ITAT Delhi Judgments — September 2025

The Tribunal ruled that the PCIT's approval, given with remarks like "Yes, it is a fit case..." or "Yes. I am satisfied", was mechanical and lacked independent application of mind. Citing Supreme Court and High Court precedents, it held that such an approval violates the safeguards under Section 151, rendering the Section 148 notice and the consequent reassessment order invalid and null.

The Tribunal held that the assessments were not sustainable as the Assessing Officer's satisfaction was based on seized material pertaining to assessment years 2013-14 and 2014-15, not the assessment years under appeal (2017-18 to 2020-21).

The Tribunal held that the reopening of assessment was vitiated because the AO's reasons were based on borrowed satisfaction from an Investigation Wing report and lacked independent application of mind, and there was no tangible material to support the belief of escapement of income.

The Tribunal held that the delay in furnishing Form 10CCB was a procedural lapse and did not dis-entitle the assessee from claiming the deduction. Relying on judicial precedents, the Tribunal stated that substantial justice must prevail over technicalities.

The Tribunal held that the impugned Section 153C assessments were not sustainable in law because the satisfaction recorded by the Assessing Officer was based on seized material pertaining to assessment years 2013-14 and 2014-15, not the assessment years under appeal (2017-18 to 2020-21).

The Tribunal noted that the CIT(A) failed to consider the fair market value based on the Net Asset Value (NAV) method despite it being raised. Consequently, the matter is remanded back to the Assessing Officer to re-evaluate the issue, specifically considering the NAV method, after providing the assessee with a proper opportunity to be heard.

The Tribunal held that the satisfaction recorded by the revenue authorities was not specific enough to link the seized material to the assessee and its income, which is a mandatory prerequisite for initiating proceedings under Section 153C. Therefore, the assessments were found to be unsustainable.

The Tribunal held that the assessee had set up its business activities, distinguishing between 'set up' and 'commencement'. Various steps taken by the assessee, such as obtaining approvals, incorporation, hiring employees, and opening bank accounts, demonstrated the business was set up, even without actual sales or purchases.

The Tribunal held that the assessee failed to discharge the burden of proof regarding the identity, genuineness, and creditworthiness of the loan-giving parties, especially after field enquiries revealed the companies did not exist at the given addresses and had negligible share capital and reserves. The addition made by the AO was affirmed.

The Tribunal acknowledged that the valuation of an asset is subjective and that the assessee's capital asset suffered from various distressing factors. Therefore, a lump sum relief of Rs.10,00,000/- was granted, with the condition that it should not be treated as a precedent.

The Tribunal held that the additions made by the AO concerning the allotment of shares were illegal and set aside, referring to judicial precedents. Similarly, additions related to unexplained investments and fictitious sundry debtors were also found to be illegal and set aside.

The Tribunal held that the impugned section 153C assessments were not sustainable. This was because the satisfaction recorded by the Assessing Officer for initiating the proceedings pertained to assessment years 2013-14 and 2014-15, while the impugned assessments were for the years 2017-18 to 2020-21, and there was no incriminating material for these specific years.

The Tribunal, relying on Supreme Court precedents (E-Funds IT Solution Inc), held that the assessee had no fixed place PE, service PE, or dependent agent PE in India. Consequently, the business income of the assessee was not chargeable to tax in India, and the profit attribution was deleted. The Tribunal also upheld the CIT(A)'s finding that link charges/IPLC charges do not qualify as royalty under Article 12 of the DTAA and are therefore not taxable in India. Grounds related to interest under sections 234A/234B and penalty under section 270A were dismissed, and the MAP determination was held non-binding for AY 2022-23.

The tribunal held that "protective" additions could not be made in proceedings under Section 148/147 solely to protect the Revenue's interest, citing a precedent from the Bombay High Court.

The Tribunal held that the CIT(A)'s refusal to condone the delay was not sustainable in law. The delay was condoned, and the appeals were restored to the CIT(A) for fresh adjudication on merits.

The Tribunal held that the assessee (CVG) did not have a fixed place PE, service PE, or dependent agent PE in India, citing decisions of the Hon'ble Supreme Court. Consequently, business income attributable to PE was not taxable. Regarding link charges, the Tribunal found they were not taxable as royalty, as there was no transfer of the right to use equipment and payments were in the nature of reimbursement.

The Tribunal held that the assessee did not have a fixed place PE, service PE, or dependent agent PE in India, aligning with Supreme Court precedents. Consequently, business income is not chargeable to tax in India. The Tribunal also ruled that link charges do not qualify as royalty.

The Tribunal held that the AO's addition was made without proper application of mind, as the AO accepted the sales and purchases but added the difference in creditors in a gross manner. The Tribunal observed that the assessee had provided confirmations and other documents, and the AO should have rejected the entire purchases if genuineness was doubted, rather than making an addition based on the difference in balances.

The Tribunal held that the reassessment proceedings were initiated without proper verification of facts and relied heavily on unsubstantiated statements. It was also noted that the previous assessment order, which was subject to appeal, had already dealt with similar transactions. The Tribunal concurred with the CIT(A)'s decision to delete the addition.

The Tribunal held that the assessee did not have a fixed place PE, service PE, or dependent agent PE in India. Consequently, business income attributable to a PE is not taxable in India. The Tribunal also ruled that payments for link charges/IPLC are not taxable as royalty.

The Tribunal found that the papers proving the creditworthiness of the lender were not presented before the lower authorities. Therefore, the case was remanded back to the CIT(A) for verification of these documents.

The Tribunal held that the CIT(A)'s refusal to condone the delay was not sustainable in law, relying on the decision in Collector Land Acquisition vs. Mst. Katiji & Ors. The delay was condoned, and the appeals were restored to the CIT(A) for fresh adjudication.

The Tribunal found that the mandatory notice under Section 143(2) of the Income-tax Act, 1961, was not issued by the assessing authority who framed the assessment, rendering the assessment invalid. Consequently, the assessment order was quashed.

The Tribunal held that additions under Section 68 of the Income Tax Act can only be made for unexplained cash credits. In this case, the credits arose from journal entries, not cash or its equivalent. Therefore, Section 68 was inapplicable.

The Tribunal held that the assessee did not have a fixed place PE, service PE, or dependent agent PE in India, based on the Supreme Court's decision in E-Funds IT Solution Inc. Consequently, the business income was not chargeable to tax in India. The issue of taxability of link charges/IPLC as royalty was also decided against the Revenue, holding that they did not qualify as royalty under the DTAA.

The Tribunal held that the assessee did not have a fixed place PE, service PE, or dependent agent PE in India. Consequently, business income attributable to PE was not taxable in India. The taxability of link charges/IPLC as royalty was also decided against the revenue.

The Tribunal, relying on Supreme Court precedents, ruled that the assessee did not constitute a Fixed Place PE, Service PE, or Dependent Agent PE in India. Consequently, the assessee's business income was not chargeable to tax in India, and profit attribution to a PE was deleted. Furthermore, the Tribunal held that link charges/IPLC charges were not taxable as royalty, as the Revenue failed to establish control/possession of equipment or the fulfillment of the 'make available' clause. The assessee's appeals were allowed, and the Revenue's appeals were dismissed.

The Tribunal observed that the CIT(A) dismissed the appeal without deciding on merit. In the interest of justice, the Tribunal restored the matters to the CIT(A) for a fresh hearing on merit, allowing one more opportunity to the assessee.

The Tribunal allowed the assessee's claim for deduction under Section 80IAB for income from food and beverage services, finding these activities were authorized operations within the SEZ and thus constituted eligible business income. Regarding the interest on delayed TDS deposits, the Tribunal held it to be a compensatory business expenditure allowable under Section 37, setting aside the AO's addition under 'Income from Other Sources' and remanding the matter to the AO for verification.

The Tribunal held that additions under Section 68 of the Act are applicable only for unexplained cash credits, not for journal entries. The Tribunal found that the transactions in question were journal entries and not cash credits, and therefore, Section 68 was inapplicable. It also noted that the AO conceded the initial addition was improper and should be limited.