ITAT Delhi Judgments — May 2024

The Tribunal observed that while the Assessing Officer's assessment order recorded satisfaction for initiating penalty proceedings under Section 271(1)(c), there was no explicit satisfaction recorded for initiating penalty under Section 271D of the Act. Citing the Supreme Court's decision in Jai Laxmi Rice Mills, the Tribunal held that a penalty under Section 271D cannot be sustained without a valid satisfaction recorded in the assessment order itself. Consequently, the Tribunal deleted the penalties for both assessment years.

The Tribunal held that in cases of unabated assessments, additions under Section 153A can only be made if incriminating material is found during the search. Since no such material was found, the additions made by the Assessing Officer and the First Appellate Authority were deleted.

The Tribunal held that the CIT(A) should have inquired into the assessee's claim that payments were made within the statutory due dates, despite the Tax Audit Report's incorrect mention. The issue was restored to the CIT(A) for fresh adjudication.

The Tribunal observed that while the Assessing Officer's assessment order recorded satisfaction for initiating penalty proceedings under Section 271(1)(c), there was no explicit satisfaction recorded for initiating penalty under Section 271D of the Act. Citing the Supreme Court's decision in Jai Laxmi Rice Mills, the Tribunal held that a penalty under Section 271D cannot be sustained without a valid satisfaction recorded in the assessment order itself. Consequently, the Tribunal deleted the penalties for both assessment years.

The Tribunal held that in cases of unabated assessments, additions under Section 153A can only be made if incriminating material is found during the search. Since no such material was found, the additions made by the Assessing Officer and the First Appellate Authority were deleted.

The Tribunal held that in cases of unabated assessments, additions under Section 153A can only be made if incriminating material is found during the search. Since no such material was found, the additions made by the Assessing Officer and the First Appellate Authority were deleted.

The tribunal held that the satisfaction note recorded by the Assessing Officer (AO) for initiating proceedings under Section 153C was vague and lacked specific incriminating material directly linking to the assessee for the relevant assessment years. Therefore, the proceedings initiated under Section 153C were deemed void ab initio and invalid.

The Income Tax Appellate Tribunal, considering the assessee's request for withdrawal and the Department's agreement, dismissed the appeal as withdrawn.

The Revenue's appeal was dismissed due to low tax effect as per CBDT Circular No.17/2019, rendering the assessee's cross-objection infructuous and dismissed. The Tribunal allowed the assessee's appeal, holding that sustaining ad-hoc disallowances on a lump-sum basis by the CIT(A) was unjustified, as additional evidence was admitted and the AO's remand report only noted minor discrepancies without proving falsity or manipulation.

The Tribunal held that the filing of Form 67 is a procedural and directory requirement, not mandatory. Violation of such procedural norms does not extinguish the substantive right to claim FTC. Therefore, the denial of FTC based solely on the delayed filing of Form 67 was incorrect.

The Tribunal upheld the CIT(A)'s deletion of additions related to undisclosed interest income, interest expense calculation, and the treatment of an NPA acquisition. The Tribunal also found no substance in the revenue's grounds regarding the deletion of the addition for share capital.

The Tribunal held that in cases of unabated assessments, additions under Section 153A can only be made if incriminating material is found during the search. Since no such material was found, the additions made by the Assessing Officer and the First Appellate Authority were deleted.

The Tribunal held that in cases of unabated assessments, additions under Section 153A can only be made if incriminating material is found during the search. Since no such material was found, the additions made by the Assessing Officer and the First Appellate Authority were deleted.

The Tribunal held that the Revenue's appeal was not maintainable, citing Circular No.22/2019 dated 30.08.2019, specifically para-4(ii). This circular advises the Department not to press grounds related to Section 56(2)(viib) additions for recognized startups who have filed Form No.2 in appeals pending before the ITAT. As the assessee had filed Form No.2 and obtained startup recognition, the appeal was dismissed.

The Income Tax Appellate Tribunal (ITAT) upheld the decision of the CIT(A), ruling that ESOP expenses, even if cross-charged by a parent entity, are allowable business expenditures under Section 37(1) of the Income Tax Act. The Tribunal found no reason to interfere with the CIT(A)'s findings, reiterating that such expenses are not notional or contingent and aligning with precedents from various High Courts and ITAT benches.

The tribunal held that the satisfaction note recorded by the Assessing Officer (AO) for initiating proceedings under Section 153C was vague and lacked specific incriminating material directly linking to the assessee's income for the relevant assessment years. Consequently, the proceedings were deemed void ab initio.

The Tribunal observed that the CIT(A) dismissed the appeal without granting the assessee a fair and meaningful opportunity to present evidence, thereby denying natural justice. To achieve the goal of justice, the Tribunal decided to remit the matter back to the Assessing Officer for fresh adjudication, directing the AO to provide sufficient opportunity to the assessee, who is also required to cooperate.

The Tribunal noted that the CIT(A) dismissed the appeal without adjudicating on its merits. With the consent of both parties, the Tribunal decided to remit the case back to the CIT(A) for fresh adjudication on the merits of the addition made under section 68.

The Tribunal held that the Assessing Officer failed to comply with the specific directions of the Dispute Resolution Panel (DRP) to pass a speaking order after examining the assessee's explanation regarding the investments. Therefore, the matter was remitted back to the AO for fresh adjudication, strictly in accordance with the DRP's instructions.

The Tribunal held that the approval granted under Section 153D was invalid due to a common and composite approval for multiple assessment years, indicating a lack of application of mind. Consequently, the assessment orders were quashed.

The Tribunal held that investments in equity and preference shares are not loans and advances, and if sufficient own funds are available, it's presumed they were used for such investments. The Tribunal also found that the disallowance of travel expenses was too general and that prior period expenses were correctly accrued in the disputed assessment year.

The Tribunal found no infirmity in the CIT(A)'s order, affirming the additions made by the AO and confirmed by the CIT(A). The Tribunal concluded that the assessee's appeal lacked merit due to the absence of assistance from the assessee and the consistent findings by lower authorities.

The Tribunal noted that the other appeal was already listed and adjourned sine-die. Considering the instant appeal to be a duplicate for the same assessment year, the Tribunal deemed it appropriate to dismiss it.

The Tribunal held that investments in equity and preference shares are not loans and advances, and if sufficient own funds are available, it's presumed they were used for such investments. The Tribunal also found that the disallowance of travel expenses was too general and that prior period expenses were correctly accrued in the disputed assessment year.

The Tribunal held that the additional evidence, a now certified segmental financial statement, has a direct and important bearing on deciding the appropriate method to determine the Arm's Length Price for the specified domestic transaction. Citing judicial precedents, the Tribunal found that admitting the evidence was necessary for proper adjudication and in the interest of natural justice, as rejecting it would not adhere to the principles of natural justice.

The Tribunal upheld that leave encashment deduction is allowable only on an actual payment basis, directing the AO to verify payment dates and allow deduction in the relevant assessment year, citing the Supreme Court decision in *Union of India & ors. vs. Exide Industries Limited & Anr.*. On the issue of excise duty subsidy, the Tribunal admitted the additional ground and, following its own previous decision and the Jurisdictional High Court's ruling in the assessee's own case (*PCIT Vs. Crystal Crop Protection (P) Ltd.*), held that the subsidy is capital in nature and therefore not taxable.

The Tribunal held that in cases of unabated assessments, additions under Section 153A can only be made if incriminating material is found during the search. Since no such material was found, the additions made by the Assessing Officer and the First Appellate Authority were deleted.

The Tribunal held that in cases of unabated assessments, additions under Section 153A can only be made if incriminating material is found during the search. Since no such material was found, the additions made by the Assessing Officer and the First Appellate Authority were deleted.

The Tribunal held that the assessee deserved a reasonable opportunity of being heard to address shortcomings at the AO level. Consequently, the impugned order was set aside, and the matter was remitted back to the AO for a fresh assessment regarding the taxability of the Rs. 14,85,560/- unexplained investment, with both parties required to ensure compliance and provide opportunities.

The Tribunal found that the issue in the assessment order was indeed different from the one settled under the Vivad se Vishwas Scheme. Therefore, the matter was remitted back to the CIT(A) for fresh adjudication.

The Tribunal set aside the case to the Assessing Officer (AO) for fresh adjudication. The AO was directed to provide the assessee a proper opportunity of being heard and pass a reasoned order after considering all evidence.

The Tribunal remitted the matter back to the Assessing Officer for fresh adjudication, emphasizing the importance of providing the assessee with a more effective and meaningful opportunity of being heard. The assessee is directed to cooperate in the proceedings and is permitted to submit all relevant documents and evidence.

The ITAT observed that this was the second round of litigation and that the AO had disbelieved the assessee's claims regarding the genuineness of advances. Considering the EOW/CBI investigations, the Orissa High Court's cognizance of the matter, and the Government of Odisha's correspondence regarding depositor identification and refunds, the Tribunal restored the issue of cash credits under section 68 to the Assessing Officer. The AO is directed to conduct a fresh examination and verification of depositor details, providing the assessee a reasonable opportunity to be heard and furnish all necessary evidence.

The tribunal held that the satisfaction note recorded by the Assessing Officer (AO) for initiating proceedings under Section 153C was vague and lacked specific incriminating material directly linking to the assessee for the relevant assessment years. Therefore, the proceedings initiated under Section 153C were deemed void ab initio and invalid.

The Tribunal observed that the CIT(A) upheld additions for certain management services based on alleged non-submission of complete details by the assessee, which the assessee disputed. The Tribunal decided to remand the matter back to the CIT(A) for re-examination of the documents already on record and any further submissions, instructing the CIT(A) to pass a speaking order on the taxability of these services.

The Income Tax Appellate Tribunal (ITAT) observed that the CIT(A) (NFAC) disposed of the appeal ex-parte. Considering the overall circumstances, including the assessee's claims of not receiving physical notices and business challenges due to Covid, the ITAT decided to remit the matter back to the CIT(A) for fresh adjudication. The CIT(A) is directed to provide a reasonable and sufficient opportunity of being heard to the assessee, who is also directed to cooperate for expeditious disposal.

The CIT(A) sustained the assessee's contentions, relying on previous ITAT Delhi Bench decisions in the assessee's own case for earlier assessment years, which held that similar payments were not 'royalty' and thus no TDS was required. The Tribunal noted that the Delhi High Court had subsequently dismissed the Revenue's appeals against these earlier ITAT orders, confirming the legal position. Therefore, the payments were held not to be royalty/FTS, and the disallowance under section 40(a)(i) was not justified.

The tribunal held that the satisfaction note recorded by the Assessing Officer (AO) for initiating proceedings under Section 153C was vague and lacked specific incriminating material directly linking to the assessee for the relevant assessment years. Therefore, the proceedings initiated under Section 153C were deemed void ab initio and invalid.

The Tribunal held that the Assessing Officer failed to comply with the specific directions of the Dispute Resolution Panel (DRP) to pass a speaking order after examining the assessee's explanation regarding the investments. Therefore, the matter was remitted back to the AO for fresh adjudication, strictly in accordance with the DRP's instructions.

The Tribunal held that the CIT(A) erred in rejecting the additional evidences without proper reasoning, noting the assessee's individual and agriculturist status who initially hadn't filed a return. It found that the additional evidences presented (sale deed, ownership proof, confirmations) strongly supported co-ownership. Consequently, the Tribunal allowed the additional evidences and remanded the entire issue back to the AO for fresh enquiry and consideration of the new evidence.

The ITAT observed that this was the second round of litigation and that the AO had disbelieved the assessee's claims regarding the genuineness of advances. Considering the EOW/CBI investigations, the Orissa High Court's cognizance of the matter, and the Government of Odisha's correspondence regarding depositor identification and refunds, the Tribunal restored the issue of cash credits under section 68 to the Assessing Officer. The AO is directed to conduct a fresh examination and verification of depositor details, providing the assessee a reasonable opportunity to be heard and furnish all necessary evidence.

The Tribunal found merit in the assessee's argument and held that the cost of acquisition for land and building should be apportioned using the circle rates prevalent at the time of the agreement to sell in May 2014. Consequently, depreciation on the land is to be disallowed after working out its cost based on the May 2014 circle rates.

The Tribunal dismissed the appeal due to the consistent non-appearance of the assessee and the absence of essential case records, particularly the assessment and appellate orders. This lack of information prevented the Tribunal from adjudicating the appeal on its merits.

The Revenue's appeal was dismissed due to low tax effect as per CBDT Circular No.17/2019, rendering the assessee's cross-objection infructuous and dismissed. The Tribunal allowed the assessee's appeal, holding that sustaining ad-hoc disallowances on a lump-sum basis by the CIT(A) was unjustified, as additional evidence was admitted and the AO's remand report only noted minor discrepancies without proving falsity or manipulation.

The Tribunal affirmed that disallowance under section 14A cannot exceed the actual exempt income earned, thereby upholding the first appellate authority's decision. Regarding the section 40A(2)(b) disallowance, the Tribunal held that the Assessing Officer failed to provide comparable instances or material to establish the fair market value of services, justifying the deletion of disallowance by the first appellate authority.

The Tribunal held that the correct revenue receipt figure for AY 2020-21 is Rs.6,01,48,473/-. Consequently, the corrigendum directed that this correct figure be read in place of the incorrect amount previously mentioned in paras 2 and 13 of the original order.

The Tribunal held that a company, being an inanimate person, cannot incur personal expenses. The authorities below erred in disallowing the club expenses without adverting to this fundamental aspect and without specific findings.

The Tribunal held that since the assessee's mercantile system of accounting was established and accepted in a previous related order, the disallowance of mobilization advance needed to be re-examined by the AO under this accounting method. Similarly, the disallowance for iron purchases was not sustainable, as payment was made in the relevant financial year, and under mercantile accounting, the timing of stock receipt (whether same or next year) does not invalidate the expense. The appeal was partly allowed.

The Tribunal identified a 'technical error' where the appellant's PAN (ABFFA0879F) was utilized to file the ITR of Akhil Mittal & Co., leading to a mismatch between the taxpayer name and the PAN. The Tribunal held that the CPC-ITR cannot process an ITR without a valid filing and, refraining from commenting on the merits of taxability, restored the matter to the Assessing Officer for fresh adjudication. The AO is directed to pass a fresh order after granting the appellant a reasonable opportunity of being heard and collecting necessary details from the CPC-ITR.

The Tribunal held that in cases of unabated assessments, additions under Section 153A can only be made if incriminating material is found during the search. Since no such material was found, the additions made by the Assessing Officer and the First Appellate Authority were deleted.