ITAT Bangalore Judgments — August 2020

The Tribunal noted that a subsequent valuation report, which was not considered by the AO, used the DCF method. The Tribunal restored the issue to the AO for fresh consideration of this report and other relevant decisions.

The Tribunal held that the entire undisclosed turnover cannot be treated as profit and only the profit element should be taxed. It applied a profit rate based on declared turnover to the undisclosed turnover.

The Tribunal noted that the assessees wished to withdraw their appeals as their applications under the Vivad Se Vishwas Scheme were accepted. Accordingly, the appeals were dismissed as withdrawn.

The Tribunal noted that the assessees wished to withdraw their appeals as their applications under the Vivad Se Vishwas Scheme were accepted. Accordingly, the appeals were dismissed as withdrawn.

The Tribunal directed the Transfer Pricing Officer (TPO) to exclude certain companies from the list of comparables as they were functionally dissimilar to the assessee, being product development companies rather than captive service providers. The Tribunal also allowed the assessee's claim for the benefit of applying a +/-5% range for ALP determination for statistical purposes.

The Tribunal held that the reassessment proceedings were validly initiated and that the agreement for joint development constituted a transfer. Consequently, capital gains were exigible to tax. However, certain grounds related to the computation of capital gains and interest were allowed.

The Tribunal directed the exclusion of certain comparable companies based on excessive turnover and functional dissimilarity, referencing previous rulings. Given the significant reduction in the comparable set, the Tribunal restored the issue to the AO/TPO for a fresh analysis.

The Tribunal held that the expenditure incurred for employee welfare was not covered under Section 40A(9) and was allowable under Section 37. Regarding Section 115JB, the Tribunal allowed the addition related to Section 14A disallowance but rejected grounds related to the write-back of provisions for bad debts.

The Tribunal held that the inability of the legal representative to produce evidence should not be the sole basis for disallowing expenses. It considered the comparative percentage of expenses in preceding and succeeding years, noting that a similar percentage was accepted in a scrutiny assessment for the subsequent year.

The Tribunal held that since the substantive addition related to M/s. Children Education Society was deleted on merits by the co-ordinate bench, the protective addition in the assessee's hands was unjustified. The Tribunal noted that the Tribunal had already held the entire amount to be explained and accounted for in the hands of M/s. Children Education Society.

The Tribunal held that the CIT(A) was justified in allowing the appeal. The assessee had provided confirmations, and where differences existed, they were minor and explained. Furthermore, outstanding amounts for certain creditors were settled by payments in the subsequent year.

The Tribunal held that the tax effect in each of the four appeals filed by the Revenue was below Rs. 50 lakhs. Therefore, the appeals were not maintainable in view of the low tax effect as per CBDT instructions.

The Tribunal, in the interest of natural justice, set aside the CIT(A)'s order and restored the issues to the AO for a fresh assessment. The assessee was directed to cooperate with the AO for expeditious completion.

The Tribunal held that the CIT(Appeals) should have admitted the additional evidence regarding construction cost and Section 54 exemption. The Tribunal also found that the issue of taxing the sale consideration difference needed further examination by the AO.

The Tribunal held that cash withdrawals from the bank account that were subsequently redeposited could not be disbelieved by the revenue authorities based on surmises. However, a portion of the deposits remained unexplained.

The Tribunal noted that the assessee had opted for the Vivad Se Vishwas Scheme and would withdraw the appeal in due course. Therefore, keeping the appeal pending would serve no purpose.

The Tribunal held that the entire undisclosed turnover cannot be treated as profit, and only the profit element should be taxed. It applied a profit rate based on declared turnover to the undisclosed turnover.

The Tribunal held that internal TNMM should be preferred over external TNMM for benchmarking AE transactions. The matter was restored to the AO/TPO for fresh analysis on both TP and club expense issues.

The Tribunal noted that the assessee sought withdrawal of the appeal due to opting for the Vivad se Vishwas Scheme. No purpose would be served in keeping the appeal pending.

The Tribunal held that other income, including unrealized exchange gain, should be considered as profits of the industrial undertaking for Section 10A deduction. The Tribunal also directed the Assessing Officer to examine and verify the correctness of the TDS credit claim.

The Tribunal found that the facts of the case were different from the Supreme Court's judgment in Seshasayee Steels Pvt. Ltd. The Tribunal upheld the CIT(A)'s order regarding the taxability of capital gains but admitted the assessee's additional ground for deduction under Section 54F and restored the matter to the CIT(A) for decision.

The Tribunal allowed the assessee's appeal on the interest disallowance, holding that Section 145A does not mandate including interest in inventory valuation. However, it reversed the CIT(A)'s deletion of commission payments, finding insufficient evidence. The Tribunal also upheld the CIT(A)'s deletion of Section 40A(3) disallowances, accepting that payments were made by account payee cheques.

The Tribunal allowed the assessee's appeal regarding the disallowance of interest, holding that it was not required to be included in inventory valuation under Section 145A. However, the Revenue's appeal was partly allowed, with the disallowance of commission payments being restored to the AO.

The Tribunal found factual errors in the AO's assessment and noted that the CIT(A) did not adjudicate one of the grounds raised. Therefore, the matter was remanded back to the CIT(A) for fresh adjudication.

The Tribunal held that the AO cannot change the method of valuation opted by the assessee (DCF method) but can scrutinize the valuation report and underlying assumptions. The matter was restored to the AO for fresh adjudication.

The Tribunal dismissed the revenue's appeal because the tax effect was below the monetary limit prescribed by the CBDT circular for filing appeals. The revenue was granted liberty to seek recall if the issue falls under exceptions in the circular.

The Tribunal found merit in the assessee's request for a fresh examination of the issue. The order of the CIT(A) was set aside, and the matter was restored to the AO for a de novo assessment.

The Tribunal held that the CIT(A) erred in making an addition under Section 69 of the Income Tax Act as unexplained investment without properly considering the confirmations from parties and bank transactions provided by the assessee. The matter was remanded back to the AO for fresh adjudication.

The Tribunal held that interest expenditure incurred on borrowings for acquiring inventory is allowable under Section 36(1)(iii) of the Income Tax Act, overriding accounting standards. It also held that Section 14A is not triggered in the absence of exempt income.

The Tribunal noted that the assessee had opted for the Vivad Se Vishwas Scheme and would likely withdraw the appeal. Therefore, the Tribunal dismissed the appeal as withdrawn, as keeping it pending would serve no purpose.

The Tribunal held that internal TNMM should be preferred over external TNMM for benchmarking AE transactions. The matter was remanded to the AO/TPO for fresh analysis on both TP and club expense issues.

The Tribunal held that no transfer of property had taken place as per Section 2(47) of the Income Tax Act. Consequently, the computation of capital gains by the lower authorities was unjustified.

The Tribunal noted that the assessees wished to withdraw their appeals as their applications under the Vivad Se Vishwas Scheme were accepted. Accordingly, the appeals were dismissed as withdrawn.

The Tribunal held that the entire undisclosed turnover cannot be treated as profit, and only the profit element should be taxed. It applied a profit rate based on declared turnover to the undisclosed turnover.

The Tribunal held that the entire undisclosed turnover cannot be treated as profit, and only the profit element should be taxed. It applied a profit rate based on declared turnover to the undisclosed turnover.

The Tribunal held that the entire undisclosed turnover cannot be treated as profit, and only the profit element should be taxed. It applied a profit rate based on declared turnover to the undisclosed turnover.

The Tribunal held that the entire undisclosed turnover cannot be treated as profit, and only the profit element should be taxed. It applied a profit rate based on declared turnover to the undisclosed turnover.

The Tribunal held that the entire undisclosed turnover cannot be treated as profit, and only the profit element should be taxed. It applied a profit rate based on declared turnover to the undisclosed turnover.

The Tribunal held that the entire undisclosed turnover cannot be treated as profit, and only the profit element should be taxed. It applied a profit rate based on declared turnover to the undisclosed turnover.

The Tribunal held that the entire undisclosed turnover cannot be treated as profit, and only the profit element should be taxed. It applied a profit rate based on declared turnover to the undisclosed turnover.

The Tribunal held that interest expenditure incurred on borrowings for acquiring inventory is allowable under Section 36(1)(iii) of the Income Tax Act, overriding accounting standards. It also held that Section 14A is not triggered in the absence of exempt income.

The Tribunal noted the assessee's failure to provide the required CA certificate and other evidence. However, considering the circumstances, including the COVID-19 pandemic, the Tribunal decided to grant one more opportunity to the assessee to produce the necessary documents before the Assessing Officer.

The Tribunal held that the tax effect in each of the four appeals filed by the Revenue was below Rs. 50 lakhs. Therefore, the appeals were not maintainable in view of the low tax effect as per CBDT instructions.

The Tribunal held that the tax effect in each of the four appeals filed by the Revenue was below Rs. 50 lakhs. Therefore, the appeals were not maintainable in view of the low tax effect as per CBDT instructions.

The Tribunal held that the tax effect in each of the four appeals filed by the Revenue was below Rs. 50 lakhs. Therefore, the appeals were not maintainable in view of the low tax effect as per CBDT instructions.

The Tribunal held that the expenditure incurred for employee welfare was not covered under Section 40A(9) and was allowable under Section 37. Regarding Section 115JB, the Tribunal allowed the addition related to Section 14A disallowance but rejected grounds related to the write-back of provisions for bad debts.

The Tribunal noted that the assessees wished to withdraw their appeals as their applications under the Vivad Se Vishwas Scheme were accepted. Accordingly, the appeals were dismissed as withdrawn.

The Tribunal noted that the assessees wished to withdraw their appeals as their applications under the Vivad Se Vishwas Scheme were accepted. Accordingly, the appeals were dismissed as withdrawn.

The Tribunal noted that the assessees had opted for the Vivad Se Vishwas Scheme and would be withdrawing their appeals. Therefore, the Tribunal dismissed the appeals as withdrawn, granting liberty to move for recall if necessary.

The Tribunal admitted additional evidence filed by the assessee and set aside the CIT(A)'s order. The case was remitted back to the Assessing Officer to verify and examine the additional evidence and the assessee's claims.