ITAT Delhi Judgments — May 2025

The Tribunal held that purchases from Indo Trading Co. and Soma Enterprises remained unverified as no replies were received from these parties, and the assessee provided only ledger accounts without confirmations or bank statements. Regarding Krishna Traders, the proprietor admitted to being a salaried employee and having no business transactions. The GST Department's survey also indicated non-payment of GST by Krishna Traders, and the assessee subsequently deposited the GST along with interest. Therefore, the Tribunal inclined to interfere with the lower authorities' observations that purchases from these three parties totaling INR 26,47,92,365 remained unverified. However, considering that the assessee claimed to have sold the goods and offered profits, which were not doubted by the AO, and Section 145(3) was not invoked, the Tribunal upheld the Ld. CIT(A)'s action of applying a profit rate on unverifiable purchases, citing the Supreme Court in N.K. Proteins vs DCIT. The Tribunal found no evidence to suggest a 25% profit suppression as in N.K. Proteins. Considering the business of the assessee, a G.P. rate of 5% on the unverifiable purchases of INR 26,47,92,365 was deemed reasonable. The AO was directed to apply a 5% profit rate and make the addition after reducing the G.P. declared by the assessee. The addition was confirmed as a trading addition, and no addition was sustained under Section 69C.

The tribunal held that the compliance of filing/uploading Form 10B tax audit report is a directory provision, not mandatory. Therefore, the action of the lower authorities rejecting the Section 11 exemption is reversed.

The Tribunal allowed the assessee's grounds related to software expenses and warranty provisions, while dismissing the ground concerning liquidated damages. The Revenue's appeal was dismissed as infructuous due to the completion of Mutual Agreement Procedure (MAP) formalities.

The Tribunal allowed the assessee's grounds related to software expenses and warranty provisions, while dismissing the ground concerning liquidated damages. The Revenue's appeal was dismissed as infructuous due to the completion of Mutual Agreement Procedure (MAP) formalities.

The Tribunal, while acknowledging that the assessee did not press its initial grounds concerning the validity of reopening and natural justice, focused on the substantive issue of the commission addition. The assessee's sole argument was based on a previous decision of the Tribunal in ITA No. 953/Del/2020, Mekaster Finlease Limited Vs. DCIT, which dealt with the same search operation and identical accommodation entries. In that case, the Tribunal had directed the AO to assess the commission at 0.5%. The Revenue did not offer any counter-arguments or rebuttals to this submission. Adopting judicial consistency and in the given facts and circumstances, the Tribunal found it just and proper to assess the commission on the accommodation entries at 0.5% for the assessee. Consequently, the addition was adjusted to reflect this rate. No other grounds or arguments were pressed by the assessee.

The Tribunal noted that the assessee had raised a legal argument before the CIT(A)/NFAC, claiming to be a public limited company in which public is substantially interested, thereby contending that the addition under section 56(2)(viib) was wrongly made. The Tribunal also observed that the revenue did not dispute that this plea was not specifically discussed or rejected in the assessment order or the lower appellate discussion. In the interest of justice, the Tribunal deemed it appropriate to restore the issue back to the Assessing Officer for fresh adjudication. The Assessing Officer is directed to consider the assessee's plea afresh in light of all relevant facts. The taxpayer is to plead and prove its case at its own risk and responsibility. The appeal is allowed for statistical purposes.

The Tribunal noted that the assessee's primary contention was that the CIT(A) had passed an ex-parte order without affording adequate opportunity of hearing. The assessee had filed an adjournment application, which was allegedly not considered, leading to the appeal being decided without hearing the assessee. The revenue's representative fairly agreed that the assessee was not afforded adequate opportunity of hearing before the CIT(A). Given this admission, the Tribunal considered it fit to restore the matter back to the CIT(A) for fresh adjudication after affording due opportunity of hearing to the assessee. Consequently, Ground No.1 raised by the assessee was allowed. As the appeal was restored to the CIT(A) for fresh adjudication, the other grounds raised by the assessee on the merits of the issue were not adjudicated by the Tribunal. The operative direction was to set aside the order of the CIT(A) and restore the appeal to the file of the CIT(A) for fresh disposal.

The Tribunal held that the deposit of Specified Bank Notes (SBNs) was permissible under the Specified Bank Notes (Cessation of Liabilities) Act, 2017, as the deposit was made before the appointed date of 31.12.2016. However, the disallowance of 10% of car expenses for lack of a log book was upheld due to insufficient evidence from the assessee.

The Tribunal held that the reassessment was invalid due to the non-issuance of a mandatory Section 143(2) notice. Therefore, the impugned reassessment was quashed.

The CIT(A) deleted the addition by treating the cash deposits as business receipts and estimating the income at 30% of gross receipts, following the precedent from earlier assessment years. The Tribunal upheld the CIT(A)'s decision, finding it to be correct and not requiring interference.

The Tribunal held that additions under Section 153A cannot be made based on incriminating material found in a third party's search without it being linked to the assessee. Furthermore, the approval granted under Section 153D was found to be mechanical and lacking application of mind, rendering the assessment orders invalid.

The Tribunal held that additions under Section 153A cannot be made based on incriminating material found in a third party's search without it being linked to the assessee. Furthermore, the approval granted under Section 153D was found to be mechanical and lacking application of mind, rendering the assessment orders invalid.

The Tribunal held that additions under Section 153A cannot be made based on incriminating material found in a third party's search without it being linked to the assessee. Furthermore, the approval granted under Section 153D was found to be mechanical and lacking application of mind, rendering the assessment orders invalid.

The Tribunal found that several additions made by the lower authorities were not supported by the facts or pertained to amounts not credited in the relevant financial year. Consequently, these additions were directed to be deleted.

The Tribunal held that the CIT(A) had correctly noted the repayment of the loan, the PAN error, and the corroborative evidence, thus finding the explanation for the credits satisfactory and saw no error in the CIT(A)'s reasoning.

The Tribunal allowed the assessee's grounds related to software expenses and warranty provisions, while dismissing the ground concerning liquidated damages. The Revenue's appeal was dismissed as infructuous due to the completion of Mutual Agreement Procedure (MAP) formalities.

The Tribunal held that penalty under Section 271(1)(c) cannot be levied on an estimated disallowance of expenses. Following various High Court judgments, the Tribunal deleted the penalty.

The Tribunal noted that the appellant wished to withdraw the appeal as they did not wish to pursue the matter further. The Revenue had no objection to this request.

The Tribunal held that the provisions of Section 80-IA(7) are applicable to start-ups claiming deductions under Section 80-IAC by virtue of Section 80-IAC(4). Therefore, furnishing the audit report in Form 10CCB within the specified date is mandatory for claiming the deduction.

The Tribunal noted that the CIT(A) relied on the Assessing Officer's favorable remand report, which confirmed that the donations came from concerned donors with instructions to form part of the societies' corpus. Citing relevant case law, the Tribunal found that the Revenue could not be considered an aggrieved party in this context.

The Tribunal held that interest on enhanced compensation is taxable as income from other sources, following a jurisdictional High Court decision. The earlier Supreme Court ruling was considered unsustainable due to subsequent legislative amendments.

The Tribunal held that the CIT(A) erred in upholding the AO's decision to deny deduction u/s 80JJAA. The Tribunal noted that Form 10DA was filed before the intimation and that the filing of the form is directory and not a fatal flaw for claiming the deduction.

The Tribunal noted that the assessee, running a mother dairy booth, failed to appear before the authorities. However, in the interest of substantial justice, the orders of the AO and CIT(A) were set aside to grant the assessee an adequate opportunity of hearing.

The Tribunal condoned the delay in filing the appeal due to reasonable grounds presented by the assessee. However, it held that the updated return filed u/s 139(8A) was invalid as it was filed after the assessment proceedings were completed. Consequently, the addition made by the Assessing Officer was confirmed due to the lack of supporting evidence.

The Tribunal held that the proviso (a) to Section 43(5) of the Income Tax Act, 1961, which excludes hedging transactions from speculative transactions, applies to both manufacturers and traders. The Tribunal also found that the payment for delayed gold delivery was incidental to business and not a penalty.

The Tribunal held that payments of royalty and FTS should be allowed, following the principle of consistency as applied by the Supreme Court and High Court, since there was no change in facts from the previous year. The issue of depreciation allowance was restored to the Assessing Officer for fresh decision.

The tribunal dismissed ITA No. 637/Del/2025 as it was not arising from the CIT(E)'s order. For ITA No. 638/Del/2025, concerning the rejection of registration, the tribunal restored the matter back to the CIT(E) for fresh adjudication on merits, directing the CIT(E) to provide the assessee a reasonable opportunity to furnish necessary evidence.

The tribunal dismissed ITA No. 637/Del/2025 as it was not arising from the CIT(E)'s order. For ITA No. 638/Del/2025, concerning the rejection of registration, the tribunal restored the matter back to the CIT(E) for fresh adjudication on merits, directing the CIT(E) to provide the assessee a reasonable opportunity to furnish necessary evidence.

The Tribunal held that while the assessee did not comply with the notices issued by the CIT(A), it was important to provide a reasonable opportunity for hearing in the interest of justice. Therefore, the appeals were restored to the CIT(A) for fresh adjudication.

The Tribunal held that the assessee cannot be denied the credit of TDS deducted at source, even if the deductor failed to deposit it with the government. The Income Tax Act is a complete code, and the Revenue has a statutory obligation to recover the TDS from the deductor.

The Tribunal held that the assessee cannot be denied the credit of TDS deducted at source, even if the deductor failed to deposit it with the government. The Income Tax Act is a complete code, and the Revenue has a statutory obligation to recover the TDS from the deductor.

The Tribunal held that due to the circumstances, principles of natural justice warrant giving one more opportunity. The matter was remitted back to the AO for fresh adjudication after providing a reasonable opportunity of being heard to the assessee.

The Tribunal held that the reasons provided by the assessee for the delay were sufficient for condonation. Since the CIT(A) had not decided the appeal on merits, the case was restored back to the CIT(A) for a decision on merits.

The Tribunal held that the filing of Form 67 is directory and not mandatory, and that filing it before the processing of the return of income constitutes sufficient compliance. The delay in filing Form 67 was condoned.

The Tribunal held that while the assessee did not comply with the notices issued by the CIT(A), it was important to provide a reasonable opportunity for hearing in the interest of justice. Therefore, the appeals were restored to the CIT(A) for fresh adjudication.

The Tribunal, considering the arguments and a similar order in the assessee's own case for prior assessment years, recalled its consolidated order. The appeals were restored to the Assessing Officer for fresh consideration.

The Tribunal, considering the arguments and a similar order in the assessee's own case for prior assessment years, recalled its consolidated order. The appeals were restored to the Assessing Officer for fresh consideration.

The Tribunal, considering the arguments and a similar order in the assessee's own case for prior assessment years, recalled its consolidated order. The appeals were restored to the Assessing Officer for fresh consideration.

The Tribunal held that the filing of Form 67 is directory, not mandatory, and belated filing alone cannot be a ground to deny FTC. It allowed the assessee's claim for FTC but remanded the issue back to the Assessing Officer (AO) for necessary verification of the claim based on Form 67 and other relevant documents, to grant the credit according to law.

The Tribunal upheld the order of the CIT(A) and dismissed the Revenue's appeals. The Tribunal noted that the AO computed the disallowances under Section 36(1)(iii) and Section 37(1) by invoking the methodology provided in Rule 8D of the Income Tax Rules, 1962. The Tribunal held that Rule 8D(2) can only be invoked if the AO is satisfied that the assessee has incurred expenses to earn exempt income. Since it was an accepted position that the assessee had not earned any exempt income, the AO's action in computing the disallowances under Section 36(1)(iii) using Rule 8D(2) was patently wrong. Furthermore, for disallowance under Section 36(1)(iii), a nexus must be established between borrowed funds and the investment made. The Tribunal observed that the assessee had installed a wind power plant using funds borrowed from financial institutions, and this had no relationship with the investment made in non-convertible preference shares in group concerns. The Tribunal also found that the assessee had sufficient interest-free funds, supporting the argument that the investment was not made out of borrowed funds. The disallowance of INR 15 Lakhs under Section 37(1) was also deleted as it was wrongly calculated by applying Rule 8D(2)(iii). The Tribunal concluded that the disallowances were bad in law and deleted them, upholding the CIT(A)'s order.

The Tribunal condoned the delay in filing the appeal, finding reasonable cause. It held that the assessee was not provided a proper opportunity to be heard and set aside the CIT(E)'s order.

The Tribunal, considering the arguments and a similar order in the assessee's own case for prior assessment years, recalled its consolidated order. The appeals were restored to the Assessing Officer for fresh consideration.

The Tribunal, considering the arguments and a similar order in the assessee's own case for prior assessment years, recalled its consolidated order. The appeals were restored to the Assessing Officer for fresh consideration.

The Tribunal found that the CIT(A) had provided opportunities but they were not availed. In the interest of justice, the Tribunal decided to grant one more opportunity to the assessee and sent the matter back to the CIT(A).

The Tribunal condoned the delay in filing the appeal before the CIT(A) finding sufficient cause. The appeal was restored to the CIT(A) to decide the issues on merits after affording reasonable opportunity of hearing.

The Tribunal held that the matter should be sent back to the AO for a fresh decision after providing reasonable opportunities to the assessee. The appeal was partly allowed for statistical purposes.

The Tribunal restored the issue back to the file of the CIT(A) for fresh adjudication on merits. The assessee was directed to participate in the appellate proceedings and be given an opportunity of being heard.

The Tribunal held that interest earned on FDRs kept as security for a bank guarantee is business income and can be set off against project expenses, following a Coordinate Bench decision. For the second ground regarding Section 24(b), the Tribunal admitted additional evidence and remitted the matter back to the AO for fresh adjudication.

The Tribunal found that the CIT(A) had failed to adjudicate the issues as required by Section 250(6) of the Act. Therefore, the matter was restored to the CIT(A) to decide the issues afresh.

The Tribunal set aside the orders of the Ld. CIT(E) and restored the matter for fresh decision, directing that the applicant be given a fair opportunity to file documents and be heard. The appeals were allowed for statistical purposes.