ITAT Delhi Judgments — January 2024

The Tribunal held that the tax effect involved in the appeal was indeed less than Rs. 50 lakhs. Therefore, the appeal was not maintainable in light of the aforementioned CBDT circular.

The Tribunal held that the reference to DVO by the AO for determining the sale consideration was illegal as the value adopted by the assessee was equal to the stamp duty value, and Section 50C of the Act mandates adoption of stamp duty value in such cases. Regarding the purchase cost, the Tribunal found the reference to DVO to be illegal as the assessee's claimed value was higher than the DVO's determined fair market value as on 1.4.1981.

The tribunal held that the assessee failed to comply with the provisions of filing the Audit Report under section 80IC of the Act in time, which is a prerequisite for claiming the deduction. Therefore, the grounds of appeal were found to have no merit.

The Tribunal noted that CBDT Circular No.17/2019 revised the monetary limit for filing appeals to Rs.50 Lacs and this was applicable to pending appeals. Therefore, the present appeal with a low tax effect was not maintainable.

The Tribunal held that the derivative transactions were indeed carried out through sub-brokers, and the assessee had physically funded the losses incurred through regular banking channels. The evidence provided, including ledger accounts and contract notes, supported the assessee's claims. The Tribunal found no need for an addition on account of alleged margin money.

The Tribunal held that the Assessing Officer's failure to pass a draft assessment order under Section 144C(1) of the Income Tax Act, 1961, renders the final assessment orders bad in law and unsustainable. This is based on statutory provisions and numerous High Court judgments.

The Tribunal held that the Assessing Officer erred in passing the assessment order directly without issuing a draft assessment order, as required by Section 144C for eligible assessees, including foreign companies. This procedural lapse rendered the assessment void.

The tribunal referred to the Supreme Court's decision in Checkmate Services Pvt. Ltd. vs. CIT, which held that the employee's contribution to PF/ESI, if not deposited on or before the due date, cannot be allowed as a deduction. The tribunal noted that previous decisions relied upon by the assessee were rendered before this Supreme Court ruling.

The Tribunal held that the addition of Rs.8,95,750/- made on an estimated basis by the First Appellate Authority was unjustified. The Tribunal found that the assessee's explanation for withdrawals for renovation and subsequent redeposits was credible, especially since the First Appellate Authority had already accepted the source of pre-demonetization deposits.

The Tribunal noted that the CIT(A) passed ex-parte orders due to the assessee's non-appearance. Considering the facts and circumstances, the bench decided to remand the appeals to the CIT(A) for fresh consideration after hearing the assessee. This decision was made to avoid prejudice to any party.

The Tribunal noted that the CIT(A) passed ex-parte orders due to the assessee's non-appearance. Considering the facts and circumstances, the bench decided to remand the appeals to the CIT(A) for fresh consideration after hearing the assessee. This decision was made to avoid prejudice to any party.

The Tribunal held that the Assessing Officer's failure to pass a draft assessment order under Section 144C(1) of the Income Tax Act, 1961, renders the final assessment orders bad in law and unsustainable. This is based on statutory provisions and numerous High Court judgments.

The Tribunal restored the issue of foreign exchange fluctuation loss to the Assessing Officer for fresh adjudication, considering the assessee's arguments and judicial precedents. It also directed the Assessing Officer to verify if a disputed liability written off by a creditor had subsequently been paid by the assessee.

The Tribunal noted that the assessee's grounds of appeal were identical to those considered in the case of co-owners Vinit Kumar and Vijay Kumar. The Tribunal referred to its previous decision in that case, which stated that section 56(2)(vii) could only be invoked if the purchase price was less than the stamp duty value and the circle rate was more than the purchase price. The Tribunal found that the invocation of section 56(2)(vii) was wrong.

The Tribunal noted that multiple opportunities were given to the assessee to present their case, but none appeared, leading to an ex-parte decision. The Tribunal found no justifiable reason to interfere with the CIT(E)'s orders as no factual position was placed before it to rebut the denial.

The Tribunal noted that multiple opportunities were given to the assessee to present their case, but none appeared, leading to an ex-parte decision. The Tribunal found no justifiable reason to interfere with the CIT(E)'s orders as no factual position was placed before it to rebut the denial.

The Tribunal, considering the coordinate bench's decisions for earlier assessment years (AY 2013-14 and 2014-15) which were also favorable to the assessee, found no illegality or irregularity in the CIT(A)'s findings. The Tribunal relied on the binding precedent of the Hon'ble Apex Court in PCIT vs. Arham Softronics for the issue of substantial expansion under Section 80IC.

The Tribunal held that the Assessing Officer erred by not issuing a draft assessment order to the eligible assessee (a foreign company) as required by Section 144C of the Income Tax Act. This procedural lapse rendered the assessment order void ab initio.

The Tribunal held that the assessment proceedings under Section 153C were initiated beyond the prescribed period of six assessment years from the date of recording the satisfaction note. Therefore, the AO lacked jurisdiction to make the assessment for the years in question.

The Tribunal acknowledged the assessee's circumstances, including being a housewife without personal email access and her husband's family issues. Despite acknowledging the non-cooperation, the Tribunal found it fit to restore the appeal to the AO for de novo adjudication.

The Tribunal perused the bank account statements and found that the AO and DRP disregarded overwhelming evidence and made additions on non-substantial grounds.

The Tribunal perused the bank account statements and found that the AO and DRP disregarded overwhelming evidence and made additions on non-substantial grounds.

The CIT(A) correctly held that the appellant company was not the beneficiary but a pass-through entity for accommodation entries. The commission earned by the entry operators (Anand Jain and Naresh Jain) was already taxed, and thus, no separate commission income could be taxed in the hands of the assessee company.

The CIT(A) correctly held that the appellant company was not the beneficiary but a pass-through entity for accommodation entries. The commission earned by the entry operators (Anand Jain and Naresh Jain) was already taxed, and thus, no separate commission income could be taxed in the hands of the assessee company.

The Tribunal found that the assessee had sufficiently explained the source of cash deposits through opening cash balances and bank withdrawals, supported by documentary evidence. The Tribunal noted that the assessee had a history of substantial income and cash transactions, and relied on CBDT instructions and judicial precedents.

The Tribunal ruled that the assessee could not be compelled to explain the source of cash in an account he denied owning. It criticized the lower authorities for failing to conduct basic KYC inquiries despite the assessee's strong denial and the filing of an FIR, ultimately deleting the addition as the cash deposit did not belong to the assessee.

The CIT(A) correctly held that the appellant company was not the beneficiary but a pass-through entity for accommodation entries. The commission earned by the entry operators (Anand Jain and Naresh Jain) was already taxed, and thus, no separate commission income could be taxed in the hands of the assessee company.

The CIT(A) correctly held that the appellant company was not the beneficiary but a pass-through entity for accommodation entries. The commission earned by the entry operators (Anand Jain and Naresh Jain) was already taxed, and thus, no separate commission income could be taxed in the hands of the assessee company.

The Tribunal held that the assessee had properly explained the difference between the AIR information and the books of accounts. The SAD amount was not claimed as expenditure but as a receivable, eligible for set off against CENVAT Credit.

The Tribunal held that employee contributions to provident fund and labour welfare fund, if deposited beyond the due date, are disallowable as per the Supreme Court's decision in Checkmate Services Pvt Ltd. However, it directed the AO to verify specific amounts for January and Labour Welfare Fund to allow deduction if deposited before the due date.

The Tribunal held that the assessment proceedings under Section 153C were initiated beyond the prescribed period of six assessment years from the date of recording the satisfaction note. Therefore, the AO lacked jurisdiction to make the assessment for the years in question.

The Tribunal held that since the transfer pricing issues were being remanded for de novo consideration with additional evidence, the related corporate tax issues (goodwill valuation and depreciation) should also be remanded. The AO/TPO was directed to consider these issues afresh after providing the assessee an opportunity to be heard.

The Tribunal held that the reassessment proceedings were initiated on an incorrect assumption of fact, as the assessee had indeed filed an original return of income. Therefore, the basis for reopening the assessment was flawed and void ab initio. Additionally, the notice under section 148 was not properly served on the assessee.

The Tribunal held that since the transfer pricing issues were being remanded for de novo consideration with additional evidence, the related corporate tax issues (goodwill valuation and depreciation) should also be remanded. The AO/TPO was directed to consider these issues afresh after providing the assessee an opportunity to be heard.

The Tribunal, following its own co-ordinate bench decisions for earlier assessment years (AY 2010-11, 2013-14, 2016-17), disposed of the appeals. For Ground No. 1 and its sub-ground concerning profit on sale/redemption of investments and Section 10(38) exemption, the AO was directed to verify the status of Securities Transaction Tax (STT) payment and allow exemption accordingly, thus remanding the issue for fresh consideration. Ground No. 2 was deemed consequential. For Ground No. 3 regarding depreciation disallowance, the issue was remanded to the AO for fresh consideration, following previous orders. For Ground No. 4, the disallowance of Rs 1,87,82,355/- for Provision for Standard Assets was deleted, allowing the ground, by relying on a co-ordinate bench decision that held such provisions are reserves and not expenditures or allowances not admissible under Sections 30 to 43B, and that Rule 5 of the First Schedule to the Act did not mandate an addition for such provisions. For Ground No. 5, the AO was directed to re-compute book profit under Section 115JB with reasons and an opportunity for the assessee to be heard, partly allowing the ground. Ground No. 6 was general and required no adjudication. The appeals were partly allowed for statistical purposes.

The Tribunal considered that the search was not at the assessee's premises and the impugned agreement between BAIPL and DMPL, which formed the basis of the AO's addition, did not involve the assessee. The Tribunal found no evidence of suppression of sale consideration by the assessee.

The Tribunal, following its own co-ordinate bench decisions for earlier assessment years (AY 2010-11, 2013-14, 2016-17), disposed of the appeals. For Ground No. 1 and its sub-ground concerning profit on sale/redemption of investments and Section 10(38) exemption, the AO was directed to verify the status of Securities Transaction Tax (STT) payment and allow exemption accordingly, thus remanding the issue for fresh consideration. Ground No. 2 was deemed consequential. For Ground No. 3 regarding depreciation disallowance, the issue was remanded to the AO for fresh consideration, following previous orders. For Ground No. 4, the disallowance of Rs 1,87,82,355/- for Provision for Standard Assets was deleted, allowing the ground, by relying on a co-ordinate bench decision that held such provisions are reserves and not expenditures or allowances not admissible under Sections 30 to 43B, and that Rule 5 of the First Schedule to the Act did not mandate an addition for such provisions. For Ground No. 5, the AO was directed to re-compute book profit under Section 115JB with reasons and an opportunity for the assessee to be heard, partly allowing the ground. Ground No. 6 was general and required no adjudication. The appeals were partly allowed for statistical purposes.

The Tribunal held that bonus shares are issued out of capitalization of existing reserves and do not result in any inflow of fresh funds or increase in capital employed. Therefore, the provisions of Section 56(2)(vii)(c) are not attracted.

The Tribunal held that the show cause notice issued on 31/03/2015 was fundamentally defective because it was a generic proforma notice for Section 271(1)(c) and failed to specify the appropriate charge or penalty rate under Section 271AAB. The Tribunal emphasized that Sections 271(1)(c) and 271AAB are mutually exclusive, rendering such a notice invalid for initiating penalty under Section 271AAB and vitiating the entire proceedings.

The Tribunal found merit in the assessee's submission that no notices or the assessment order were served. Therefore, there was no justification for levying the penalty under Section 271(1)(b) for non-compliance with Section 142(1) notices.

The Tribunal, following the Supreme Court's decision in Abhisar Buildwell, held that in the absence of any incriminating material found during a search, the AO cannot assess or reassess completed/unabated assessments under section 153A/153C. Such assessments can only be re-opened under sections 147/148, subject to their conditions.

The Tribunal quashed the reassessment proceedings, finding that there was no tangible material before the AO to form a belief that income had escaped assessment due to client code modification. The Tribunal held that the reassessment was not sustainable in law.

The Tribunal, following the Supreme Court's decision in Abhisar Buildwell, held that in the absence of any incriminating material found during a search, the AO cannot assess or reassess completed/unabated assessments under section 153A/153C. Such assessments can only be re-opened under sections 147/148, subject to their conditions.

The Tribunal found that the CIT(A) erred in not admitting additional evidence filed by the assessee, which was relevant for adjudication. The AO's report, solely based on the opportunities given during assessment, was not sufficient reason to deny admission.

The Tribunal held that the assessee had provided sufficient documentation to prove the identity, creditworthiness, and genuineness of the unsecured loan. The AO's reliance on an investigation at the wrong address and an unsubstantiated statement was found to be flawed.

The Tribunal held that the assessee had provided sufficient evidence to prove the identity, creditworthiness, and genuineness of the unsecured loan. The AO's reliance on the investigation report and the statement was found to be flawed, especially since similar loans from the same lender had been held as genuine in other cases.

The Tribunal held that Section 80-IA(5) requires the eligible business to be treated as the only source of income for computing the deduction quantum. Losses from non-eligible units cannot be set off against the profits of eligible units for this purpose.

The Tribunal held that certain expenses, including taxi and jeep hire charges, vehicle hire charges for guests and senior staff, medical expenses, and refreshments, are not liable to FBT based on relevant CBDT circulars and judicial precedents. Therefore, no further addition other than Rs. 113,86,653 is liable for FBT.

The Tribunal held that the PCIT had erred in assuming jurisdiction under Section 263 of the Income-tax Act, 1961. The Tribunal found that the assessment order for AY 2014-15 was passed after a complete scrutiny by the Assessing Officer (AO). The AO had examined the issue of share premium and made an addition of Rs. 15,00,000/- under Section 69C. The Tribunal noted that the PCIT's observations regarding the share premium valuation and the applicability of Section 56(2)(viib) were essentially a re-appreciation of the material that was already on record and considered by the AO. The PCIT had not pointed out any specific material that was ignored by the AO or any lack of inquiry. The Tribunal relied on the principle that Section 263 cannot be used to direct the AO to make a fresh or de novo assessment or to substitute the PCIT's own view for that of the AO when the AO has applied his mind to the issue. Therefore, the orders passed by the PCIT under Section 263 were quashed. The appeals filed by the assessee were allowed.

The Tribunal held that penalty under Section 271D cannot be sustained. This was based on the reasoning that once expenses were treated as income of the assessee, they could not simultaneously be considered as loans in violation of Section 269SS.