ITAT Bangalore Judgments — August 2019

The Tribunal admitted an additional ground regarding the computation of capacity utilization. It also allowed the assessee's claim for software expenses as revenue expenditure, following a High Court precedent. Revenue's appeal regarding Section 10A deduction was dismissed, following Supreme Court and High Court rulings.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty under Section 271C was not sustainable. They relied on a previous decision where similar penalties were deleted, and also on the Karnataka High Court's view that if an appeal is admitted on substantial questions of law, it indicates the debatable nature of the issue and the assessee's bonafides.

The Tribunal held that the penalty orders under Section 271C were barred by limitation as they were passed beyond the time limit prescribed under Section 275(1)(c) of the Income Tax Act. The initiation of penalty proceedings was considered to be linked to the earlier TDS default orders, not the later show-cause notice.

The Tribunal held that the penalty orders under Section 271C were barred by limitation as they were passed beyond the time limit prescribed under Section 275(1)(c) of the Income Tax Act. The initiation of penalty proceedings was considered to be linked to the earlier TDS default orders, not the later show-cause notice.

The Tribunal followed its own precedent and restored the issue to the Assessing Officer for verification. The AO is directed to examine if the CBF contribution was made in accordance with the relevant government notification and to allow it if verified.

The Tribunal held that the payments made by the assessee to CGI, Canada, under the cost-sharing agreement were indeed royalty, relying on the decision of the Hon'ble Karnataka High Court. The Tribunal found no reason to interfere with the CIT(Appeals)'s order.

The Tribunal held that no disallowance under Section 14A is warranted from interest expenditure as the assessee's own funds exceeded its investments. However, the matter was restored to the AO for fresh decision regarding disallowance of administrative expenses.

The Tribunal upheld the disallowance of interest, agreeing with the lower authorities that the assessee failed to establish that the advances to the sister concern were for business purposes and not from borrowed funds.

The Tribunal found that the matter needed further examination by the Assessing Officer with the information provided by the assessee. The order of the CIT(Appeals) was set aside to allow the Assessing Officer to adjudicate the issue afresh.

The Tribunal, following the Karnataka High Court judgment in CIT vs. Smt. K.G. Rukminiamma, held that the term 'a residential house' in Section 54F does not imply singularity and can refer to multiple properties. Therefore, the disallowance based on the sale of two properties was incorrect.

The Tribunal found that the assessee could not provide satisfactory documentary evidence to the Assessing Officer. Therefore, the issue was restored to the Assessing Officer for verification of the expenditure and examination of supporting evidence.

The Tribunal upheld the disallowance of interest, agreeing with the lower authorities that the assessee failed to establish that the advances to the sister concern were for business purposes and not from borrowed funds.

The Tribunal found that the CIT(Appeals) had not properly adjudicated the assessee's submissions regarding the maintenance of segmental information. Therefore, the issue was restored to the CIT(Appeals) for fresh adjudication.

The Tribunal restored the disallowance under Section 40(a)(ia) and personal use of aircraft to the AO for fresh examination based on log books and the applicability of the second proviso. The disallowance of interest on work in progress was also restored to the AO for verification of own funds exceeding capital work in progress.

The Tribunal restored the matter to the Assessing Officer (AO) for fresh consideration. This was based on a co-ordinate bench's decision which required verification of the impact of the assessee's registration under the Karnataka Souhardha Sahakari Act, 1977, on its eligibility for Section 80P deduction.

The Tribunal restored the matter to the Assessing Officer (AO) for fresh consideration. This was based on a co-ordinate bench's decision which required verification of the impact of the assessee's registration under the Karnataka Souhardha Sahakari Act, 1977, on its eligibility for Section 80P deduction.

The Tribunal held that the CIT(Appeals) erred in rejecting the additional evidence and that penalty proceedings should be dealt with independently. The case was restored to the CIT(Appeals) for fresh adjudication.

The Tribunal noted that the CIT(A) passed an ex-parte order and that the assessee was relying on a High Court decision which should be preferred over a Tribunal decision. Therefore, the matter was set aside to the CIT(A) for fresh adjudication.

The Tribunal found that the assessee had provided substantial material to demonstrate compliance with the conditions for exemption under Section 54F, including evidence of construction completion within the prescribed period. Therefore, the order of the CIT(Appeals) was set aside.

The Tribunal followed a High Court judgment which held that denial of a fair hearing by not providing statement copies and cross-examination opportunities vitiates the assessment. Therefore, the matter was restored to the Assessing Officer for fresh decision.

The Tribunal held that the issue of whether the assessee is entitled to deduction under Section 80P(2)(a)(i) and 80P(2)(d) requires fresh examination in light of Supreme Court and High Court judgments. The matter was remanded to the AO for a fresh decision.

The Tribunal restored the matter to the Assessing Officer (AO) for fresh consideration. This was based on a co-ordinate bench's decision which required verification of the impact of the assessee's registration under the Karnataka Souhardha Sahakari Act, 1977, on its eligibility for Section 80P deduction.

The Tribunal condoned the delay in filing the appeal before the CIT(A) and the ITAT, citing reasonable cause. The order of the CIT(A) was set aside, and the issues were restored to his file for adjudication on merits.

The Tribunal allowed the assessee's plea for exclusion of MPS Ltd. from the comparables list for transfer pricing analysis. It also directed the AO to treat foreign exchange gain/loss as part of operating income, following its own prior decisions.

The Tribunal restored the appeals to the CIT(A) for a fresh decision. The CIT(A) was directed to examine the facts in light of two conflicting Karnataka High Court judgments and decide accordingly.

The Tribunal restored the matter to the Assessing Officer (AO) for fresh consideration. This was based on a co-ordinate bench's decision which required verification of the impact of the assessee's registration under the Karnataka Souhardha Sahakari Act, 1977, on its eligibility for Section 80P deduction.

The Tribunal restored the appeals to the CIT(A) for a fresh decision. The CIT(A) was directed to examine the facts in light of two conflicting Karnataka High Court judgments and decide accordingly.

The tribunal held that the AO was not justified in adding outstanding labour charges as confirmations from workers were rejected on flimsy grounds. For other expenses, a 10% adhoc disallowance was considered high, and it was reduced to 5%.

The Tribunal held that M/s RS Software Pvt. Ltd. should be included as a comparable. However, M/s E-Infochips Ltd. was correctly excluded as it failed the service income filter, a decision supported by previous tribunal rulings.

The Tribunal set aside the orders of the lower authorities and restored both issues to the file of the Assessing Officer for fresh examination. The assessee was directed to produce relevant documents and vouchers to substantiate their claims.

The Tribunal held that the CIT(A) did not critically examine the assessee's reasons for the delay and that the matter of condoning the delay required fresh examination. The Tribunal also found the CIT(A)'s interpretation of the Fatheraj Singhvi judgment to be incorrect.

The Tribunal held that the reopening of assessment was bad in law. It found that the AO had not relied solely on the CBI information but had independently examined the assessees' returns, noting the huge share premium received which was not commensurate with their financial strength or income. However, the Tribunal noted that the AO did not demonstrate that the share premium represented the assessees' own money, which is a prerequisite for addition under Section 68. The Tribunal observed that the assessees had furnished a valuation report to justify the premium, even if rejected by the AO. It emphasized that the AO's doubt about the quantum of share premium alone was not a sufficient ground for addition under Section 68, citing CIT vs. Green Infra Ltd. The Tribunal also noted that the AO had not made independent inquiries with the share applicants and that the deficiencies pointed out were procedural. Therefore, the additions made by the AO were deemed to have no merit. The Tribunal quashed the orders, allowing the appeals.

The Tribunal held that Section 14A disallowance is only applicable if there is actual receipt of exempt income. Since the assessee earned no exempt income, the disallowance made by the AO was deleted.

The Tribunal held that a penalty under Section 271(1)(c) cannot be levied solely on the basis of lack of evidence for expenses incurred about 20 years ago. The AO has to conclusively establish concealment or furnishing of inaccurate particulars. Therefore, the penalty was deleted.

The Tribunal held that the requirement of filing the audit report is procedural and not fatal to the claim for exemption. Following the precedent set by the Calcutta High Court, the Tribunal restored the matter to the AO for fresh assessment on merits.

The Tribunal held that several companies chosen by the TPO as comparables were not appropriate for determining the ALP of software development services. It also ruled that the tax holiday under Section 10A should be allowed without setting off losses from non-eligible units.

The Tribunal found that the CIT(Appeals) did not properly adjudicate the issue regarding the Tahsildar's certificate, which was used against the assessee without being provided to them. Therefore, the issue was restored to the CIT(Appeals) for fresh adjudication.