ITAT Delhi Judgments — May 2024

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal found that the Ld. CIT(Appeals) had dismissed the assessee's appeals under a mistaken impression regarding the VSVS settlement. It was established that the disputes related to reassessment orders were never settled under VSVS. Therefore, the Tribunal restored the appeals to the file of the Ld. CIT(Appeals) for adjudication on merits after providing a reasonable opportunity to the assessee.

The Income Tax Appellate Tribunal (ITAT) upheld the decision of the CIT(A), finding no error in the conclusion. The Tribunal observed that the CIT(A) had properly appreciated the details of cash withdrawals provided by the assessee and noted that the AO's disbelief was based merely on suspicion without substantive inquiries or circumstantial evidence.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal held that the CIT(A) erred in treating the transaction as capital gains and allowing indexation without proper substantiation. The Tribunal also found that the assessee failed to prove the property was a residential house for Section 54F exemption.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal, considering previous co-ordinate bench decisions, restored the issue of disallowance of delayed employees' contribution to ESI and EPF to the file of the Assessing Officer (AO). The AO is directed to decide the matter afresh in light of the observations made by the co-ordinate benches of ITAT and provide adequate opportunity of hearing to the assessee.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal found that justice requires considering all material and documents. To achieve this, the matter was remitted back to the Assessing Officer to decide afresh after providing a meaningful opportunity to the assessee.

The Tribunal quashed the CIT(A)'s order, finding a procedural error as the CIT(A) decided the appeal without addressing the assessee's application for additional evidence under Rule 46A. The matter was restored to the first appellate authority to first decide the application for additional evidence and then adjudicate the appeals on their merits, including the penalty appeal.

The Tribunal observed that the CIT(A)'s ex parte order was against the principle of natural justice, as the assessee was not given proper opportunities. Therefore, the Tribunal remitted the case back to the Assessing Officer for a de novo assessment, with instructions to provide reasonable opportunities of being heard to the assessee, and refrained from commenting on the merits of the case.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal held that the transaction between the assessee and the buyer was concluded in 2003, and the consideration of Rs. 9,26,000/- was in line with the circle rate on the date of the agreement to sell (07.02.2003). Applying the proviso to Section 50C, which allows for the adoption of the agreement date's valuation when the agreement and registration dates differ and a part payment is received, the Tribunal ruled that no addition under Section 50C was warranted.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal held that the addition of Rs. 77 lacs under Section 68 was not sustainable. It found that the assessee had justified the source of the cash deposit with supporting documents, and merely a time gap between cash withdrawals and subsequent deposits, especially when eventually used for Section 54 exemption, does not justify an addition under Section 68. The Departmental Representative also did not object to the veracity of the assessee's documents.

The Tribunal, relying on Supreme Court and Delhi High Court decisions, clarified that for a non-searched person, the commencement date for computing the six assessment years under Section 153C is the date of recording satisfaction by the Assessing Officer, not the date of search. As the satisfaction was recorded on 23.11.2010, the block of six assessment years commenced from A.Y. 2005-06. Consequently, A.Y. 2004-05 fell outside this block, rendering the assessment order without jurisdiction and thus quashed. The Revenue's appeal, therefore, became infructuous.

The Tribunal held that penalty under Section 271(1)(c) is not imposable on transfer pricing adjustments if the assessee proves that the price was computed in accordance with Section 92C in good faith and with due diligence. The assessee's method and comparables were accepted as bona fide and exercised with due diligence.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal found that the assessee was not given a proper and effective opportunity of being heard, especially given the ex-parte nature of both the original assessment and the first appeal. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the case back to the Assessing Authority for a fresh assessment, instructing to provide the assessee with a reasonable opportunity to present their case.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal affirmed the CIT(A)'s decision, holding that if a provision for doubtful advance was created in a previous year (AY 2012-13) and MAT provisions were not applicable in that year due to book loss (even after statutory adjustments), then the subsequent recovery of that advance in a later year (AY 2014-15) should not be subjected to MAT again by adding it back to the book profit.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal held that the PCIT's show-cause notice, issued on 24.03.2023 with a reply deadline of 28.03.2023, was grossly inadequate and unreasonable, especially as the proceedings were nearing the limitation expiry of 31.03.2023. This short notice violated the Principles of Natural Justice, leading the Tribunal to set aside the PCIT's order. The matter was restored to the PCIT for fresh adjudication after providing the assessee a proper opportunity of being heard.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal held that prior approval under Section 153D is mandatory and must involve due consideration, not a mechanical process. Despite repeated opportunities, the Department failed to produce any evidence of such valid approval, leading to the presumption that the assessments were completed without the requisite legal approval under Section 153D.

The Tribunal upheld the CIT(A)'s decision to delete the addition u/s 68, finding that the amount was already accounted for in the previous assessment year and properly reconciled. The deletion of salary/wages disallowance u/s 37 was also confirmed, as the assessee provided sufficient documentation of bank transfers and PF/ESI compliance. For the u/s 14A disallowance, the Tribunal confirmed its deletion, noting no exempt income was earned or claimed by the assessee, consistent with judicial precedents.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal upheld the CIT(A)'s deletion of additions for royalty payment, commission to non-resident agents, and disallowance under Section 14A, citing previous judgments and the fact that the assessee's own funds exceeded investments without earning dividend income. However, the issue of delayed ESI contribution was remanded to the CIT(A) for fresh consideration in light of a recent Supreme Court judgment. The addition for understatement of income due to TDS mismatch was also deleted as the income was declared in the prior year.

Given that the underlying quantum additions were deleted in a previous order, the penalty levied under section 271(1)(c) of the Income Tax Act, 1961, is not sustainable and must also be deleted. The tribunal consequently allowed the assessee's appeal.

The Income Tax Appellate Tribunal considered the submission of the Department's counsel regarding the duplicate appeal. Consequently, the Tribunal acceded to the request and dismissed the appeal as withdrawn.

The Tribunal decided to remit the issues of additional service tax and interest on loans to sister concerns back to the AO for fresh examination, emphasizing the need to verify commercial expediency. The disallowance of ad-hoc labour welfare expenses was reversed, and the depreciation disallowance was upheld.

The Tribunal found that the AO failed to dispose of the assessee's rectification application under section 154 within the statutory time limit, thereby breaching a statutory obligation. It clarified that the communication from the AO on 04.07.2020 was not a proper order under section 154. Citing CBDT Circulars, the Tribunal held that rectification applications can be disposed of by the AO even after the expiry of the statutory time limit. Therefore, the Tribunal directed the AO to entertain and dispose of the assessee's application filed on 10.11.2014 as per law after verifying the records.

The Tribunal upheld the disallowance, citing the Supreme Court's decision in `Checkmate Services Private Limited Vs. CIT`. The Supreme Court clarified that employee contributions, being held in trust, must be deposited on or before the due dates mandated by the relevant welfare enactments for deduction under Section 43B of the Income Tax Act.

The Tribunal held that the case should be remitted back to the Assessing Officer for a de novo assessment. This is to afford the assessee reasonable opportunities of being heard, without commenting on the merits or legal issues.

The Tribunal allowed Ground No. 2 of the appeal, finding that the CIT(A) had passed the order without providing the assessee a proper opportunity of being heard. Consequently, the matter was remanded to the CIT(A) for de-novo adjudication, with a clear direction to provide the assessee with an opportunity of being heard.

The Tribunal noted that the Auditor did not explicitly categorize the club membership fees as capital, personal, or disallowable expenditure in Form 3CD. Following precedent from a Coordinate Bench and High Court rulings, the Tribunal held that a debatable claim cannot be disallowed through intimation under section 143(1)(a) and that club membership fees can be allowable business expenditure. Consequently, the disallowance was deleted.

The Tribunal held that prior approval under Section 153D is mandatory and must involve due consideration, not a mechanical process. Despite repeated opportunities, the Department failed to produce any evidence of such valid approval, leading to the presumption that the assessments were completed without the requisite legal approval under Section 153D.

The Tribunal noted that the CIT(A)'s order was silent on the mode of issuance and service reports of the notices, despite the assessee having requested email service in Form 35A. Therefore, the tribunal allowed the appeal and restored the matter to the file of the CIT(A) for a fresh hearing with proper opportunity.

The ITAT found that the CIT(A) erroneously concluded that the rectification petition under Section 154 was rejected, as the intimation merely stated it was transferred to the jurisdictional AO for technical reasons and that a subsequent rectification application was still pending. The Tribunal held that the appellant had good and sufficient reasons for the delay, as it was genuinely pursuing another remedy. Therefore, the ITAT condoned the delay and directed the CIT(A) to hear the appeal on merits.

The Tribunal upheld the validity of the notice issued u/s 143(2), citing the extended limitation period under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. However, it remitted the matter back to the Assessing Officer to pass a fresh order regarding the indexation benefit on amounts paid to HUDA, following DRP directions, and to specifically examine the indexation on interest paid for delayed installments.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal found that the Ld. CIT(Appeals) had dismissed the assessee's appeals under a mistaken impression regarding the VSVS settlement. It was established that the disputes related to reassessment orders were never settled under VSVS. Therefore, the Tribunal restored the appeals to the file of the Ld. CIT(Appeals) for adjudication on merits after providing a reasonable opportunity to the assessee.

The Tribunal found that both the Assessing Officer (AO) and the Ld. CIT(A) failed to provide the assessee with an effective, fair, and adequate opportunity of being heard. Consequently, the ITAT remitted the entire matter back to the CIT(A) with a direction to afford a meaningful and effective opportunity to the assessee, consider all material/evidence, and decide the appeal afresh.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal, noting the lower authority's error in deeming the appeal non-maintainable and to ensure natural justice, remitted the case back to the Assessing Officer. The AO is directed to provide the assessee a fresh, effective opportunity to present evidence, and then decide the matter afresh.

The Tribunal held that prior approval under Section 153D is mandatory and must involve due consideration, not a mechanical process. Despite repeated opportunities, the Department failed to produce any evidence of such valid approval, leading to the presumption that the assessments were completed without the requisite legal approval under Section 153D.

The Tribunal held that additions cannot be made solely on the basis of uncorroborated evidence like loose slips or WhatsApp messages without independent corroborative evidence. The CIT(A)'s deletion of such additions was upheld.

The Tribunal held that prior approval under Section 153D is mandatory and must involve due consideration, not a mechanical process. Despite repeated opportunities, the Department failed to produce any evidence of such valid approval, leading to the presumption that the assessments were completed without the requisite legal approval under Section 153D.