ITAT Bangalore Judgments — May 2016

The Tribunal held that the Assessing Officer had not properly assumed jurisdiction under Section 153C as no incriminating material relating to the assessee was found during the search. Therefore, the additions made were unsustainable.

The Tribunal held that the CIT(A) was justified in granting relief for Rs. 8.89 lakhs (commission) and Rs. 15 lakhs (advance for property sale) but erred in granting relief for the balance amount, which should have been sustained. Regarding Section 54, the matter was remitted back to the AO for examination.

The Tribunal held that the CIT(A) erred in directing the AO to recompute capital gains using a specific cost of construction without fully appreciating the valuation report and the AO's earlier acceptance of a higher value. The CIT(A) also failed to adjudicate grounds related to Section 54F deductions.

The Tribunal held that the TPO's persistence with the original adjustment was inappropriate, especially after the DRP accepted the assessee's stand. The Tribunal found that the TPO had not followed the directions to verify the acceptance of similar transactions in subsequent years.

The Tribunal held that the assessee failed to provide sufficient grounds for condoning the delay. Ignorance of law is not an excuse, and the assessee did not disclose the source of the alleged ill-advice.

The Tribunal held that ATMs are neither computers nor part of computers, thus not eligible for higher depreciation. However, UPS machines are considered part of computer systems and eligible for higher depreciation. Depreciation on assets lacking invoices was confirmed as disallowed, and the issue of penalty disallowance was remanded to the Assessing Officer.

The Tribunal directed the exclusion of certain companies from the comparable list due to high turnover and the inclusion of CG-VAK. It also directed that foreign exchange gains/losses be considered operational for margin calculations. The Revenue's appeal was dismissed.

The Tribunal held that the land remained agricultural despite conversion orders, as agricultural operations continued and the conversion was solely to facilitate sale to a developer. The Joint Development Agreement was also cancelled and possession was not transferred.

The Tribunal held that the amount received by the assessee from the trusts, as a beneficiary, was not a receipt without consideration and therefore not taxable under Section 56(2)(vi). The income retains its character from the trust's income.

The Tribunal held that the payments were made in the capacity of an agent to the publisher of the newspaper. Following CBDT Circulars No. 715 and 5 of 2016, which clarify that TDS under Section 194C is not applicable on payments made by an advertising agency to a media company, the Tribunal upheld the CIT(A)'s decision.

The Tribunal noted that the assessee's earlier appeals for different assessment years were decided against them. However, a subsequent High Court judgment on a similar issue under Section 10A allowed benefits even for indirect exports. Therefore, the Tribunal remitted the issue back to the AO for fresh consideration.

The Tribunal found that the CIT(A) accepted the land value as on 01/04/1981 based on a sale instance without discussing its comparability. The Tribunal also noted that the CIT(A) allowed set off of unabsorbed depreciation based on a Supreme Court decision, but the applicability of amendments to Section 32(2) was contested.

The Tribunal found that the CIT(A) erred in deleting the additions without proper factual examination. The matter was remitted back to the AO to verify the year of the credits and allow cross-examination of creditors.

The Tribunal found that for exemption under Section 10(23C)(iiiab), the assessee must be an educational institution existing solely for educational purposes and wholly or substantially financed by the government. The assessee's objects and financing structure did not meet these criteria.

The Tribunal found that for exemption under Section 10(23C)(iiiab), the assessee must be an educational institution existing solely for educational purposes and wholly or substantially financed by the government. The assessee's objects and financing structure did not meet these criteria.

The Tribunal found that for exemption under Section 10(23C)(iiiab), the assessee must be an educational institution existing solely for educational purposes and wholly or substantially financed by the government. The assessee's objects and financing structure did not meet these criteria.

The Tribunal found that for exemption under Section 10(23C)(iiiab), the assessee must be an educational institution existing solely for educational purposes and wholly or substantially financed by the government. The assessee's objects and financing structure did not meet these criteria.

The Tribunal held that the liability to deduct tax at source arises only when there is accrual of income in the hands of the payee. Since the provisions were reversed and no payees were identified, no income had accrued, and thus no TDS liability arose.

The Tribunal held that expenses excluded from export turnover for Section 10A deduction must also be excluded from total turnover to maintain parity. It also directed the exclusion of certain companies from the list of comparables in transfer pricing analysis.

The Tribunal held that the transfer pricing grounds of appeal no longer survived due to the MAP resolution. For Section 10A, it followed the jurisdictional High Court's decision that items excluded from export turnover must also be excluded from total turnover.

The Tribunal held that the assessee failed to satisfactorily explain the inordinate delay in filing the appeal. However, it found that the CIT(A) erred in holding that the appeal against the AO's order, passed pursuant to a Section 263 direction, was not maintainable.

The Tribunal held that the transfer pricing grounds became infructuous due to resolution under MAP proceedings. Regarding Section 10A, the Tribunal followed the jurisdictional High Court's decision in Tata Elxsi, stating that expenses excluded from export turnover must also be excluded from total turnover.

The Tribunal held that the CIT was justified in cancelling the registration because the assessee had been dormant and not carrying on any activities for a long time. It further held that the CIT has the power to cancel registration with retrospective effect, especially after the amendment by the Finance Act, 2010.

The CIT(A) considered the revised stamp duty valuation order which determined a lower value for the property. The Tribunal likely upheld the CIT(A)'s decision to consider this revised valuation.

The Tribunal confirmed the CIT(Appeals) order, agreeing that the payments were for technical services and not works contract. The CIT(Appeals) had directed the AO to compute tax deductible under Section 194J on the remuneration component.

The Tribunal held that provisions made based on claims and services rendered within the relevant year are allowable, even if payment is postponed or some portion is reversed later. Reliance was placed on the Supreme Court decision in Bharath Earth Movers v. CIT.

The Tribunal held that allowing depreciation in subsequent years on a capital asset, even if its acquisition was claimed as application of income, does not amount to double deduction. Depreciation represents wear and tear, and disallowing it would erode the trust's corpus.

The Tribunal held that rental income from malls is taxable as business income, aligning with previous ITAT decisions. However, it upheld the disallowance of administrative expenditure under Section 14A, while deleting the disallowance of interest expenditure as the assessee had sufficient own funds.

The Tribunal held that the assessee failed to provide sufficient evidence of actual services rendered for marketing, sales support, and laboratory technical support. However, for IT services, the CIT(A) had not examined the evidence filed for the first time before the Tribunal, necessitating a remand.

The Tribunal directed the AO to reduce leased line charges from total turnover for Section 10A computation, following jurisdictional High Court precedent. Other issues were adjudicated based on the lead case, with directions for re-examination of comparables in one appeal.

The Tribunal held that the assessee failed to provide sufficient evidence of actual services rendered for marketing, sales support, and laboratory technical support. However, for IT services, the CIT(A) had not examined the evidence filed for the first time before the Tribunal, necessitating a remand.

The Tribunal held that since the assessee raised an objection to the valuation adopted by the AO, the AO should have referred the matter to the District Valuation Officer (DVO) to ascertain the fair market value. The lower authorities failed to examine the assessee's submissions regarding the actual sale consideration received.

The Tribunal held that the CIT was justified in setting aside the assessment order to examine issues related to advance payments for capital items and the applicability of the second proviso to Section 11(2). However, regarding the allowability of depreciation and the computation of income for accumulation, the Tribunal relied on a co-ordinate bench's decision in favor of the assessee.

The Tribunal held that interest expenditure incurred for earning interest income is deductible under Section 57(iii). Regarding DDT, it was held that the tax rate and surcharge applicable are those prevailing in the financial year when the dividend is declared, distributed, or paid.

The Tribunal held that rental income from malls is taxable as business income, aligning with previous ITAT decisions. However, it upheld the disallowance of administrative expenditure under Section 14A, while deleting the disallowance of interest expenditure as the assessee had sufficient own funds.

The Tribunal held that the CIT rejected the applications without considering the assessee's reply and without giving a proper opportunity of hearing. Therefore, the orders were set aside.

The Tribunal held that the CIT's reasoning for invoking Section 263 was not acceptable as the claim for deduction under Section 10A was made in the original return. However, it was found that the Assessing Officer had not properly applied his mind to other requirements for the enhanced claim. Therefore, the issue was restored to the Assessing Officer for re-examination.

The Tribunal considered the comparability of certain companies used by the TPO for determining the ALP. It noted that Accentia Technologies Limited, one of the comparables, had undergone significant acquisitions and diversifications, making its financial results potentially incomparable due to extraordinary events.

The Tribunal held that the assessee acquired rights in the flat from the date of share allotment, thus the capital gain is long-term. The matter was restored to the AO for recomputation of the long-term capital gain.

The Tribunal confirmed the order of the CIT(Appeals) because no defects were highlighted by the assessees. The appeals were dismissed as the grounds were not properly presented.

The Tribunal held that the income earned from the sale of shares should be treated as capital gains, as the shares were shown as capital investments in the assessee's books. The period of holding is not the sole deciding factor.

The Tribunal held that Section 115BBC is not attracted to the pooja and hundi collections received by the assessee, as it falls under the exceptional categories of a trust established for religious and charitable purposes. The CIT(A)'s order was upheld.

The Tribunal upheld the lower authorities' decision to tax lease rentals as business income, as the property was held as stock-in-trade. The disallowance of bad debts was confirmed due to the assessee's failure to prove the business purpose of the advance. The issues regarding labour payments and construction expenditure were remanded to the AO for fresh adjudication.

The Tribunal held that the 10 consecutive assessment years for Section 10B deduction must be reckoned from the year of commencement of manufacture or production. Since this period had expired before AY 2008-09, the assessee was not entitled to the deduction.

The Tribunal noted that while prior years' decisions allowed partnership insurance premiums, there was no evidence of premium payments in the current year. The Tribunal found the issue required fresh examination by the AO.

The Tribunal held that the AO's order giving effect to the ITAT's directions lacked application of mind and proper enquiry. The CIT was justified in invoking Section 263 as the AO's cryptic order, coupled with the absence of necessary verification, rendered the order erroneous and prejudicial to the revenue.

The Tribunal noted that the assessee had no further grievance after the subsequent assessment order. The assessee agreed to withdraw the appeal, and the Revenue had no objection.

The Tribunal set aside the order of the CIT(E) and restored the matter for fresh adjudication. The CIT(E) was directed to re-examine the issue after giving the assessee an opportunity to be heard and to present relevant evidence regarding its activities.