ITAT Bangalore Judgments — August 2015

The Tribunal upheld the CIT(A)'s decision, following its own prior rulings in the assessee's own case and related trusts. It allowed the claim for depreciation on assets and the set-off of brought forward deficits.

The Tribunal held that the lower authorities incorrectly treated the 18% interest payment as excessive. Citing High Court and Tribunal precedents, it found the 18% rate reasonable for unsecured loans from related parties, especially given business expediency.

The Tribunal held that the CIT was correct in rejecting the applications. The primary object of the association was to protect the welfare of civil contractors, which does not qualify as an object of general public utility as defined in Section 2(15).

The Tribunal noted that the CIT(A) in a previous year had erroneously assumed the expenditure was for share capital. The ITAT had previously set aside the issue to the AO for fresh consideration, finding that Section 35D does not distinguish between capital and revenue expenditure. The Tribunal applied the same reasoning to the current assessment year.

The Tribunal held that the assessee is entitled to deduction under Section 80P(2)(a)(i) and deleted the disallowance. It also deleted the disallowance under Section 43B, stating that government audit fees are not covered by this section.

The Tribunal found a mismatch between the assessee's books and the supplier's records. It set aside the issue to the Assessing Officer to clarify this discrepancy and provide the assessee with an opportunity to be heard.

The Tribunal found that the assessee had fulfilled all the necessary requirements and the CIT(Exemption) had wrongly concluded that the applicant was not interested. The Tribunal set aside the CIT's order and directed him to re-examine the Trust Deed.

The Tribunal found that the CIT(Exemption) rejected the application without properly examining the details provided in the trust deed and other documents. The Tribunal decided to remand the issue back to the CIT for a fresh examination.

The Tribunal, following the jurisdictional High Court's judgment, held that once the admitted tax is paid, the appeal should be decided on merits. The CIT(A)'s order dismissing the appeal solely for non-payment of admitted tax was set aside.

The Tribunal noted that the jurisdictional High Court in the Tumkur Merchants' Souharda Credit Cooperative Ltd. case had held that interest from surplus funds deposited in banks could be attributable to the business of banking. However, the nature of the assessee's deposits (short-term vs. long-term) was not clear.

The Tribunal upheld the CIT(Appeals)'s decision regarding the exclusion of expenses from export turnover, stating that the jurisdictional High Court's decision was binding. For the depreciation on goodwill issue, the Tribunal set aside the CIT(Appeals)'s order and remanded the issue to the Assessing Officer for fresh consideration.

The Tribunal held that the entire cost of the property, including amenities and upgrades agreed upon with the developer, should be considered for the Section 54F exemption, not just the value in the registered sale deed. The CIT(Appeals) was directed to re-examine the issue based on the total investment.

The Tribunal held that the show cause notice issued under Section 274 was defective as it did not specify the grounds for penalty. Following the Karnataka High Court's decision, the penalty orders were deemed invalid.

The Tribunal held that the Rs. 33 lacs received was for the surrender of leasehold rights and taxable as capital gains. It allowed the deduction for dismantling expenses but disallowed the indexed cost of acquisition of the structure.

The Tribunal held that the income from fixed deposits earned by the credit co-operative society out of surplus business funds is attributable to its business of providing credit facilities and thus eligible for deduction under Section 80P(2)(a)(i). The AO's disallowance was incorrect.

The Tribunal held that interest earned on deposits with cooperative banks is eligible for deduction under Section 80P(2)(d). Deposits can be considered investments, and the interest income is attributable to the cooperative society's primary business of providing credit facilities.

The Tribunal held that the facts for the current assessment year were identical to the previous year, where the CIT(A) had allowed the claim. Therefore, the Tribunal found no merit in the Revenue's appeal.

The Tribunal held that the provision for commission of Rs. 1,14,00,000/- against the invoice from M/s. Platinum Corporation and the potential duplication of disallowance of Rs. 6,54,734/- require fresh verification by the AO. If the invoice is proven to be the basis for the provision, it should be considered an ascertained liability.

The Tribunal held that the assessee is a co-operative society and not a co-operative bank. Therefore, the denial of deduction under Section 80P(2)(a)(i) by the CIT(A) was incorrect, following the jurisdictional High Court's decision.

The Tribunal held that the appeal was not maintainable as the tax effect was below the prescribed monetary limit. This decision was based on previous coordinate bench rulings and the objective of reducing litigation.

The Tribunal held that the expression 'such income' in Section 11(1)(a) refers to gross income, not net income after deducting administrative expenditure. Therefore, the assessee was entitled to accumulate 15% of its gross receipts.

The Tribunal held that the payment to Hero Honda Motors was a reimbursement of expenses where TDS was already deducted by the principal company, hence Section 194C was not applicable. However, additions for unrecorded income and excess partner credit were upheld due to lack of satisfactory explanation.

The Tribunal held that the payment to Hero Honda Motors was a reimbursement of expenses where TDS was already deducted by the principal company, hence Section 194C was not applicable. However, additions for unrecorded income and excess partner credit were upheld due to lack of satisfactory explanation.

The Tribunal upheld the additions made by the AO and confirmed by the CIT(A) due to the assessee's failure to furnish any evidence or explanation regarding the source of credit card payments or to contradict other additions.

The Tribunal upheld the CIT(A)'s order, agreeing that the assessee failed to prove the genuineness of the gift. The lack of a clear relationship, proper documentation, and a plausible occasion for the gift were key factors.

The Tribunal held that the assessee failed to substantiate its claim for deduction under Section 80-O due to lack of cogent evidence. However, the revenue's appeal regarding the exclusion of design and development fees from business profits for Section 80HHC calculation was dismissed.

The Tribunal held that the assessee failed to substantiate its claim for deduction under Section 80-O due to lack of cogent evidence. However, the revenue's appeal regarding the exclusion of design and development fees from business profits for Section 80HHC calculation was dismissed.

The Tribunal held that depreciation is allowable on capital assets for computing the income of a charitable trust, as it is a necessary deduction for preserving the corpus. The claim for depreciation does not amount to double benefit.

The Tribunal held that as per the jurisdictional High Court's decision, expenses excluded from export turnover must also be excluded from total turnover. Therefore, the CIT(Appeals)'s order was confirmed.

The Tribunal found that the Dispute Resolution Panel (DRP) did not properly consider the assessee's objections, particularly regarding underutilization of capacity and reconciliation of AIR information. Therefore, both the transfer pricing adjustment and the corporate tax issues were restored to the AO/TPO for fresh consideration.

The Tribunal held that Section 68 is not applicable as the credit entries did not arise from transactions in the relevant previous year. For Section 41(1), the Tribunal, relying on Supreme Court precedent, ruled that cessation of liability requires more than just the creditor not pursuing the debt; it needs a remission by the creditor or a clear act by the debtor indicating non-payment.

The Tribunal upheld the CIT(A)'s decision to delete the addition of Rs. 35,00,000 in the assessee's hands. This was based on the principle that the same income cannot be taxed twice, as it was already taxed in the hands of her husband, which he had accepted.

The Tribunal held that expenses excluded from export turnover must also be excluded from total turnover for Section 10A deduction, following the jurisdictional High Court. It also directed the deletion of advertisement expenses apportioned to the assessee's STPI units as they did not benefit from them.

The ITAT found that the CIT(Appeals) order was not speaking and relied on inapplicable case laws. The Tribunal noted that the interest was charged after the assessment order, and the grounds raised before the CIT(Appeals) were factually incorrect.

The Tribunal held that the addendum by the Government of Karnataka specifying the use of grants and interest would only apply from AY 2010-11 onwards. For earlier periods, there were no restrictions on the use of grants, thus the principle of diversion of income by overriding title was not applicable. Therefore, the grant and interest income were taxable.

The Tribunal held that the process of extracting rock and converting it into dimensional blocks constituted 'manufacture' as defined under Section 2(29BA) of the Income Tax Act. Therefore, the assessee was eligible for deduction under Section 10B.

The Tribunal held that the word 'a' in Section 54 of the Income Tax Act should be interpreted in the plural, allowing deduction for multiple residential units received under a JDA. The amendment to Section 54F, effective from 01.04.2015, was considered prospective.

The Tribunal held that expenses reduced from export turnover must also be reduced from total turnover for Section 10A deduction, following the jurisdictional High Court. It also held that employees' PF/ESI contributions paid before the return filing due date are allowable deductions, as per the jurisdictional High Court.

The Tribunal upheld the CIT(A)'s decision, relying on a previous ruling in the assessee's own case. The Tribunal found that the services rendered by the assessee were considered eligible for deduction under Section 10A as they fell under the definition of computer software and IT-enabled services.

The Tribunal held that voluntary contributions received for a specific purpose, like construction of a building, are capital receipts and not income under Section 2(24)(iia) of the Income Tax Act, even if the assessee is not registered under Section 12AA. The AO was directed to verify donation receipts.

The Tribunal held that the penalty notices were defective as they did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars, and this defect was not curable. Therefore, the penalties were cancelled.

The Tribunal held that the CIT(A) was correct in allowing the deduction. Following the jurisdictional High Court's decisions, payments made before the due date of filing the return are considered within the due dates for the purpose of Section 36(1)(va).

The Tribunal held that Section 80P(4) applies only to cooperative banks, not to credit cooperative societies. Therefore, the assessee, being a cooperative society and not a cooperative bank, is eligible for the deduction under Section 80P(2)(a)(i).

The Tribunal held that deduction under Section 10A of the Act should be allowed on the assessed income, which includes profits enhanced due to disallowances. This decision was based on the reasoning that there is no statutory provision to exclude such enhanced profits from the Section 10A calculation.

The Tribunal held that the AO had failed to conduct necessary inquiries regarding the interest-free advances made to related parties, rendering the assessment order erroneous and prejudicial to revenue. However, the Pr. CIT's direction to disallow a specific interest amount was modified.

The Tribunal held that the penalty notice under Section 274 was defective as it did not specify the grounds for penalty. Additionally, the additions made by the AO were based on estimation and comparative data, not on detected concealment, making the penalty unsustainable.

The Tribunal held that the Supreme Court's decision in Goetze India Ltd. limits the Assessing Officer's power but not the appellate authorities' power to entertain claims not made via a revised return. The issue was remanded to the Assessing Officer for fresh consideration.

The Tribunal held that the Assessing Officer (AO) had not applied his mind to the facts and had failed to conduct necessary enquiries regarding the conversion of investment to stock-in-trade and the alleged cash transactions. Therefore, the assessment order was erroneous and prejudicial to the interests of revenue.

The Tribunal held that the Assessing Officer (AO) had not made proper enquiries regarding the hire charges and the applicability of Section 40(a)(ia). While the CIT's view on the lack of enquiry was justified, his observation on the non-retrospectivity of the proviso was not in line with other tribunal decisions.