ITAT Delhi Judgments — April 2024

The Tribunal ruled that the product evaluation expenses were revenue in nature, not capital, as they did not confer an enduring benefit and similar expenditures were accepted in prior assessment years. It also held that the ad-hoc disallowance of 10% of other expenses was baseless, made without pointing out specific defects or providing adequate opportunity to the assessee.

The tribunal dismissed the assessee's jurisdictional grounds (2-7) due to non-appearance and lack of supporting evidence. Regarding the addition under Section 68 (grounds 1 & 8), the tribunal affirmed the CIT(A)'s finding that the assessee failed to discharge the onus to prove the identity, creditworthiness, and genuineness of the transactions, thereby upholding the addition made by the Assessing Officer.

The Tribunal held that the Assessees had provided sufficient documentary evidence to establish the identity, creditworthiness, and genuineness of the investors. It also found that the valuation report was prepared according to the prescribed rules and that the CIT(A) had erred in enhancing income without proper justification.

The Tribunal held that for Assessment Year 2007-08, the pre-amendment provisions of Section 40A(3) of the Income Tax Act, 1961 are applicable, which stipulated that only 20% of such cash expenditure exceeding INR 20,000/- should be disallowed. Thus, the disallowance made by the lower authorities should be restricted to 20% of the total expenditure.

The Tribunal held that the assessee's consistently followed project completion method was acceptable under Section 145 of the Income Tax Act. Furthermore, even as per the ICAI guidance note, revenue recognition under POCM was not applicable as the project completion stage was less than 25% of the estimated cost.

The Tribunal held that the Assessees had provided sufficient documentary evidence to establish the identity, creditworthiness, and genuineness of the investors. It also found that the valuation report was prepared according to the prescribed rules and that the CIT(A) had erred in enhancing income without proper justification.

The Income Tax Appellate Tribunal held that the CIT(A) was not justified in refusing to consider the additional evidence submitted by the assessee, especially since the CIT(A) has co-terminus powers as the first appellate authority to remedy such situations. The Tribunal found that the CIT(A) failed to be circumspect and exercise its power. Therefore, the matter is restored to the CIT(A) for a decision on merits, taking into account the evidence and granting the assessee an opportunity of hearing.

The Tribunal held that the CIT(A) erred in partially accepting the explanation for the cash. Since the assessee provided documentary evidence and a plausible explanation for the entire Rs. 20 lakhs from M/s Luv Films LLP, the addition for the balance amount was deleted.

The Tribunal upheld the CIT(A)'s decision, ruling that once an expenditure is accepted as genuine and revenue in nature, it must be allowed in the year it is incurred, unless the assessee chooses to defer it. Citing a Supreme Court judgment, the Tribunal stated that disproportionality to sales is not a valid reason for unilateral deferment by the AO. The Tribunal also directed the AO to verify if the disallowed 2/3rd was subsequently allowed in AYs 2016-17 and 2017-18 and, if so, to withdraw it to prevent double benefit.

The Tribunal primarily addressed the jurisdictional issue, finding that assessment notices were issued by a non-jurisdictional AO without proper transfer of jurisdiction. Relying on precedents, the Tribunal held that an act by an authority without jurisdiction is void ab initio and that Sections 124(3) and 292BB do not cure such a fundamental defect. Consequently, the assessment order was quashed due to lack of jurisdiction, making the merits of the case academic.

The Income Tax Appellate Tribunal dismissed the appeal ex parte as the assessee failed to attend the proceedings since 2022, and its company had been struck off the records of the ROC. The Tribunal found no infirmity in the CIT(A)'s order, affirming it, and consequently dismissed all grounds raised by the assessee.

The Tribunal held that the Commissioner erred in rejecting the application on the grounds of limitation. The application was considered to be filed within the time allowed, considering the provisional approval granted.

The Tribunal held that the Assessees had provided sufficient documentary evidence to establish the identity, creditworthiness, and genuineness of the investors. It also found that the valuation report was prepared according to the prescribed rules and that the CIT(A) had erred in enhancing income without proper justification.

The Tribunal held that the Assessees had provided sufficient documentary evidence to establish the identity, creditworthiness, and genuineness of the investors. It also found that the valuation report was prepared according to the prescribed rules and that the CIT(A) had erred in enhancing income without proper justification.

The Tribunal held that the Assessees had provided sufficient documentary evidence to establish the identity, creditworthiness, and genuineness of the investors. It also found that the valuation report was prepared according to the prescribed rules and that the CIT(A) had erred in enhancing income without proper justification.

The tribunal, relying on its previous decision in the assessee's own case for AY 2019-20, held that the filing of Form 67 is a procedural and directory requirement, not a mandatory one. It ruled that a violation of procedural norms does not extinguish the substantive right to claim FTC, and Rule 128(9) does not mandate disallowance for delayed filing. The tribunal affirmed that the Double Taxation Avoidance Agreement (DTAA) overrides the provisions of the Act and Rules in this context, directing the AO to allow the credit for FTC.

The Tribunal dismissed the appeal as defective due to the unsigned appeal memo. The assessee was, however, granted the liberty to file an appropriate application for the restoration of the appeal.

The Tribunal held that the manual cash book found from the company's premises, which was reconciled with the company's books and did not lead to additions in the company's assessment, could not be considered incriminating material for the assessee under Section 153A. The Tribunal also noted that Section 153C should have been invoked if the document related to the assessee. Furthermore, the benefit of cash disclosed under the Income Declaration Scheme should have been allowed for telescoping.

The Tribunal upheld the CIT(A)'s decision regarding the disallowance of delayed PF/ESI deposits, affirming that such contributions paid beyond the statutory due date are to be added back to the assessee's income, citing the Supreme Court's ruling in *Checkmate Services Pvt. Ltd.*. However, the Assessing Officer was directed to re-examine and decide the issue of TDS refund as per law.

The Tribunal upheld the CIT(A)'s decision regarding the disallowance of delayed PF/ESI deposits, affirming that such contributions paid beyond the statutory due date are to be added back to the assessee's income, citing the Supreme Court's ruling in *Checkmate Services Pvt. Ltd.*. However, the Assessing Officer was directed to re-examine and decide the issue of TDS refund as per law.

The Tribunal condoned the 77-day delay in filing the appeal and admitted the additional legal ground on limitation. It held that as per Section 153(3) of the Income Tax Act, the fresh assessment order, giving effect to the PCIT's order, should have been passed by 01.11.2016. Since the order was actually passed on 30.08.2017, it was time-barred and consequently quashed.

The Tribunal held that the reimbursement for software licenses does not constitute royalty income as there was no transfer of copyright. The assessee merely provided a non-exclusive license for use of standard software.

The Tribunal held that the amendment to Rule 11UA, introducing a 10% safe harbor, is curative and should be applied retrospectively. Since the difference between the issue price and the AO's valuation was only 2.1%, which is less than 10%, the addition made by the AO was unsustainable.

The Tribunal condoned the 226-day delay in filing appeals, accepting the assessee's explanation regarding improper notice service. It restored both appeals against the rejection orders (u/s 12AB(1)(b) and 80G(5)) to the CIT(E) for de novo adjudication. The assessee was directed to regularly monitor the e-filing portal for notices and cooperate with the CIT(E) for expeditious disposal.

The Tribunal condoned the 226-day delay in filing appeals, accepting the assessee's explanation regarding improper notice service. It restored both appeals against the rejection orders (u/s 12AB(1)(b) and 80G(5)) to the CIT(E) for de novo adjudication. The assessee was directed to regularly monitor the e-filing portal for notices and cooperate with the CIT(E) for expeditious disposal.

The Tribunal found that the assessee, a super senior citizen, lacked access to the ITD Portal, which constituted sufficient cause for not participating in the assessment and appellate proceedings. To ensure justice and fair play, the Tribunal restored the appeal to the CIT(A), directing a fresh decision after providing the assessee a full opportunity of being heard, considering their age and portal access issues.

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal, relying on the Full Bench decision of the Bombay High Court in Mohd. Farhan A Shaikh, held that omnibus show-cause notices issued without striking off irrelevant portions demonstrate non-application of mind and vitiate penalty proceedings. Consequently, the Tribunal directed the AO to delete the penalty levied under section 271(1)(c).

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal held that the issue of the source of investment, which was accepted by the AO in the original assessment, cannot be revised under section 154 as it does not constitute a 'mistake apparent from record'. Relying on the Supreme Court's decision in *ITO vs. Volkart Brothers*, the Tribunal stated that a rectifiable mistake must be obvious and patent, not one requiring a long process of reasoning or where two opinions are possible. Therefore, the rectification order passed u/s 154 was deemed invalid and quashed.

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal observed that the assessee had submitted voluminous information and documents to the lower authorities which were not considered. Therefore, in the interest of justice, the Tribunal remitted the issue back to the file of the Assessing Officer. The AO is directed to consider the matter afresh after providing the assessee a proper opportunity of being heard.

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal condoned the delay in filing appeals due to the assessee's demise. Recognizing that both assessment and first appellate proceedings were ex-parte, the tribunal set aside the impugned orders and restored the issues to the Assessing Officer for de novo adjudication, providing the legal heir an opportunity to present explanations and evidence.

The Tribunal held that the addition under section 69 was not justified as it was based solely on an unsigned, undated, and unverified loose paper (a "dumb document") without any corroborative evidence. The AO failed to conduct substantive enquiries, summon the seller, or verify the transaction. Citing the precedent of *Sh. Rishi Aggarwal vs. DCIT*, the Tribunal ruled that such a document, not being in the ordinary course of business and with an unidentified author, cannot be the sole basis for an addition.

The Tribunal confirmed the CIT(A)'s decision, holding that the additions were protective in nature and the substantive additions concerning the undisclosed income had already been addressed in the case of Sh. Anurag Dalmia. As the Revenue could not present any evidence to contradict this, the protective additions against the assessee were deemed unsustainable and liable for deletion.

The Tribunal confirmed the CIT(A)'s decision, holding that the additions were protective in nature and the substantive additions concerning the undisclosed income had already been addressed in the case of Sh. Anurag Dalmia. As the Revenue could not present any evidence to contradict this, the protective additions against the assessee were deemed unsustainable and liable for deletion.

The Tribunal confirmed the CIT(A)'s decision, holding that the additions were protective in nature and the substantive additions concerning the undisclosed income had already been addressed in the case of Sh. Anurag Dalmia. As the Revenue could not present any evidence to contradict this, the protective additions against the assessee were deemed unsustainable and liable for deletion.

The Tribunal confirmed the CIT(A)'s decision, holding that the additions were protective in nature and the substantive additions concerning the undisclosed income had already been addressed in the case of Sh. Anurag Dalmia. As the Revenue could not present any evidence to contradict this, the protective additions against the assessee were deemed unsustainable and liable for deletion.

The Tribunal upheld the CIT(A)'s decision, confirming that since the assessee's 12AA registration was restored by the Lucknow ITAT, the denial of exemption under Section 11 was incorrect. Consequently, the original assessment framed under Section 143(3) stood restored, and the grounds relating to the bogus donation and expenses became infructuous. The ITAT found no infirmity in the CIT(A)'s order.

The Tribunal held that the write-off was not a bad debt under section 36(1)(vii) and the claim was not capital in nature, as it was a legitimate business asset acquired through slump sale. It was concluded that the CENVAT Credit, although irrecoverable due to documentation issues, constitutes an allowable business deduction under section 37(1) of the Act. The Tribunal allowed the assessee's appeal.

The Tribunal, following Supreme Court precedents (PCIT vs Abhishar Buildwell P Ltd and PCIT vs Jay Ambey Aromatics), held that no addition could be made under section 153A in a concluded/unabated assessment if no incriminating material was found during the search. Consequently, the addition of Rs 1,15,000/- was directed to be deleted, and the appeal was allowed on this legal issue.

The Tribunal held that the MAT credit under Section 115JAA should include surcharge and education cess. It relied on prior decisions of the Kolkata and Hyderabad Tribunals, which established that 'tax' encompasses both surcharge and cess, and referenced an Apex Court ruling defining 'surcharge' as an 'additional tax'. The Tribunal further noted that Explanation 1 Clause 5 of Section 234B defines 'assessed tax' to include these components, reinforcing the legislative intent. Accordingly, the AO was directed to recompute the MAT credit by including the surcharge and cess portion along with the tax component.