The Tribunal quashed the Assessing Officer’s action of taxing the entire purchase value after invoking Section 145(3). Only estimated profit embedded in such purchases, if higher than declared profit, can be brought to tax.
The Tribunal reiterated that tax authorities cannot impose notional income merely because interest could have been charged. Commercial decisions on interest-free advances lie with the assessee, not the assessing officer.
The issue involved denial of charitable registration citing delay and lack of evidence. The Tribunal ruled that the assessee deserved a final opportunity to substantiate activities before a fresh decision is taken.
ITAT Delhi emphasized that FAR analysis governs segmentation for transfer pricing purposes. Artificial aggregation without disproving segmental allocation cannot justify adjustments.
The ITAT held that rejecting Rule 11UA valuation without verifying exclusions of non-realisable assets violates natural justice. Valuation additions were remanded for fresh examination, stressing non-mechanical application of deeming provisions.
The issue was whether payments for supplying in-flight entertainment content constituted royalty. The Tribunal held that mere provision and processing of licensed content without transfer of copyright does not amount to royalty under the India-UK DTAA.
The issue was whether contingent liabilities disclosed only in the tax audit report could be added under Section 143(1). The Tribunal held that such additions require factual verification and remanded the matter for fresh adjudication.
The issue was whether a mismatch between ledger sales and P&L sales justified a major addition. The Tribunal held that reconciliation explaining VAT, service tax, and other receipts removed the difference, making the addition unsustainable.
The issue was whether appeals could be dismissed outright for delay without examining the merits. The Tribunal held that justice required restoration where plausible reasons for delay were cited and directed reconsideration.
The issue was whether appeals dismissed for an extraordinary delay could be restored. The Tribunal held that, despite the assessee’s lapses, justice required giving an opportunity to seek condonation and have the case decided on merits.
