,00,000/- for appeals to the Tribunal.

The Tribunal held that the AO's reasons for reopening the assessment were vague and lacked specific material to form a 'reason to believe' that income had escaped assessment. The notice issued under Section 148 was found to be ultra vires.