ITAT Delhi Judgments — June 2025

The Tribunal held that the sale proceeds of fly ash and the interest earned thereon are not taxable as income because a statutory mandate created an overriding title, divesting the assessee of absolute control. Following a jurisdictional High Court decision, the Tribunal set aside the additions.

The Tribunal held that Electricity Duty collected by the assessee as an agent of the State Government is not covered under Section 43B. The Tribunal also noted that the loan was taken by the holding company, and therefore, interest paid on it was not the assessee's liability.

The Tribunal considered the rival submissions and the material on record. It noted that the additions were made by the Assessing Officer based on the return of income filed by the assessee. In light of the assessee's plea for verification and the fact that the Ld. CIT(A) had proceeded ex-parte, the Tribunal decided to remit the issues, including the penalty, back to the file of the Ld. CIT(A). The Ld. CIT(A) was directed to verify the assessee's claim after providing a proper opportunity of being heard to the assessee. The ratio decidendi is that where an ex-parte decision is made by the lower appellate authority and the assessee seeks verification of facts, remission is appropriate to ensure a fair hearing and proper adjudication. The operative direction is to remand the matters to the Ld. CIT(A) for fresh adjudication.

The Tribunal considered the rival submissions and the material on record. It noted that the additions were made by the Assessing Officer based on the return of income filed by the assessee. In light of the assessee's plea for verification and the fact that the Ld. CIT(A) had proceeded ex-parte, the Tribunal decided to remit the issues, including the penalty, back to the file of the Ld. CIT(A). The Ld. CIT(A) was directed to verify the assessee's claim after providing a proper opportunity of being heard to the assessee. The ratio decidendi is that where an ex-parte decision is made by the lower appellate authority and the assessee seeks verification of facts, remission is appropriate to ensure a fair hearing and proper adjudication. The operative direction is to remand the matters to the Ld. CIT(A) for fresh adjudication.

The Tribunal held that the sale proceeds of fly ash and the interest earned thereon are not taxable as income because a statutory mandate created an overriding title, divesting the assessee of absolute control. Following a jurisdictional High Court decision, the Tribunal set aside the additions.

The Tribunal held that the sale of fly ash and its proceeds were subject to strict government regulation under a statutory mandate, creating an overriding title. Therefore, these amounts could not be considered income of the assessee.

The Tribunal held that merely making a claim for deduction under Section 54F, even if found unacceptable, does not automatically attract penalty under Section 271(1)(c) if all relevant information was disclosed. The penalty was deleted as it was not a case of concealment of income.

The Tribunal held that the interest under Section 28 of the Land Acquisition Act is part of the enhanced compensation and exempt under Section 10(37), affirming the Assessing Officer's view. The revisional order based solely on an audit objection was deemed unsustainable.

The Tribunal considered the rival submissions and the material on record. It noted that the additions were made by the Assessing Officer based on the return of income filed by the assessee. In light of the assessee's plea for verification and the fact that the Ld. CIT(A) had proceeded ex-parte, the Tribunal decided to remit the issues, including the penalty, back to the file of the Ld. CIT(A). The Ld. CIT(A) was directed to verify the assessee's claim after providing a proper opportunity of being heard to the assessee. The ratio decidendi is that where an ex-parte decision is made by the lower appellate authority and the assessee seeks verification of facts, remission is appropriate to ensure a fair hearing and proper adjudication. The operative direction is to remand the matters to the Ld. CIT(A) for fresh adjudication.

The Tribunal considered the rival submissions and the material on record. It noted that the additions were made by the Assessing Officer based on the return of income filed by the assessee. In light of the assessee's plea for verification and the fact that the Ld. CIT(A) had proceeded ex-parte, the Tribunal decided to remit the issues, including the penalty, back to the file of the Ld. CIT(A). The Ld. CIT(A) was directed to verify the assessee's claim after providing a proper opportunity of being heard to the assessee. The ratio decidendi is that where an ex-parte decision is made by the lower appellate authority and the assessee seeks verification of facts, remission is appropriate to ensure a fair hearing and proper adjudication. The operative direction is to remand the matters to the Ld. CIT(A) for fresh adjudication.

The Tribunal noted that the lower appellate authority had proceeded ex-parte against the assessee, potentially due to communication gaps. Therefore, to do justice, the appeals were restored to the CIT(A) for a fresh adjudication.

The Tribunal noted that the lower appellate authority had proceeded ex-parte against the assessee, potentially due to communication gaps. Therefore, to do justice, the appeals were restored to the CIT(A) for a fresh adjudication.

The Tribunal held that the seized Excel sheet, along with the statement of the employee, established the cash receipts as unaccounted business income. The assessees failed to rebut the presumption of correctness of the seized material.

The Tribunal held that the seized Excel sheet, along with the statement of the employee, established the cash receipts as unaccounted business income. The assessees failed to rebut the presumption of correctness of the seized material.

The Tribunal held that the seized Excel sheet, along with the statement of the employee, established the cash receipts as unaccounted business income. The assessees failed to rebut the presumption of correctness of the seized material.

The Tribunal held that the seized Excel sheet, along with the statement of the employee, established the cash receipts as unaccounted business income. The assessees failed to rebut the presumption of correctness of the seized material.

The Tribunal held that the seized Excel sheet, along with the statement of the assessee's employee, established the receipt of unaccounted cash. The assessees failed to rebut the statutory presumption of correctness of the seized material.

The Tribunal held that the seized Excel sheet, along with the statement of the employee, established the cash receipts as unaccounted business income. The assessees failed to rebut the presumption of correctness of the seized material.

The Tribunal noted that the lower authorities, including the AO and CIT(A), did not comprehensively analyze the issue of share capital sources. The AO's order lacked findings on the merits, and even during remand, no thorough examination occurred. The Tribunal found merit in the assessee's plea for another chance.

The Tribunal noted that the assessee failed to provide explanations for the source of cash deposits and credit entries. While the AO's addition for cash deposits was largely upheld, the addition for credit entries was restricted. The Tribunal granted a partial relief considering the assessee's socio-economic status.

The Tribunal noted that the assessee did not appear before the Ld. CIT(A) and did not effectively represent before the Assessing Officer. Considering the interest of justice, the appeal was restored to the Ld. CIT(A) for de novo adjudication.

The Tribunal noted that the revenue did not dispute the assessee's submission regarding the scheme. The appeal was dismissed with liberty to be restored if the scheme application failed.

The Tribunal held that the reassessment notice issued under Section 148 was barred by limitation, following Supreme Court judgments. Consequently, the Revenue's appeal became infructuous.

The Tribunal observed that the assessee had already declared a gross total income of Rs. 2,61,000/-. The cash deposits were considered part of this declared income. Therefore, any addition should only be on the additional cash deposit amount, not the entire sum.

The Tribunal held that the approval for reopening by the prescribed authority was mechanical and lacked proper application of mind. Therefore, the reopening itself was vitiated and quashed.

The Tribunal noted the ex-parte proceedings at both the appellate and Tribunal levels. Considering potential communication gaps due to the new faceless hearing system, the Tribunal restored the appeal to the CIT(A)/NFAC for a fresh adjudication.

The tribunal held that employees of the erstwhile State Electricity Board, whose services vested in the State Government and were then transferred to transferee entities under the Electricity Act, 2003, are eligible for leave encashment exemption. The service conditions were protected, entitling them to the exemption.

The Tribunal noted the assessee's non-compliance and absence from hearings. Consequently, the Tribunal decided to remit the issue back to the file of the CIT(A) and directed the assessee to comply with the directions without seeking adjournments.

The Tribunal found that the case warranted an opportunity for the assessee to raise disputed questions of fact and law before the CIT(A). The appeal was allowed for statistical purposes, and the issues were restored to the NFAC for a fresh hearing.

The Tribunal held that the PCIT's order under Section 263 was unsustainable. It found that the Assessing Officer (AO) had conducted necessary inquiries and verified the claims during the original and reassessment proceedings, and the assessment order was not erroneous or prejudicial to the revenue.

The Tribunal held that the PCIT correctly exercised revisionary powers under Section 263. Regarding the first issue, it was held that 'records' for Section 263 purposes include all records relating to the proceedings available with the Commissioner, including reports from the Investigation Wing, even if not part of the assessee's assessment file. The decision in CIT Vs. Shree Manjunathesware Packing Products & Camphor Works was cited. Therefore, the contention that the PCIT could not consider the Investigation Wing's report was dismissed. On the second issue, the Tribunal found no merit in the assessee's contention that the PCIT recorded incorrect facts. It was held that the AO's inquiry was indeed inadequate as it did not consider the information that the shares traded were from a penny stock company. The AO merely accepted documentary evidence of purchase and sale without investigating the genuineness of the transactions in light of the penny stock information. The Tribunal upheld the PCIT's finding that the assessment order was erroneous and prejudicial to the revenue due to the AO's failure to conduct proper inquiries. The appeal was dismissed.

The Tribunal held that the PCIT's order under Section 263 was unsustainable. It found that the Assessing Officer (AO) had conducted necessary inquiries and verified the claims during the original and reassessment proceedings, and the assessment order was not erroneous or prejudicial to the revenue.

The Tribunal held that the PCIT's order under Section 263 was unsustainable. It found that the Assessing Officer (AO) had conducted necessary inquiries and verified the claims during the original and reassessment proceedings, and the assessment order was not erroneous or prejudicial to the revenue.

The Tribunal held that the additions were made on the basis of borrowed satisfaction and lacked independent inquiry by the AO. Relying on previous co-ordinate bench decisions with similar facts and evidence, the Tribunal found no merit in the impugned additions.

The Tribunal held that CAM charges are governed by Section 194C, not Section 194I, of the Income Tax Act. The Co-ordinate Bench's decision in the assessee's own case on this issue was relied upon.

The Tribunal held that CAM charges are governed by Section 194C, not Section 194I, of the Income Tax Act. The Co-ordinate Bench's decision in the assessee's own case on this issue was relied upon.

The Tribunal held that CAM charges are governed by Section 194C, not Section 194I, of the Income Tax Act. The Co-ordinate Bench's decision in the assessee's own case on this issue was relied upon.

The Tribunal held that the PCIT's order was without jurisdiction, as the power to cancel registration under Section 12AB(4) was not vested with the PCIT in this case. Furthermore, the Tribunal found that the PCIT erred in applying the 'specified violation' clause, which was introduced later and not applicable to the assessment years in question.

The Tribunal held that the additions were made on the basis of borrowed satisfaction and lacked independent inquiry by the AO. Relying on previous co-ordinate bench decisions with similar facts and evidence, the Tribunal found no merit in the impugned additions.

The Tribunal held that an unregistered agreement to sell, when the property is under construction, is sufficient for claiming exemption under Section 54. The First Appellate Authority's decision to allow the exemption was upheld.

The Tribunal deleted the disallowance of Rs.4,35,00,600/- under Section 14A, following its own prior decision and a Delhi High Court ruling. The AO had not provided reasons for rejecting the assessee's suo-moto disallowance.

The Tribunal held that the additions were made on the basis of borrowed satisfaction and lacked independent inquiry by the AO. Relying on previous co-ordinate bench decisions with similar facts and evidence, the Tribunal found no merit in the impugned additions.

The Tribunal observed that the Central Excise and Service Tax Appellate Tribunal (CESTAT) had quashed the additions/demands against both M/s Trikoot Iron and Steel Ltd. and the assessee in related excise proceedings. As the income tax additions were solely based on these now-quashed excise findings, the ITAT concluded there was no basis to sustain the additions. Consequently, the assessee's appeal was allowed, and the Revenue's appeal was dismissed.

On the issue of disallowance under Section 14A, the Tribunal noted that the Revenue failed to refute the assessee's argument that no borrowed funds were used for mutual fund investments and that the assessee had made a suo-moto disallowance. The Tribunal observed that the Assessing Officer failed to point out any defect in the suo-moto disallowance or why the assessee's accounts were incorrect. The Tribunal also noted an error in the amount recorded by the AO during satisfaction recording. Citing the Delhi High Court judgments in H.T. Media Ltd. and Joint Investments (P.) Ltd., the Tribunal held that recording of satisfaction is a sine qua non for invoking Section 14A and that the AO's satisfaction was not properly recorded. Considering these aspects, the Tribunal deleted the addition made by the AO on this ground. Regarding the issue of interest on delayed receivables, the Tribunal, following the Delhi High Court's decision in Kusum Health Care, held that working capital adjustment subsumes interest on delayed receivables. The Tribunal restored this issue to the file of the TPO to examine the facts in light of Kusum Health Care, provide working capital adjustment, and then make any necessary adjustment for outstanding receivables. The Tribunal also noted that the DRP's reliance on certain precedents was misplaced as those orders were either recalled or distinguished. For grounds related to errors in the intimation order (Section 143(1)), additions under Section 43B, disallowance of bonus, penalty under SEZ Act, and short credit of TDS, the Tribunal directed the Assessing Officer to verify and decide these issues afresh in accordance with the law.

The Tribunal held that the PCIT's order under Section 263 was unsustainable. It found that the Assessing Officer (AO) had conducted necessary inquiries and verified the claims during the original and reassessment proceedings, and the assessment order was not erroneous or prejudicial to the revenue.

The Tribunal held that a notice issued in the name of a dead person is invalid. Proceedings against a deceased person require identification and proper service of notice on legal heirs within the prescribed time limit.

The Tribunal held that the notice under Section 148 was validly issued within the prescribed period, considering the participation of the assessee in the reassessment proceedings as per Section 292BB. It also found that the AO failed to discharge the onus to disprove the genuineness of the loans produced by the assessee.

The Tribunal held that the AO was justified in treating the cash sales of Rs. 2,95,78,312/- as unexplained cash credit under Section 68 read with Section 115BBE, applying the test of human probabilities. The CIT(A)'s deletion of this addition was reversed.

The Tribunal held that the additions were made on borrowed satisfaction and without independent inquiry, relying on previous judgments with similar facts and evidence. The Tribunal found no reason to deviate from the established ratio where similar additions were deleted.