TRIANZ HOLDINGS PRIVATE LIMITED,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-7(1)(1), BENGALURU

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ITTPA 736/BANG/2025Status: DisposedITAT Bangalore02 April 2026AY 2015-169 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal decided on the remaining grounds as follows: Grounds 1 to 6, pertaining to transfer pricing issues including imputation of interest on delayed receivables, were permitted to be withdrawn by the assessee and were accordingly dismissed as withdrawn. Regarding ground 7, concerning the set-off of brought forward losses and unabsorbed depreciation, the Tribunal, after examining the schedules of the return of income for AY 2014-15 and AY 2015-16, found that these claims were not given effect to by the AO in the final assessment order. Therefore, this issue was remitted back to the AO to recompute the income after giving effect to the unabsorbed depreciation and brought forward losses. For ground 8, regarding the surcharge calculation, the Tribunal observed that the AO had applied a 12% surcharge on a total tax of Rs. 3,35,62,118/-, which amounted to Rs. 40,27,454/-. The Tribunal noted that for domestic companies with total income exceeding Rs. 10 crores, the surcharge should be 10% of the income-tax. Thus, the AO's calculation of 12% was deemed incorrect, and this issue was also remitted to the AO for recomputation in accordance with law. On ground 9, concerning the non-computation of tax liability under Section 115JB, the Tribunal agreed with the assessee that the AO had erred by computing tax liability only under normal provisions. This issue was remitted to the AO for a fresh calculation as per Section 115JB. Lastly, for ground 10, relating to the levy of interest under Section 234B, the Tribunal considered it consequential in nature and remitted it to the AO to recalculate the interest after considering the other issues raised by the assessee.

What were the facts?

The assessee, Trianz Holdings Private Limited, Bengaluru, filed an appeal before the Income Tax Appellate Tribunal (ITAT) against the order of the DCIT, Circle 7(1)(1), Bengaluru, dated January 9, 2025. This order was passed under Section 143(3) read with Section 144C(13) and Section 144B of the Income Tax Act, 1961, for the Assessment Year 2015-16. The assessee initially raised ten grounds of appeal. However, at the outset of the hearing, the assessee's authorized representative requested to withdraw grounds 1 to 6, which pertained to transfer pricing issues, specifically the imputation of interest on delayed receivables. The revenue's representative had no objection to this withdrawal. The remaining grounds dealt with the set-off of brought forward losses and unabsorbed depreciation, the calculation of surcharge, the computation of tax liability under Section 115JB, and the levy of interest under Section 234B.

What were the issues?

1. Whether the Assessing Officer (AO) erred in not granting the set-off of brought forward business losses and unabsorbed depreciation while computing the assessed income for AY 2015-16, as claimed by the assessee in its return of income for AY 2014-15 and AY 2015-16, turning on Section 70, 72, and 32(2) of the Income Tax Act, 1961. 2. Whether the AO erred in calculating the surcharge at 12% instead of the legally prescribed rate of 10% for domestic companies with total income exceeding Rs. 10 crore, as per the relevant provisions of the First Schedule of the Income Tax Act, 1961. 3. Whether the AO erred in computing the tax liability under normal provisions only, without considering the applicability of Section 115JB of the Income Tax Act, 1961. 4. Whether the AO erred in computing the interest under Section 234B of the Income Tax Act, 1961. Assessee's Contentions: - Grounds 1-6: Withdrawn. - Ground 7: The AO erred in not granting set-off of brought forward losses and unabsorbed depreciation, which were duly claimed in the returns for AY 2014-15 and AY 2015-16. - Ground 8: The AO incorrectly calculated the surcharge at 12% instead of the correct rate of 10% as per law. - Ground 9: The AO failed to compute tax liability under Section 115JB, which is applicable. - Ground 10: The AO erred in computing interest under Section 234B. Revenue's Contentions: - No objection to the withdrawal of grounds 1-6.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144C(13),Section 144B,Section 70,Section 72,Section 32(2),Section 115JB,Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C’’ BENCH: BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI KESHAV DUBEY

For Appellant: Shri Abdul Kadir Jawadiwala, A.R
For Respondent: Dr. Divya K.J., D.R
Hearing: 05.02.2026Pronounced: 02.04.2026

PER KESHAV DUBEY, JUDICIAL MEMBER:

This appeal at the instance of the assessee is directed against the order of ld. DCIT, Circle 7(1)(1), Bengaluru dated 9.1.2025 vide DIN: ITBA/AST/M/143(3)/2024-25/1072046989(1) passed u/s. 143(3) r.w.s. 144C(13) r.w.s. 144B of the Income Tax Act, 1961 (in short “the Act”) for the AY 2015-16.

2.

The assessee has raised the following grounds of appeal:-

IT(TP)A No.736/Bang/2025 Trianz Holdings Private Limited, Bengaluru Page 2 of 9

IT(TP)A No.736/Bang/2025 Trianz Holdings Private Limited, Bengaluru Page 3 of 9 3. At the outset, the ld. A.R. of the assessee drew our attention to an application dated 4.2.2026 and submitted that the ground nos.1 to 6 relating to transfer pricing issue, more particularly issue pertaining to imputation of interest on delayed receivables may kindly be treated as withdrawn. The copy of the request letter are reproduced below for ease of reference and convenience:

3.1 The ld. DR has no objection whatsoever on the request for withdrawal as made by the AR of the assessee.

IT(TP)A No.736/Bang/2025 Trianz Holdings Private Limited, Bengaluru Page 4 of 9

3.2 In view of the above, ground nos.1 to 6 as raised by the assessee are permitted to be withdrawn and accordingly the same are dismissed as withdrawn.

4.

Further, with regard to ground no.7 relating to the set off of brought forward losses & unabsorbed depreciation not granted by the AO while computing the assessed income, the ld. A.R. of the assessee vehemently submitted that the assessee is claiming the brought forward losses & unabsorbed depreciation in its return of income for assessment year 2014-15 as well as AY 2015-16. However, the AO while computing the assessed income for the AY 2015-16, had grossly erred in not giving effect to the brought forward business losses and unabsorbed depreciation.

4.1 Before us, the ld. A.R. of the assessee drew our attention to schedule CFL as well as Schedule UD of the return of income filed for the AY 2014-15 and 2015-16, which are reproduced below for ease of reference and convenience:

IT(TP)A No.736/Bang/2025 Trianz Holdings Private Limited, Bengaluru Page 5 of 9

IT(TP)A No.736/Bang/2025 Trianz Holdings Private Limited, Bengaluru Page 6 of 9

4.2 On going through the above schedules of the return filed for the AYs 2014-15 & 2015-16, we observed that the assessee had claimed the unabsorbed depreciation as well as also claimed brought forward business losses which in our opinion as rightly contended by the AR of the assessee were not given effect while computing the assessed income while passing the final assessment order u/s 143(3) r.w.s. 144C(13) of the Act. This being so, we are remitting this issue

IT(TP)A No.736/Bang/2025 Trianz Holdings Private Limited, Bengaluru Page 7 of 9 to the file of AO to examine the same and recompute the income after giving effect of the unabsorbed depreciation and brought forward losses as claimed by the assessee in the return of income. It is ordered accordingly.

5.

Further, in ground No.8, the assessee has claimed that while computing the tax liability, the AO has calculated the surcharge @ 12% instead of 10% as per law. In this regard, the ld. A.R. of the assessee also submitted a copy of the part 1 of the 1st schedule, which are reproduced below for ease of reference and convenience:

“Surcharge on income-tax

The amount of income-tax computed in accordance with the preceding provisions of this Paragraph, or in section 111A or section 112, shall, be increased by a surcharge for the purposes of the Union calculated,-- i. In the case of every domestic company,-- a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of five per cent of such income-tax; and b) having a total income exceeding ten crore rupees, at the rate of ten per cent of such income-tax; ii. in the case of every company other than a domestic company,- a) having a total income exceeding one crore rupees but not exceeding ten crore rupees, at the rate of two per cent of such income-tax; and b) having a total income exceeding ten crore rupees, at the rate of five per cent of such income-tax; Provided that in the case of every company having a total income exceeding one crore rupees but not exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax on a total income of one crore rupees by more than the amount of income that exceeds one crore rupees: Provided further that in the case of every company having a total income exceeding ten crore rupees, the total amount payable as income-tax and surcharge on such income shall not exceed the total amount payable as income-tax and surcharge on a total income of ten crore rupees by more than the amount of income that exceeds ten crore rupees.”

IT(TP)A No.736/Bang/2025 Trianz Holdings Private Limited, Bengaluru Page 8 of 9

5.1 On going through the above, we note that the amount of income tax computed shall be increased by a surcharge in the case of every domestic company having a total income exceeding Rs.10 crores @ 10% of such income-tax. However, on going through the order of assessment dated 9.1.2025, we observed that AO had calculated surcharge amounting to Rs.40,27,454/- on a total tax of Rs.3,35,62,118/- and thereby applied surcharge rate of 12% which in our opinion is not correct. Therefore, we are also remitting this issue to the file of ld. AO to examine the same and recompute the correct surcharge in accordance with law. It is ordered accordingly.

6.

Now with regard to ground no.9 i.e. non-computation of tax liability u/s 115JB of the Act, the ld. A.R. of the assessee contended that the ld. AO has erred in computing tax liability under normal provisions only without considering the provisions of section 115JB of the Act, which is also applicable. We are also inclined to agree with the contention of the assessee and accordingly, we are remitting this issue also to the file of AO to calculate afresh as per section 115JB of the Act in accordance with law.

7.

Lastly, the ld. A.R. submitted that ground no.10 is related to levy of interest u/s 234B of the Act. The assessee contended that the AO had grossly erred in computing the interest u/s 234B of the Act. We are of the considered opinion that levy of interest u/s 234B of the Act is consequential in nature and accordingly, we remit this issue to the file of AO to recalculate the interest u/s 234B of the Act after taking into consideration the above issues raised by the assessee. It is ordered accordingly.

IT(TP)A No.736/Bang/2025 Trianz Holdings Private Limited, Bengaluru Page 9 of 9

8.

In the result, appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 2nd Apr, 2026

Sd/- Sd/- (Prashant Maharishi) (Keshav Dubey) Vice President Judicial Member

Bangalore, Dated 2nd Apr, 2026. VG/SPS

Copy to:

1.

The Applicant 2. The Respondent 3. The CIT 4. The DR, ITAT, Bangalore. 5 Guard file By order

Asst. Registrar, ITAT, Bangalore.

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