ITAT Delhi Judgments — August 2025

The Tribunal directed the AO to restrict the disallowance under Section 14A to the extent of exempt income, ruling in favor of the assessee for this issue. Regarding the interest disallowance, a portion of the loan was used to repay share application money for building construction, and the issue was restored to the AO for proportionate allowance.

The Income Tax Appellate Tribunal (ITAT) decided that the appeals should be restored to the file of the CIT(Appeals) for fresh adjudication. The CIT(Appeals) is directed to provide adequate opportunity to the assessee, and if the assessee fails to respond, then to proceed to dispose of the appeals on their merits.

The Tribunal decided on various grounds. It dismissed the Revenue's appeal regarding depreciation on UPS, software expenses, and 80JJAA deduction, while allowing the assessee's appeal on prior period expenses, commercial vehicle depreciation, and disallowance under Section 14A. Some grounds were decided based on preceding decisions in the assessee's own case.

The Tribunal held that the assessee is indeed an accommodation entry provider due to failure to provide supportive evidence. However, it granted partial relief by reducing the assessed commission income from 0.5% to 0.4% of the turnover, acknowledging the estimation nature of the exercise.

The Tribunal held that the assessee is indeed an entry provider due to lack of evidence for genuine business activity. However, considering the estimation exercise and varying precedents, a part relief was granted by directing the assessment of commission income at 0.4% instead of 0.5%.

The Tribunal held that the approval under section 153D of the Act was granted in a mechanical manner, without due application of mind and not independently for each assessment year as mandated by the provisions. Citing various judicial precedents, the Tribunal found the approval to be invalid.

The Tribunal decided various grounds of appeal concerning depreciation on UPS, software expenses, research and development expenses, deduction under Section 80JJAA, prior period expenses, depreciation on energy-saving devices and commercial vehicles, provision for warranty, and disallowance under Section 14A. The Tribunal affirmed the CIT(A)'s actions in most cases, dismissing some Revenue grounds and allowing others.

The Tribunal upheld the finding that the assessee was an accommodation entry provider due to insufficient evidence. However, it reduced the rate of estimation for commission income from the proposed 0.5% of turnover to 0.4%, citing that this specific rate is for the peculiar facts of this case and should not be treated as a precedent.

The Tribunal found that the CIT(Appeals) dismissed the appeals without considering the merits. Therefore, the appeals were restored to the CIT(A) for fresh adjudication after providing the assessee with an adequate opportunity to be heard.

The Tribunal held that the violation of Section 13(1) by extending benefits to specified persons cannot be a reason to deny the whole exemptions under Section 11/12. The denial should be restricted to the extent of the violation. The CIT(A)'s order to restrict the disallowance was upheld.

The Tribunal held that the assessee had correctly deducted TDS at the rate specified in the lower deduction certificate. They noted that a similar case involving the assessee's father had also been decided in favor of the assessee, and differential treatment was not warranted.

The Tribunal restored the appeal to the file of the CIT(A) to decide afresh after providing adequate opportunity to the legal heirs, noting that the original appeal was dismissed ex parte.

The Tribunal noted that the lower authorities decided the cases ex-parte without addressing the merits. Considering the appeals were not decided on merit and the assessee was denied a proper hearing, the Tribunal set aside the impugned orders.

The Tribunal found that the assessee failed to provide supportive evidence for genuine business activity and agreed with the lower authorities that the assessee acted as an accommodation entry provider. The Tribunal allowed part relief by reducing the assessed commission income from 0.5% to 0.4% of the turnover, considering it a fair estimation based on case precedents.

The Tribunal held that the assessee is indeed an accommodation entry provider due to failure to provide supporting evidence for genuine business activity. However, it modified the profit rate from 0.5% to 0.4% for assessing commission income, providing partial relief to the assessee.

The Tribunal held that disallowance under Section 14A was not automatic and required AO satisfaction. Brokerage fees paid were found to be in the ordinary course of business. Settlement fees for contract termination were considered revenue expenditure driven by commercial expediency. Deductions under Section 80IAB and set-off of losses were allowed where applicable. Short TDS credit issues were directed to be rectified.

The Tribunal held that for the share capital additions, the assessee had provided sufficient documents to establish the identity, creditworthiness, and genuineness of the transactions, and the CIT(A) was justified in deleting the addition. However, for two of the three sundry creditors, the assessee failed to establish the genuineness of the transaction and the nature/source of credit, hence the deletion by the CIT(A) was partly set aside.

The Tribunal found that the Assessing Officer's 'reason to believe' for reopening the assessment was based solely on a report from the Investigation Wing (borrowed satisfaction) without conducting any independent inquiry. The AO also failed to acknowledge that the assessee's original assessment for AY 2018-19 was already completed under Section 143(3). Citing High Court precedents, the Tribunal held that such borrowed satisfaction and non-application of mind vitiated the reassessment proceedings, and therefore quashed the notice under Sections 147/148.

The Tribunal held that notices issued under Section 148 on or after 01.04.2021 for reopening the assessment for AY 2015-16 are barred by limitation. Following the decisions of the Hon'ble Supreme Court and jurisdictional High Court, the reassessment orders were quashed as bad in law and void ab initio.

The Tribunal held that Section 14A disallowances require AO's satisfaction and cannot be automatic. Brokerage fees were allowed as incurred in the ordinary course of business. Settlement fees for contract terminations were allowed as revenue expenditure driven by commercial expediency. Various other issues concerning TDS credit, interest, and penalty were also decided.

The Tribunal upheld the Ld. CIT(A)'s decision to delete the additions. It relied on its own prior decision in the assessee's individual case involving the same scrip, where similar additions were deleted. The Tribunal noted that the assessee fulfilled the conditions for Section 10(38) exemption, and the share transactions, conducted on a regulated stock exchange with STT payment and proper documentation, could not be treated as bogus, especially in the absence of adverse findings from regulatory bodies like SEBI.

The Tribunal held that the Rs.1.14 Cr income inadvertently offered in AY 2009-10 should be adjusted in AY 2010-11 to avoid double taxation. The hedging transactions for raw materials were considered an integral part of the business and therefore allowable as revenue expenditure under Section 37(1) of the Act.

The Tribunal held that the disallowance under Section 14A was not automatic and required specific satisfaction. Brokerage fees were allowed as business expenditure. Settlement fees paid for contract termination were considered revenue expenditure due to commercial expediency. Deductions under Section 80IAB were allowed where applicable, and TDS credits were directed to be granted as per CIT(A)'s orders.

The tribunal noted that both the Assessing Officer and CIT(A) decided the cases ex-parte without addressing the issues on merits. Consequently, the tribunal set aside the impugned orders for both assessment years and remitted the matters back to the AO for fresh consideration, ensuring adequate opportunity of being heard to the assessee.

The Tribunal observed that the appeals were dismissed without going into the merits. Therefore, the Tribunal restored the appeals to the file of the CIT(A) for fresh adjudication after providing the assessee with an adequate opportunity to present their case.

The Tribunal held that the approval granted under Section 153D of the Act was mechanical and without due application of mind, violating the provisions of the Act which require approval for each assessment year. Consequently, the assessment orders were quashed.

The Tribunal held that the initiation of proceedings during the liquidation process and moratorium period is illegal and unsustainable as per the Insolvency and Bankruptcy Code, 2016. The assessment order was considered void ab initio and quashed.

The Tribunal restored the matter back to the CIT(E) for fresh adjudication on merits. The assessee was directed to provide all necessary evidences to establish the genuineness of its activities.

The Tribunal held that the approval granted under Section 153D must reflect an independent application of mind by the approving authority for each assessment year and each assessee, rather than being a mechanical or consolidated exercise. Relying on High Court and ITAT judgments, the Tribunal found that the approval in this case was granted in a mechanical way, covering multiple assessees and assessment years through a single letter, and thus lacked the requisite application of mind. Consequently, the approval was vitiated, and the assessment orders were deemed liable to be quashed.

The Tribunal held that the delay in filing Form 10-IC was a procedural lapse and not a substantive one, especially given the assessee acted in good faith and paid tax at the concessional rate. Relying on various judicial precedents, the Tribunal ruled that procedural requirements should not override substantive benefits.

The Tribunal acknowledged that the delay in filing Form 10IC was due to exceptional circumstances (a search action by DGGI leading to delayed final accounts preparation). Applying the doctrine of "substantial compliance" and "beneficial interpretation," the Tribunal ruled that procedural lapses should not override substantive rights, especially when the assessee's intention and payment of tax at the concessional rate were clear. The Tribunal, relying on various judicial precedents, directed the Assessing Officer to recompute the tax at the concessional rate under Section 115BAA.

The Tribunal held that disallowances under Section 14A should not be automatic and require AO's satisfaction. Brokerage fees were allowed as a business expense. Settlement fees for contract termination were considered revenue expenditure due to commercial expediency. Issues regarding Section 80IAB deduction, set off of losses, and TDS credit were decided in favor of the assessee.

The Tribunal dismissed most of the Revenue's appeals concerning depreciation on UPS, software expenses, R&D disallowances, and Section 80JJAA disallowance, affirming the CIT(A)'s actions. For the assessee's appeals, the Tribunal allowed claims related to prior period expenses, higher depreciation on commercial vehicles, provision for warranty, and disallowances under Section 14A, often citing precedents from the assessee's own case. It directed the AO to re-verify the depreciation calculation for energy-saving devices for statistical purposes and allowed R&D expenses as revenue expenditure under Section 37(1). Penalty appeals against the assessee were also dismissed.

The Tribunal held that the disallowance under Section 14A concerning dividend income was not automatic and required AO's satisfaction. The disallowance of brokerage fees was deleted as it was incurred in the ordinary course of business. The denial of deduction u/s 80IAB on car parking rentals was deleted. The settlement fees paid for termination of service contracts were held to be revenue expenditure. TDS credits were directed to be granted fully.

The Tribunal restored the appeal to the file of the CIT(A) for deciding the appeal on merits after providing the assessee an adequate opportunity to explain the delay.

The Tribunal observed that the assessee's submissions for condonation of delay were vague and lacked evidence. The assessee was aware of the proceedings and had represented before the CIT(Appeals) prior to the order being passed, yet failed to properly explain the significant delay.

The Tribunal held that the disallowance under Section 14A was not automatic and required AO's satisfaction. Brokerage fees paid were allowed as they were in the ordinary course of business. Settlement fees for contract termination were treated as revenue expenditure. Deductions under Section 80IAB were allowed on enhanced income, and TDS credits were to be granted fully. Interest and penalty proceedings were addressed.

The Tribunal directed the Assessing Officer (AO) to consider the TPO's order giving effect to DRP directions and re-compute the assessee's income. Since the TPO made no adjustment, there was no grievance for the assessee.

The Tribunal held that the approval granted by the Additional Commissioner of Income Tax under Section 153D was mechanical and not in consonance with the statutory requirements, as it was a consolidated approval for multiple assessment years for one assessee. Consequently, the assessment orders were quashed.

The Tribunal noted that both the lower authorities decided the case ex-parte and not on merits. Therefore, the Tribunal set aside the impugned order and remitted the matter back to the AO for deciding the case afresh after providing adequate opportunity of being heard to the assessee.

The Tribunal held that disallowances under Section 14A were not automatic and required specific satisfaction by the AO. Brokerage fees were allowed as a business expense. Deductions for car parking rentals were allowed based on previous rulings. Settlement fees for contract termination were considered revenue expenditure driven by commercial expediency. TDS credits were directed to be granted fully after verification.

The Tribunal held that initiation of proceedings during the liquidation period and under moratorium was illegal and unsustainable. Relying on the Supreme Court judgment in CIT vs. Moser Baer India Limited, the assessment order was deemed void ab initio and quashed.

The Tribunal upheld the relief granted by the CIT(A) to the assessee. The addition of 2% of the cash deposits as income was deemed justified, considering the nature of transactions and the low profit ratio of the business. The Revenue's appeal was dismissed.