ITAT Bangalore Judgments — December 2016

The Tribunal held that only the gross profit on undisclosed receipts should be taxed, not the entire amount, citing various High Court judgments. It also upheld the CIT(A)'s decision to grant telescoping benefit for peak cash credit, preventing double taxation.

The tribunal held that the revenue cannot make an addition solely based on evidence not confronted to the assessee. The matter was restored to the AO to confront the statement of Mr. Mukesh Chokshi and allow cross-examination if requested.

The Tribunal held that only gross profit on undisclosed receipts should be taxed, not the entire amount, citing High Court judgments. It also upheld the CIT(A)'s decision to grant telescoping benefit for peak cash credit, preventing double taxation.

The tribunal held that capital gains should be taxed in the hands of the co-owners. While the assessment in the assessee's hands was correct, the mother had already paid tax on the entire gain, so the excess tax paid by the mother should be refunded.

The Tribunal found no infirmity in the CIT(Appeals) order, which had rightly adjudicated the issues in detail. The Tribunal confirmed the order of the CIT(Appeals).

The Tribunal restored the addition of Rs. 7.50 lakhs to the AO for fresh decision after issuing summons to the remaining debtors. However, the addition of Rs. 1.45 lakhs was confirmed as the concerned parties had appeared before the AO and their statements were consistent.

The Tribunal held that the failure of the AO to dispose of the assessee's objections by a separate order before framing the reassessment order invalidates the reassessment proceedings. Consequently, the issue on merits becomes academic.

The Tribunal agreed with the CIT(A) that foreign currency expenses should be excluded from both export and total turnover. It also directed the exclusion of scrap sales from total turnover, following a Supreme Court decision.

The Tribunal held that the assessee should be given an opportunity to prove the nature of the transaction with the traders as that of principal agents who were required to make cash payments to farmers. If established, the payments would fall under Rule 6DD(e) & (k).

The Tribunal held that since the deceased could not have deliberately concealed income after his death, and there was no evidence that the assessee herself made the deposits or was aware of them, the penalty was not leviable. The Tribunal also noted that if the income belonged to the son, it should have been assessed in his hands.

The Tribunal restored the issue of foreign exchange gains to the AO/TPO for fresh examination, particularly concerning whether the gains related to current or prior year turnover. For the issue of comparable company selection, it was also restored to the AO/TPO to examine the RPT percentage.

While the TPO cannot question the necessity of incurring expenditure, the assessee has the onus to prove that services were actually rendered by the AE. Since the assessee failed to provide sufficient evidence, the TPO was justified in determining the ALP at Nil.

The Tribunal partly allowed the appeal and cross-objection. It reversed the CIT(A)'s order on some comparables, directing their inclusion or exclusion based on specific filters and previous tribunal rulings, while upholding the CIT(A)'s decision on others.

The Tribunal upheld the CIT(A)'s deletion of additions related to excess payments, finding no infirmity as the transactions were through bank and not disputed as non-genuine. However, for outstanding credit balances, the matter was remanded to the CIT(A) for fresh adjudication on creditworthiness.

The Tribunal held that the AO's failure to examine whether the sum was offered to tax rendered the assessment order erroneous and prejudicial to the revenue. The CIT was justified in exercising revisionary powers under Section 263.

The Tribunal held that the CIT's order under Section 263 had become infructuous because of the initiation of proceedings under Section 153A. However, to safeguard revenue interests, it was held that the original assessment order would revive if Section 153A proceedings were quashed.

The Tribunal found that complete documentation, including quotations, was not available to determine if technical know-how was made available. Therefore, the matter was restored to the AO for a fresh decision.

The Tribunal followed its previous order for assessment year 2010-11, which had restored the matter to the AO for de novo examination. Therefore, the Tribunal set aside the CIT(A)'s order and restored the issue to the AO for fresh decision.

The Tribunal held that the CIT(A) should have decided the issue on its merits rather than rejecting it solely because it was not in the original return. The matter was restored to the CIT(A) for a fresh decision.

The Tribunal held that the PCIT was justified in assuming jurisdiction under Section 263 as the AO had not properly examined the issue of under-invoicing and its impact on revenue. The assessment order was set aside to the file of the AO for re-examination.

The Tribunal directed the exclusion of certain companies from the list of comparables in the transfer pricing analysis. It also directed the AO to recompute the deduction under Section 10A based on High Court decisions and to adjudicate the disallowance of expenses in light of a CBDT circular.

The Tribunal noted that a previous appeal concerning the cancellation of the trust's 12AA registration had been allowed, quashing the CIT's order. Therefore, the current order of the CIT rejecting the 80G application was considered cryptic and set aside.

The Tribunal held that the original property sold could be treated as 'land' qualifying for deduction under Section 54F. However, the assessee violated the conditions of Section 54F by purchasing another residential property within two years of the sale.

The Tribunal allowed the exclusion of certain comparable companies based on functional differences and turnover filters. It also directed the TPO to consider risk adjustments and allowed the exclusion of specific expenses from both export and total turnover for Section 10A deduction.

The Tribunal held that for Section 41(1) to apply, there must be a remission or cessation of a liability, or a benefit of income accrual. In this case, the outstanding amounts were advances for goods that did not materialize, and the parties did not collect them. The Tribunal found no evidence of remission or cessation of liability without the assessee writing it off.

The Tribunal held that the CIT(A) was justified in deleting the disallowance as the facts and methodology for provision for warranty were identical to a previous assessment year where the Tribunal had ruled in favour of the assessee.

The Tribunal held that the AO had not properly verified the applicability of CBDT Instruction No. 1916 regarding the seizure of jewellery. The case was restored to the AO for fresh consideration to ascertain the marital status of family members and quantify the permissible jewellery based on the instruction.

The Tribunal dismissed the assessee's appeal, confirming the disallowance of written-off advances and depreciation on aircraft. The Revenue's appeal regarding Section 14A disallowance was remitted back to the Assessing Officer for fresh adjudication.

The Tribunal dismissed the assessee's appeal, confirming the disallowance of written-off advances and depreciation on aircraft. The Revenue's appeal regarding Section 14A disallowance was remitted back to the Assessing Officer for fresh adjudication.

The Tribunal, following its own order for a prior assessment year, deleted the remaining 50% disallowance of commission. However, it upheld the disallowance of personal expenses.

The Tribunal held that the aggregate annual receipts of each educational institution, not the total receipts of all institutions combined, should be considered for exemption under Section 10(23C). The case was restored to the AO for re-examination.

The Tribunal upheld the AO's action of re-opening the assessment and valuing the excess stock at the market rate prevailing on the survey date. The AO's adjustment for the income already declared by the assessee was considered fair.

The Tribunal condoned the delay in filing the appeals before the CIT(A), citing the demise of the assessee's mother and other personal pressures as sufficient cause. The matter was remitted back to the CIT(A) for adjudication on merits.

The tribunal held that depreciation is allowable on assets even if their cost was claimed as application of income, as it does not amount to double deduction. The amendment to Section 11(6) is prospective and not applicable to the assessment year in question.

The Tribunal found that the CIT(A) had not properly appreciated the facts, failed to adjudicate all grounds of appeal, and relied on an irrelevant precedent. The matter was therefore restored to the CIT(A) for fresh consideration.

The Tribunal held that expenses excluded from export turnover must also be excluded from total turnover for Section 10B deduction. Furthermore, the deduction under Section 10B is to be computed before setting off brought forward losses.

The Tribunal condoned the delay in filing the appeals before the CIT(A), citing the demise of the assessee's mother and other personal pressures as sufficient cause. The matter was remitted back to the CIT(A) for adjudication on merits.

The Tribunal held that the deduction under Section 10A should be computed on a standalone basis, ignoring losses of non-10A units. It also held that expenses excluded from Export Turnover must also be excluded from Total Turnover for Section 10A computation.

The Tribunal held that Circular No. 21/2015, which sets a monetary limit for filing appeals, was applicable. As the tax effect was below the prescribed limit, the appeal was not maintainable.