ITAT Delhi Judgments — February 2024

The Tribunal dismissed the Revenue's appeal, finding no reason to deviate from the CIT(A)'s deletion of disallowances on trial sales, Section 43B, Section 14A, and advertisement expenses. The Tribunal allowed the assessee's cross-objection regarding depreciation, noting that the tax audit report confirmed the assets were put to use.

The Tribunal held that the date of recording the satisfaction note, not the date of search, is to be considered for calculating the six-year period for Section 153C assessments. It also held that additions under Section 68 cannot be made in assessments under Section 153C without incriminating material found during search.

The Tribunal noted that the quantum orders had already been remanded to the CIT(A). Consequently, in the interest of justice, the penalty appeals were also remanded to the CIT(A) for fresh adjudication, contingent upon the outcome of the quantum appeals.

The Tribunal noted that the quantum orders had already been remanded to the CIT(A). Consequently, in the interest of justice, the penalty appeals were also remanded to the CIT(A) for fresh adjudication, contingent upon the outcome of the quantum appeals.

The Tribunal found the assessee's objections to be genuine, noting that the DVO had failed to provide adequate opportunity to the assessee to present their case and did not consider the impact of property encroachment or the decline in circle rates. Consequently, the Tribunal remanded the entire matter back to the Assessing Officer for fresh adjudication, directing them to consider all the specific grounds raised by the assessee, including the factual conditions of the property and the revised circle rates.

The Tribunal observed that the Ld. CIT(A) proceeded ex parte despite the assessee's adjournment request and confirmed additions made by the Assessing Officer. Recognizing that the hearings occurred during the peak of COVID-19, the Tribunal found the assessee had valid reasons for non-appearance. Upholding the principle of natural justice, the Tribunal set aside the impugned orders and restored the issues to the Ld. First Appellate Authority for de novo adjudication with proper opportunity to the assessee.

The Tribunal observed that the Ld. CIT(A) proceeded ex parte despite the assessee's adjournment request and confirmed additions made by the Assessing Officer. Recognizing that the hearings occurred during the peak of COVID-19, the Tribunal found the assessee had valid reasons for non-appearance. Upholding the principle of natural justice, the Tribunal set aside the impugned orders and restored the issues to the Ld. First Appellate Authority for de novo adjudication with proper opportunity to the assessee.

The Tribunal observed that the Ld. CIT(A) proceeded ex parte despite the assessee's adjournment request and confirmed additions made by the Assessing Officer. Recognizing that the hearings occurred during the peak of COVID-19, the Tribunal found the assessee had valid reasons for non-appearance. Upholding the principle of natural justice, the Tribunal set aside the impugned orders and restored the issues to the Ld. First Appellate Authority for de novo adjudication with proper opportunity to the assessee.

The CIT(A) deleted the addition, finding that the transaction was a genuine business settlement between a holding company and its subsidiary. The tribunal upheld the CIT(A)'s order, noting that the AO had not appreciated the facts and that the Revenue had not controverted the CIT(A)'s findings with cogent evidence.

The Tribunal held that the amount retained in escrow, which was neither received nor likely to be received by the assessee due to substantial liabilities, should not be included in the full value of sale consideration for capital gains. Regarding Section 14A, the Tribunal found that while some disallowance was warranted, the AO's calculation was not entirely justified.

The assessee's counsel informed the Tribunal that the matter has been admitted by the National Company Law Tribunal (NCLT). Both parties agreed that the appeals before the ITAT should be dismissed as withdrawn, granting the assessee liberty to re-approach the Tribunal after the NCLT proceedings are concluded.

The assessee's counsel informed the Tribunal that the matter has been admitted by the National Company Law Tribunal (NCLT). Both parties agreed that the appeals before the ITAT should be dismissed as withdrawn, granting the assessee liberty to re-approach the Tribunal after the NCLT proceedings are concluded.

The Tribunal observed that the Ld. CIT(A) proceeded ex parte despite the assessee's adjournment request and confirmed additions made by the Assessing Officer. Recognizing that the hearings occurred during the peak of COVID-19, the Tribunal found the assessee had valid reasons for non-appearance. Upholding the principle of natural justice, the Tribunal set aside the impugned orders and restored the issues to the Ld. First Appellate Authority for de novo adjudication with proper opportunity to the assessee.

The Tribunal held that Section 56(2)(viib) is not applicable to transactions between a holding company and its wholly-owned subsidiary. The Tribunal also noted that the premium was supported by a valuation report and the allotment was to an existing shareholder.

The Tribunal observed that in the quantum proceedings, the matter was remanded, and the Assessing Officer subsequently deleted the additions that formed the very basis for imposing the penalty. Since the foundational additions for the penalty were deleted and the Revenue did not dispute this fact, the Tribunal held that the impugned penalty could not survive. Consequently, the Tribunal directed the AO to delete the penalty.

The Tribunal held that the issue of belated deposit of employees' contribution to PF/ESI has been settled by the Supreme Court in the Checkmate Services Pvt. Ltd. case. The Supreme Court ruled that for deduction, these contributions must be deposited on or before the due date specified by the respective laws.

The Tribunal held that the issue of belated deposit of employees' contribution to PF/ESI has been settled by the Supreme Court in the Checkmate Services Pvt. Ltd. case. The Supreme Court ruled that for deduction, these contributions must be deposited on or before the due date specified by the respective laws.

The tribunal, after considering the assessee's submission that the Delhi appeal was filed due to a technical glitch and the correct appeal was before the Chandigarh Benches, permitted the withdrawal. The Ld. DR had no objection to the withdrawal request, and consequently, the appeal before the Delhi ITAT was dismissed as withdrawn.

The Tribunal affirmed the CIT(A)'s decision, noting that the AO illegally invoked Section 154 for rectification without granting the assessee an opportunity of being heard and in the absence of a specific direction for rectification from the CIT(A) order for AY 2010-11. Consequently, the impugned rectification order was deemed unsustainable.

The Tribunal, in the interest of justice, remanded the issue back to the CIT(A). The CIT(A) was directed to grant the assessee a fresh opportunity to explain the circumstances negating the delay and then pass a fresh order as per law after affording reasonable opportunity of hearing.

The Tribunal concurred with the CIT(A) that the Assessing Officer's action in rejecting the book results and making an ad-hoc addition of Rs. 25 crores under Section 145(3) was not sustainable. The Tribunal found that the recovery ratio compared favorably and that the AO did not draw any adverse inference from the verified excise records.

The Tribunal held that proper service of notice under Section 148 of the Income Tax Act is a fundamental jurisdictional requirement. Since the Revenue failed to prove valid service of the notice, as the address used was incorrect, the reassessment proceedings were invalid and therefore liable to be quashed, a position supported by several High Court judgments.

The Tribunal found no merit in re-characterizing the income declared by the assessee as 'income from other sources' under Section 69A, nor in the addition for LTCG in the wife's name, as verification showed she earned no such gain. It held that the provisions of Section 115BBE were not applicable as the Assessing Officer merely re-characterized income without making a separate addition under Section 69A, citing a similar decision by a coordinate bench. Therefore, the Tribunal directed the deletion of the entire impugned addition.

The Tribunal concurred with the CIT(A) that the Assessing Officer's action in rejecting the book results and making an ad-hoc addition of Rs. 25 crores under Section 145(3) was not sustainable. The Tribunal found that the recovery ratio compared favorably and that the AO did not draw any adverse inference from the verified excise records.

The Tribunal held that the legal expenses incurred for defending ongoing litigation, including those arising from the takeover of a previous firm's business and violations of PNDT and Environmental Acts, were revenue in nature and allowable as business expenditure. The Tribunal relied on the principle that defending existing business operations and protecting capital assets is a revenue expense.

The Tribunal held that the legal expenses incurred for defending ongoing litigation, including those arising from the takeover of a previous firm's business and violations of PNDT and Environmental Acts, were revenue in nature and allowable as business expenditure. The Tribunal relied on the principle that defending existing business operations and protecting capital assets is a revenue expense.

The Tribunal held that the sale of plant and equipment occurred outside India as per the FOB terms and documentary evidence. It also ruled that Section 44BB is not applicable as the assessee did not supply equipment on hire for mineral oil extraction, nor was it engaged in such services.

The Tribunal followed a coordinate bench's decision on identical facts, which had deleted the addition. The Tribunal found that SEBI had later revoked its interim orders against the assessee and that the AO had relied on interim SEBI orders without independent verification.

The Tribunal held that the issue of exemption under sections 11 and 12, and the treatment of infrastructure fund, required reconsideration by the AO. The assessee's entitlement to exemption under section 11, even if the infrastructure fund was treated as income, needed to be examined.

Considering the facts and circumstances on record, and after hearing the Ld. DR, the Tribunal found no reason to interfere with the findings of the lower authorities. As neither the assessee nor their representative appeared or produced any material to dispute the lower authorities' findings, the appeal was dismissed.

The Tribunal found that no addition was made based on the initial reason for reopening. It relied on High Court judgments stating that if the original reason for reopening is not sustained with an addition, no addition can be made on any other issue, as Explanation 3 to Section 147 does not allow it. Consequently, the reassessment order was quashed.

The Tribunal held that the revenue had not presented any distinguishing facts or new material to deviate from prior rulings. Therefore, the Tribunal dismissed the revenue's grounds of appeal, upholding the CIT(A)'s order.

The Tribunal found, after reviewing bank statements and ledger accounts, that there was no direct nexus between the assessee's borrowings from Fortis Hospital Ltd and its lending to Blue Line Finance Ltd. It noted that fresh loans to Blue Line Finance were minimal, while significant repayments were made, and borrowings from Fortis Hospital Ltd did not coincide with the loan disbursements. Consequently, the disallowance was uncalled for, and the Assessing Officer was directed to delete it.

The Tribunal affirmed the CIT(A)'s order regarding the disallowance under Section 14A, finding the assessee's suo motu disallowance to be fair and sufficient. Regarding bad debts, the Tribunal noted that after amendments, it is sufficient if the bad debt is written off as irrecoverable in the accounts, and remitted the matter to the AO for de novo consideration on this specific aspect.

The Tribunal held that the addition made by the AO was not justified as the assessee provided a plausible explanation for the stock difference, supported by documentary evidence and verified by the AO's independent inquiry. The Tribunal noted that no defects were pointed out in the assessee's reconciliation or supporting documents.

The Tribunal, with the consent of the Revenue's representative, dismissed the appeal as withdrawn. It granted the assessee the liberty to re-approach the Tribunal after the conclusion of the proceedings before the NCLT.

The Tribunal noted that the CIT(A)'s order was passed ex parte, relying solely on the assessment order findings. To ensure substantial justice and fair play, the Tribunal restored the entire appeal to the Ld. CIT(A) for de novo adjudication. The CIT(A) was directed to provide the assessee a reasonable opportunity of being heard and to consider any further evidence presented.

The ITAT ruled that since the search was conducted before the expiry of the time limit for issuing a notice under section 143(2), the assessment for AY 2009-10 was pending/abated, allowing the AO to make additions based on independent inquiries, irrespective of seized material. The tribunal confirmed that the unsecured loans were indeed unexplained cash credits under section 68, thereby setting aside the CIT(A)'s order and restoring the AO's addition.

The Tribunal held that the issue of exemption under sections 11 and 12, and the nature of the infrastructure fund, required reconsideration by the AO. The assessee was granted registration under section 12AA, and the utilization of the infrastructure fund needed to be examined in light of its charitable objects and the directions of state authorities.

The Tribunal held that the CIT(A) erred in changing the section under which the addition was made from Section 68 to Section 69A, as this amounted to enhancing the income by introducing a new source without proper notice. The Tribunal found this action to be contrary to established legal principles.

During the hearing, the assessee's counsel requested to withdraw the appeal, stating that the assessee had opted for the Vivad Se Vishwas Scheme, 2020, and had settled the tax arrears. The Departmental Representative did not object to this request. The Tribunal allowed the withdrawal, consequently dismissing the appeal as withdrawn.

The CIT(A) deleted the disallowance, noting that during remand proceedings, all six contractors were produced before the AO and confirmed supplying labor. The CIT(A) explained the initial non-traceability due to a contractor shifting residence and clarified the cash withdrawal and ex-employee aspects as practical arrangements for continuous labor supply. The Income Tax Appellate Tribunal (ITAT) upheld the CIT(A)'s order, finding no infirmity in its well-reasoned decision.

The Tribunal held that interest under section 234B is leviable only up to the date of the order admitting the settlement application (Section 245D(1)), not up to the date of the final settlement order (Section 245D(4)). The Settlement Commission cannot reopen concluded proceedings under Section 154 to levy interest.

The Tribunal held that the PCIT correctly invoked Section 263 as the AO failed to make necessary inquiries regarding the property transfer and capital gains. The Tribunal found that the registered sale deed indicated a physical transfer of leasehold rights, and the assessee's claim of non-receipt of full payment was questionable.

The Income Tax Appellate Tribunal (ITAT) found that the assessee's explanation of internal organizational issues leading to the unavailability of a responsible person for filing replies constituted a reasonable cause under Section 273B. Consequently, the tribunal held that the penalty imposed under Section 272(1)(d) for non-compliance with Section 142(1) notices was not justified and ordered its obliteration.

The Tribunal, relying on various High Court judgments and the Supreme Court decision in M/s. Abhisar Buildwell P. Ltd., held that no addition can be made in assessments under Section 153A of the Income Tax Act if no incriminating material is unearthed during the search, particularly for completed or unabated assessments. Since the additions by the AO in this case were not based on any seized incriminating material, the CIT(A)'s decision to delete the additions was upheld.

The Tribunal dismissed the Revenue's appeal, affirming the CIT(A)-24's decision. It was held that the initial 143(3) assessment order was rightly declared null and void by CIT(A)-37 after the search, and since no new additions concerning the deduction under Section 54F were made in the subsequent 153A order, CIT(A)-24 had no basis to adjudicate on that issue. The Tribunal found no reason to interfere with the CIT(A)-24's order.

The Tribunal upheld the CIT(A)'s decision to delete the protective addition on account of unexplained credit entries. It was held that since the assessee acted as a conduit and the beneficiaries were identified, no addition could be made in the assessee's hands.

The Tribunal upheld the CIT(A)'s decision to delete the protective addition on account of unexplained credit entries. It was held that since the assessee acted as a conduit and the beneficiaries were identified, no addition could be made in the assessee's hands.