ITAT Bangalore Judgments — September 2019

The Tribunal allowed the appeal in part. It accepted the assessee's plea to reject certain comparables, directed the AO/TPO to reconsider the margin for another comparable, and allowed the inclusion of telecommunication expenses for Section 10A deduction. The disallowance of hotel expenses was also deleted.

The Tribunal directed the Transfer Pricing Officer (TPO) to re-examine the disputed comparable companies. Specifically, M/s. Akshay Software Technologies Ltd. and M/s. Spry Resources India Pvt. Ltd. were to be included as comparables.

The Tribunal held that the assessee had provided sufficient evidence to substantiate the genuineness of the loans and advances received. The AO had completed the assessment to the best of his judgment without considering the evidence filed by the assessee.

The Tribunal held that the Assessing Officer's failure to conduct any inquiry on the goodwill claim rendered the assessment order erroneous and prejudicial to the revenue. Therefore, the revision order passed by the Principal Commissioner was upheld.

The Tribunal set aside the appeal back to the CIT(A) to grant the assessee a fresh hearing. This is subject to the assessee paying a cost of Rs. 5000/- and filing proof of deposit.

The Tribunal held that the comparability of one specific company (L & T Infotech Ltd.) with the assessee's software development services segment requires fresh examination by the TPO. Additionally, the Tribunal ruled that provisions for bad and doubtful debts should be treated as operating expenses when computing the profit level indicator of comparable companies.

The Tribunal dismissed the Revenue's appeal for AY 2005-06 due to low tax effect. For AY 2008-09, the Tribunal upheld the CIT(A)'s decision on Section 10A deduction based on jurisdictional High Court precedent. However, the transfer pricing grounds were restored to the CIT(A) for fresh adjudication on comparability and functionality aspects.

The Tribunal held that losses from forward contracts should be apportioned and set off against the profits of STPI units before computing the Section 10A deduction. Brand building expenses were held to be revenue in nature and thus deductible. Foreign tax credit was directed to be verified and allowed.

The Tribunal held that the reasons provided for the inordinate delay were general, vague, and indicated gross negligence on the part of the assessee. The Tribunal emphasized that the law assists the vigilant, not those who sleep over their rights.

The Tribunal held that the facts were identical to a previous case where the property was let out in the preceding year but not in the relevant year. The Tribunal distinguished the High Court judgment relied upon by the lower authorities, finding it not applicable due to factual differences.

The Tribunal held that the assessee did not receive the notice and thus was not given a proper opportunity to be heard. Consequently, the orders of the CIT(Exemptions) were set aside.

The Tribunal found that the value mentioned in the joint development agreement for the flats was likely an estimated future value and not the actual sale consideration. It also noted that the deduction was claimed under section 54, not 54F as presumed by the AO. The matter was restored to the AO for fresh determination.

The Tribunal held that the right of being heard cannot be denied to the assessee. Therefore, the case was set aside to the CIT(A) for a fresh decision, subject to the assessee paying a cost of Rs. 5000.

The Tribunal held that the disallowance under Section 14A of the Act should be restricted to the extent of exempt income earned by the assessee. This aligns with previous decisions of the Tribunal in the assessee's own case and other co-ordinate benches.

The Tribunal held that the CIT(A) passed the order without providing a proper opportunity of hearing to the assessee. Therefore, the order of the CIT(A) was set aside and the matter was restored to his file for a fresh decision.

The Tribunal held that the CIT(A) passed the order without providing a proper opportunity of hearing to the assessee. Therefore, the order of the CIT(A) was set aside and the matter was restored to his file for a fresh decision.

The Tribunal found that the CIT(A) did not provide an adequate opportunity of being heard to the assessee. Therefore, the ex parte order was set aside and the matter was restored to the CIT(A)'s file for a fresh decision.

The Tribunal held that the appeal filed by the Revenue was not maintainable due to the low tax effect, as per the CBDT circulars. The circulars were applicable retrospectively to pending appeals.

The Tribunal found that although the assessee made a mistake in not communicating the address change, it was in the interest of justice to provide another opportunity. Therefore, the ex parte order of the CIT(A) was set aside.

The Tribunal noted that the allowability of the deduction depends on whether the funds earning interest were out of the society's liability or its own funds. It restored the matter to the CIT(A) for a fresh decision based on this distinction.

The Tribunal held that the stock difference found on 03.07.2013 pertains to Assessment Year 2014-15, not the current year. It also ruled that addition for stock shortage should only be to the extent of gross profit, not the entire shortage.

The Tribunal held that the CIT(A) passed the order without providing a proper opportunity of hearing to the assessee. Therefore, the order of the CIT(A) was set aside and the matter was restored to his file for a fresh decision.

The Tribunal held that the CIT(A)'s reliance on the Citizen Co-Operative Society judgment was misplaced as it pertained to a different state's act and there was no finding of violation of Karnataka's Co-Operative Societies Act. The Tribunal also found the CIT(A)'s factual assertion about interest income incorrect and distinguished the Totgars judgment based on the source of funds for investment.

The Tribunal found that the tax effect in the appeal was below Rs. 50 Lakhs. Therefore, the appeal was dismissed as not maintainable due to low tax effect.

The Tribunal held that the assessee did not receive the notice and thus was not given a proper opportunity to be heard. Consequently, the orders of the CIT(Exemptions) were set aside.

The ITAT deleted the addition related to the capital account difference, finding that the AO had used an incorrect figure and that the actual capital balance was supported by documentation. However, the addition for cash loans was upheld due to insufficient evidence regarding the identity, creditworthiness, and genuineness of the creditors.

The Tribunal found that both the assessee and TPO erred in benchmarking domestic transactions by comparing units owned by the same entity, as arm's length can only be established with unrelated parties. For corporate guarantee, the Tribunal directed to follow the methodology from earlier years. For Section 14A, the Tribunal directed fresh examination based on High Court and Special Bench decisions.

The tribunal allowed the assessee's alternative prayer for depreciation on tools treated as capital assets. For the ALP issue, the tribunal restored the matter to the AO/TPO for fresh consideration of capacity utilization and working capital adjustments, following its own previous orders.

The Tribunal noted that the claim about interest income being from margin money for LCs was made for the first time. Since the purpose and nexus with business were not examined by lower authorities, the matter was set aside for fresh examination.

The Tribunal held that the appeals filed by the Revenue were not maintainable due to the low tax effect, as per the CBDT circulars. The circulars were also applicable retrospectively to pending appeals.

The Tribunal held that the appeals filed by the Revenue were not maintainable due to the low tax effect, as per the CBDT circulars. The circulars were also applicable retrospectively to pending appeals.

The Tribunal found that the issue of whether chit fund losses are allowable business expenditure depends on the utilization of funds. Since the lower authorities did not examine this aspect and the assessee provided additional evidence, the matter was restored to the CIT(A) for fresh adjudication.

The Tribunal held that the treatment of a receipt in the assessee's books is not decisive for its taxability, and if a receipt is capital in nature, it cannot be taxed merely because it was offered as revenue. The issue of MAT credit was rejected as the assessee sought an advance decision.

The Tribunal held that the mining lease and license, being a commercial right acquired for business purposes, qualifies as an intangible asset eligible for depreciation under Section 32(1)(ii) of the Income Tax Act.

The Tribunal held that the treatment of a receipt in the assessee's books is not decisive for its taxability, and if a receipt is capital in nature, it cannot be taxed merely because it was offered as revenue. The issue of MAT credit was rejected as the assessee sought an advance decision.

The Tribunal held that the mining lease and license, being a commercial right acquired for business purposes, qualifies as an intangible asset eligible for depreciation under Section 32(1)(ii) of the Income Tax Act.

The Tribunal held that the treatment of a receipt in the assessee's books is not decisive for its taxability, and if a receipt is capital in nature, it cannot be taxed merely because it was offered as revenue. The issue of MAT credit was rejected as the assessee sought an advance decision.

The Tribunal decided to remand the issue of determination of ALP to the TPO/AO for fresh consideration. It also allowed the ground relating to the exclusion of foreign currency expenses from both export and total turnover for computing deduction under Section 10A.

The Tribunal set aside the CIT(A)'s order and restored the issues to the AO. This was to allow the AO to re-examine the matters afresh, considering the assessee's eligibility for exemption under Section 11.

The Tribunal held that provision for bad and doubtful debts should be considered an operating expense. It also directed the TPO to re-examine the comparability of certain companies based on turnover and other factors.

The Tribunal held that the mining lease and license, being a commercial right acquired for business purposes, qualifies as an intangible asset eligible for depreciation under Section 32(1)(ii) of the Income Tax Act.

The Tribunal held that the treatment of a receipt in the assessee's books is not decisive for its taxability, and if a receipt is capital in nature, it cannot be taxed merely because it was offered as revenue. The issue of MAT credit was rejected as the assessee sought an advance decision.

The Tribunal held that provision for bad and doubtful debts should be considered an operating expense. It also directed the TPO to re-examine the comparability of certain companies based on turnover and other factors.

The Tribunal held that the treatment of a receipt in the assessee's books is not decisive for its taxability, and if a receipt is capital in nature, it cannot be taxed merely because it was offered as revenue. The issue of MAT credit was rejected as the assessee sought an advance decision.

The Tribunal upheld the CIT(A)'s order, stating that the facts of the current year were similar to previous years for which the Tribunal's orders were approved by the Karnataka High Court. The revenue could not point out any factual differences.

The Tribunal held that the Pr.CIT's direction to mandatorily apply Section 115BBE(2) without proper inquiry into the source of funds was not proper. It also held that there was no justification for rejecting the books of account.

The Tribunal decided to remand the issue of determination of ALP to the TPO/AO for fresh consideration. It also allowed the ground relating to the exclusion of foreign currency expenses from both export and total turnover for computing deduction under Section 10A.

The Tribunal held that the treatment of a receipt in the assessee's books is not decisive for its taxability, and if a receipt is capital in nature, it cannot be taxed merely because it was offered as revenue. The issue of MAT credit was rejected as the assessee sought an advance decision.

The Tribunal held that opening balances of sundry creditors carried forward from earlier years, recorded in the books, cannot be charged to income tax under Section 68. The matter was restored to the Assessing Officer for limited examination of evidence, excluding opening balances.