ITAT Bangalore Judgments — April 2019

The Tribunal set aside the orders of the CIT(A) and restored the matters back to the CIT(A) for a fresh decision. This was to be done after the CIT(Exemption) passed a fresh order on the assessee's application for registration under Section 12AA.

The Tribunal set aside the orders of the CIT(A) and restored the matters back to the CIT(A) for a fresh decision. This was to be done after the CIT(Exemption) passed a fresh order on the assessee's application for registration under Section 12AA.

The Tribunal restored the entire disputed issue to the file of the AO, allowing the assessee an opportunity to substantiate the cash deposits with sources. The AO was directed to verify and reconcile the bank statements and deposits, and the assessee was to be given an adequate opportunity of hearing.

The Tribunal held that the provisions of the DTAA, being more beneficial to the assessee, would override Section 206AA. Therefore, tax deduction at the rate prescribed in the DTAA was correct, and Section 206AA could not be invoked to insist on a higher rate.

The Tribunal set aside the CIT(A)'s order, directing that the assessee be allowed an opportunity to produce the original notice of demand. The appeal should then be admitted and adjudicated on its merits, without denying the right of appeal on technicalities.

The Tribunal held that the customer relationship rights should be treated as goodwill. Following the Supreme Court's decision in CIT vs. Smifs Securities Ltd., depreciation is allowable on goodwill.

The Tribunal held that the CIT(A) should have examined the reasons for the delay and passed a reasoned order. The Tribunal set aside the CIT(A)'s order and restored the matter to the CIT(A)'s file for fresh hearing and adjudication on merits after condoning the delay.

The Tribunal held that the AO's failure to follow the mandatory procedure of issuing a draft order under Section 144C before issuing a final assessment order rendered the assessment order invalid. The subsequent final order could not cure this statutory violation.

The Tribunal held that the AO's penalty notice was bad in law as it was not clear whether it was for concealment of income or furnishing inaccurate particulars. This indicated a lack of application of mind by the AO.

The Tribunal held that the customer relationship rights should be treated as goodwill. Following the Supreme Court's decision in CIT vs. Smifs Securities Ltd., depreciation is allowable on goodwill.

The assessee's appeal before the ITAT was withdrawn by the assessee through a letter submitted to the tribunal. Consequently, the grounds raised in the appeal were rendered infructuous.

The Tribunal held that the notice initiating penalty proceedings under section 271(1)(c) was defective as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following the Karnataka High Court's decision in Manjunatha Cotton & Ginning Factory, the Tribunal found the notice invalid.

The Tribunal held that the customer relationship rights should be treated as goodwill. Following the Supreme Court's decision in CIT vs. Smifs Securities Ltd., depreciation is allowable on goodwill.

The Tribunal allowed the appeal concerning the disallowance of interest expenditure, finding it to be an expansion of existing business and not an extension. The TP adjustments were also deleted based on a coordinate bench's decision for a subsequent year.

The Tribunal held that the payment to the non-resident was a subscription fee for accessing software and not fees for services, thus no TDS was required, and the addition was deleted. The issue of income from the venture capital fund was restored to the AO for verification. The disallowance under Section 14A was also restored to the AO for recomputation.

The Tribunal found merit in the Revenue's contention that additional evidence was accepted without proper procedure. Therefore, the CIT(A)'s order was set aside and restored for fresh adjudication.

The Tribunal admitted the additional grounds, finding them to be pure questions of law not requiring further factual investigation. The matter was restored to the CIT(A) for a fresh decision considering these grounds.

The Tribunal set aside the orders of the CIT(A) and restored the matters back to the CIT(A) for a fresh decision. This was to be done after the CIT(Exemption) passed a fresh order on the assessee's application for registration under Section 12AA.

The Tribunal noted that the taxability of such interest income depends on whether the deposited funds were out of the assessee's own funds or its liabilities. Since the lower authorities did not examine this factual aspect, the matter was restored to the CIT(A) for a fresh decision.

The Tribunal held that the CIT(A) was justified in deleting the addition of interest accrued on NPAs. This was because the CIT(A) had followed the binding decisions of the jurisdictional Karnataka High Court on this matter.

The Tribunal set aside the orders of the CIT(A) and restored the matters back to the CIT(A) for a fresh decision. This was to be done after the CIT(Exemption) passed a fresh order on the assessee's application for registration under Section 12AA.

The Tribunal set aside the orders of the CIT(A) and restored the matters back to the CIT(A) for a fresh decision. This was to be done after the CIT(Exemption) passed a fresh order on the assessee's application for registration under Section 12AA.

The tribunal allowed the assessee to withdraw the appeal as they were not interested in pursuing it further. The Revenue did not object to this request.

The Tribunal held that if the assessee complied with Section 194C(6) by obtaining declarations from transporters, disallowance under Section 40(a)(ia) does not arise even if Section 194C(7) provisions were not fully complied with.

The Tribunal held that non-payment of tax on returned income before filing an appeal is a directory, not mandatory, requirement. If the tax is paid subsequently, the defective appeal becomes valid and should be adjudicated on merits.

The Tribunal held that the maintenance revenue is not royalty taxable in India, following a previous ITAT ruling that the underlying software supply was business income and not royalty.

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

The assessee's authorized representative, under instructions, filed a letter praying for the withdrawal of the appeal. Consequently, the appeal was rendered infructuous and dismissed.

The Tribunal found merit in the assessee's contention, observing that the CIT(A) had not rendered a finding on the Rs. 10,78,193/- cash credit (dishonoured cheque). Therefore, the Tribunal remanded the issue back to the CIT(A) for proper examination and adjudication.

The Tribunal held that computer software is eligible for depreciation at 60% as per IT Rules, 1962, following a Special Bench decision. The transfer pricing ground was dismissed as the assessee had withdrawn its objection due to an APA. The AO was directed to verify the refund claim and re-compute interest under sections 234B and 234D.

The Tribunal upheld the additions made by the AO and confirmed by the CIT(A) for the current assessment years. However, to prevent double taxation, the AO was directed to exclude these amounts from the taxable income of the later year if the assessee provided evidence of offering them for taxation.

The Tribunal held that RPM is the appropriate method for benchmarking for traders and distributors without value addition. The issue of subvention charges was remanded to the TPO for fresh examination considering RPM as the most appropriate method.

The Tribunal directed the exclusion of eClerx Services Ltd. and Infosys BPO Ltd. from the list of comparable companies used by the TPO. This was based on findings that eClerx provided high-end services involving specialized knowledge, unlike the assessee's low-end services, and that Infosys BPO underwent an amalgamation during the relevant period, making it an unsuitable comparable.

The Tribunal found that the notice from the CIT(E) was indeed not served due to an 'Insufficient address' remark. Considering that other communications were received at the same address, the Tribunal set aside the CIT(E)'s orders and restored the matter for fresh decision.

The Tribunal upheld the additions made by the AO and confirmed by the CIT(A) for the current assessment years. However, to prevent double taxation, the AO was directed to exclude these amounts from the taxable income of the later year if the assessee provided evidence of offering them for taxation.

The Tribunal restored the matter to the AO to verify the TDS and advance tax payments. Credit for these payments should be granted if established and not already allowed.

The Tribunal found that the notice from the CIT(E) was indeed not served due to an 'Insufficient address' remark. Considering that other communications were received at the same address, the Tribunal set aside the CIT(E)'s orders and restored the matter for fresh decision.

The Tribunal directed the exclusion of eClerx Services Ltd. and Infosys BPO Ltd. from the list of comparable companies used by the TPO. This was based on findings that eClerx provided high-end services involving specialized knowledge, unlike the assessee's low-end services, and that Infosys BPO underwent an amalgamation during the relevant period, making it an unsuitable comparable.

The Tribunal held that the issue was covered by a previous ITAT order for the same assessment year and similar functional profile. Following that order, the three companies (Infosys Ltd., Persistent Systems Ltd., and Larsen & Toubro Infotech Ltd.) were excluded from the comparable list.

The Tribunal held that the disallowance under Section 14A read with Rule 8D(2)(iii) cannot exceed the actual administrative expenses debited to the Profit & Loss Account. Since the AO and CIT(A) did not provide sufficient details, the matter was remitted back to the AO for fresh examination.

The Tribunal held that the cash seized in AY 2007-08 was explained as agricultural land sale proceeds and upheld the CIT(A)'s deletion of the addition. For other assessment years, a uniform estimate of net professional income at 35% was applied, partly accepting the Revenue's plea for higher estimates.

The Tribunal held that the cash seized in AY 2007-08 was explained as agricultural land sale proceeds and upheld the CIT(A)'s deletion of the addition. For other assessment years, a uniform estimate of net professional income at 35% was applied, partly accepting the Revenue's plea for higher estimates.

The Tribunal held that the cash seized in AY 2007-08 was explained as agricultural land sale proceeds and upheld the CIT(A)'s deletion of the addition. For other assessment years, a uniform estimate of net professional income at 35% was applied, partly accepting the Revenue's plea for higher estimates.

The Tribunal found that the assessee was not given a proper opportunity of being heard by the CIT(A). Therefore, the order of the CIT(A) was set aside.

The Tribunal held that processing fees and pre-closure charges for loans are allowable as interest under Section 24(b) based on the definition in Section 2(28A) and CBDT circulars. The disallowance of proportionate interest was also addressed in favor of the assessee for certain assessment years.

The Tribunal held that the cash seized in AY 2007-08 was explained as agricultural land sale proceeds and upheld the CIT(A)'s deletion of the addition. For other assessment years, a uniform estimate of net professional income at 35% was applied, partly accepting the Revenue's plea for higher estimates.

The Tribunal held that the cash seized in AY 2007-08 was explained as agricultural land sale proceeds and upheld the CIT(A)'s deletion of the addition. For other assessment years, a uniform estimate of net professional income at 35% was applied, partly accepting the Revenue's plea for higher estimates.

The Tribunal held that processing fees and pre-closure charges for loans are allowable as interest under Section 24(b) based on the definition in Section 2(28A) and CBDT circulars. The disallowance of proportionate interest was also addressed in favor of the assessee for certain assessment years.