ITAT Delhi Judgments — June 2025

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 loss on the Amritsar project crystallized on the date of the compromise deed, which was July 20, 2012. The Tribunal also noted that the tax rates remained the same for the relevant assessment years, and the loss was incurred in the ordinary course of business and shown under current assets, thus qualifying as a revenue loss.

The Tribunal held that the penalty proceedings are vitiated because the Assessing Officer failed to specify the relevant limb(s) of Section 271(1)(c) in the penalty show-cause notices. Reliance was placed on High Court judgments in similar cases.

The Tribunal held that the Assessee is entitled to depreciation on leasehold improvements, confirming the CIT(A)'s order. However, the Tribunal found that the sale consideration of Rs. 16 crores for shares was correctly assessed by the AO, and the CIT(A)'s deletion of Rs. 4 crores was not supported by facts.

The Tribunal held that the AO's rectification order under section 154 deleting the addition was beyond the AO's jurisdiction as it was a debatable issue and not a mistake apparent from the record. The Tribunal found the PCIT's action under section 263 to be justified.

The Tribunal noted that the disputed tax effect in the Revenue's appeal was Rs.57,38,666, which is less than the revised monetary limit of Rs.60,00,000 for appeals before the Tribunal as per CBDT Circular No. 09/2024. Consequently, the Revenue's appeal was dismissed.

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 the AO had travelled beyond the limited scrutiny parameters for which the case was selected. The addition made by the AO was not legally permissible as it did not fall within the specified reasons for limited scrutiny. The Tribunal directed the AO to delete the addition.

The Tribunal held that the approval granted by the Additional Commissioner under Section 151 was mechanical and without application of mind, rendering the reassessment proceedings void ab initio. Consequently, the reassessment order was quashed.

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 dismissed both appeals in limine due to a significant delay in filing. The assessee's explanation for the delay was found to be vague and lacking specific dates, such as when the assessee became aware of the CIT(A)'s order, when they approached a Chartered Accountant, and when the appeal papers were prepared. The Tribunal held that there was no plausible reason to condone the delay. Consequently, the appeals were not admitted for hearing on their merits. The specific grounds of appeal concerning the legality of the Section 153A order, the addition of unsecured loans under Section 68, and the disallowance of deductions under Chapter VI-A were not adjudicated upon by the Tribunal due to the dismissal in limine. The operative direction was to dismiss the appeals.

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.

The Income Tax Appellate Tribunal observed that the CIT(A) upheld the assessment order due to the assessee's lack of response. However, in the interest of justice, the Tribunal set aside the CIT(A)'s order and restored the appeal to the CIT(A) for de novo adjudication, granting the assessee a fresh opportunity to make submissions.

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 dismissed the appeal as withdrawn, acknowledging the assessee's participation in the Vivad se Vishwas Scheme. However, it granted liberty to the assessee to seek a recall of the order if they are not successful in getting relief through the scheme.

The Tribunal noted that the disputed tax effect in the Revenue's appeal was Rs.57,38,666, which is less than the revised monetary limit of Rs.60,00,000 for appeals before the Tribunal as per CBDT Circular No. 09/2024. Consequently, the Revenue's appeal was dismissed.

The Tribunal held that the penalty proceedings are vitiated because the Assessing Officer failed to specify the relevant limb(s) of Section 271(1)(c) in the penalty show-cause notices. Reliance was placed on High Court judgments in similar cases.

The Tribunal dismissed both appeals in limine due to a significant delay in filing. The assessee's explanation for the delay was found to be vague and lacking specific dates, such as when the assessee became aware of the CIT(A)'s order, when they approached a Chartered Accountant, and when the appeal papers were prepared. The Tribunal held that there was no plausible reason to condone the delay. Consequently, the appeals were not admitted for hearing on their merits. The specific grounds of appeal concerning the legality of the Section 153A order, the addition of unsecured loans under Section 68, and the disallowance of deductions under Chapter VI-A were not adjudicated upon by the Tribunal due to the dismissal in limine. The operative direction was to dismiss the appeals.

The Tribunal held that the assessee is eligible for deduction under section 80IA(4)(iv) even for captively consumed power, as this issue was decided in its favor in preceding assessment years. The disallowance of expenditure under section 14A was also deleted due to the AO's failure to record dissatisfaction with the assessee's suo motu disallowance.

The Tribunal held that the assessee is eligible for deduction under section 80IA(4)(iv) even for captively consumed power, as this issue was decided in its favor in preceding assessment years. The disallowance of expenditure under section 14A was also deleted due to the AO's failure to record dissatisfaction with the assessee's suo motu disallowance.

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 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 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 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 the Revenue's grievance was without merit, following judicial consistency and a previous order of the Tribunal in a preceding assessment year. Therefore, the appeal was dismissed.

The Tribunal held that the AO initiated reassessment proceedings based on suspicion and without cogent material, failing to provide proper reasons. The AO also did not dispose of the assessee's objections properly. Therefore, the reassessment proceedings were quashed.

The Tribunal held that reopening of assessment after more than four years without valid reasons is not permissible. Furthermore, additions under Section 68/69A based on third-party search material, without rejecting the assessee's books of accounts, are unsustainable.

The Tribunal held that the amounts deposited were already offered as sales in the audited books of account and were not rejected by the AO. Therefore, taxing these amounts again would constitute double taxation. The Tribunal noted that the assessee had provided documents to substantiate the cash sales, and no defects were pointed out by the AO or during remand proceedings.

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 initiated under Section 147 of the Act were unsustainable. The Tribunal noted that the reasons recorded for reopening did not mention any failure on the part of the assessee. Crucially, the basis for reopening was a search conducted on a third party (M/s. Faith Jewellers) and statements of individuals. The Tribunal relied on the decision in M/s. MAH Impex Pvt. Ltd. vs. ITO, which held that if an assessee's explanation under Section 68 is discredited based on incriminating material found in a search of another person, the assessment of that other person should be under Section 153C, not Section 147. Therefore, proceedings under Section 148 based on a third-party search were deemed unsustainable and ought to have been conducted under Section 153C. Furthermore, the Tribunal observed that the AO and CIT(A) had not rejected the assessee's books of accounts, stock books, or sales. Citing the case of Durga Fire Works vs. ITO, the Tribunal held that when audited books of account are not rejected and sales are not disturbed, additions under Section 68 are precluded. Consequently, the additions made by the AO were set aside. All questions were decided in favour of the assessee.

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 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 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 upheld the CIT(A)'s decision to delete the addition. The CIT(A) found merit in the assessee's contention that the amount pertained to a prior year and was a capital creditor, not a trade payable for the impugned year.

The Tribunal held that the assessee had provided sufficient evidence to substantiate the source of cash deposits, including cash sales and recovery from debtors, which were corroborated by VAT and Excise returns. The AO had not pointed out any defects in the books of account, and the CIT(A)'s findings were supported by evidence.

The Tribunal, relying on a Madras High Court judgment, determined that the higher tax rate under Section 115BBE applies only to transactions undertaken from April 1, 2017, onwards. Since the transactions in this case occurred in Financial Year 2016-17, the provisions of Section 115BBE are not applicable. The Assessing Officer was directed to recalculate the taxes accordingly.

The Tribunal affirmed that an order passed against a deceased person is void ab initio. It set aside the orders of the CIT(A) and directed the CIT(A) to bring the legal heirs of the assessee on record and re-adjudicate the appeals after providing them a proper opportunity of being heard.

The Tribunal held that reopening of assessment after more than four years without valid reasons is illegal and that assessment should have been under Section 153C if incriminating material was found during a search on a third party. Additions made under Section 68/69A without rejecting the assessee's books of accounts are unsustainable.

The Tribunal noted that the CIT(A) had merely reproduced the AO's order without giving independent findings. The Tribunal found that the AO did not have adequate opportunities to examine the facts and decided to remit the issue back to the AO for fresh adjudication.

The Tribunal held that the reassessment proceedings were initiated on incorrect facts and were beyond the statutory period of three years, as the amount involved was less than Rs.50 lacs. Therefore, the reopening was not sustainable in law.

The Tribunal set aside the order of the CIT(A) and restored the matter for fresh adjudication after providing the assessee an opportunity to be heard. If the assessee fails to appear again, the CIT(A) can decide the issues on merits.

The Tribunal observed that the NFAC had entirely overlooked the assessee's application for additional evidence. Consequently, the impugned order was set aside, and the matter was restored to the NFAC for a fresh decision, with a specific direction to consider and dispose of the assessee's Rule 46A application.

The Tribunal set aside the order of the CIT(A) and remanded the matter back for fresh adjudication. The assessee was directed to participate before the CIT(A) and make necessary compliance.

The Tribunal found that the difference in TDS claim was due to income pertaining to earlier years received during the current year, and the assessee had not claimed this TDS in prior years. Therefore, the assessee is entitled to the credit.

The Tribunal restored the issue to the file of the NFAC, granting one final opportunity to the assessee to present its claim. The assessee was directed to appear before the NFAC and cooperate with the proceedings.

The Tribunal condoned the delay in filing the appeal, finding the assessee's explanation to be genuine. The case was remitted to the CIT(A) to consider the application for condonation of delay and dispose of the matter accordingly.

The Tribunal held that the lower appellate authority did not consider the assessee's submissions regarding the source of cash deposits. The appeal was restored to the CIT(A)/NFAC for a fresh adjudication with opportunities for the assessee to prove the case. Section 115BBE was noted to apply to transactions on or after 01.04.2017.

The ITAT condoned the delay in filing the appeal. Recognizing the CIT(A) had proceeded ex-parte and considering potential communication gaps in the new faceless hearing system, the Tribunal restored the matter to the CIT(A) for fresh adjudication, granting the assessee three opportunities to present its case at its own risk.

The Tribunal found that while the assessees claimed to be engaged in regular business, they failed to reconcile their turnover with the seized cash. The Tribunal, in the interest of justice, restricted the impugned additions to a lump sum amount of Rs. 3,50,000/- and Rs. 2,50,000/-, respectively, with a rider that this would not be treated as a precedent.