ITAT Bangalore Judgments — January 2022

The Tribunal held that the exchange fluctuation loss is allowable as revenue expenditure. It found that Section 43A of the Income Tax Act was not applicable as no capital assets were imported from outside India.

The Tribunal directed the Assessing Officer/TPO to exclude certain companies from the list of comparables, including Acropetal Technologies Ltd. and iGate Global Solutions Ltd., due to functional dissimilarity or lack of segmental information. However, e4e Healthcare Business Services Pvt. Ltd. was directed to be included as a comparable.

The Tribunal held that the exchange fluctuation loss is allowable as revenue expenditure. It found that Section 43A of the Income Tax Act was not applicable as no capital assets were imported from outside India.

The Tribunal held that the exchange fluctuation loss is allowable as revenue expenditure. It found that Section 43A of the Income Tax Act was not applicable as no capital assets were imported from outside India.

The Tribunal held that Section 43A of the Income Tax Act was not applicable as no capital assets were imported. It also ruled that no disallowance under Section 14A could be made in the absence of exempt income.

The Tribunal held that the employees' contribution to PF and ESI paid before the due date of filing the return under section 139(1) is an allowable deduction. The amendments by the Finance Act, 2021, were held to be prospective and not applicable to the assessment year in question.

The Tribunal noted that the assessee has now filed all necessary details. In the interest of justice, the issue was remitted back to the CIT(A) for examination and consideration of the claim.

The Tribunal held that an assessment order passed in the name of a non-existent company is invalid and suffers from a jurisdictional defect. Therefore, the reassessment order is liable to be quashed.

The Tribunal directed the Assessing Officer/TPO to exclude certain companies from the list of comparables, including Acropetal Technologies Ltd. and iGate Global Solutions Ltd., due to functional dissimilarity or lack of segmental information. However, e4e Healthcare Business Services Pvt. Ltd. was directed to be included as a comparable.

The Tribunal allowed the appeal on the addition related to real estate income, finding the AO's estimation arbitrary. For unexplained investments and undisclosed bank deposits, the matter was remanded to the CIT(A) for fresh verification of evidence. The addition for drawings was deleted.

The Tribunal restored the transfer pricing adjustment issue to the AO/TPO to ascertain if transactions were similar to those covered by an Advance Pricing Agreement (APA) and to apply the APA's net margin if so. Issues related to disallowance of software expenses and TDS on communication expenses were also restored to the AO for fresh examination.

The Tribunal held that the employees' contribution paid before the due date of filing the return under Section 139(1) is an allowable deduction. It further held that the amendments to Sections 36(1)(va) and 43B by the Finance Act, 2021, are not retrospective in nature for the assessment year in question.

The Tribunal held that the payment made before the due date of filing the return of income is allowable as a deduction under Section 43B, even if it was delayed beyond the due date prescribed by the ESI Act. The amendment by the Finance Act 2021 is prospective and not applicable to the assessment year in question.

The Tribunal held that the amended provisions of Section 43B and 36(1)(va) of the Income Tax Act are not applicable for the assessment year under consideration. Following the jurisdictional High Court's decision, employees' contribution paid before the due date of filing the return is an allowable deduction.

The Tribunal noted that the issues contested in the appeal had been settled under the Vivad Se Vishwas Act. Therefore, the appeal was dismissed as withdrawn.

The Tribunal noted that the utilization of the loan by the assessee had not been adequately verified by the authorities below. The disallowance was based on surmises and conjectures.

The Tribunal held that if the assessee has disallowed the entire provision under Section 40(a)(i)/(ia) of the Act, then levying TDS demand and interest under Section 201(1A) would lead to double jeopardy. The AO must first ascertain if the recipient has paid taxes on the income.

The Tribunal held that if the assessee has disallowed the entire provision under Section 40(a)(i)/(ia) of the Act, then levying tax and interest under Section 201(1)/(1A) would lead to double jeopardy. The Assessing Officer must first ascertain if the recipient has paid taxes on the income embedded in the provision.

The Tribunal held that the assessee granted only permissive possession, not legal possession as contemplated under Section 53A of the Transfer of Property Act. Therefore, Section 2(47)(v) of the Income Tax Act was not applicable, and capital gains were not assessable.

The Tribunal held that the employees' contribution to PF and ESI paid before the due date of filing the return is an allowable deduction. The amendment by the Finance Act, 2021, was held to be prospective and not applicable to the assessment year in question.

The Tribunal restored the transfer pricing adjustment issue to the AO/TPO to ascertain if transactions were similar to those covered by an Advance Pricing Agreement (APA) and to apply the APA's net margin if so. Issues related to disallowance of software expenses and TDS on communication expenses were also restored to the AO for fresh examination.

The assessee requested to withdraw the appeal against the Section 263 order, as the consequential assessment was accepted. The Tribunal allowed the withdrawal.

The Tribunal held that the disallowance of delayed payment of employee contribution to EPF and ESI was incorrect if the payments were made before the due date of filing the return of income. The amended provisions of the Finance Act 2021, which clarified the applicability of these sections, were not applicable retrospectively.

The Tribunal held that the PCIT correctly invoked revisionary powers under Section 263 as the AO failed to conduct adequate enquiries regarding the written-off loans. The Tribunal found no infirmity in the PCIT's order and upheld it, remanding the issue to the AO for proper verification.

The Tribunal held that if the employee contributions were paid before the due date of filing the return of income under Section 139(1), the deduction is allowable. Amendments made by the Finance Act 2021 are prospective and do not apply to the assessment year in question.

The Tribunal held that the solar plant was put to use when it generated power, not necessarily when it synchronized with the grid. Since power was generated and sold, depreciation was allowable.

The Tribunal held that the matter needed to be re-examined by the Assessing Officer (AO) in light of Supreme Court and High Court judgments. The AO was directed to consider the allowability of deduction under Section 80P and also the deduction of expenses incurred for earning such interest income.

The Tribunal held that the PCIT was justified in assuming jurisdiction under Section 263 as the AO had not properly examined the issue. However, on merits, the matter was remitted to the PCIT to verify if the amount was claimed as a deduction, as this would determine the applicability of Section 40(a)(ia).

The Tribunal held that the CIT(A) erred in refusing to admit additional evidence supporting the existence of a residential building. The Tribunal directed the AO to grant the deduction under Section 54 and also allow the cost of construction as part of the cost of acquisition.

The Tribunal held that the waiver of the principal portion of term loans taken for capital assets is a capital receipt and not taxable. However, waiver of other types of loans like overdrafts, letters of credit, etc., used for day-to-day business operations, are considered revenue receipts and taxable.

The Tribunal held that additions cannot be sustained solely on the basis of a retracted statement under Section 132(4) without corroborative evidence. Since no evidence was found to support the alleged unexplained investment, the CIT(A)'s deletion of the addition was confirmed.

The Tribunal held that the aggregation of transactions in the TP study was correct and deleted the addition made by the TPO. It also ruled in favour of the assessee regarding the deduction under section 10AA, following a Supreme Court decision.

The Tribunal found that the assessee provided a detailed explanation of cash withdrawals, re-deposits, and cash receipts from consultancy fees, supported by a fund flow statement. The Tribunal concluded that the sources of the bank deposits were sufficiently explained.

The Tribunal held that deferred receivables constitute an independent international transaction that needs to be benchmarked. It also directed that interest on such receivables should be computed based on LIBOR + 2%, referencing relevant High Court decisions.

The Tribunal held that the written-off advances were capital expenditure and not deductible. It also held that the incentive deposit received for rebranding was revenue in nature and taxable in the year of receipt, as the assessee followed the mercantile system of accounting.

The Tribunal held that Section 44AD of the Income Tax Act cannot be applied to the assessee's case because the assessee's total turnover exceeded the prescribed limit and their books of account were audited under Section 44AB. The issue was remitted to the AO for fresh consideration based on the audited books of account.

The Tribunal partly allowed the assessee's appeal for AY 2011-12, remitting certain issues back to the AO/TPO for fresh consideration. The revenue's appeal was dismissed on grounds already decided in favor of the assessee for the previous assessment year.

The Tribunal held that the proviso to Section 40(a)(ia) applies only when an expenditure was disallowed in an earlier year due to non-deduction of TDS. Since the expenses crystallized in earlier years and were not claimed as deductions then, they cannot be claimed in the current year on a payment basis.

The Tribunal allowed the assessee's request for withdrawal of the appeal. The Dispute Resolution Panel's order was not contested on merits.

The assessee's authorized representative requested to withdraw the appeal. The Departmental Representative did not object to this request. Consequently, the Tribunal dismissed the appeal as withdrawn.

The Tribunal noted that the assessee requested withdrawal of the appeal and the revenue did not object. Consequently, the appeal was dismissed as not pressed.

The Tribunal partly allowed the assessee's appeal for AY 2011-12, remitting certain issues back to the AO/TPO for fresh consideration. The revenue's appeal was dismissed on grounds already decided in favor of the assessee for the previous assessment year.

The Tribunal held that the AO's order was passed without following the due process of law as enumerated in relevant judgments. Consequently, the assessment order was quashed and set aside.

The Tribunal partly allowed the assessee's appeal for AY 2011-12, remitting certain issues back to the AO/TPO for fresh consideration. The revenue's appeal was dismissed on grounds already decided in favor of the assessee for the previous assessment year.

The Tribunal partly allowed the assessee's appeal for AY 2011-12, remitting certain issues back to the AO/TPO for fresh consideration. The revenue's appeal was dismissed on grounds already decided in favor of the assessee for the previous assessment year.

The Tribunal noted that the revenue could not definitively prove the cash deposits were unexplained. However, the assessee also failed to provide sufficient independent evidence to establish the source of the deposits. Therefore, the issue was remanded to the AO for further verification.

The Tribunal held that depreciation is allowable as application of income. It also directed the AO to recompute the interest under Section 234B after hearing the assessee.

The Tribunal noted that the assessee had raised additional grounds of appeal before the CIT(A) which were not adjudicated. Therefore, the Tribunal remitted the entire issue back to the CIT(A) for fresh consideration of these additional grounds.

The Tribunal held that depreciation is allowable as application of income. It also directed the AO to recompute the interest under Section 234B after hearing the assessee.