ITAT Bangalore Judgments — May 2017

The Tribunal held that applying a strict turnover filter is not proper and that high profit margin alone is not a ground for exclusion. The matter of determining the arm's length price and consequential transfer pricing adjustment was set aside to the CIT(A) for re-adjudication.

The Tribunal held that the reassessment order was made without providing the assessee a copy of the relied-upon statement and without affording an opportunity for cross-examination. Therefore, the matter was restored to the AO for fresh examination.

The Tribunal upheld the CIT(A)'s decision, following the Karnataka High Court's ruling in Tata Elxsi Ltd. The court held that expenses excluded from export turnover should also be excluded from total turnover for calculating deductions under Section 10A, which is analogous to Section 10B.

The Tribunal upheld the CIT(A)'s disallowance of technical consultancy fees, finding insufficient evidence of services rendered. Regarding interest disallowance under Section 14A, the matter was remanded for fresh consideration.

The Tribunal held that the assessee is a co-operative society providing credit facilities to its members and not a co-operative bank carrying on exclusive banking business. Therefore, it is eligible for exemption under Section 80P(2)(a)(i).

The Tribunal held that depreciation on assets is allowable as a deduction in computing income under Section 11, following the Bombay High Court's decision. It also held that the 15% accumulation under Section 11(1)(a) should be calculated on gross receipts, not net receipts, as per Supreme Court pronouncements.

The Tribunal upheld the disallowance of Rs. 5,896/- under Rule 8D(2)(ii) as not pressed. However, the issue of disallowance under Rule 8D(2)(iii) was set aside to the AO for proper examination and computation of administrative expenditure attributable to earning exempt income.

The Tribunal held that the CIT(A) should have adjudicated the claim on merits, as appellate authorities can entertain fresh claims that are part of the record or material for correct tax assessment. The matter was restored to the CIT(A) for fresh adjudication.

The Tribunal agreed with the principle of using peak credit for additions but directed the AO to recompute it by excluding payments made to third parties from the total withdrawals.

The Tribunal noted that the AO did not refer the matter to the Valuation Officer and had not properly examined the assessee's contentions regarding the settlement with a third party. Therefore, the issue was set aside for readjudication.

The Tribunal held that the reassessment order was passed without providing the assessee a copy of the relied-upon statement and without affording an opportunity for cross-examination. Therefore, the matter was restored to the AO for fresh examination.

The Tribunal held that the AO did not consider the allowable deductions for the cost of acquisition and indexation benefit while computing capital gains. The matter was set aside to the AO for fresh adjudication after providing an opportunity of hearing.

The Tribunal held that the assessee was not seriously interested in pursuing the appeal, applying the principle that the law aids the vigilant. Consequently, the appeal was dismissed.

The Tribunal upheld the CIT(A)'s decision on both issues. It ruled that the 15% accumulation is allowable and that excess application of income can be carried forward and set off against future income, following established precedents.

The Tribunal held that the reopening of assessment under Section 148 was valid as the information received provided a reason to believe income had escaped assessment. However, the transaction of share purchase and sale, carried out without initial investment and with immediate sale, was considered trading activity and not a capital gain.

The Tribunal held that interest income earned by a co-operative society on surplus funds deposited in banks is attributable to its business of providing credit facilities and is eligible for deduction under Section 80P(2)(a)(i). This decision followed the jurisdictional High Court's rulings.

The Tribunal held that the reassessment order was passed without supplying the assessee with a copy of the sworn statement of Shri Mukesh Choksi. Following previous judgments, the matter was restored to the Assessing Officer for fresh examination.

The Tribunal noted that the assessee had submitted additional evidence, including affidavits and bank statements, before the CIT(A) to explain the source of the cash deposits as loans from friends and relatives. However, the CIT(A) had not examined this evidence. Therefore, the Tribunal set aside the issue to the Assessing Officer for readjudication after examining the evidence.

The Tribunal held that since the revision orders were set aside, the assessment orders passed in pursuance thereof were not sustainable. Therefore, the assessment orders were liable to be set aside.

The Tribunal held that since the revision orders were set aside, the assessment orders passed in pursuance thereof were not sustainable. Therefore, the assessment orders were liable to be set aside.

The Tribunal upheld the CIT(A)'s disallowance of technical consultancy fees, finding insufficient evidence of services rendered. Regarding interest disallowance under Section 14A, the matter was remanded for fresh consideration.

The Tribunal held that the reassessment order was passed without providing the assessee a copy of the relied-upon statement and without affording an opportunity for cross-examination. Therefore, the matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal held that the carry forward of excess application of income for set-off against income of subsequent assessment years is allowable. The Tribunal relied on the decision in ACIT Vs. City Hospital Charitable Trust (2015) 42 ITR (Trib) 583 (Bangalore), which was followed by the CIT(A). The Tribunal further cited various High Court decisions, including CIT Vs. Maharana of Mewar Charitable Foundation (164 ITR 439) and CIT Vs. Shri Plot Swetamber Murti Pujak Jain Mandal (211 ITR 293), which held that Section 11(1)(a) does not restrict application of income only to the year it arises. The adjustment of earlier year's excess expenditure against a subsequent year's income constitutes application of income in the subsequent year. The Tribunal also referred to CIT Vs. Institute of Banking Personnel Selection (264 ITR 110) (Bom) and Govindu Naicker Estate VS. ADIT (248 ITR 368) (Mad), emphasizing that income should be computed on commercial principles and that expenditure on religious or charitable purposes in earlier years can be adjusted against subsequent years' income. The principle of set-off of loss under one head against another is not relevant when the expenditure is for charitable purposes. The Tribunal found no reason to interfere with the CIT(A)'s order. The issue of depreciation was also discussed in relation to charitable trusts, with the Tribunal holding it allowable for determining funds applied for charitable objects, citing CIT v. Market Committee, Pipli (330 ITR 16) (P&H) and CIT v. Society of Sisters of St. Anne (146 ITR 28) (Kar).

The Tribunal held that the TPO did not apply proper filters for turnover and related party transactions (RPT) when selecting comparable companies. Consequently, the issue of ALP and TP adjustment was set aside to the TPO for fresh consideration. Certain grounds were dismissed as not pressed, while others were allowed or dismissed based on specific findings.

The Tribunal held that applying a strict turnover filter is not proper and that high profit margin alone is not a ground for exclusion. The matter of determining the arm's length price and consequential transfer pricing adjustment was set aside to the CIT(A) for re-adjudication.

The Tribunal held that interest income earned on surplus funds deposited in banks, which are not liabilities to members, is attributable to the business of providing credit facilities and eligible for deduction under Section 80P. The jurisdictional High Court's decisions were followed.

The Tribunal held that interest income earned on surplus funds deposited in banks, which are not liabilities to members, is attributable to the business of providing credit facilities and eligible for deduction under Section 80P(2)(a)(i). The Tribunal followed the jurisdictional High Court's decisions on this matter.

The Tribunal held that the assessee is a co-operative society providing credit facilities to its members and not a co-operative bank. Therefore, the deduction under Section 80P(2)(a)(i) is allowable.

The Tribunal noted that the CIT(A) estimated expenses without a clear basis and allowed the assessee one more opportunity to file evidence. The matter was remitted to the Assessing Officer for verification of the expenditure claim.

The Tribunal held that interest income earned on surplus funds deposited in banks, which are not liabilities to members, is attributable to the business of providing credit facilities and eligible for deduction under Section 80P. The Tribunal followed the jurisdictional High Court's decisions which distinguished the Totgars case.

The Tribunal confirmed the CIT(A)'s order, holding that the cooperative society's income earned from providing credit facilities to its members is eligible for deduction under Section 80P(2)(a)(i). The Tribunal found no infirmity in the CIT(A)'s decision as it followed the jurisdictional High Court's judgment.

The Tribunal confirmed the CIT(A)'s order, holding that the assessee is entitled to deduction under Section 80P(2)(a)(i) for income earned from providing credit facilities to its members. The Tribunal found no infirmity in the CIT(A)'s decision as it followed the jurisdictional High Court's judgment.

The Tribunal confirmed the CIT(A)'s order, holding that the cooperative society's income earned from providing credit facilities to its members is eligible for deduction under Section 80P(2)(a)(i). The Tribunal found no infirmity in the CIT(A)'s decision as it followed the jurisdictional High Court's judgment.

The Tribunal held that the assessee failed to provide evidence that the trust had offered the interest income to tax, despite the High Court's directions. Therefore, the addition made by the AO and confirmed by the CIT(Appeals) was upheld.

The CIT(A) allowed the deduction, relying on the jurisdictional High Court's judgment that income from credit facilities provided to members is eligible for deduction under Section 80P(2)(a)(i). The Tribunal found no infirmity in the CIT(A)'s order.

The Tribunal followed its previous decision in a co-owner's case and restored the matter to the AO. The AO was directed to recompute the capital gains by considering the fair market value of the constructed area as on the date of the JDA.

The Tribunal held that the tax effect of the appeal was below the prescribed limit for filing appeals before the Tribunal as per Circular No. 21/2015. Therefore, the appeal was dismissed on this technical ground.

The Tribunal held that the AO was not justified in making the addition without confronting the statement of Shri Mukesh Choksi to the assessee and allowing cross-examination. The matter was restored to the AO for fresh adjudication.

The Tribunal held that stamp duty on the issue of debentures is an allowable revenue expenditure, following the jurisdictional High Court's decision. It also directed the Assessing Officer to verify the disallowance of ROC charges.

The Tribunal held that as per Section 50C(2), if the assessee disputes the fair market value, the AO should refer the matter to the Departmental Valuation Officer (DVO). Since the AO did not do so, the matter was set aside.

The Tribunal found that the assessee likely received amounts beyond the agreed sale consideration. However, the AO did not quantify this excess amount. Therefore, the issue was restored to the AO for fresh adjudication.

The Tribunal found that the CIT(Appeals) had not properly considered the evidence submitted by the assessee. Therefore, the matter was set aside and restored to the CIT(Appeals) for readjudication.

The Tribunal condoned the delay in filing the appeal before it, finding the assessee's reasons for delay before the CIT(Appeals) to be bonafide. The Tribunal set aside the CIT(Appeals)'s order and restored the matter for fresh adjudication.

The Tribunal confirmed the CIT(A)'s order, holding that the assessee is entitled to deduction under Section 80P(2)(a)(i) for income earned from providing credit facilities to its members. The Tribunal found no infirmity in the CIT(A)'s decision as it followed the jurisdictional High Court's judgment.

The Tribunal held that the AO was not justified in making the addition without allowing the assessee to cross-examine Shri Mukesh Choksi, whose statement was relied upon. The matter was restored to the AO for fresh adjudication.

The Tribunal upheld the reopening of assessment, finding no illegality as the AO had information about land sales and no return was filed by the alleged AOP. However, on merits, the Tribunal found that the AO had not considered the expenditure incurred in leveling the plots for carving out smaller plots.

The Tribunal upheld the reopening of assessment, finding no illegality as the AO had information about land sales and no return was filed by the alleged AOP. However, on merits, the Tribunal found that the AO had not considered the expenditure incurred in leveling the plots for carving out smaller plots.

The Tribunal held that the directions issued by the Additional CIT under Section 144A were prejudicial to the assessee and were issued without providing an opportunity of being heard, violating the proviso to Section 144A. Therefore, the assessment order based on these directions was set aside.

The Tribunal held that since the Hon'ble High Court of Karnataka had already decided an identical issue in the assessee's own case, allowing deduction for such payments made before the due date of filing the return, there was no justification to re-examine the issue. The CIT(Appeals) order was confirmed.

The Tribunal held that relying on Shri Bhandari's statement without confronting it to the assessee or allowing cross-examination violated the principles of natural justice. The matter was restored to the AO for fresh adjudication after confronting the statement and allowing cross-examination if requested.