ITAT Bangalore Judgments — February 2020

The Tribunal held that since a MAP was concluded, the transfer pricing grounds raised by both parties did not survive. The corporate tax issue raised by the revenue was also decided in favor of the assessee, following the Karnataka High Court's judgment in Tata Elxsi Ltd.

The Tribunal held that since a MAP was concluded, the transfer pricing grounds raised by both parties did not survive. The corporate tax issue raised by the revenue was also decided in favor of the assessee, following the Karnataka High Court's judgment in Tata Elxsi Ltd.

The Tribunal found that the Dispute Resolution Panel (DRP) had not independently adjudicated the objections regarding comparable companies, merely excluding some based on turnover. Therefore, the issue was remanded back to the DRP for a fresh and detailed analysis of all comparables.

The Tribunal found that there were sufficient reasons for the delay in filing the appeal. The Tribunal condoned the delay and remanded the matter back to the CIT(A) to decide the appeal on merits.

The Tribunal condoned the delay in filing the appeal before the CIT(A) by following the judgment of the Hon'ble Apex Court in Collector Land Acquisition Vs. MST Katiji & Ors. The matter was restored to the CIT(A) for a fresh decision on merit.

The Tribunal held that the stamp duty value as on the date of the sale agreement should be adopted for calculating capital gains under Section 50C. This was based on the principle that the sale process initiated from the agreement date and part consideration was received before the sale deed.

The Tribunal held that the provisions of Double Taxation Avoidance Agreements (DTAA) prevail over Section 206AA of the Income Tax Act, as per established judicial pronouncements. Therefore, the demands raised for short deduction of tax at source were not sustainable.

The Tribunal held that the AO validly assumed jurisdiction by issuing the notice under section 143(2) on the original return, as the revised return was filed after the AO was already seized of the proceedings. The Tribunal also ruled on the eligibility for deductions under sections 35(2AB) and 10B based on the facts and applicable case laws.

The Tribunal accepted the assessee's request for withdrawal. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal held that an assessment order passed without issuing a notice under Section 143(2) after a return was filed in response to a Section 148 notice is null and void. The defect of non-issuance of such notice cannot be cured by the assessee's participation in proceedings.

The Tribunal directed the exclusion of two comparable companies, Larsen & Toubro Infotech Ltd. and Persistent Systems Ltd., from the TPO's list. It also held that foreign exchange gain should be treated as part of operating profit for calculating the Profit Level Indicator (PLI). The TPO was instructed to rework the ALP based on these directions.

The Tribunal held that the issue regarding Section 80JJAA deduction requires fresh examination by the Assessing Officer due to factual confusion. For Section 14A, the Tribunal directed the AO to re-compute the disallowance by excluding investments in foreign subsidiaries. The provision for mark-to-market loss on derivatives was also restored to the AO for fresh examination.

The Tribunal found that the CIT(Appeals) had not adjudicated on the issue of applying the MAP percentage to non-MAP entities. Therefore, the issue was restored to the CIT(Appeals) for fresh adjudication.

The Tribunal held that penalties imposed without prior approval of the Joint CIT, as required by Section 274(2), are invalid. Furthermore, penalties imposed where the AO did not record satisfaction in the assessment order for the default are also unsustainable.

The Tribunal held that the AO had assumed valid jurisdiction by issuing the notice under section 143(2) on the original return, and the subsequent revised returns did not invalidate the assessment. The Tribunal also ruled on the eligibility for deductions under sections 35(2AB) and 10B based on the facts and applicable case laws.

The Tribunal held that the AO validly assumed jurisdiction by issuing the notice under section 143(2) on the original return, as the revised return was filed after the AO was already seized of the proceedings. The Tribunal also ruled on the eligibility for deductions under sections 35(2AB) and 10B based on the facts and applicable case laws.

The Tribunal held that in the absence of any exempt income earned by the assessee, the disallowance of expenses under Section 14A was not justified. The CIT(Appeals) was correct in deleting the disallowance.

The Tribunal noted that the CIT(Appeals) had not adjudicated the assessee's ground regarding the jurisdictional issue. Therefore, the Tribunal set aside the CIT(Appeals)'s order and restored the issue to the CIT(Appeals) for adjudication of the legal ground on jurisdiction first.

The Tribunal held that FCCBs should be included in the capital employed for Section 35D deduction, following its own previous decisions. It also accepted the assessee's claim that any increase in business profit due to disallowance should be eligible for Section 10A deduction.

The Tribunal directed the exclusion of certain comparables based on turnover and functional dissimilarity, while restoring others for further examination by the TPO. It also directed the TPO to grant working capital and risk profile adjustments.

The Tribunal held that the matter of computing the margin for non-Australian entities needs to be remanded to the TPO. Regarding foreign currency expenses, the Tribunal upheld the DRP's direction to reduce them from total turnover, following the jurisdictional High Court's decision.

The tribunal rejected the claim for sub-contracting charges to be treated as pass-through costs, citing a previous decision. It restored two companies to the AO/TPO for re-examination as comparables and directed the exclusion of two other companies from the comparable list.

The Tribunal restored the issue of interest disallowance on advances to sister concerns to the Assessing Officer for fresh consideration, citing previous orders in the assessee's own case. The Tribunal also confirmed the CIT(Appeals)'s direction regarding the computation of Section 10B deduction.

The Tribunal held that depreciation on investments should be allowed, following previous decisions in the assessee's own case and High Court rulings. Similarly, the claim for amortization of premium on government securities was also allowed, aligning with various Tribunal benches' decisions.

The Tribunal held that depreciation on investments and amortization of premium on government securities should be allowed, following previous decisions in the assessee's own case and other similar cases. The classification in the balance sheet as per RBI regulations does not preclude the claim under the Income Tax Act.

The Tribunal held that Section 292BB of the Income Tax Act does not cure the complete absence of a notice under Section 143(2). Therefore, the assessment order passed without issuing such notice is invalid.

The Tribunal noted that the CIT(Appeals) had not adjudicated the assessee's ground regarding the jurisdictional issue. Therefore, the Tribunal set aside the CIT(Appeals)'s order and restored the issue to the CIT(Appeals) for adjudication of the legal ground on jurisdiction first.

The Tribunal held that if the tax due on the returned income has been paid, the appeal should be adjudicated on merits. The CIT(A) was directed to verify the assessee's claim of tax payment.

The Tribunal admitted the additional evidence (creditor confirmations) as it was crucial to the case. The order of the CIT(Appeals) was set aside, and the issue was restored to the CIT(Appeals) for adjudication on merits after providing an opportunity to the assessee.

The Tribunal held that depreciation on investments and amortization of premium on government securities should be allowed, following previous decisions in the assessee's own case and other similar cases. The classification in the balance sheet as per RBI regulations does not preclude the claim under the Income Tax Act.

The Tribunal noted that the CIT(Appeals) had not adjudicated the assessee's ground regarding the jurisdictional issue. Therefore, the Tribunal set aside the CIT(Appeals)'s order and restored the issue to the CIT(Appeals) for adjudication of the legal ground on jurisdiction first.

The Tribunal noted that the CIT(Appeals) had not adjudicated the assessee's ground regarding the jurisdictional issue. Therefore, the Tribunal set aside the CIT(Appeals)'s order and restored the issue to the CIT(Appeals) for adjudication of the legal ground on jurisdiction first.

The Tribunal restored the issue of interest disallowance on advances to sister concerns to the Assessing Officer for fresh consideration, citing previous orders in the assessee's own case. The Tribunal also confirmed the CIT(Appeals)'s direction regarding the computation of Section 10B deduction.

The Tribunal restored the issue of interest disallowance on advances to sister concerns to the Assessing Officer for fresh consideration, citing previous orders in the assessee's own case. The Tribunal also confirmed the CIT(Appeals)'s direction regarding the computation of Section 10B deduction.

The Tribunal restored the issue of interest disallowance on advances to sister concerns to the Assessing Officer for fresh consideration, citing previous orders in the assessee's own case. The Tribunal also confirmed the CIT(Appeals)'s direction regarding the computation of Section 10B deduction.

The Tribunal restored the issue of interest disallowance on advances to sister concerns to the Assessing Officer for fresh consideration, citing previous orders in the assessee's own case. The Tribunal also confirmed the CIT(Appeals)'s direction regarding the computation of Section 10B deduction.

The assessee requested to withdraw its appeal as the APA resolved the issues. The Revenue did not object to the withdrawal request.

The Tribunal noted that salary is taxable on accrual basis as per Section 15(a). However, it directed the AO to verify if the company claimed only Rs. 2.10 crore as salary expenditure, as taxing an amount higher than what the company deducted as expense would be illogical.

The ITAT condoned the delay in filing the appeal before the CIT(A), citing sufficient cause and the principle of natural justice prevailing over technicalities, subject to a cost. The ITAT restored the issues to the CIT(A) for fresh adjudication.

The Tribunal, following the Karnataka High Court's decision, held that entities registered under the Karnataka Souharda Sahakari Act, 1997, are considered cooperative societies for the purpose of Section 80P. However, the case was restored to the AO for fresh examination.

The Tribunal held that the addition of Rs. 25,00,000/- is not warranted if it was accounted for in the books of M/s Shree Saraswathi Iron Foundaries. The addition of Rs. 1,10,000/- from past savings was also not doubted.

The Tribunal held that the notice issued by the AO under Section 274 was vague and did not specify the grounds for penalty, violating the principles of natural justice. Following the Karnataka High Court's judgment in CIT vs. Manjunath Cotton & Ginning Factory, the Tribunal deleted the penalty.

The Tribunal held that the assessee could not controvert the CIT(Appeals)'s observations with cogent evidence regarding the necessity of Transfer Pricing adjustment on SBLC. Therefore, the Tribunal confirmed the CIT(Appeals)'s order.