ITAT Bangalore Judgments — June 2016

The Tribunal directed the TPO/AO to re-examine the comparability of certain companies and to exclude them if they generated revenue from software development. The Tribunal also held that the deduction under Section 10A should be allowed without setting off brought forward losses and unabsorbed depreciation, following jurisdictional High Court decisions.

The Tribunal held that the CIT(A) was justified in excluding certain comparable companies based on turnover and functional dissimilarity. It also directed the TPO to recompute the ALP considering the correct operating margin and risk adjustment, and to apply the benefit of the proviso to Section 92C(2) if applicable.

The CIT(A) allowed the assessee's claim for deduction under Section 80IB(10), holding that the assessee was eligible for the deduction on the housing project income. The revenue appealed this decision.

The tribunal deleted the disallowance of expenditure as it was based on surmises. Regarding capital gains, it was held that the shed belonged to a HUF, not the assessee, but the CIT(A) had rightly allowed the cost of the shed as per the HUF's balance sheet. The agricultural income addition was restricted, granting partial relief.

The Tribunal found no record of service of hearing notices on the assessee and restored the matter to the CIT(A) for a fresh consideration. The CIT(A) was directed to provide a reasonable opportunity of hearing.

The Tribunal dismissed the revenue's appeal, upholding the CIT(A)'s deletion of disallowances for loose tools, interest, and salary expenses, largely following ITAT's prior decisions. The assessee's appeal was dismissed as the provision for erection and commissioning was not demonstrably accrued with reasonable accuracy.

The Tribunal held that unless the earlier order of the Tribunal is stayed or reversed by the High Court, it must be followed. Therefore, the issue was decided against the assessee, confirming the CIT(Appeals)'s order.

The Tribunal held that a penalty under Section 271(1)(c) cannot be levied on additions made based solely on the DVO's estimation or opinion. The assessee's failure to appeal the quantum addition does not preclude them from challenging the penalty.

The Tribunal held that in the interest of justice, the matter should be remanded back to the CIT(A) for fresh adjudication on merits, as the CIT(A) had not decided the appeal on its merits.

The Tribunal held that the addition was not justified as the revenue had not proven that the sale proceeds were invested elsewhere. The explanation of the HUF's source of funds was not disbelieved solely on the basis of the time gap.

The Tribunal dismissed the revenue's appeal, upholding the CIT(A)'s deletion of disallowances for loose tools, interest, and salary expenses, largely following ITAT's prior decisions. The assessee's appeal was dismissed as the provision for erection and commissioning was not demonstrably accrued with reasonable accuracy.