ITAT Delhi Judgments — June 2025

The Tribunal allowed both appeals filed by the assessees. The Tribunal found that the assessees were residents of Mauritius, with their control and management situated wholly in Mauritius. This was supported by the fact that board meetings were chaired, convened, and conducted in Mauritius, tax returns were regularly filed in Mauritius and assessed by the MRA, and all statutory books and records were maintained in Mauritius. The Mauritian Revenue Authority (MRA) had issued a TRC certifying the assessee as a resident of Mauritius, with a clarification stating that the TRC was issued based on the company's incorporation in Mauritius and the control and management being in Mauritius. The Tribunal noted that the assessees had acquired shares in VEL through various agreements and loans, and subsequently sold them to EPSL, realizing capital gains. The Tribunal held that the assessees were entitled to the benefits of Article 13(4) of the India-Mauritius tax treaty. The Tribunal did not find the assessees to be conduit companies or involved in a colourable device for tax avoidance. The Tribunal's findings in the case of Essar Communications Ltd. were applied mutatis mutandis to Essar Com Ltd. due to identical facts. The operative direction was to allow the appeals.

The Tribunal noted that the reopening was based on a mechanical approval from the prescribed authority under section 151, which was not rebutted by the department. Citing a precedent, the Tribunal quashed the assessment.

The Tribunal allowed the appeal regarding freight charges by following a coordinate bench's decision in a similar case involving the same group. For interest expenses, the Tribunal found that the assessee had sufficient interest-free funds available, thus the entire interest disallowance was not justified.

The Tribunal held that the entire structure was a colourable device created to evade Indian taxes, with control and management effectively residing in India. The Mauritian directors acted as puppets, and crucial decisions were made by key executives of the Essar Group in India.

The Tribunal noted that the earlier appeal concerning Section 80G was remanded. The Tribunal decided to grant the assessee one more opportunity to furnish necessary evidence for registration under Section 12A, remanding the matter back to the CIT(Exemption).

The Tribunal held that assessments framed under Section 153A based on material found in the possession of a third party are invalid. The Assessing Officer was required to follow the mandatory procedure under Section 153C.

The Tribunal allowed the appeal regarding freight charges by following a coordinate bench's decision in a similar case involving the same group. For interest expenses, the Tribunal found that the assessee had sufficient interest-free funds available, thus the entire interest disallowance was not justified.

The Tribunal held that no disallowance under Section 14A can be made if no exempt income is earned, and that CBDT circulars do not override this settled legal position. Regarding TDS mismatch, the Tribunal found the assessee's POCM explanation valid and that the AO had accepted it.

The Tribunal set aside the order of the CIT(E) and remitted the issue back to the CIT(E) for fresh decision after affording a reasonable opportunity to the assessee to produce all details and evidence.

The Tribunal set aside the order of the CIT(E) and remitted the issue back to the CIT(E) for fresh decision after affording a reasonable opportunity to the assessee to produce all details and evidence.

The Tribunal decided to remit the issue back to the CIT(E) for a decision on merits, after allowing the assessee a proper opportunity to present documentary evidence and comply with the notices. The appeals were allowed for statistical purposes.

The Tribunal held that the failure of the Assessing Officer to specify the corresponding limb in the penalty show-cause notice, as required by law, vitiates the penalty proceedings. Therefore, the penalty proceedings were declared void.

The CIT(A) deleted the additions made by the AO, holding that the assessee had proved the identity and creditworthiness of the parties from whom the loans were received. The Tribunal's decision is not fully detailed in the provided text, but it appears to be reviewing the CIT(A)'s order.

The Tribunal held that the reopening of assessment under section 148 was not sustainable in law due to the lack of valid sanction under section 151(ii) of the Act. The Tribunal referred to the Hon'ble Apex Court's decision in Union of India Vs. Rajeev Bansal [2024] 167 taxmann.com 70, which clarified the authorities required for sanctioning reassessment notices based on the time elapsed from the end of the relevant assessment year. In the instant case, the notice under section 148 was issued after more than three years had elapsed from the end of assessment year 2016-17. According to section 151(ii) of the new regime, for cases where more than three years have elapsed, the prior approval must be obtained from a higher authority, specifically the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General. The Tribunal found that the approval obtained was not from the appropriate higher authority as mandated by section 151(ii). Consequently, the impugned reopening and reassessment proceedings were quashed. As a result, all other pleadings on merits were rendered academic. The issue regarding the disallowance of EDC and the levy of interest were not decided on merits.

The Tribunal held that the CIT(A) erred in dismissing the appeals without affording adequate opportunity of hearing to the assessee. Therefore, the orders of the CIT(A) and AO were set aside.

The Tribunal held that the order of the PCIT was not sustainable. The Tribunal adopted the reasoning from its own recent decision in Pawan Kumar vs. PCIT, which had distinguished the case law relied upon by the Revenue. The Tribunal found that the Supreme Court's decision in CIT vs. Ghanshyam HUF, which held that interest under section 28 of the Land Acquisition Act is an accretion to the value of land and part of enhanced compensation, has been affirmed by the Supreme Court in UOI vs. Hari Singh. The Tribunal noted that the decision in Mahender Pal Narang vs. CBDT, relied upon by the Revenue, was rendered in peculiar facts and circumstances and that the Supreme Court's decision in Hari Singh's case was not brought to the notice of the Punjab & Haryana High Court in Mahender Pal Narang. The Tribunal also emphasized that the dismissal of an SLP in limine does not constitute a declaration of law. Furthermore, the Tribunal held that the PCIT's order was prompted solely by an audit objection, which, as per the Punjab & Haryana High Court in CIT vs. Sohana Woollen Mills, cannot lead to an inference that the AO's order is erroneous. The Tribunal concluded that the AO's order, based on the Ghanshyam HUF decision, represented a debatable issue where two views were possible, and the AO accepted one view, thus precluding the assumption of revisional jurisdiction by the PCIT. Consequently, the appeal of the assessee was allowed, and the impugned order of the PCIT was quashed.

The Tribunal held that the assessee had established the identity, creditworthiness, and genuineness of the transactions with the lender companies. The AO failed to provide evidence to negate the genuineness of the transactions, and the additions were based on suspicion.

The Tribunal held that the imposition of penalty was unsustainable. The claim for leave encashment was considered debatable and made on a provisional basis with bona fides, and therefore, the penalty should not have been imposed.

The Tribunal dismissed the Revenue's appeals for AY 2013-14 and 2014-15 as the tax effect was below the threshold. Assessee's appeals for AY 2014-15 and 2015-16 were partly allowed, with reduced disallowances on foreign travel and club expenses. Revenue's appeal for AY 2015-16 was dismissed.

The Tribunal allowed the appeal regarding freight charges by following a coordinate bench's decision in a similar case involving the same group. For interest expenses, the Tribunal found that the assessee had sufficient interest-free funds available, thus the entire interest disallowance was not justified.

The Tribunal held that the additional evidences filed by the assessee were crucial and went to the root of the matter. The CIT(A) was directed to admit these documents and decide the appeal on merits after providing sufficient opportunities to the assessee.

The Tribunal restored the issues to the file of the CIT(A) for fresh adjudication, granting the assessee an opportunity to present their case and evidence, noting that while the assessee did not comply with notices, it was in the interest of justice.

The Tribunal dismissed the Revenue's appeals for not meeting the monetary threshold. Assessee's appeals were partly allowed, with specific adjustments made to deductions and disallowances related to head office expenses, foreign travel, and club expenses.

The Tribunal held that the notice under Section 153C was issued beyond the prescribed time limit, making the assessment jurisdictionally flawed. Consequently, the assessments were quashed.

The Tribunal set aside the order of the Ld. CIT(A) and remanded the matter back for a fresh decision. The assessee was directed to appear before the Ld. CIT(A) and provide necessary evidence.

The Tribunal held that the notice under Section 153C was issued beyond the prescribed time limit, making the assessment jurisdictionally flawed. Consequently, the assessments were quashed.

The Tribunal condoned the delay in filing the appeal, citing reasonable cause and bonafide reasons. The Tribunal set aside the order of the CIT(E) and remitted the issue back for fresh consideration, directing the assessee to provide all necessary details.

The Tribunal noted that the CIT(A) had entertained details and evidences not produced before the AO, violating Rule 46A of the Income Tax Rules, which mandates an opportunity for the AO to be heard. The rights of the Revenue were violated.

The Tribunal held that the market value of the electricity transferred should be determined based on the rates at which State Electricity Boards supply electricity to end consumers. This is because the assessee's industrial units would have had to purchase power from the State Electricity Board at these rates if they did not have captive power plants.

The Tribunal noted that the CIT(E) had provided multiple opportunities for furnishing information, which the assessee failed to utilize. However, considering the totality of facts, the Tribunal decided to grant one more opportunity to the assessee to file the necessary information.

The Tribunal held that interest paid on cancelled bookings is a contractual obligation and part of construction cost, thus not disallowable. However, IBMS and sinking fund charges collected from customers, without proper accounting for refunds or adjustments, are to be treated as income.

The Tribunal held that the PCIT wrongly invoked revision jurisdiction u/s 263 of the Act because the issue of interest disallowance was an offshoot of the primary issue already under appeal before the CIT(A). The CIT(A) could have dealt with it using enhancement powers.

The Tribunal found that the CIT(A) erred by rejecting the additional evidence, as its arguments were based on conjectures and adjudicating without considering all facts violated natural justice. The matter was remitted back to the AO for fresh adjudication de novo, allowing the assessee one final opportunity to present all relevant supporting evidence.

The Tribunal found that the CIT(A) had not addressed the legal grounds raised by the Assessee and had merely set aside the matter for fresh assessment. Therefore, the Tribunal set aside the order of the CIT(A).

The Tribunal noted that the reasons recorded for reopening were undated and the Revenue could not provide any copy of approval from the competent authority. Consequently, the reassessment orders made without the prior approval of the competent authority u/s 151 of the Act were held to be bad in law and void ab initio.

The Tribunal noted that the assessment year was 'unabated' and that according to a Supreme Court decision, additions in such cases must be based on seized or incriminating material. No such material was found to support the addition made by the Assessing Officer.

The Tribunal held that interest paid on cancelled bookings is a contractual obligation and part of construction cost, thus not disallowable. However, IBMS and sinking fund charges collected from customers, without proper accounting for refunds or adjustments, are to be treated as income.

The Tribunal held that the reassessment proceedings were invalid as the reasons for issuing the notice under Section 148 were not provided to the assessee. Furthermore, on merits, the addition was deleted as the investments were duly disclosed in the financial statements and the switch-outs were not considered.

The Tribunal held that the AO's failure to dispose of the assessee's objections before passing the reassessment order was a clear violation of the mandatory procedure laid down by the Supreme Court in CIT v. Kelvinator of India Ltd. Consequently, the initiation of proceedings under Section 148 and the completion of assessment without prior disposal of objections were deemed bad in law and void ab initio.

The Tribunal held that while the AO and CIT(A) had not fully appreciated the documents regarding loan transactions, the issue of unsecured loans should be remanded to the AO for fresh verification. The Tribunal allowed the bad debt claim based on the Supreme Court ruling in TRF Limited.

The Tribunal held that the PCIT wrongly invoked revision jurisdiction u/s 263 of the Act because the issue of interest disallowance was an offshoot of the primary issue already under appeal before the CIT(A). The CIT(A) could have dealt with it using enhancement powers.

The Tribunal noted that the reasons recorded for reopening were undated and the Revenue could not provide any copy of approval from the competent authority. Consequently, the reassessment orders made without the prior approval of the competent authority u/s 151 of the Act were held to be bad in law and void ab initio.

The Tribunal noted that the reasons recorded for reopening were undated and the Revenue could not provide any copy of approval from the competent authority. Consequently, the reassessment orders made without the prior approval of the competent authority u/s 151 of the Act were held to be bad in law and void ab initio.

The Tribunal found that neither the assessee's claim nor the Revenue's contention for a 10% adhoc disallowance could be fully accepted. In the interest of justice, the Tribunal decided to assess the total expenses at 4% for estimation purposes, with a rider that this would not be treated as a precedent.

The Tribunal found no difference in the declared turnover but, in the interest of justice, remanded the issue of revenue calculation to the AO for verification. The disallowance for delayed PF/ESI contributions was confirmed.

The Tribunal held that the PCIT wrongly invoked revision jurisdiction u/s 263 of the Act because the issue of interest disallowance was an offshoot of the primary issue already under appeal before the CIT(A). The CIT(A) could have dealt with it using enhancement powers.

The Tribunal held that the PCIT wrongly invoked revision jurisdiction u/s 263 of the Act because the issue of interest disallowance was an offshoot of the primary issue already under appeal before the CIT(A). The CIT(A) could have dealt with it using enhancement powers.

The Tribunal held that the PCIT wrongly invoked revision jurisdiction u/s 263 of the Act because the issue of interest disallowance was an offshoot of the primary issue already under appeal before the CIT(A). The CIT(A) could have dealt with it using enhancement powers.

The Tribunal upheld the CIT(A)'s decisions, finding that the interest expenditure was correctly claimed as a deduction under Section 36(1)(iii) as it was for business purposes. Similarly, finance costs for loans and indirect management expenses were deemed allowable business expenditures. The disallowance of land development expenditure was also deleted as the services were found to be genuine and rendered.

The Tribunal held that interest paid on cancelled bookings is a contractual obligation and part of construction cost, thus not disallowable. However, IBMS and sinking fund charges collected from customers, without proper accounting for refunds or adjustments, are to be treated as income.