The Tribunal deleted the unexplained investment (Section 69) and cash interest (Section 69A) additions, emphasizing that unsigned, vague slips and digital data, where the parties were not confronted and no independent verification was done, have no evidentiary value in search assessment law. This aligns with Supreme Court rulings on the invalidity of additions based on non-speaking loose sheets.
The ITAT deleted a Rs. 23.30 Lakh protective addition made in the firm’s hands under Section 68, as the corresponding cash deposit had already been offered to tax by the partners. The Tribunal ruled that once the real recipient (partners) has paid tax, the protective assessment on the firm becomes redundant and cannot lead to double taxation.
The Tribunal directed the AO to treat the sales tax subsidy as a capital receipt, finding its purpose was to promote industrialization in backward regions, not subsidize production. The ITAT also deleted the Section 14A disallowance, confirming the taxpayer had sufficient own funds.
The issue was whether the AO could make an addition for unexplained share capital and premium without finding any defect in the extensive documentation filed by the taxpayer. The Tribunal emphasized that the AO must make an independent inquiry and bring contrary material; mere suspicion or non-appearance cannot override the legal requirement that the addition must be based on a failure to prove the creditor’s details.
The Tribunal held that an AO cannot treat a return filed in response to a Section 148 notice as non-est while using it as the base for computing the final income. Following High Court precedent, the ITAT confirmed that once the return is taken into account for assessment, the issue of Section 143(2) notice becomes a prerequisite, making the assessment void.
The ITAT deleted the addition of Rs. 73 lakh on the unrealized surrender value of Keyman Insurance Policies, ruling that notional or hypothetical income cannot be taxed. Since the matured policy value was already offered to tax, taxing the value of unmatured policies would amount to double taxation.
The ITAT deleted transfer pricing adjustments for Advertisement, Marketing, and Sales Promotion (AMP) expenses, confirming no international transaction existed with the AE. The ruling held that the Bright Line Test (BLT) is invalid and that since the entity-level TNMM was accepted, no separate AMP adjustment was permissible.
The ITAT ruled that the Rs. 5.97 crore received by a charitable trust for a cultural event were tax-exempt donations, not business income hit by Section 2(15) proviso. The Tribunal held that TDS deduction or invoice issuance does not change the essential charitable character of the receipt, relying on a binding Delhi High Court judgment.
The ITAT confirmed the deletion of a Rs.1.84 crore addition on demonetisation cash deposits, ruling they were genuine sales proceeds. The Tribunal held that since the audited books were accepted and the cash increase was explained by business changes, the addition based on mere suspicion was invalid and caused double taxation.
The ITAT quashed the entire assessment order, ruling that the DCIT (Exemption), Ghaziabad, lacked jurisdiction to pass the order since no mandatory Section 127 transfer order was produced. The Tribunal held that without a valid transfer order from the original AO, the assessment is illegal, arbitrary, and void ab initio.
