The Delhi ITAT held that opening balances of unsecured loans cannot be treated as unexplained cash credits under Section 68 when no fresh funds were received during the relevant year. The Tribunal deleted additions after finding that the Assessing Officer wrongly included brought-forward balances.
The Tribunal ruled that the Revenue must establish a direct connection between seized material and the assessee’s taxable income before invoking Section 153C. Mechanical initiation of proceedings for multiple years was declared invalid.
The Tribunal held that tax authorities cannot reject documentary evidence solely by labeling the explanation as an afterthought. Proper verification and rebuttal of evidence are necessary before sustaining additions under Section 69A.
ITAT Delhi held that penalty proceedings under Section 271(1)(c) should not be decided before disposal of the related quantum appeal. The matter was restored to the CIT(A) for fresh adjudication.
ITAT Delhi held that an appeal dismissed ex-parte by NFAC should still be decided on merits under Section 250 of the Income Tax Act. The Tribunal restored the matter for fresh adjudication after granting one final opportunity to the assessee.
ITAT Delhi held that penalty under Section 271AAC cannot survive once the underlying Section 153C assessment is quashed. The Tribunal deleted the penalty after noting that the quantum assessment itself no longer existed.
ITAT Delhi held that electronic evidence seized during search proceedings cannot be relied upon without mandatory certification under Section 65B of the Evidence Act. The Tribunal ruled that initiation of Section 153C proceedings based on uncertified electronic records was invalid.
ITAT Delhi held that where sales are accepted and purchases are supported by invoices and banking transactions, only the profit element embedded in alleged bogus purchases can be taxed. The Tribunal restricted the addition by applying the average profit rate instead of sustaining the entire disallowance.
ITAT Delhi held that disallowance of delayed PF and ESI deposits through Section 143(1) adjustment was unsustainable because the issue was highly debatable at the relevant time.
The Tribunal ruled that additions proposed by CPC under Section 143(1)(a) ceased to survive after the Assessing Officer deleted them in the final scrutiny assessment order. As a result, further appeals relating to the original intimation became infructuous.
