ITAT Delhi Judgments — October 2024

The Tribunal held that the interest liability was ascertained and not contingent, especially since the assessee followed the mercantile system of accounting. The Tribunal noted that similar claims for interest expenditure had been allowed in preceding and succeeding assessment years for the assessee.

The Tribunal upheld the CIT(A)'s decision, finding that the AO failed to establish the assessee's failure to disclose material facts and did not conduct proper investigation before reopening the assessment. The AO also did not follow the prescribed procedures for reopening.

For AY 2015-16, the Tribunal quashed the reassessment, holding that the reasons for reopening were fallacious as the assessee proved genuine purchase, holding, and STT-paid sale of shares prior to any alleged malafide scheme. For AY 2017-18, the Tribunal upheld the CIT(A)'s deletion of the addition, accepting the assessee's explanation of manifold increase in cash sales due to new business agreements, which were duly reflected in VAT returns.

The Tribunal found that the assessee's explanation regarding seized documents was uncontroverted and that the CIT(A) failed to provide a proper opportunity of hearing or adjudicate on merits. It also noted the AO's lack of rationale for distinguishing cash deposits in A.Y. 2017-18. Consequently, the income calculation for all assessment years was restored to the Assessing Officer for fresh adjudication, with directions for the assessee to furnish documents and the AO to provide a fair hearing.

The Tribunal found that the assessee's explanation regarding seized documents was uncontroverted and that the CIT(A) failed to provide a proper opportunity of hearing or adjudicate on merits. It also noted the AO's lack of rationale for distinguishing cash deposits in A.Y. 2017-18. Consequently, the income calculation for all assessment years was restored to the Assessing Officer for fresh adjudication, with directions for the assessee to furnish documents and the AO to provide a fair hearing.

The Tribunal found that the assessee's explanation regarding seized documents was uncontroverted and that the CIT(A) failed to provide a proper opportunity of hearing or adjudicate on merits. It also noted the AO's lack of rationale for distinguishing cash deposits in A.Y. 2017-18. Consequently, the income calculation for all assessment years was restored to the Assessing Officer for fresh adjudication, with directions for the assessee to furnish documents and the AO to provide a fair hearing.

The Tribunal held that the approval granted under Section 153D was invalid as it was a mechanical and consolidated approval without due application of mind, rendering the assessment order unenforceable. Therefore, the assessment order was quashed.

The Tribunal held that the approval granted under Section 153D was invalid as it was a mechanical and consolidated approval without due application of mind, rendering the assessment order unenforceable. Therefore, the assessment order was quashed.

The Tribunal noted that the Ld. CIT DR for the Revenue had no objection to the withdrawal. Accordingly, the Tribunal allowed the request to withdraw the appeal and dismissed it as withdrawn.

The Tribunal found substantial weight in the assessee's reasons for non-appearance before the AO and CIT(A). Consequently, the case was restored to the AO for fresh adjudication. The assessee is directed to furnish original documents and material evidence, and the AO is directed to re-examine the issue after affording a proper opportunity of being heard.

The Tribunal found that the AO had failed to examine the effect of the revised TDS statement by ATIL and distinguished the case from *Wipro Ltd.*, noting it was not an additional claim but a revision impacting income for both associated concerns. The Tribunal directed the AO to verify and reconcile the 26AS data with ATIL's revised TDS statement and the assessee's accounting entries, subsequently revising the assessee's income after proper verification and reconciliation. The AO was also directed to grant credit for withholding tax/TDS after due verification, remitting these issues for de novo consideration.

The ITAT noted that the CIT(A) dismissed the appeal ex-parte as the assessee failed to furnish submissions or arguments. Considering the ex-parte nature of the decision and to uphold principles of natural justice, the tribunal decided to restore the matter to the file of the CIT(A) for fresh consideration after hearing the assessee.

The Tribunal held that the interest payable to the Government of India is an allowable deduction as it is an ascertained liability and the assessee follows the mercantile system of accounting. The appreciation on PSU Bonds is not taxable on a yearly basis but at the time of maturity or redemption.

Considering the assessee's application for withdrawal, prompted by the successful acquisition of registration under Section 80G through a new CBDT circular, and with no objection from the Revenue, the Tribunal accepted the request. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal condoned the 56-day delay, finding it reasonable given the circumstances. It noted that the FAA proceeded ex-parte without considering the merits and failed to recognize the assessee's preference for postal notices. Consequently, the Tribunal restored the matter to the CIT(A)/NFAC for fresh consideration on merits, with directions to issue proper notices via both email and post.

The Tribunal held that, in light of CBDT Circular No. 09/2024 dated 17.09.2024, which revised the monetary limit for filing appeals before the Tribunal to Rs. 60 Lacs, the Revenue's appeal was not maintainable. The appeal was dismissed as withdrawn/not pressed, with liberty granted to the Revenue for re-institution if it falls under specified exceptions of the Circular.

The Tribunal, relying on the Supreme Court's decision in `Checkmate Services Pvt. Ltd. vs. CIT-I` (2022), held that payment of employee's contributions to provident fund and ESI after the due date prescribed by the relevant statute is not allowable as a deduction under Section 36(1)(va) of the Act. The issue was deemed settled and decided in favor of the Revenue.

The Tribunal observed that the CIT(E)'s order was passed ex-parte and the Assessee claimed a lack of timely e-portal verification. In the interest of justice and to ensure a fair hearing, the matter was remanded back to the CIT(E) with directions for the Assessee to participate in proceedings, and for the CIT(E) to decide the issue afresh after hearing the Assessee in accordance with law.

The Tribunal held that the initiation of proceedings under Section 153C was bad in law as the assessment years in question (2011-12 and 2012-13) fell outside the ten-year outer limit prescribed by the statute, counting backward from the date the seized material was forwarded to the jurisdictional AO.

The Tribunal held that the initiation of proceedings under Section 153C was bad in law as the assessment years in question (2011-12 and 2012-13) fell outside the ten-year outer limit prescribed by the statute, counting backward from the date the seized material was forwarded to the jurisdictional AO.

The ITAT found the reasons for non-appearance before the CIT(A) to have substantial weight and, in the interest of justice, remanded the case back to the CIT(A). The CIT(A) is directed to provide a fresh opportunity to the assessee to present their case and documentary evidence, and then decide the issue as per law.

The Tribunal, acknowledging the assessee's inability to appear before the CIT(A) due to judicial custody in a separate case, set aside the CIT(A)'s ex-parte order. The case was remanded back to the CIT(A) for fresh adjudication, ensuring the assessee receives a reasonable opportunity of being heard in adherence to natural justice principles.

The Raipur Tribunal had already disposed of the assessee's appeal by restoring the matter to the CIT(A) for fresh adjudication. Consequently, the Delhi Bench held that the appeal before it had become infructuous and was therefore dismissed.

The Tribunal considered CBDT Circular No. 05 of 2024 dated 15/03/2024, which sets a monetary limit of Rs. 50,000/- for appeals to the Tribunal and explicitly omitted the exception for revenue audit objections. Applying the new circular to the pending appeal, the Tribunal concluded that the Revenue's appeal, with a tax effect exceeding Rs. 50,000/-, was not maintainable due to the removal of the specific exception it relied upon.

The Tribunal noted the assessee's request to withdraw the appeal after the TPO accepted that the international transactions were at Arm's Length Price (ALP). Subsequently, the AO enhanced the income as 'NIL' under section 92CA(5), granting the assessee complete relief on the issues raised.

The ITAT found that the Ld. CIT(A) had passed the order without hearing the Assessee and had failed to decide certain specific grounds on their merits, erroneously considering them general in nature. To ensure substantial justice, the Tribunal set aside the CIT(A)'s order and remanded the matter back for de novo adjudication of all issues after hearing the Assessee. If the Assessee fails to appear, the CIT(A) is at liberty to pass an order in accordance with law.

The Tribunal held that the Ld. CIT(A) should have condoned the 81-day delay by adopting a liberal approach. It condoned the delay and remanded the case back to the Ld. CIT(A) to decide the appeal afresh on its merits after hearing the Assessee.

The Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision. It held that the transitional arrangement was a commercially prudent measure necessitated by business exigencies following the slump sale of a running business with pending contracts. As both the parent and subsidiary companies were in losses, the arrangement was not considered a decoy for tax evasion, and thus the loss claimed by the assessee was allowable.

The Tribunal found the AO's claim of lack of bifurcation between software updates and support services factually incorrect, as invoices showed separate costs. It was held that the 'make available' condition under Article 12(4)(b) of the India-USA DTAA was not met, as the Revenue failed to prove that technical knowledge, know-how, or skill was transferred to service recipients. Therefore, the receipts are not taxable as FIS under Article 12(4)(b) of the DTAA. For the secondary issue, the AO was directed to verify the assessee's claim and compute interest on refund under section 244A up to the date of issuance of the refund voucher.

The Tribunal dismissed the Revenue's appeal on the grounds of low tax effect, in accordance with CBDT Circulars, but included a rider allowing for restoration of the appeal if specific exceptions apply or for valid reasons. Concurrently, the assessee's Cross Objection was also dismissed following its withdrawal.

The Tribunal held that the reassessment proceedings were void ab initio due to defects in the reasons recorded by the Assessing Officer and mechanical approval by the competent authority under Section 151. Consequently, the grounds raised by the Revenue on merits were not adjudicated.

The ITAT held that the CIT(A) erred by summarily rejecting additional evidence and not providing the assessee a reasonable opportunity of being heard, which violates principles of natural justice. The Tribunal set aside the CIT(A)'s order and remanded the matter back for fresh adjudication, directing the CIT(A) to admit and examine the additional evidence and assessee's claims.

The ITAT found that the CIT(A) violated natural justice by dismissing the appeal after sending notices via email, despite the assessee having opted for physical communication in Form No. 35. Citing a precedent, the ITAT set aside the CIT(A)'s order and remanded the case for fresh adjudication, instructing the CIT(A) to provide proper opportunity, including physical notices.

The Tribunal ruled that the initial filing on 22.10.2021 was within the due date, and the re-filing was necessitated by a departmental technical glitch. Therefore, the late filing fee under Section 234E was not justified. The Tribunal deleted the levied fee.

The Tribunal upheld the exclusion of certain companies as comparables based on geographical differences, functional dissimilarity, and high advertisement/marketing expenses. It also followed a previous ruling regarding export sales filters.

The Tribunal upheld the exclusion of certain companies as comparables based on geographical differences, functional dissimilarity, and high advertisement/marketing expenses. It also followed a previous ruling regarding export sales filters.

The Tribunal condoned the delay, finding sufficient cause. It quashed the assessment proceedings, holding that the AO should not tax income offered on a mercantile basis for unrealized debtors, applying the principle of consistency. The penalty appeal was also allowed.

The ITAT observed that the assessee, an individual and housewife, did not appear before the lower authorities. To ensure justice and provide a proper opportunity, the Tribunal set aside the ex-parte order of the CIT(A) and restored the matter for fresh adjudication after giving the assessee a reasonable opportunity of being heard.

The Tribunal held that while the AO had reasons to believe that the assessee had not disclosed material facts, the addition on account of deemed rental income for an uninhabitable property was incorrect. The Tribunal allowed deletion of the addition for the property at Dhauj, following a previous DRP order.

The Tribunal held that the assessee had provided sufficient details to prove the source of funds and the source of the source. The identity and creditworthiness of the investors were proven, and the genuineness of the transactions was established through confirmations and bank statements.

The ITAT noted that the CIT(A) had affirmed the AO's order ex-parte without examining the merits. To ensure natural justice and provide a fair opportunity, the ITAT set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for a fresh decision on merits after granting the assessee an adequate hearing.

The Tribunal held that the CIT(A)'s findings regarding the cash deposits were detailed and reasoned, dismissing the Revenue's ground on this issue. However, the Tribunal upheld the disallowance of salary paid to the Director's wife and sister-in-law due to lack of evidence of services rendered.

The Tribunal held that since the additions for undisclosed sources were made on a protective basis and substantive additions were already taxed in the hands of beneficiaries/Anand Kumar Jain, the CIT(A) was correct in deleting them. Similarly, the commission income, having been offered to tax and confirmed in Anand Kumar Jain's case, could not be taxed twice, thus affirming the CIT(A)'s deletion of this addition.

The Tribunal found merit in the assessee's Ground No. 3, concluding that the Ld. CIT(A) failed to provide an adequate opportunity for personal hearing or to specifically request the necessary documentary evidence. Consequently, the Tribunal restored the matter to the CIT(A) for fresh adjudication, with directions to grant the assessee a personal hearing and allow them to substantiate their claims.

The Tribunal held that the reassessment proceedings were void ab initio due to defects in the reasons recorded by the Assessing Officer and mechanical approval by the competent authority under Section 151. Consequently, the grounds raised by the Revenue on merits were not adjudicated.

The Tribunal held that while the AO had reasons to believe that the assessee had not disclosed material facts, the addition on account of deemed rental income for an uninhabitable property was incorrect. The Tribunal allowed deletion of the addition for the property at Dhauj, following a previous DRP order.

The Tribunal upheld the exclusion of certain companies as comparables based on geographical differences, functional dissimilarity, and high advertisement/marketing expenses. It also followed a previous ruling regarding export sales filters.

The Tribunal held that the approval granted under Section 151 was mechanical and lacked proper application of mind, making the reassessment proceedings invalid. Consequently, the assessment made in the assessee's case was set aside.

The Tribunal held that since the additions for undisclosed sources were made on a protective basis and substantive additions were already taxed in the hands of beneficiaries/Anand Kumar Jain, the CIT(A) was correct in deleting them. Similarly, the commission income, having been offered to tax and confirmed in Anand Kumar Jain's case, could not be taxed twice, thus affirming the CIT(A)'s deletion of this addition.

The Tribunal held that since the additions for undisclosed sources were made on a protective basis and substantive additions were already taxed in the hands of beneficiaries/Anand Kumar Jain, the CIT(A) was correct in deleting them. Similarly, the commission income, having been offered to tax and confirmed in Anand Kumar Jain's case, could not be taxed twice, thus affirming the CIT(A)'s deletion of this addition.