ITAT quashed revision order noting that PCIT exceeded the jurisdiction u/s 263 in directing initiation of penalty proceedings u/s 271E in absence of any satisfaction by the AO; PCIT noted violations u/s 269T however said penalty was neither initiated nor imposed during assessment proceeding; When penalty proceedings are not initiated by the AO, the Commissioner cannot direct the initiation of penalty proceedings; Reliance placed on SC ruling in Jai Laxmi Rice Mills

ITAT held profit rate of 4% on alleged bogus purchases declared by the assessee as reasonable; Assessee has filed all the evidence to prove the genuineness of purchases made from the party alleged as bogus; AO was not able to controvert the evidence filed by the Assessee while discharging its burden u/s 69C; Although the AO referred to certain statements that were recorded during the survey but none of these statements were provided to the Assessee; AO cannot disallow the entire purchases made from the supplier when it has accepted the production and sales thereof.

ITAT deleted addition of Rs. 2.13 Cr by observing that AO’s action of holding the finished goods as sales was incorrect; Assessee has followed ‘Project Completion Method’ wherein the sale is booked when sale deed is executed and physical possession is handed over; Reliance placed on Delhi HC judgment in Paras Buildtech India to note that when income is offered to tax in subsequent year and there is no actual loss to the Revenue, no further addition is required to be made.

ITAT deleted addition of ‘on money’ received by the Assessee for certain projects undertaken by the Assessee; Lower authorities had made addition as per own presumptions to assume the receipt of ‘on-money’ by the Assessee on sale of units without any corroborative evidence being found during the search action or during the course of post-search inquiries; Neither any unaccounted cash in the possession of the Assessee, nor any such cash book recording on-money receipts or any other evidence of the utilization of such alleged cash was found during search; In absence of evidence that any transaction actually materialized at the rates as depicted in the alleged seized documents, ITAT opined that the AO had wrongly made assumptions.

ITAT allowed deduction of employees PF contribution paid with one day delay due to proven technical glitches which were beyond Assessee’s control; Despite initiating payment on the due date, remittance could not be completed owing to technical glitches in the PF payment gateway, evidenced by screenshots, contemporaneous emails to the grievance cell, etc; Separately, ITAT held that DTAA provisions override Section 115-O and that DDT on dividends paid to a UK parent company must be restricted to the rate prescribed in DTAA; ITAT thus directed refund of excess dividend distribution tax paid.

ITAT deleted addition u/s 28(i) observing that the AO had only made reference to Section 2(24)(iv) without specifying the charging section under which the alleged income was taxable; Fundamental principle of taxation is that the liability to tax is based on the charging section and not on a definition section; ITAT articulated that the charging/ machinery provision is necessary for justifying the addition made in the assessment order.

High Court quashed notice u/s 148 issued without affixing manual or digital signatures of the AO and ousted the jurisdiction of AO on matter of proceeding with the reassessment; In the absence of such signature, the notice was held to be void and non est in the eyes of law, and consequently, lacked jurisdiction; HC rejected Revenue’s reliance on Section 292B and observed that the said provisions cannot resurrect an invalid notice which goes to the root of jurisdiction and an unsigned notice is not a curable defect.

ITAT upheld validity of assumption of the reassessment jurisdiction under Section 147 by observing that there was enough material before the AO to initiate the proceedings; ITAT restored the matter directing the AO to allow the Assessee cross examination of Mr. Chabaria, based on whose statement, the AO re-opened the assessment; Reliance placed on SC judgments in Andaman Timber Industries and M. Pirai Choodi; AO is under statutory obligation to facilitate a cross examination.

ITAT quashed reassessment proceedings based on mechanical sanction of PCIT u/s 151 which merely specified ‘Yes, I am satisfied’ expression; Sanction held to be given without application of mind; PCIT merely relied on reasons recorded by AO without having tangible material on hand; PCIT must record his ‘independent’ satisfaction and not ‘borrowed’ satisfaction; Reliance placed on Gujarat HC judgment in Adani Ports.

ITAT deleted addition u/s 69A for Mr Anil Ambani towards deposits in HSBC account, holding that no independent material existed to support the additions; Revenue had reopened the assessment for AY 2006–07 based on information received from the French Government that certain beneficial interest in bank accounts of Late Mr. Dhirubhai H. Ambani with HSBC Bank, Geneva, having a peak balance of US $55 lacs was passed on to his legal heirs; Addition merely based on the strength of BUP IDs, internal transaction identifiers was not sustainable; Reliance placed on co-ordinate bench rulings in case of Shri Dhirubhai H. Ambani and Shri Mukesh D. Ambani.