ITAT Delhi Judgments — May 2024

The Tribunal held that the assessee provided sufficient evidence, including affidavits and a valuation report, to prove that a significant portion of the jewellery found belonged to her widowed mother-in-law, divorced sister-in-law, and sister. Since the revenue authorities did not counter these submissions, the benefit of CBDT Instruction No. 1916 should be extended to include this jewellery.

The Tribunal found that the CIT(A) had not conducted adequate inquiries and had summarily accepted the assessee's version without proper examination. The Tribunal held that mere banking channels and FRC certificates do not establish genuineness, especially given the large amounts and the company's meager capital.

The Tribunal upheld the CIT(A)'s decision, agreeing that the payments for services rendered outside India were not chargeable to tax in India. Therefore, the disallowance under Section 40(a)(i) was not justified.

The Tribunal upheld the CIT(A)'s decision, agreeing that the payments for services rendered outside India were not chargeable to tax in India. Therefore, the disallowance under Section 40(a)(i) was not justified.

The Tribunal held that the assessee is a tax resident of Cyprus and the beneficial owner of the interest income, having borne the financial risks. Therefore, the assessee is entitled to the concessional tax rate under Article 11 of the India-Cyprus DTAA.

The Tribunal upheld the CIT(A)'s decision, stating that when there are both credit and debit entries in a bank account, peak credit can be considered for addition. The Tribunal found no reason to disturb the CIT(A)'s finding that business activity was being carried out, supported by the Investigation Wing's report.

The Tribunal held that the CIT(A) was correct in not treating the entire cash deposits as undisclosed income, especially when there were both deposits and withdrawals. The Tribunal also noted that the Investigation Wing had reported business activity, supporting the CIT(A)'s approach.

The Tribunal found that the revenue department had already rectified the order on 17.05.2019, which resulted in a Nil demand. As the assessee's grievance was fully redressed by this action, the appeal was deemed infructuous.

The ITAT observed that the CIT(A) confirmed the addition without providing adequate opportunity to the assessee, particularly noting that three out of four notices were issued within a month of the CIT(A)'s decision. Consequently, the ITAT allowed the appeal and restored the matter to the file of the CIT(A) for a fresh decision after duly hearing the parties and in accordance with the law.

The Tribunal held that the addition made solely on the ground of no cash sales in preceding and subsequent years was not justified, especially when the assessee provided cash book, sales, and purchase details, and the AO had not rejected the books of account or doubted the trading results. The Tribunal relied on various High Court and Tribunal decisions to support its view.

The ITAT restored the issue of addition regarding share premium (under sections 56(2)(viib) and 68) to the AO for verifying the director's financials, emphasizing that section 56(2)(viib) is generally not applicable for existing shareholders/directors. The tribunal also allowed the ground concerning the ad-hoc disallowance of expenses, finding no justification for it.

The ITAT held that CIT(A)-1 Noida had no jurisdiction to pass the order, rendering it a nullity as per CBDT notifications. The ITAT also clarified that the CBDT Circular 3/2018 regarding monetary limits for appeals does not apply when the lower appellate authority has exercised wrong jurisdiction. Consequently, the CIT(A) Noida's order was set aside.

The Tribunal observed that the assessee was not effectively represented before the lower authorities and the CIT(A) dismissed the appeal without a merit-based decision. To uphold natural justice, the Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A) for fresh adjudication on merits, ensuring the assessee is given a reasonable opportunity of being heard.

The Tribunal held that granting the assessee an opportunity to file additional evidences would not prejudice the revenue. It directed the CIT(A) to consider these evidences, pass a speaking order, and adjudicate the matter according to the Income Tax Act.

The Tribunal allowed the appeal for statistical purposes, setting aside the NFAC's order. It restored the matter to the First Appellate Authority (NFAC) for a fresh decision on merits, directing that the assessee be given a proper opportunity of hearing.

The Tribunal found that the AO made an arbitrary addition for unexplained investment without conducting proper inquiry, without rejecting the books of account, and without identifying specific bogus investments. Concluding that the addition was against legal principles, the Tribunal allowed the assessee's appeal.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal condoned the substantial delays for both appeals, acknowledging the genuine reasons provided by the legal heir in the interest of substantial justice. It directed the CIT(A) to condone the initial delays and restored both appeals (ITA No. 1750/Del/2023 and ITA No. 1751/Del/2023) to the file of the CIT(A) for de novo adjudication in accordance with law.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal noted that the assessee failed to utilize opportunities provided by both the AO and CIT(A), leading to ex-parte orders. However, in the interest of justice and to provide one more opportunity, the Tribunal remitted the matter back to the jurisdictional Assessing Officer for de novo verification and re-assessment. The assessee is directed to cooperate, and the AO is to provide adequate opportunity of being heard.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal set aside the issue to the file of the Assessing Officer (AO) for a fresh decision, directing that the assessee be given a fresh opportunity of being heard and to present evidence. It was clarified that if the assessee fails to cooperate, the AO is at liberty to finalize the matter strictly in accordance with law.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal condoned the substantial delays for both appeals, acknowledging the genuine reasons provided by the legal heir in the interest of substantial justice. It directed the CIT(A) to condone the initial delays and restored both appeals (ITA No. 1750/Del/2023 and ITA No. 1751/Del/2023) to the file of the CIT(A) for de novo adjudication in accordance with law.

The Tribunal found that the CIT(A) passed an ex-parte order and did not properly adjudicate the grounds of appeal. The Tribunal also noted the assessee's claim of insufficient opportunity before the AO.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal deemed it just to grant the assessee one more opportunity for a hearing. Therefore, the appeal was restored to the Assessing Officer for a de novo verification and assessment, contingent on the assessee's cooperation.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal, with the consent of both parties, set aside the issue to the Assessing Officer for fresh adjudication. The AO was directed to consider the evidence of employer's contribution deposit, refer to Form 3CD and challans, and provide an opportunity of being heard to the assessee during the re-assessment.

The Tribunal held that the DRP's action of not deciding the issue on merits and effectively remanding it to the AO was contrary to Section 144C(8). Since the valuation aspects under Rules 11UB/11UC were not properly examined by either the AO or DRP, the Tribunal restored the issue to the Assessing Officer for de novo adjudication, allowing the assessee to provide further evidence and requiring a speaking, reasoned order.

The Tribunal held that the CIT(A) was correct in deleting the addition made by the Assessing Officer. The Tribunal found that the cash deposits were business receipts and supported by evidence, and that the rejection of the cash book was erroneous.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

A Co-ordinate Bench of ITAT had previously quashed the CIT's revisionary order under Section 263, ruling that the CIT could not substitute their view without demonstrating new facts or proving the AO's order was erroneous and prejudicial, especially given the consistent past assessment history. Following this, the CIT(A) upheld that the assessment order passed by the AO under Section 143(3) r.w.s. 263, which was based on the now-quashed revision order, was no longer operative and thus quashed it.

The tribunal held that since the loan was taken jointly and the father demonstrated sufficient sources for the cash deposits (agricultural income, sale of property, and bank withdrawals), the addition could not be sustained in the assessee's hands. It clarified that as long as the source of funds is explained, it does not matter whether the assessee or the father settles a joint loan. If the AO had doubts about the father's capacity, the enquiry and addition should have been directed towards the father.

The Tribunal held that the addition of Rs. 4,37,50,000 made by the Assessing Officer in the hands of the assessee company was unjustified. This was because the said cash was already accepted as additional income by Mr. Jai Shiv Saxena and assessed in his hands for a prior assessment year, leading to double taxation if also assessed in the hands of the assessee.

The Tribunal held that royalty payments for the use of brand name and technical know-how, which are recurring in nature, should be treated as revenue expenditure. The matter of entertainment expenses was remanded to the CIT(A) for fresh adjudication.

The tribunal noted that while the Pr. CIT considered the affidavits, the revisional order was passed because no sale deed was produced. However, the tribunal found that the Pr. CIT failed to properly examine the assessee's contentions or rebut the affidavits. Consequently, the tribunal quashed the Pr. CIT's order under Section 263, concluding it was made in a routine manner without sufficient basis.

The Tribunal held that the rent received by the assessee from the specified concerns was adequate and reasonable. The Revenue failed to provide cogent evidence to prove the inadequacy of the rent, and the difference between the rent received and the estimated market value was less than 10%.

The Tribunal upheld the CIT(A)'s decision, ruling that assessment proceedings initiated against a deceased person are void ab initio. It affirmed that since Mayank Enterprises was a proprietorship concern, it was not a separate legal entity from its proprietor, Rajeev Garg. Therefore, no notice could be validly served, rendering the entire proceedings unsustainable in the eyes of law.

The Tribunal upheld the CIT(A)'s decision, ruling that assessment proceedings initiated against a deceased person are void ab initio. It affirmed that since Mayank Enterprises was a proprietorship concern, it was not a separate legal entity from its proprietor, Rajeev Garg. Therefore, no notice could be validly served, rendering the entire proceedings unsustainable in the eyes of law.

The Tribunal dismissed the grounds related to depreciation disallowance and capitalization of technical know-how fees, following previous decisions in the assessee's own case. However, it allowed the assessee's claim to set off brought forward long-term capital loss against current year's long-term capital gains, holding that Section 74 overrides Section 71.

The Tribunal found that the assessee had a sufficient opening cash balance and had recorded the advance payment transaction in its books, as evidenced even by the Assessing Officer's observation of the balance sheet. Consequently, the Tribunal ruled that the addition made by the lower authorities was unwarranted and should not be sustained.

The Tribunal condoned the delay, acknowledging the assessee's charitable work and partial compliance. It set aside the CIT(E)'s ex-parte order, emphasizing the need for fair play and natural justice. The issue was restored to the CIT(E) for a de novo consideration, granting the assessee another opportunity to present its case.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal held that the short compliance period (two working days for 11 cases) rendered the opportunity 'illusory' and constituted a reasonable cause for non-compliance. It also found the demand notices issued before the penalty orders to be legally infirm as per Section 156. Consequently, the penalties imposed under Sections 271(1)(b) and 272A(1)(d) were quashed, without needing to delve into the additional grounds.

The Tribunal upheld the CIT(A)'s decision, ruling that assessment proceedings initiated against a deceased person are void ab initio. It affirmed that since Mayank Enterprises was a proprietorship concern, it was not a separate legal entity from its proprietor, Rajeev Garg. Therefore, no notice could be validly served, rendering the entire proceedings unsustainable in the eyes of law.

The Tribunal condoned the delay of 11 days in filing the physical appeal documents, accepting the explanation of the assessee's counsel's injury as a reasonable cause. Regarding the FTC claim, the Tribunal held that the assessee is entitled to claim FTC under Section 90 of the Act read with Article 25 of the India-US DTAA. The Tribunal reasoned that FTC is a vested right and should not be disallowed for non-compliance with procedural requirements like the late filing of Form 67, especially when the form has since been filed and can be verified. The Tribunal emphasized that procedural law is subservient to justice and that the DTAA provisions, being more beneficial to the assessee, override the Act's procedural requirements. The issue was set aside to the Assessing Officer (AO) with a direction to verify the details of Form 67 and grant relief in accordance with law, providing the assessee an opportunity of being heard and to submit evidence. The Tribunal expressly left no issue undecided.

The ITAT found that the CIT(A) dismissed the appeal ex parte without deciding on merits or adhering to the mandate of Section 250(6) of the IT Act, which requires stating points in dispute and providing reasons. Citing a violation of natural justice, the ITAT set aside the CIT(A)'s order and remanded the case back for re-adjudication after granting the assessee a proper opportunity of hearing.