ITAT Bangalore Judgments — October 2017

The Tribunal found that the CIT(Appeals) considered additional evidence without allowing the Assessing Officer an opportunity to verify it, violating Rule 46A of the IT Rules. Therefore, the matter was remanded back to the CIT(Appeals).

The Tribunal held that the accumulation under Section 11(1)(a) should be computed on gross receipts, not net receipts. This decision followed precedents from the Kerala High Court and the ITAT's Special Bench.

The Tribunal held that the AO failed to record the mandatory satisfaction required under Section 14A(2) before invoking Rule 8D. This jurisdictional deficiency rendered the AO's and CIT(A)'s orders improper and without jurisdiction.

The Tribunal held that the CIT(A) did not make a categorical finding on whether incriminating material was found during the search. Following the Karnataka High Court's decision in CIT vs. Lancy Construction, proceedings under Section 153A are invalid in the absence of such material.

The Tribunal confirmed the order of the CIT(Appeals), finding no infirmity in allowing the deduction as the payment was made before the filing of the return of income, following the jurisdictional High Court's precedent.

The Tribunal held that the assessee has a right to know the reasons for reopening the assessment. The CIT(Appeals) erred in not supplying the reasons when demanded. Therefore, the matter was restored to the CIT(Appeals) to first provide the reasons and dispose of objections before deciding the appeal on merits.

The Tribunal held that the penalty notice was not valid as it did not clearly specify the grounds for imposing the penalty, violating the principles of natural justice. Following the Karnataka High Court's judgment in CIT vs. Manjunatha Cotton & Ginning Factory, the penalty was quashed.

The Tribunal held that the notice issued for penalty proceedings was defective as it did not specify the grounds for levying the penalty. Following the jurisdictional High Court's decision, the Tribunal found the penalty order unsustainable in law.

The Tribunal held that technical objections regarding the validity of reassessment proceedings should be decided before the merits of the case. The CIT(A) had failed to decide this issue and only decided on merits.

The Tribunal restored the issue of exclusion of certain comparables to the AO/TPO for re-examination, considering the turnover filter and the availability of financial data. It also directed re-adjudication of market risk and depreciation adjustments.

The Tribunal set aside the CIT(A)'s order and restored the matter back to the CIT(A). The CIT(A) is to obtain a remand report from the AO and then decide the case afresh after providing an opportunity to both parties.

The Tribunal held that the amortization of premium on investments requires a factual determination of whether the investments were made to comply with statutory SLR requirements. The claim for currency fluctuation fund was rejected due to lack of evidence of an accrued or ascertainable liability. The provision for standard assets was disallowed as the assessee failed to establish advances from rural branches as required by Section 36(1)(vii)(a).

The Tribunal found that the CIT(Appeals) did not accommodate the assessee's adjournment request and dismissed the appeal ex parte. Therefore, in the interest of justice, the order of the CIT(Appeals) was set aside.

The Tribunal found that the CIT(Appeals) did not accommodate the assessee's adjournment request and dismissed the appeal ex parte. Therefore, in the interest of justice, the order of the CIT(Appeals) was set aside.

The Tribunal held that subordinate authorities are bound to follow the judgment of the jurisdictional High Court as long as it holds the field. Therefore, the order of the CIT(Appeals) following the High Court's decision in Tata Elxsi Ltd. was confirmed.

The Tribunal restored the issue of exclusion of certain comparables to the AO/TPO for re-examination, considering the turnover filter and the availability of financial data. It also directed re-adjudication of market risk and depreciation adjustments.

The Tribunal held that filing a revision petition does not preclude an assessee from filing an appeal after withdrawing it. The delay in filing the appeal was condoned due to the assessee pursuing an alternative remedy.

The Tribunal found that the CIT(Appeals) did not accommodate the assessee's adjournment request and dismissed the appeal ex parte. Therefore, in the interest of justice, the order of the CIT(Appeals) was set aside.

The Tribunal held that the assessee society, by providing credit facilities to its members, is eligible for deduction under Section 80P(2)(a)(i). It was also held that the assessee is not a cooperative bank as defined, and thus not excluded by Section 80P(4).

The Tribunal held that the notice issued under Section 274 of the Act must clearly state the grounds for penalty, whether it is for concealment of income or for furnishing inaccurate particulars. Following the judgment of the Hon'ble Karnataka High Court, the Tribunal quashed the penalty order as it was not legally valid.

The Tribunal held that the disallowance of depreciation and expenditure on the aircraft was justified due to lack of explanation of business use. However, the issue of repairs and maintenance expenses was restored to the AO for fresh adjudication. The revenue's appeal regarding bio-fuel pellets and cane purchases was also restored to the AO for fresh examination.

The Tribunal held that the assessee's reliance on previous judgments was misplaced because the reversals were not made at the beginning of the next accounting year. The Tribunal found that the dates of reversal indicated that income might have accrued to the payees, making TDS applicable.

The Tribunal held that the interest on the government loan was correctly treated as a liability and not disallowed under Section 43B. However, the management charges paid to the holding company were considered to attract TDS provisions under Section 194J, and the CIT(A)'s deletion was set aside.

The Tribunal held that the foreign exchange fluctuation gain realized by the assessee is a revenue receipt, not a capital receipt, and is taxable. It further held that Section 115JB is applicable to companies under liquidation, requiring them to prepare their P&L account as per Schedule VI of the Companies Act for book profit calculation.

The Tribunal upheld the CIT(A)'s decision to allow the deduction. It clarified that if export proceeds are not fully realized, the deduction should be calculated on the realized amount over total turnover, not gross export proceeds.

The Tribunal held that the Assessing Officer was not justified in rejecting the books of accounts solely on the ground of incurring a loss or alleged undervaluation of services. The Tribunal followed its own prior decision in a similar case for AY 2010-2011.

The Tribunal restored the entire Transfer Pricing (TP) issue back to the TPO for fresh consideration. The TPO was directed to re-examine the functional similarity and the application of the turnover filter in light of the Delhi High Court's judgment in Chryscapital Investment Advisors (India) P. Ltd. The RPT filter was to be considered in line with the Tribunal's previous decisions, suggesting a tolerance range of 15% to 25%.

The Tribunal held that the disallowance under Section 14A cannot exceed the amount of exempt income earned. As the CIT(A)'s order was in line with this settled legal position, the Tribunal found no reason to interfere.

The Tribunal dismissed the assessee's appeal, upholding the AO's disallowances due to lack of substantiation and business relevance. For the revenue's appeal, the Tribunal partly allowed it by restoring certain disallowances deleted by the CIT(A) due to lack of cogent evidence.

The Tribunal dismissed the assessee's appeal, upholding the AO's disallowances due to lack of substantiation and business relevance. For the revenue's appeal, the Tribunal partly allowed it by restoring certain disallowances deleted by the CIT(A) due to lack of cogent evidence.

The Tribunal noted the assessee's consistent absence and concluded that the assessee was not interested in prosecuting the appeal. Consequently, the appeal was dismissed for non-prosecution.

The Tribunal held that the AO is bound to dispose of objections against a Section 148 notice by a separate speaking order before proceeding with the assessment. The Tribunal set aside the CIT(Appeals) order and the reassessment order, remitting the matter to the AO to decide the objections first.

The Tribunal upheld the CIT(A)'s decision, stating that total turnover is the sum of export and domestic turnover. Therefore, any reduction in export turnover automatically reduces the total turnover.

The Tribunal observed that the assessee was not present despite proper notice and concluded that the assessee was not interested in pursuing the appeal. Therefore, the appeal was dismissed for non-prosecution.

The Tribunal set aside the assessment order on the transfer pricing issue and restored it to the DRP for a fresh, reasoned decision. Regarding the corporate tax issue concerning Section 10A deduction, the Tribunal followed the Karnataka High Court's decision in CIT vs. Tata Elxsi Ltd.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when additions are made solely on an estimated basis without concrete evidence of concealment. The judgments cited by the revenue were distinguished as they involved established concealment based on incriminating material or admissions.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when additions are made solely on an estimated basis without concrete evidence of concealment. The judgments cited by the revenue were distinguished as they involved established concealment based on incriminating material or admissions.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when additions are made solely on an estimated basis without concrete evidence of concealment. The judgments cited by the revenue were distinguished as they involved established concealment based on incriminating material or admissions.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when additions are made solely on an estimated basis without concrete evidence of concealment. The judgments cited by the revenue were distinguished as they involved established concealment based on incriminating material or admissions.

The Tribunal set aside the assessment order on the transfer pricing issue and restored it to the DRP for a fresh, reasoned decision. Regarding the corporate tax issue concerning Section 10A deduction, the Tribunal followed the Karnataka High Court's decision in CIT vs. Tata Elxsi Ltd.

The Tribunal restored the issue of reducing expenses from export turnover to the AO for fresh decision, directing the assessee to prove expenses are not related to article delivery. For transfer pricing, the matter was also restored to the AO/TPO to examine arm's length interest rate based on established High Court judgments.

The Tribunal held that while agreed credit periods are factored into agreed prices, any extra credit allowed beyond the agreed period constitutes an independent international transaction requiring separate benchmarking. The AO was directed to determine the cost of the assessee's total funds to benchmark this transaction.

The Tribunal held that penalty under Section 271(1)(c) is not leviable when additions are made solely on an estimated basis without concrete evidence of concealment. The judgments cited by the revenue were distinguished as they involved established concealment based on incriminating material or admissions.

The Tribunal held that when material is found during a search in a third party's case, assessment should be made under Section 153C, not Section 148. The AO's assumption of jurisdiction under Section 148 was therefore held to be bad in law.

The Tribunal held that the assessees are entitled to adopt the fair market value of the property as on April 1, 1981, as the cost of acquisition for computing long-term capital gains. The matter was remanded to the Assessing Officer for fresh adjudication.

The Tribunal held that the assessees are entitled to adopt the fair market value of the property as on April 1, 1981, as the cost of acquisition for computing long-term capital gains. The matter was remanded to the Assessing Officer for fresh adjudication.

The Tribunal held that the assessees are entitled to adopt the fair market value of the property as on April 1, 1981, as the cost of acquisition for computing long-term capital gains. The matter was remanded to the Assessing Officer for fresh adjudication.