ITAT Delhi Judgments — November 2024

The Tribunal affirmed the CIT(A)'s decision, holding that the assessee had not included the provision for gratuity in its P&L account, effectively disallowing it as per section 40A(7). The Tribunal found the assessee's contention to be correct and upheld the deletion of the addition made by the CPC.

The Tribunal held that salary received by a director is taxable under the head 'Salary' and not 'Income from Other Sources'. It also deleted additions for certain bank deposits and an amount of salary, but restored issues related to unexplained bank deposits and business expenditures to the AO for fresh adjudication.

The Tribunal condoned the significant delay in filing the appeals, acknowledging the lack of departmental records and the assessee's claims of forgery. It remitted the matter back to the Assessing Officer (AO) to provide the assessee a fresh opportunity of hearing, conclude assessment proceedings, and investigate the serious allegations of forgery as per the assessee's affidavit.

The Tribunal held that the penalty notice issued under Section 271AAB was defective for not specifying the charges. Consequently, the penalty was deleted on technical grounds.

The Tribunal held that the CIT(A)/NFAC erred by including the period from 15.3.2020 to 19.10.2020 in the delay calculation, as this period should be excluded for limitation purposes according to the Supreme Court's decision in *Cognizance For Extension Of Limitation (2022) 441 ITR 722 (SC)*. The case was remanded back to the CIT(A)/NFAC for fresh adjudication on merits, with the onus on the assessee to prove relevant facts.

Considering the assessee's past returned income and cash in hand figures, which were not properly credited, and the assessee's inability to fully reconcile figures, the Tribunal deemed it appropriate to restrict the addition to Rs. 2,41,500/-. This decision resulted in a relief of Rs. 10,00,000/- for the assessee, with the caveat that this estimation should not set a precedent.

The Tribunal held that salary received by a director is taxable under the head 'Salary' and not 'Income from Other Sources'. It also deleted additions for certain bank deposits and an amount of salary, but restored issues related to unexplained bank deposits and business expenditures to the AO for fresh adjudication.

The Tribunal held that, in light of the Supreme Court's moratorium order prohibiting the institution of proceedings and enforcement of orders against the companies, the present appeals were not maintainable. Consequently, the appeals were dismissed in-limine, with liberty granted to both the assessees and the department to seek their restoration if the moratorium is lifted or circumstances change.

The Tribunal found merit in the assessee's explanation for the delay, noting that it included the Covid-19 pandemic period which the Supreme Court has directed to be excluded for limitation purposes. Consequently, the Tribunal condoned the 2250-day delay and directed the CIT(A)/NFAC to decide the appeal on its merits within three effective opportunities of hearing.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

Citing judicial precedent, the Tribunal held that the delay should have been condoned to allow for adjudication on merits. Consequently, the Tribunal restored the assessee's appeal back to the CIT(A)/NFAC for fresh adjudication, providing three effective opportunities.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal, relying on the Supreme Court's decision in CIT vs. Reliance Petroproducts, clarified that mere quantum additions or disallowances do not automatically attract a penalty under section 271(1)(c), as these are parallel proceedings. Applying this principle, the Tribunal found that the issues in question did not constitute concealment or furnishing inaccurate particulars of income. Consequently, the impugned penalty was deleted.

The Tribunal found that the CIT(A) failed to properly adjudicate the assessee's substantive grievances. Consequently, the appeal was restored to the CIT(A) for fresh appropriate adjudication, with the assessee responsible for proving all relevant facts within three opportunities of hearing.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal dismissed the Revenue's appeals, holding that the Assessing Officer's satisfaction note did not comply with the amended provisions of Section 153C, particularly as clarified by the Delhi High Court in PCIT Vs. Ojjus Medicare Pvt. Ltd. & Others. Since the Revenue failed to produce a compliant satisfaction note invoking the extended period, the Tribunal quashed the assessments for all four assessment years.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal held that the penalty order was barred by limitation as per Section 275(1)(c) of the Income Tax Act. The limitation period for imposing the penalty commenced from the date of the initial notice issued by the AO on December 31, 2010.

The Tribunal dismissed the Revenue's appeals, affirming that the CIT(A) was correct in rejecting the protective additions against the assessees. The Tribunal found no material under section 292C to uphold these impugned protective additions. Furthermore, the share capital addition was deemed a double addition, as it had already been assessed in the preceding assessment year 2011-12.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal upheld the CIT(A)'s decision, affirming that the assessee's activities were primarily for promoting the handloom sector for and on behalf of the Government of India, and not for trade, commerce, or business. It noted that the facts were identical to previous assessment years where the ITAT had consistently held in favor of the assessee, and no new facts were brought by the Revenue to warrant a different conclusion.

The Tribunal found doubt regarding the nature of the Rs. 50 lakh transaction, with the assessee claiming it was for property sale while the revenue argued it was a loan. The matter was remanded for further verification.

The Tribunal dismissed the Revenue's appeals, holding that the Assessing Officer's satisfaction note did not comply with the amended provisions of Section 153C, particularly as clarified by the Delhi High Court in PCIT Vs. Ojjus Medicare Pvt. Ltd. & Others. Since the Revenue failed to produce a compliant satisfaction note invoking the extended period, the Tribunal quashed the assessments for all four assessment years.

The Tribunal acknowledged that the underlying TP adjustments, which were the subject of previous related appeals, had been deleted by a coordinate bench following a High Court order. Given that the impugned assessment orders were based on issues that no longer survived, the Tribunal accepted the assessee's submission that the appeals had become infructuous.

The Tribunal dismissed the Revenue's appeals, affirming that the CIT(A) was correct in rejecting the protective additions against the assessees. The Tribunal found no material under section 292C to uphold these impugned protective additions. Furthermore, the share capital addition was deemed a double addition, as it had already been assessed in the preceding assessment year 2011-12.

The Tribunal found no material evidence to support the Revenue's claim of unsecured cash loans or cash interest payments by the assessee. Upon reviewing Sh. Sant Lal Aggarwal's statement, it was noted that he denied any connection with the assessee, and a prior co-ordinate bench order in a similar case had rejected his statement. Consequently, the Tribunal deleted the section 69C addition and reversed the section 271D and 271E penalties due to the absence of evidence from the department.

The Tribunal found doubt regarding the nature of the Rs. 50 lakh transaction, with the assessee claiming it was for property sale while the revenue argued it was a loan. The matter was remanded for further verification.

The Tribunal held that the assumption of jurisdiction under Section 147 was invalid. It found that the 'reason to believe' recorded by the AO was based on surmises and conjectures and lacked proper application of mind, not meeting the threshold for definite escapement of income as required by Section 147. Consequently, the foundation for reopening the assessment was void ab-initio, rendering the notice under Section 148 and the subsequent reassessment order bad in law.

The Tribunal found doubt regarding the nature of the Rs. 50 lakh transaction, with the assessee claiming it was for property sale while the revenue argued it was a loan. The matter was remanded for further verification.

The Tribunal found doubt regarding the nature of the Rs. 50 lakh transaction, with the assessee claiming it was for property sale while the revenue argued it was a loan. The matter was remanded for further verification.

The Tribunal deleted the long-term capital gains addition, noting that the 'transfer' of the capital asset occurred in FY 2011-12 (AY 2012-13) as per the sale deed, not AY 2011-12. The Tribunal also deleted the unexplained cash credit addition, finding it to represent 'on-money' consideration for the land sale, which was received in FY 2010-11.

The Tribunal dismissed the Revenue's appeals, affirming that the CIT(A) was correct in rejecting the protective additions against the assessees. The Tribunal found no material under section 292C to uphold these impugned protective additions. Furthermore, the share capital addition was deemed a double addition, as it had already been assessed in the preceding assessment year 2011-12.

The Tribunal dismissed the Revenue's appeals, affirming that the CIT(A) was correct in rejecting the protective additions against the assessees. The Tribunal found no material under section 292C to uphold these impugned protective additions. Furthermore, the share capital addition was deemed a double addition, as it had already been assessed in the preceding assessment year 2011-12.

The Tribunal ruled that the assessee had sufficiently explained the source of the cash deposits as accumulated past savings, which had been accepted in principle by the authorities. Consequently, the impugned addition of Rs. 1.58 lakhs was deleted.

The Tribunal held that the rectification order under section 154 was unsustainable because the Assessing Officer failed to provide the assessee with a reasonable opportunity, which is a mandatory requirement under section 154(3) of the Act. Consequently, the impugned disallowance made without observing this procedural safeguard was deemed not sustainable in law.

The Tribunal dismissed the Revenue's appeals, holding that the Assessing Officer's satisfaction note did not comply with the amended provisions of Section 153C, particularly as clarified by the Delhi High Court in PCIT Vs. Ojjus Medicare Pvt. Ltd. & Others. Since the Revenue failed to produce a compliant satisfaction note invoking the extended period, the Tribunal quashed the assessments for all four assessment years.

The Tribunal ruled that the assessee had sufficiently explained the source of the cash deposits as accumulated past savings, which had been accepted in principle by the authorities. Consequently, the impugned addition of Rs. 1.58 lakhs was deleted.

The Tribunal held that the assessee's revaluation of opening stock was a consequence of adopting Ind AS for the first time, as per Ind AS-101. Adjustments for such adoption are to be made directly to retained earnings, not through the profit and loss account. The Tribunal found that this revaluation did not alter the method of stock valuation and did not impact the Gross Profit ratio negatively, agreeing with the CIT(A)'s findings.

The Tribunal directed the Assessing Officer to verify the facts and ensure that no double addition is made in the assessee's hands. The onus was placed on the assessee to present and prove all relevant facts during the consequential proceedings.

The Tribunal dismissed the Revenue's appeals, affirming that the CIT(A) was correct in rejecting the protective additions against the assessees. The Tribunal found no material under section 292C to uphold these impugned protective additions. Furthermore, the share capital addition was deemed a double addition, as it had already been assessed in the preceding assessment year 2011-12.

The Tribunal dismissed the Revenue's appeals, affirming that the CIT(A) was correct in rejecting the protective additions against the assessees. The Tribunal found no material under section 292C to uphold these impugned protective additions. Furthermore, the share capital addition was deemed a double addition, as it had already been assessed in the preceding assessment year 2011-12.

The Tribunal found that the CIT(A) did not provide the assessee with a proper opportunity to substantiate its case and confirmed the AO's action without addressing the merits. Therefore, the ITAT remitted the issues back to the CIT(A) with directions to decide the matter afresh on merits, ensuring adequate opportunity of being heard for the assessee.

The Tribunal held that since the underlying quantum additions/disallowances, which were the very basis for imposing the penalty under Section 271(1)(c), had been reversed in the quantum proceedings, the penalty could not be sustained. Consequently, the action of the AO in imposing the penalty was set aside and cancelled.

The Tribunal found merit in the appellant's argument for a harmonious interpretation of Section 80G(5), especially for long-established charitable organizations, noting that the CBDT had issued Circular No. 7/2024 extending due dates for Form 10A and 10AB. The Tribunal concluded that the CIT(E) failed to consider all facts and the welfare objective of Section 80G. Therefore, the application filed in Form No. 10AB should be treated as timely, and the matter was remitted back to the CIT(E) for a fresh decision on its merits.

The tribunal noted that the CIT(A)-NFAC failed to address the Revenue's factual matrix and did not frame points of determination as mandated by section 250(6) of the Act. Consequently, the case was restored to the CIT(A)-NFAC for fresh and appropriate adjudication, with the assessee to be given three effective opportunities to present its claim.