The Tribunal confirmed the jurisdictional validity of reassessment based on new information. However, the addition was restored to ensure compliance with principles of natural justice and Section 250(6).
The Tribunal ruled that failure to examine whether payees discharged tax liability vitiates proceedings under Section 201. The case was sent back to the AO to verify compliance and re-decide the issue.
The Tribunal ruled that amounts received were repayments of past advances and could not be taxed as unexplained cash credits in the current year. Additions were deleted as they did not pertain to fresh transactions.
While noting deficiencies in supporting evidence, the ITAT found that entire addition of ₹50.90 lakh was not sustainable. The addition was restricted to 10% of purchases due to absence of book rejection.
ITAT ruled that reliance on statements without offering cross-examination and without supporting evidence violates principles of natural justice. Additions under Sections 69A and 153C were set aside.
The Tribunal held that failure to indicate the precise charge in a Section 274 notice renders penalty proceedings unsustainable. Following jurisdictional High Court rulings, the penalty was set aside.
The Tribunal ruled that CPC cannot deny carry forward of losses during processing under Section 143(1) without issuing prior intimation notice. Since losses were accepted in earlier years, the adjustment was set aside.
The Tribunal emphasized that the test under Section 57(iii) is one of purpose and connection. As the assessee demonstrated reasonable nexus between borrowings and interest income, the deduction was upheld.
Relying on Supreme Court and Bombay High Court rulings, the Tribunal ruled that sanction by an incorrect authority vitiates jurisdiction. The reassessment proceedings were set aside for non-compliance with Section 151.
ITAT Delhi held that Section 2(22)(e) cannot apply where the assessee held less than 10% shareholding in the lending company. As statutory thresholds were not met, the deemed dividend addition was largely deleted.
