ITAT Bangalore Judgments — June 2016

The Tribunal found that the same quantity of gold declared under VDIS was sold. Since the VDIS declaration and tax were accepted, the addition on account of sale proceeds was unjustified.

The Tribunal held that the same quantity of gold/silver and diamonds declared under VDIS were sold, despite being in a different form. Since the VDIS declaration was accepted and tax paid, no further addition should have been made on account of the sale proceeds.

The Tribunal found that the same quantity of silver and diamond declared under VDIS was sold, supported by evidence of conversion. Therefore, the addition made on account of sale proceeds was unjustified.

The Tribunal held that the same quantity of gold, silver, and diamonds declared under VDIS was sold. Since the VDIS declaration and tax were accepted, no further addition should be made on account of the sale proceeds.

The Tribunal held that the CIT(Appeals) is empowered to adjudicate appeals on merits, even if the appellant does not appear. Therefore, the order of the CIT(Appeals) was set aside.

The Tribunal held that the transfer pricing adjustment made on interest paid to the associated enterprise should be deleted, following a similar decision in the preceding assessment year. Regarding the Section 80JJAA claim, the Tribunal found that the Assessing Officer's reason for disallowance (requiring more than 100 new workmen) was not supported by the law and restored the issue to the Assessing Officer for fresh adjudication.

The Tribunal held that the same quantity of gold and diamonds declared under VDIS were sold, despite the sale bill showing them separately. Since the Revenue accepted the VDIS declaration and tax paid, further additions on account of sale proceeds were unjustified.

The Tribunal found that the same quantity of gold and diamonds declared under VDIS were sold, despite being in a different form (bullion and separate diamonds vs. jewellery). The addition made by the revenue authorities was deemed unjustified.

The Tribunal upheld the CIT(Appeals) decision, confirming that expenses incurred in foreign currency should be reduced from both export and total turnover for Section 10A deduction. It also allowed tax paid on behalf of expatriate employees as an expenditure.

The Tribunal found that the same quantity of gold, silver, and diamonds declared under VDIS was sold. Since the Revenue accepted the VDIS declaration and tax paid, no further addition should have been made on account of the sale proceeds.

The Tribunal held that the same quantity of gold, silver, and diamond declared under VDIS was sold. Since the Revenue accepted the VDIS declaration and tax paid, further addition on account of sale proceeds was unjustified.

The Tribunal held that the same quantity of gold, silver, and diamond declared under VDIS was sold, even if in a different form. Since the VDIS declaration was accepted and tax paid, no further addition should be made on account of the sale proceeds.

The Tribunal held that the service of notice under Section 143(2) within the prescribed time is mandatory. Since no such notice was served on the assessee, the assessment order passed by the AO was quashed.

The Tribunal held that previous decisions concerning similar companies and assessment years could be considered as precedent for excluding certain comparables. The Tribunal also addressed issues related to Section 10A deduction and foreign tax credit.

The Tribunal found that new arguments and facts were presented by the assessee for the first time. Therefore, the matter was remitted to the TPO for fresh adjudication, allowing the assessee to raise all contentions. The Tribunal also directed that adjustments for marketing and sales promotion expenses should be considered.

The Tribunal held that companies with different financial year endings should be excluded from the list of comparables. It also set aside the comparability of Infosys BPO Limited for reconsideration, citing its market leadership, brand value, and significant marketing expenses, making it unsuitable for comparison with a captive BPO.

The Tribunal held that merely showing land as agricultural in records or past use for agriculture is not decisive if the land's character has changed to non-agricultural for future use. The intention and actual conversion for non-agricultural industrial purpose, especially when sold with such a condition, determines its classification.

The Tribunal held that leasehold rights on land do not qualify as intangible assets for depreciation under Section 32(1)(ii) of the Income Tax Act. Regarding the Section 14A disallowance, the matter was remanded to the Assessing Officer for fresh adjudication.

The Tribunal found that the crucial issue of whether the gains were short-term or long-term was not decided by the CIT(A). Therefore, the matter was restored to the CIT(A) for a fresh decision on all aspects, including this primary issue.

The Tribunal held that the assessment order framed in the capacity of an AOP was valid, rejecting the assessee's reliance on various case laws related to reassessment notices. The matter was restored to the AO for fresh decision on merits.

The Tribunal observed that the CIT(A) had not fully adjudicated all aspects of the objections raised by the assessee, particularly regarding functional dissimilarity of comparables. Consequently, the matter was restored to the CIT(A) for a fresh decision on all aspects.

The Tribunal held that Circular No. 21/2015 was squarely applicable as the tax effect was below the prescribed limit and no exceptions were met. Consequently, the Revenue's appeal was dismissed.

The Tribunal directed the exclusion of certain companies (M/s. Infosys BPO Ltd., M/s. Wipro Ltd., and M/s. Accentia Technologies Ltd.) from the list of comparables due to factors like brand value, intellectual property, and extraordinary events impacting financial results. The revenue's grounds regarding diminishing revenue filter and different year ending filter were not pressed.

The Tribunal held that the service of notice under Section 143(2) within the prescribed time is mandatory. Since no such notice was served on the assessee, the assessment order passed by the AO was quashed.

The Tribunal held that the assessee failed to provide plausible evidence for the source of cash deposits, justifying the addition under Section 69. The disallowance of house property loss was also confirmed due to lack of evidence.

The Tribunal held that certain companies, including Persistent Systems Ltd. and Infosys Technologies Ltd., were not comparable to the assessee due to functional differences and risk profiles. Consequently, these companies were excluded from the comparable set.

The Tribunal held that without a valid service of notice under Section 143(2), the AO could not assume jurisdiction to frame the assessment. Consequently, the assessment framed was illegal and bad in law.

The Tribunal found that the assessee did not appear before the AO and the CIT(Appeals) rejected the explanation due to lack of evidence. Following a similar precedent, the Tribunal set aside the CIT(Appeals) order and restored the matter to the AO for de novo assessment.

The Tribunal held that the deficiencies in Form 10 regarding the amount and purpose of accumulation did not disentitle the assessee from accumulating income, especially when the expenditure on charitable activities substantially fulfilled the requirements. The appeal by the revenue was dismissed.

The Tribunal set aside the issue of bad debts to the Assessing Officer for verification and examination of the additional evidence filed by the assessee. The assessee was to be given an opportunity of hearing before a final decision.

The Tribunal held that the penalty notice issued under Section 274 r.w. Section 271 was invalid because it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. This was in line with the jurisdictional High Court's decision.

The Tribunal held that there was no obligation to deduct tax at source on payments made for transmission charges to KPTCL, following the jurisdictional High Court's decision in the assessee's own case.

The Tribunal held that the show cause notice under Section 274 was not valid because it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following the jurisdictional High Court's decision, the penalty was deleted.

The Tribunal held that since the assessee followed the project completion method, expenditure incurred on a project can only be set off in the year revenue is realized from work-in-progress. As no income was returned from the project, the expenditure was correctly added to work-in-progress.

The Tribunal held that the Assessing Officer had no valid reason to believe that income escaped assessment, as the law, as interpreted by the jurisdictional High Court, permitted set-off of losses against income even after claiming Section 10A deduction.

The Tribunal held that the assessee's explanation was satisfactory, considering his NRI status and the probability of him sending money to his mother. The addition made by the AO was deleted, but the issue of undisclosed interest income was remitted back to the file.

The Tribunal held that the assessees had discharged their onus by providing evidence of conversion and sale, including bills from the refinery and purchasers. The Tribunal found that the AO's conclusion about the non-existence of the entities was based on inquiries conducted much later and that the evidence presented by the assessees tilted the case in their favor.

The Tribunal found contradictions in the assessee's statements regarding the participation of non-members. Therefore, the matter was remitted back to the AO for a fresh examination of the issue of non-member participation.

The Tribunal found that the CIT(A) did not refer to any material to support its conclusions regarding deposits being from unaccounted sales or the timely remittance of TDS. Therefore, the case was remitted back to the AO for fresh adjudication.

The Tribunal held that the same quantity of gold and diamonds declared under VDIS was sold, even if they were in a different form. Since the Revenue accepted the VDIS declaration and the tax paid, making a further addition on account of sale proceeds was unjustified.

The Tribunal considered the assessee's application to withdraw the appeal. As there was no objection from the revenue, the appeal was dismissed as withdrawn.

The Tribunal held that the issues raised by the assessee regarding the selection of comparable companies and necessary adjustments should be restored to the AO/TPO for fresh decision, following a previous Tribunal order in the assessee's own case. The Tribunal also held that TNMM is the most appropriate method for transfer pricing.

The Tribunal has corrected clerical errors in the assessment year and the name of the Departmental Representative in its previous order. No substantive legal issues were decided in this corrigendum.

The Tribunal held that the AO ought to have framed a fresh assessment as directed by the CIT. It also found that certain issues were not decided by the CIT(A) and that the Section 10A deduction issue needed reconsideration in light of a High Court judgment.

The Tribunal held that deduction under Section 10B should be computed prior to setting off brought forward losses and unabsorbed depreciation, following the Karnataka High Court's decision. It also upheld the exclusion of certain expenses from both export and total turnover, again based on jurisdictional High Court rulings.

The Tribunal held that the amounts collected over and above prescribed fees were capitation fees and not voluntary contributions. Therefore, they were not eligible for exemption under Section 11 of the Income Tax Act.

The Tribunal held that the reopening of assessment under Section 147 was valid as the AO had tangible material from the Excise authorities and the assessee failed to disclose material facts. However, the addition of the entire deposit amount as income was incorrect; only the gross profit on such sales should be assessed.

The Tribunal excluded nine companies from the TPO's list of comparables. It restored the matter to the AO to re-examine the average PLI of the remaining comparables and directed the AO to compute total turnover as per the Karnataka High Court's judgment for Section 10A deductions.

The Tribunal admitted the additional evidence and held that the transfer pricing issue requires a fresh look due to the incorrect revenue bifurcation. The matter was remitted back to the TPO/AO for re-analysis based on correctly worked-out revenue streams.

The Tribunal held that the interest expenditure was not allowable as a deduction under Section 57(iii) because it was not incurred wholly and exclusively for the purpose of earning income. It also held that the borrowings were not proven to be for business purposes under Section 36(1)(iii) due to the diversion of funds to a related party.