ITAT Delhi Judgments — May 2025

The Tribunal held that the CIT(A) was correct in deleting the interest charged under Section 234B. This was based on the Supreme Court's decision in Mitsubishi Corporation, which stated that for assessment years prior to 2013-14, interest under Section 234B is not applicable if taxes were considered deductible at source.

The Tribunal held that the addition of Rs. 70,46,028/- made in the hands of the assessee towards the acquisition of the property was wrongly made. The Tribunal noted that the property was purchased in the joint name of the assessee and her husband, Shri Shyamlendu Chatterjee, for a total consideration of Rs. 59,13,680/- (as per the purchase deed dated 30.04.2010). Crucially, the entire investment was made by the husband, who had disclosed this transaction in his return of income for AY 2011-12 and claimed deduction under Section 54 of the Act against capital gains from the sale of another property. This fact remained uncontroverted by the revenue. The Tribunal observed that no action was taken by the revenue against the husband, who made the entire investment and disclosed it. Therefore, since no investment was made by the assessee and she was only included as a co-owner, the addition was deleted. Grounds of appeal No. 2 & 3 were allowed.

The Tribunal held that the disallowance of technical know-how fees was not justified as the services were genuine, substantiated by documentation, and accepted by ONGC. Similarly, the disallowance of power and fuel expenses was deleted as the captive power plant's operations were established. The disallowance under Section 14A was also restricted based on High Court pronouncements.

The Tribunal held that the reassessment proceedings were invalid due to violations of natural justice, specifically the failure to provide an opportunity for cross-examination and supply relied-upon material. Consequently, the additions made were deleted.

The Tribunal held that the payment of license fee for the use of goodwill is not an expenditure for a prohibited purpose and thus allowable. The ad-hoc disallowance of foreign travelling expenses was not sustainable, and the TDS credit claim was allowed.

The Tribunal held that penalty cannot be levied on additions made purely on estimation. Citing a coordinate bench's decision in the assessee's own case, the Tribunal found the impugned penalty unsustainable in the eyes of law.

The Tribunal held that the transfer of shares and the associated cash transactions did indeed constitute a diversion of the institution's property for the benefit of specified persons (Farooqui family) under Section 13(1)(c) read with Section 13(3) of the Act. Consequently, the denial of exemption under Section 11 by the AO was upheld.

The Tribunal held that the date of recording the satisfaction note by the AO concerning the non-searched person serves as the date of search for initiating action under section 153C. Therefore, assessment for AY 2013-14 should have been under section 153C and not 143(3). The issuance of a notice under section 153C is a prerequisite for assumption of jurisdiction under that section.

The Tribunal held that the CIT(E) erred in rejecting the applications without proper factual verification. The expenses on seminars and conferences were found to be for furthering the trust's objects, and the issue of TDS deduction by donors was addressed by relying on High Court decisions.

The Tribunal condoned the delay, accepting the reasons provided. It was held that since relevant documents were not placed before the CIT(A) and are germane to the issue, the matter should be remitted back to the AO for fresh adjudication.

The Tribunal held that the payment of license fee for the use of goodwill is not an expenditure for a prohibited purpose and thus allowable. The ad-hoc disallowance of foreign travelling expenses was not sustainable, and the TDS credit claim was allowed.

The Tribunal held that the payment of license fee for the use of goodwill is not an expenditure for a prohibited purpose and thus allowable. The ad-hoc disallowance of foreign travelling expenses was not sustainable, and the TDS credit claim was allowed.

The ITAT Delhi Benches held that they do not have territorial jurisdiction to decide these appeals and cross-objections. The jurisdiction of the Tribunal is determined by the location of the Assessing Officer who passed the assessment order, as per Supreme Court decisions.

The Tribunal held that the payment of license fee for the use of goodwill is not an expenditure for a prohibited purpose and thus allowable. The ad-hoc disallowance of foreign travelling expenses was not sustainable, and the TDS credit claim was allowed.

The Tribunal held that the reassessment proceedings were void because the AO failed to demonstrate escapement of income and did not mention any failure on the part of the assessee to disclose material facts. The expenditure was also found to be revenue neutral as it was debited as expenditure and credited as stock-in-trade.

The Tribunal held that the transfer of shares and the associated cash transactions did indeed constitute a diversion of the institution's property for the benefit of specified persons (Farooqui family) under Section 13(1)(c) read with Section 13(3) of the Act. Consequently, the denial of exemption under Section 11 by the AO was upheld.

The Tribunal held that the additions under Section 68 for share application money and unsecured loans were not sustainable as the assessee had established the identity, genuineness, and creditworthiness of the parties. The rejection of books of accounts was also found to be improper, rendering the subsequent estimation of income invalid.

The Tribunal held that the deposits in the bank accounts were not in cash but were transfers from a partnership firm and a company where the assessee was a director. The source of these deposits was found to be explained and verifiable. Therefore, the addition was deleted.

The Tribunal admitted additional evidence (registered power of attorney) and remitted the issue back to the AO for fresh adjudication. The assessee was to be given an opportunity to be heard and present further evidence.

The Tribunal held that the CIT(E) erred in rejecting the applications without proper factual verification. The expenses on seminars and conferences were found to be for furthering the trust's objects, and the issue of TDS deduction by donors was addressed by relying on High Court decisions.

The Tribunal held that the cash deposits were out of disclosed cash sales offered for taxation. Relying on various judicial precedents, the Tribunal deleted the addition made under section 69A.

The Tribunal held that the reassessment proceedings were initiated illegally as the notices under Section 148 were issued by a non-jurisdictional officer. Consequently, the entire assessment and the additions made were quashed.

The Tribunal decided to remit the issue back to the AO for fresh consideration. The AO is to grant the assessee an opportunity to be heard and consider all evidence, including new evidence. The appeal was allowed for statistical purposes.

The Tribunal held that the payment of license fee for the use of goodwill is not an expenditure for a prohibited purpose and thus allowable. The ad-hoc disallowance of foreign travelling expenses was not sustainable, and the TDS credit claim was allowed.

The Tribunal found that the assessee had substantially complied by investing in the plot before filing the return. It was held that Section 54F aims to promote investment in residential houses and the cost of the plot is part of the house cost. The Tribunal directed the AO to recalculate the capital gain.

The ITAT Delhi Benches held that they do not have territorial jurisdiction to decide these appeals and cross-objections. The jurisdiction of the Tribunal is determined by the location of the Assessing Officer who passed the assessment order, as per Supreme Court decisions.

The Tribunal held that the reassessment proceedings were invalid because the initial notice was erroneous and issued beyond the four-year period without proper approval. The Tribunal quashed the reassessment and deleted the additions made.

The Income Tax Appellate Tribunal (ITAT) upheld the decision of the Ld. CIT(A), ruling that the interest paid on delayed EDC is a revenue expenditure and not penal or capital in nature. The Tribunal relied on its own previous decisions for the assessee and precedents like CIT vs. Enchante Jewellery Ltd., affirming that such interest is an allowable business expense, especially when related to projects already completed and sold.

The Tribunal held that the AO cannot invoke Section 68 for addition when the assessee has opted for presumptive taxation under Section 44AD and has not maintained detailed books of account. The cash deposits were found to be already included in the turnover declared by the assessee. The appeal of the assessee deserves to be allowed, and the impugned addition is directed to be deleted.

The Tribunal held that the assessment framed under Section 143(3) was bad in law and void ab initio as it ought to have been framed under Section 153C, following the date of receipt of incriminating documents, not the date of search. The AO committed a substantive error by excluding the assessment year from the ambit of Section 153C.

The Tribunal held that the appeal filed by the assessee before the CIT(A) was indeed filed beyond the period of limitation. However, considering the facts and circumstances of the case, the Tribunal found that the delay was justifiable and therefore condoned the delay. On the substantive issue, the Tribunal held that the CIT(A) had correctly deleted the addition of Rs. 1,00,00,000/-. The Tribunal reasoned that the assessee had provided sufficient documentary evidence to establish the identity, creditworthiness, and genuineness of the cash credits. The AO had failed to bring any material on record to rebut the evidence produced by the assessee. Therefore, the addition made by the AO was unsustainable. The Tribunal directed the deletion of the addition.

The Tribunal allowed the deduction under Section 80IB, following a precedent that allowed rectification for subsequently filed audit reports. However, the disallowance of belated PF contributions was upheld based on Supreme Court ruling.

The Tribunal held that the reassessment order passed by the AO was invalid. The Tribunal noted that the assessee had filed a return of income on 11.12.2018 in response to the notice under section 148. As per the mandate, the AO was required to issue a notice under section 143(2) of the Act before concluding the proceedings. The Tribunal observed that admittedly, no such notice was issued by the AO in the instant case. This failure to issue a notice under section 143(2) renders the entire assessment proceedings invalid. The Tribunal relied on the Supreme Court judgment in ACIT vs Hotel Blue Moon, which held that the omission to issue notice under section 143(2) is not a procedural irregularity and is not curable. The Tribunal also referred to the jurisdictional High Court's decision in PCIT vs Shri Jai Shiv Shankar Traders Pvt.Ltd., stating that any delay in issuing notice under section 143(2) is fatal to reassessment proceedings. Consequently, the reassessment order passed under section 143(3) read with section 147 of the Act in the absence of a notice under section 143(2) was quashed. Other grounds were rendered academic and not adjudicated.

The ITAT Delhi Benches held that they do not have territorial jurisdiction to decide these appeals and cross-objections. The jurisdiction of the Tribunal is determined by the location of the Assessing Officer who passed the assessment order, as per Supreme Court decisions.

The ITAT Delhi Benches held that they do not have territorial jurisdiction to decide these appeals and cross-objections. The jurisdiction of the Tribunal is determined by the location of the Assessing Officer who passed the assessment order, as per Supreme Court decisions.

The Tribunal held that the bank passbook is not considered books of account for the purpose of Section 68. Since the assessee filed a return under Section 44AD, the initiation of proceedings under Section 68 was based on a non-existent provision as there were no proper books of account.

The Tribunal held that the AO failed to pinpoint any specific charging section under which the addition of Rs. 1 crore was made before invoking Section 115BBE. This legal infirmity was fatal to the assessment order.

The ITAT Delhi Benches held that they do not have territorial jurisdiction to decide these appeals and cross-objections. The jurisdiction of the Tribunal is determined by the location of the Assessing Officer who passed the assessment order, as per Supreme Court decisions.

The Tribunal held that the disallowance of technical know-how fees was not justified as the services were genuine, substantiated by documentation, and accepted by ONGC. Similarly, the disallowance of power and fuel expenses was deleted as the captive power plant's operations were established. The disallowance under Section 14A was also restricted based on High Court pronouncements.

The Tribunal deleted the adjustment on interest paid on compulsory convertible debentures, holding they partake the character of debt until conversion. It also deleted the adjustment for interest on outstanding receivables, following the jurisdictional High Court's decision. For reselling of services, the Tribunal set aside the DRP's findings and directed it to decide the objections regarding comparables afresh.

The Tribunal set aside the ex-parte order of the CIT(A) and remanded the matter back for fresh adjudication. The CIT(A) was directed to grant the assessee an opportunity of being heard, consider all evidence, and pass a reasoned order, including on the maintainability of the original proceedings.

The Tribunal held that the CIT(A) was correct in holding the reopening as bad in law, citing the lack of independent inquiry by the AO and the failure to disclose material facts. On merits, the Tribunal found that the assessee had offered the gains from the disputed transactions to tax and that the AO had failed to substantiate the allegations of unjustified additions and commission payments.

The Tribunal held that the CIT(A)'s deletion of the addition was justified. The AO's observation of cash entries in the bank statement, without establishing a nexus with an entry operator, did not prove bogus purchases. The AO had not found any defects in the assessee's books of account and had accepted the sales.

The Tribunal held that additions under Section 153A for unabated assessments cannot be made without incriminating material found during the search, especially when based on third-party documents. The AO's assumption of jurisdiction and subsequent additions were deemed unsustainable.

The Tribunal held that the reasons for reopening were based on borrowed satisfaction and mechanical application of mind by the AO and approving authority. The primary facts were not shown to be false, and the companies involved did exist and were assessed to tax.

The Tribunal held that the date of recording the satisfaction note by the AO concerning the non-searched person serves as the date of search for initiating action under section 153C. Therefore, assessment for AY 2013-14 should have been under section 153C and not 143(3). The issuance of a notice under section 153C is a prerequisite for assumption of jurisdiction under that section.

The Tribunal held that the date of recording the satisfaction note by the AO concerning the non-searched person serves as the date of search for initiating action under section 153C. Therefore, assessment for AY 2013-14 should have been under section 153C and not 143(3). The issuance of a notice under section 153C is a prerequisite for assumption of jurisdiction under that section.

The Tribunal held that 'under reporting of income' occurs when a person discloses a smaller amount than their actual income. Since the assessee's declared income was accepted by the Department without any additions, the limb of 'under reporting' under Section 270A was not applicable.

The Tribunal allowed the miscellaneous application to recall the order due to non-adjudication of the cash deposit issue. In the main appeal, the Tribunal held that the CIT(A) erred in deciding the appeal ex-parte and allowed the appeal to be decided afresh on merits.

The Tribunal held that the reassessment proceedings were invalid because the Assessing Officer (AO) reopened the case after four years without any new tangible material, relying solely on a change of opinion. The CIT(A)'s finding that the reassessment was based on a change of opinion and not on new evidence was not challenged by the Revenue.