ITAT Delhi Judgments — November 2024

The Tribunal found that while the claimed source was not proven, family savings could not be ruled out. Therefore, a lumpsum addition of Rs. 4 lakhs was deemed just and proper.

The Tribunal held that the addition was made on assumptions and conjectures without cogent reasons or evidence. The assessee's explanation regarding cash sales and deposits was not adversely affected or doubted.

The Tribunal held that the re-opening of assessment was based on an incorrect finding of fact and that the sanction obtained under Section 151 was invalid as it lacked a date. Consequently, the entire assessment proceedings were quashed as void ab initio.

The Tribunal observed that the delay in depositing EPF was caused by extraordinary circumstances, specifically a fire incident, which was beyond the control of the assessee. Citing established legal principles and a previous ITAT decision, the Tribunal held that the assessee should not be penalized for delays beyond their control. Consequently, the addition of Rs. 7,03,244/- was deemed unjust and unreasonable, and the impugned orders were set aside.

The Tribunal upheld the disallowance of Rs. 71,375/- for gratuity paid to an unapproved fund. However, it remitted two issues back to the AO for fresh decision: the disallowance of Rs. 13,49,827/- for bonus and gratuity shown payable, and the addition of Rs. 68,03,907/- due to receipts discrepancy, citing the need for reconciliation and considering the Supreme Court's decision in Checkmate Services Pvt. Ltd.

The Tribunal partly allowed the appeal, recognizing that it is customary for ladies to hold Stree Dhan and have cash savings. Considering the assessee's consistent income disclosure and CBDT Circular No.3 of 2017, an additional Rs. 2,50,000/- (beyond the Rs. 2,70,000/- already allowed) was deleted from the addition. Thus, a total of Rs. 5,00,000/- was deleted, and the balance addition of Rs. 5,77,000/- was upheld.

The Tribunal observed there was no material to prove the assessee herself deposited the cash sums. Since the husband made the deposits and the addition was made in the wife's hands at 50%, the Tribunal found no merit to sustain the impugned addition against the assessee. The appeal was allowed as the assessee had not made any cash deposit.

The Tribunal held that adjustments under Section 143(1) of the Income Tax Act cannot be made for debatable and controversial issues. Relying on previous judgments, the Tribunal found the addition made by the revenue concerning employee contributions, even if deposited after the statutory due dates but before the ITR due date, to be beyond the scope of Section 143(1). Consequently, the order passed by the CPC Bangalore was deemed erroneous and quashed.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that as per the amended provisions of Section 54, benefit is allowed for only one residential house, and the assessee failed to establish how two flats on different floors could be treated as a single residential unit. Distinguishing the relied-upon case of 'Anita Mahindrakumar Oberai' (where adjacent flats were considered a single unit), the Tribunal dismissed the appeal.

The Tribunal observed that the CIT(A)'s order did not comply with the requirements of section 250(6) regarding detailed adjudication. Consequently, the matter was restored to the CIT(A)-NFAC for fresh adjudication, with the condition that the assessee actively presents their case within three opportunities.

The Tribunal held that the assessee cannot be penalized for the delayed deposit of EPF when the delay was caused by technical glitches on the EPFO portal, which were beyond the control of the employer. Relying on judicial precedents and EPFO circulars, the Tribunal found that the circumstances did not constitute a default on the part of the employer. Consequently, the impugned orders confirming the disallowance were set aside.

The Tribunal ruled that "lease rights" do not fall under the definition of "immovable property" as per Section 56(2)(vii) Explanation (d)(i) and similar provisions in Section 50C, citing relevant case law. Consequently, the Tribunal concluded that the impugned addition made by the lower authorities was unsustainable and deleted it.

The tribunal accepted the explanation for Rs.12,50,000/- of the cash deposits in IndusInd Bank, attributing it to business receipts based on VAT returns showing increased turnover, and deleted this portion of the addition. However, the explanation for Rs.12,00,000/- deposited in Kotak Mahindra Bank, claimed as surplus cash from FDs matured two years prior, was rejected as being 'farfetched and afterthought'. Consequently, the total addition under Section 69A was restricted to Rs.14,00,000/-.

The Tribunal noted that the appeal was filed by the legal representative of the deceased assessee and that the CIT(A) order was passed ex-parte without proper representation. The Tribunal set aside the impugned order and remanded the matter back to the CIT(A) for fresh adjudication. The CIT(A) is directed to provide a reasonable opportunity to the assessee/legal heirs to make submissions and then pass a speaking order in accordance with law.

The Tribunal held that the disallowance of salary expenses was not justified as the payees paid tax at a comparable rate and some were not covered under Section 40A(2)(b). The disallowance of interest expenses was also not justified as sufficient interest-free funds were available for investment.

The Tribunal observed that neither the assessee fully proved the source of deposits nor the department could entirely rebut the claims. Considering the peculiar facts, the Tribunal held that a lump sum addition of Rs. 10 lakhs was just and proper, thereby granting the assessee a relief of Rs. 11.5 lakhs. This estimation is not to be treated as a precedent.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that the Assessing Officer's reasons for reopening the assessment were based on mere doubt rather than tangible material, which is not sustainable in law for an assessment already completed under Section 143(3). Citing CIT v. Insecticides India Ltd., the Tribunal concluded that such a reopening was invalid and accordingly quashed it. Consequently, all other pleadings on the merits of the case became academic.

The ITAT upheld the CIT(A)'s decision, ruling that the assessee's explanation for the inordinate delay of over 12 years in filing appeals did not constitute 'sufficient cause'. The tribunal found that the assessee's conduct showed 'absolute callousness and irresponsible conduct' and a failure to demonstrate a bonafide reason or lack of negligence in not pursuing rectification for such a long period.

The Tribunal condoned the delay in filing the appeals. It held that both the Rs. 8 lakhs addition and the Rs. 9.5 lakhs, for which penalty was levied, represented cash sale consideration, not unexplained income or loans violating section 269SS. Consequently, the Tribunal set aside the addition and deleted the penalty, allowing both appeals.

The tribunal noted that the Learned Senior DR had no objection to the withdrawal. Consequently, the tribunal accepted the assessee's request and dismissed the appeal as withdrawn.

The Tribunal condoned the delay in filing the appeals. It held that both the Rs. 8 lakhs addition and the Rs. 9.5 lakhs, for which penalty was levied, represented cash sale consideration, not unexplained income or loans violating section 269SS. Consequently, the Tribunal set aside the addition and deleted the penalty, allowing both appeals.

The Tribunal held that once the option under Section 115BAA is exercised in a previous year, it creates a substantive right that applies continuously to subsequent assessment years and cannot be withdrawn. Therefore, the requirement of re-filing Form 10IC in subsequent years is an irrelevant consideration. The matter was remitted to the AO to verify if the assessee's claim for AY 2020-21 under Section 115BAA was duly acknowledged and accepted by the Income Tax Department.

The Tribunal held that the interest earned on FDRs was inextricably linked to the business of investment management and the setting up of the company's operations. Therefore, it should be treated as business income, and related expenses should be allowed.

The Tribunal noted the assessee's repeated non-appearance and lack of interest in pursuing the appeal. It upheld the validity of the notice issued under Section 143(2) and confirmed the additions of Rs. 20,00,000/- under Section 68 and Rs. 40,000/- under Section 69C, as the assessee failed to discharge its onus or provide controverting material. The findings of the CIT(A) were upheld across all contested grounds.

The Tribunal held that expenses not directly linked to the eligible unit cannot be allocated to it, and that the AO cannot reallocate expenses under Section 80IA(8). It also directed deletion of additions on account of gift and garden expenses.

The Tribunal held that the proceedings under Section 153A were barred by law as the assessment year was beyond the ten-year period from the search year. Therefore, the AO lacked jurisdiction to initiate these proceedings.

At the hearing, the assessee submitted a written petition requesting to withdraw the appeal, stating they no longer wished to press it. The Revenue's representative confirmed no objection to the withdrawal. Consequently, the Tribunal granted the request and dismissed the appeal as withdrawn.

The Tribunal observed that it was not clear from the records whether the notices issued by the CIT(A) were properly served on the assessee. To ensure natural justice and provide a fair opportunity, the appeal was restored to the Assessing Officer for a de novo adjudication, with directions for the assessee to provide updated contact details and cooperate.

The Tribunal found prima facie merits in the assessee's arguments, noting that the case file did not show a proper transfer of jurisdiction and that Section 124(3) did not apply to the AO who finalized the assessment. The CIT(A)/NFAC's rejection of the jurisdictional ground was deemed unsustainable. The appeal is reversed, and the matter is restored to the CIT(A)/NFAC for fresh adjudication.

The Income Tax Appellate Tribunal noted that the Learned Senior DR had no objection to the withdrawal. Accordingly, the Tribunal accepted the assessee's request and dismissed the appeal as withdrawn.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that expenses not directly linked to the eligible unit cannot be allocated to it, and that the AO cannot reallocate expenses under Section 80IA(8). It also directed deletion of additions on account of gift and garden expenses.

The Tribunal held that the subscription fees received by the assessee are in the nature of business income and not taxable in India as the assessee does not have a Permanent Establishment (PE) in India. The Tribunal followed the Delhi High Court's decision in RELX INC.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that the subscription fees received by the assessee are in the nature of business income and not taxable in India as the assessee does not have a Permanent Establishment (PE) in India. The Tribunal followed the Delhi High Court's decision in RELX INC.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that the AO had recorded satisfaction for invoking Section 14A and that the financial statements indicated expenses were incurred for investments yielding exempt income. The Tribunal also noted that the issue of Employee Stock Option Scheme (ESOP) compensation was covered by earlier decisions in the assessee's own case.

The Tribunal held that the reopening of assessment initiated beyond three years (notice issued 29.03.2022 for AY 2015-16) was invalid. As per Section 149(1)(b), the threshold for reopening beyond three years is Rs. 50 lakhs, but the actual addition made by the AO was only Rs. 47 lakhs. The AO's reliance on the cumulative value of property transactions (Rs. 1.33 crore) without differentiating the actual income escaping assessment was deemed a mechanical reopening. Therefore, the reopening was vitiated for lack of jurisdiction.

The Tribunal held that expenses not directly linked to the eligible unit cannot be allocated to it, and that the AO cannot reallocate expenses under Section 80IA(8). It also directed deletion of additions on account of gift and garden expenses.

The Tribunal accepted the assessee's request to withdraw the appeal, noting that the assessee had already availed the Vivad Se Vishwas Scheme 2024 for the assessment year in question. Consequently, the appeal was dismissed as withdrawn.

The ITAT upheld the CIT(A)'s decision, ruling that the assessee's explanation for the inordinate delay of over 12 years in filing appeals did not constitute 'sufficient cause'. The tribunal found that the assessee's conduct showed 'absolute callousness and irresponsible conduct' and a failure to demonstrate a bonafide reason or lack of negligence in not pursuing rectification for such a long period.

The Tribunal held that expenses not directly linked to the eligible unit cannot be allocated to it, and that the AO cannot reallocate expenses under Section 80IA(8). It also directed deletion of additions on account of gift and garden expenses.