ITAT Bangalore Judgments — November 2016

The Tribunal observed that the assessee was not present despite proper notice of hearing. Therefore, the Tribunal concluded that the assessee was not interested in pursuing the case.

The Tribunal held that if the Assessing Officer does not make an addition on the specific issue for which the assessment was reopened, the assessment itself is bad in law. Since the reopening was based on non-deduction of TDS and potential disallowance under Section 40(a)(ia), but no such disallowance was made, the assessment was annulled.

The Tribunal upheld the CIT(Appeals) deletion of disallowance for internet charges, citing High Court precedent. For the cessation of liability, the Tribunal remanded the issue to the Assessing Officer for verification of capitalization and non-claim of expenditure.

The Tribunal acknowledged that appropriate adjustments for specific non-operating costs should be allowed while computing the operating costs and Arm's Length Price (ALP). However, due to lack of complete details, the matter was restored to the CIT(A) for re-adjudication.

The Tribunal inferred that the assessee was not interested in pursuing the appeal. Consequently, the appeal was dismissed for want of prosecution.

The Tribunal inferred that the assessee was not interested in prosecuting the appeal. Following established precedents, the appeal was dismissed in limine for want of prosecution.

The Tribunal inferred that the assessee was not interested in pursuing the appeal. Consequently, the appeal was treated as unadmitted and dismissed for want of prosecution.

The Tribunal noted that the appeal had become infructuous as the assessee had obtained the registration it sought. The assessee's request to withdraw the appeal was accepted.

The Tribunal observed that the assessee was not interested in prosecuting its case due to non-appearance. Following established precedents, the Tribunal dismissed the appeal.

The Tribunal upheld the CIT(A)'s decision, following the jurisdictional High Court's ruling that the omission of Section 10B(9) meant it should be read as if it never existed. Therefore, the change in shareholding did not disentitle the assessee to the deduction.

The Tribunal held that the assessee acted bona fide based on the law prevalent at the time of payment, before the retrospective amendment and the Karnataka High Court's ruling in Samsung Electronics. Therefore, the disallowance under Section 40(a)(i)/(ia) was not warranted.

The Tribunal directed the exclusion of 'Thirdware Solutions Ltd.' and 'Exensys Software Solutions Ltd.' from the list of comparables, upholding the CIT(Appeals)'s decision. It also upheld the exclusion of 'Four Soft Ltd.' based on related party transactions. However, it directed the inclusion of 'LGS Global Ltd.' as a comparable.

The Tribunal held that the interest-free security deposit could not be ignored when computing the ALV, following a Punjab & Haryana High Court judgment. Therefore, the AO's ALV computation was deemed correct, and the CIT(Appeals) order was confirmed.

The Tribunal found merit in the Revenue's contentions. It agreed that the AO's failure to properly examine the lease agreement and its implications under Section 13(3) rendered the assessment erroneous and prejudicial to the revenue's interest.

The Tribunal held that the interest-free security deposit could not be ignored when computing the ALV, following a Punjab & Haryana High Court judgment. Therefore, the AO's ALV computation was deemed correct, and the CIT(Appeals) order was confirmed.

The Tribunal held that the interest-free security deposit could not be ignored when computing the ALV, following a Punjab & Haryana High Court judgment. Therefore, the AO's ALV computation was deemed correct, and the CIT(Appeals) order was confirmed.

The Tribunal agreed with the CIT(A) that the deduction under Section 10A should be allowed as per the established legal position. The appeal filed by the Revenue was dismissed.

The Tribunal held that the AO's method of valuing closing stock based on average cost was correct, considering past precedents. It also upheld the disallowance of making charges for non-deduction of TDS, finding that the payments attracted Section 194C.

The Tribunal found no infirmity in the CIT(A)'s order, as it was decided in line with the jurisdictional High Court's judgment. Therefore, the CIT(A)'s decision to exclude certain expenses from total turnover, similar to their exclusion from export turnover, was upheld.

The Tribunal found that the CIT(A) in the first round had only directed the exclusion of specific expenses (telecommunication, insurance, foreign exchange) from both export and total turnover. No directions were given regarding other expenditures. Therefore, the AO's subsequent order was found to be in compliance with the CIT(A)'s directions.

The Tribunal upheld the inclusion of one comparable company but remanded the issue of another comparable (Exlerx Services) to determine if it was a KPO or ITES company. The revenue's appeal regarding the recomputation of deduction under Section 10A was dismissed.

The Tribunal held that the transfer of capital asset could not be completed prior to the conversion of agricultural land to non-agricultural use, as the JDA's enforceability was conditional on events not in the parties' control. Therefore, the reopening of assessment was deemed invalid.

The Tribunal condoned the delay in filing the appeal. It held that bank passbooks are not the assessee's books of account, and therefore, additions under Section 68 for bank deposits are not sustainable. However, the matter was remanded for a fresh opportunity to explain the deposits, with the addition capped at the peak credit.

The Tribunal held that certain comparable companies selected by the TPO were not appropriate due to functional differences and turnover criteria. It also directed the AO to exclude foreign currency expenses from both export turnover and total turnover for calculating Section 10A deduction, following the jurisdictional High Court's ruling.

The Tribunal held that the cash credits and squared-up cash loans that appeared in the books before the search and seizure operations and were squared up thereafter should be considered part of the undisclosed income voluntarily offered by the assessee. Therefore, the additions made by the AO were directed to be deleted.

The Tribunal restored the issue of one comparable (Melstar Information Technologies Ltd.) to the TPO for re-examination based on its annual report and previous ITAT rulings. The Tribunal confirmed the CIT(Appeals)'s decision regarding Section 10A deduction, as it was supported by the jurisdictional High Court's ruling.

The assessee's counsel moved an application for withdrawal of the appeals. The revenue did not object to this withdrawal.

The Tribunal held that the CIT(Appeals) was not justified in dismissing the appeal in limine as the tax on returned income was paid during the pendency of the appeal. The order of the CIT(Appeals) was set aside.

The Tribunal decided on various grounds related to the selection of comparable companies, treatment of foreign exchange fluctuations, and exclusion/inclusion of specific entities. Some of the TPO's exclusions were upheld, while others were reversed or remanded.

The Tribunal upheld the CIT(Appeals)'s order, confirming that the assessee was entitled to the deduction. This decision was based on a previous Tribunal ruling that was subsequently approved by the jurisdictional High Court.

The Tribunal held that the Assessing Officer was justified in denying depreciation on the distribution network due to inflated valuation and the nature of the transaction. Similarly, for other fixed assets, the AO's action of restricting depreciation based on Explanation 3 to Section 43(1) was upheld.

The Tribunal upheld the DRP's decision to exclude the seven companies from the comparable set, finding them functionally not comparable. It also ruled that expenses incurred in foreign currency should be excluded from both export turnover and total turnover for Section 10A deduction.

The Tribunal held that for stock-in-trade like immovable properties, income recognition should align with the transfer of risk, reward, and ownership, which occurs upon registration of the conveyance deed. Therefore, the matter was remanded for fresh examination.

The Tribunal allowed the ground related to reducing expenditure from total turnover for Section 10A computation, following a High Court judgment. For the transfer pricing issues, the Tribunal set aside the assessment order and restored the matter to the AO/TPO for a fresh decision due to improper adjudication by the DRP.

The Tribunal held that the reassessment order was bad in law due to the AO's failure to furnish the reasons for reopening the assessment, as per established judicial precedents. Consequently, the CIT(A)'s order quashing the assessment was upheld.

The Tribunal held that the shares were acquired as stock-in-trade and the loss was a business loss. It also held that the deemed dividend addition was not applicable as the assessee was not a shareholder in the lending companies.

The Tribunal held that the reassessment proceedings under Section 147 were invalid as no income had escaped assessment. For the other appeals concerning agricultural income, the matter was remanded to the Assessing Officer for fresh adjudication.

The Tribunal dismissed the Revenue's appeal due to low tax effect. The Tribunal allowed the assessee's appeal concerning the Rs. 35,00,000 expenditure, holding that it was established by notings in the seized material and was not excessive or unreasonable.

The Tribunal dismissed Ground No. 2 by following the jurisdictional High Court's decision in Tata Elxsi Ltd. For Ground No. 3, the Tribunal restored the issue to the AO for fresh consideration, citing a subsequent High Court judgment in Infosys Technologies Ltd.

The Tribunal held that the revenue's appeal was not maintainable for two reasons: it was a duplicate appeal, and it suffered from a low tax effect, which was below the threshold stipulated by the CBDT circular.

The Tribunal held that since the time limit for the AO to pass a consequential order had expired, the appeal had become infructuous. Therefore, the Tribunal dismissed the appeal without delving into the specific grounds raised by the assessee.

The Tribunal held that depreciation on non-compete fees is allowable if the right acquired is transferable, following the jurisdictional High Court's decision. The issues regarding depreciation on interiors and computer software were restored to the CIT(A) for adjudication.

The Tribunal found the DRP's order to be cryptic and without adequate reasoning. Consequently, the Tribunal set aside the AO's order and restored the matter to the AO/TPO/DRP for a fresh decision.

The Tribunal remanded the transfer pricing issues back to the Assessing Officer (AO) for a fresh decision. For corporate tax issues, the disallowance of project-specific costs was upheld, while the deduction u/s 10A was decided in favor of the assessee. The disallowance of software rentals was set aside and restored to the AO for determination of depreciation.

The Tribunal dismissed the Revenue's appeal due to low tax effect. The Tribunal allowed the assessee's appeal concerning the Rs. 35,00,000 expenditure, holding that it was established by notings in the seized material and was not excessive or unreasonable.