ITAT Bangalore Judgments — February 2022

The Tribunal found that the revenue did not verify the adopted rate with stamp duty authorities. To ensure justice, the issue of determining the correct land value for capital gains calculation was remanded back to the AO for verification.

The Tribunal allowed the grounds related to transfer pricing adjustments, finding that the TPO erred in rejecting the assessee's TP documentation and in the selection of comparable companies. However, the ground regarding the claim for Section 10A deduction on unbilled revenue was dismissed due to lack of RBI extension, and the claim for deduction of education cess was also rejected.

The Tribunal remitted the issue of comparability of one company (Sasken Communication Technologies Ltd.) back to the AO/TPO for fresh consideration. It also directed the exclusion of several companies from the comparable list and allowed the assessee's cross-objections for statistical purposes regarding two other companies, remanding them for verification.

The Tribunal held that for Assessment Years 2008-09 and 2009-10, the orders passed under Section 201(1) and 201(1A) were barred by limitation as statements under Section 200 were filed. For Assessment Years 2010-11 and 2011-12, the orders were within time. The ground regarding no obligation to deduct TDS when the payee paid tax was dismissed due to lack of evidence.

The Tribunal remanded the issues related to the disallowance of deduction under Section 80JJAA, the share of loss from A2E2, and the guarantee payments back to the AO for fresh verification. The levy of interest under Section 234B was also contested.

The Tribunal held that RPM is the most appropriate method for a distributor that does not add substantial value to the products. It also ruled that provisions for bonus and long service awards, when estimated with reasonable certainty, are ascertained liabilities and should not be added back for calculating book profits under Section 115JB.

The Tribunal noted that crucial details regarding the land acquisition and compensation were missing. It held that these details, along with supporting documents, needed to be submitted for proper consideration of the assessee's claim.

The Tribunal held that the amount debited was not a provision for bad debt but an adjustment to income due to partial recovery of waived interest. Therefore, it was an allowable deduction.

The Tribunal held that for Assessment Years 2008-09 and 2009-10, the orders passed under Section 201(1) and 201(1A) were barred by limitation as statements under Section 200 were filed. For Assessment Years 2010-11 and 2011-12, the orders were within time. The ground regarding no obligation to deduct TDS when the payee paid tax was dismissed due to lack of evidence.

The Tribunal held that the issue of imputing notional interest on outstanding receivables should be remanded to the Assessing Officer/TPO for fresh consideration in light of Supreme Court and High Court decisions. However, the claim for deduction of Education Cess and Secondary & Higher Education Cess was rejected.

The Tribunal held that while forex losses on forward contracts are generally allowable if linked to business, factual details were not submitted. For software expenses, the Tribunal remanded the issue to the AO to examine the agreement in light of Supreme Court rulings on royalty and DTAA.

The Tribunal noted that while the issues needed revisiting, the Pr.CIT's directions for additions and disallowances were not entirely in accordance with law. Citing a Supreme Court judgment, the Tribunal directed the AO to conduct a fresh verification of the issues raised by the Pr.CIT.

The Tribunal found that due to address confusion, the assessee was not properly heard. Therefore, the appeal was remanded to the CIT(A) for fresh consideration on merits, with a proper opportunity of being heard to be granted.

The Tribunal directed the exclusion of three companies (Harton Communications Limited, Capgemini Business Service (India) Limited, and Infosys BPO Limited) from the list of comparables for ALP determination. It also directed the deletion of the addition made by the AO on account of re-allocation of common expenses, considering the assessee's cost-plus mark-up operating model.

The Tribunal held that for assessment years 2008-09 and 2009-10, the orders passed under sections 201(1) and 201(1A) were barred by limitation as statements under section 200 were filed. For assessment years 2010-11 and 2011-12, the orders were within the time limit. The ground regarding no obligation to deduct TDS if the payee paid tax was dismissed due to lack of evidence.

The Tribunal held that for Assessment Years 2008-09 and 2009-10, the orders passed under Section 201(1) and 201(1A) were barred by limitation as statements under Section 200 were filed. For Assessment Years 2010-11 and 2011-12, the orders were within time. The ground regarding no obligation to deduct TDS when the payee paid tax was dismissed due to lack of evidence.

The Tribunal found that the assessee failed to participate in the proceedings before the Pr.CIT even after opportunities were given. The assessee also did not appear before the Tribunal. Therefore, the Tribunal decided the appeal based on the available material.

The Tribunal set aside the issue of whether the special discount was in the nature of commission or discount to the Assessing Officer (AO) for fresh consideration. The AO was directed to re-examine the claim for tax credits (TDS, advance tax, and self-assessment tax) and allow credit in accordance with law.

The Tribunal admitted additional evidence filed by the assessee, which demonstrated that the revenue's method of income estimation was incorrect. The Tribunal set aside the issue to the Assessing Officer for fresh consideration, keeping in mind the principles laid down by the Madras High Court regarding income recognition in chit funds.

The Tribunal admitted additional evidence filed by the assessee, which demonstrated that the revenue's method of income estimation was incorrect. The Tribunal set aside the issue to the Assessing Officer for fresh consideration, keeping in mind the principles laid down by the Madras High Court regarding income recognition in chit funds.

The Tribunal held that since the CIT(A) had cancelled the original assessment order as being barred by limitation, the PCIT's order under Section 263, which sought to revise the original order, had lost its substratum. The appeal filed by the revenue against the CIT(A)'s order was also dismissed.

The Tribunal found that the AO's estimation of income at 50% of total receipts was too high, and the CIT(Appeals)'s estimation at 8% was also not genuine. The Tribunal held that the books of account were unreliable and should be rejected, but the additions should be limited to the discrepancies found during the search.

The Tribunal held that the expenses claimed by the assessee were not allowable under Section 57 as they were not incurred wholly and exclusively for earning income from other sources. The alternative claim for capitalization against capital gains was also rejected.

The Tribunal admitted additional evidence filed by the assessee, which demonstrated that the revenue's method of income estimation was incorrect. The Tribunal set aside the issue to the Assessing Officer for fresh consideration, keeping in mind the principles laid down by the Madras High Court regarding income recognition in chit funds.

The Tribunal held that the royalty payment at 4% was at arm's length, following its own prior decisions. It also allowed the claim for foreign exchange fluctuation loss on loans, considering it a revenue expenditure. The issue of disallowance under Section 40(a)(ia) was remanded back to the AO for fresh examination.

The Tribunal directed the AO/TPO to restrict transfer pricing adjustments to international transactions with AEs and allowed the claim for finance lease charges based on Supreme Court precedent. It also directed examination of double disallowance for foreign exchange fluctuation losses and allowed realized losses on revenue account, while restoring issues of forward contract premium and interest to MSMEs to the AO for examination.

The Tribunal found that the AO's estimation of income at 50% of total receipts was too high, and the CIT(Appeals)'s estimation at 8% was also not genuine. The Tribunal held that the books of account were unreliable and should be rejected, but the additions should be limited to the discrepancies found during the search.

The Tribunal remitted the issue of ALP determination for certification services back to the TPO/AO for fresh adjudication. Corporate tax grounds related to revenue recognition were dismissed, while grounds on TDS credit were directed for fresh consideration. The deduction under Section 10A was allowed as claimed by the assessee.

The Tribunal remitted the issue of ALP determination for certification services back to the TPO/AO for fresh adjudication. Corporate tax grounds related to revenue recognition were dismissed, while grounds on TDS credit were directed for fresh consideration. The deduction under Section 10A was allowed as claimed by the assessee.

The Tribunal allowed the assessee's appeal on the disallowance under Section 14A, club services, and telecommunication expenses, following its own previous decisions. The Revenue's appeal was dismissed on all grounds.

The Tribunal permitted the assessee to withdraw its appeal. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal allowed the assessee's appeal on the disallowance under Section 14A, club services, and telecommunication expenses, following its own previous decisions. The Revenue's appeal was dismissed on all grounds.

The Tribunal held that the assessment for AY 2004-05 was already concluded under Section 143(3) and the search action did not unearth any incriminating material. Therefore, the assessment framed under Section 143(3) read with Section 153A could not stand.

The Tribunal remitted the issue of ALP determination for certification services back to the TPO/AO for fresh adjudication. Corporate tax grounds related to revenue recognition were dismissed, while grounds on TDS credit were directed for fresh consideration. The deduction under Section 10A was allowed as claimed by the assessee.

The Tribunal upheld the CIT(A)'s decision to exclude telecommunication expenses from both export and total turnover for Section 10A deduction, citing Supreme Court affirmation of the jurisdictional High Court's ruling. The Tribunal also dismissed the Revenue's grounds regarding the exclusion of specific companies as comparables for transfer pricing.

The Tribunal held that the loss could not be allowed as a business deduction because it was not properly written off in the profit and loss account and balance sheet. The assessee still held a hope of recovery, and the issue had not reached finality.

The Tribunal confirmed the deletion of disallowance made under Section 40(a)(ia) for payments made to NPCI, following its own prior decisions. Other issues related to Section 115JB were restored to the CIT(A) for fresh adjudication.

The Tribunal held that the expenses incurred by the assessee were for the purpose of business and should be allowed as a deduction, even if no income was earned in that year. The CIT(A)'s order was upheld.

The Tribunal held that the expenses incurred by the assessee were for the purpose of business and should be allowed as a deduction, even if no income was earned in that year. The CIT(A)'s order was upheld.

The Tribunal upheld the CIT(A)'s decision to exclude certain companies from the comparable list due to functional dissimilarity and to include another company. The Tribunal found that the CIT(A) was justified in excluding companies like E-Zest Solutions, Infosys, and Tata Elxsi based on prior rulings and functional dissimilarity.

The Tribunal held that the CIT(A) failed to consider relevant provisions of the Income Tax Act concerning the discontinuance of business or dissolution of companies. The impugned orders were set aside, and the issues were restored to the CIT(A) for fresh examination.

The Tribunal held that the disallowance under Section 40A(3) was wrongly applied to receipts/deposits and should only apply to expenditure. It upheld the CIT(A)'s estimation of income as a correct course of action in the absence of clear identification of expenditure.

The Tribunal held that the disallowance under Section 40A(3) was wrongly applied to receipts/deposits and should only apply to expenditure. It upheld the CIT(A)'s estimation of income as a correct course of action in the absence of clear identification of expenditure.

The tribunal restored the issue of repairs and maintenance expenses to the AO for verification of 32 items. It directed the AO to allow depreciation on amounts held capital in nature and allowed deduction under Section 80G for CSR payments. The claim for education cess deduction was rejected.

The Tribunal held that the CIT(A) failed to consider relevant provisions of the Income Tax Act concerning the discontinuance of business or dissolution of companies. The impugned orders were set aside, and the issues were restored to the CIT(A) for fresh examination.

The Tribunal held that the AO and CIT(A) did not dispute the source of accretions to the capital account as disclosed in the belatedly filed returns. Therefore, the case was remanded to the AO for fresh consideration.

The Tribunal held that the Assessing Officer was not justified in valuing the closing stock of dump material at the same rate as good stock, especially when the assessee consistently treated its realizable value as nil. The addition made on this account was therefore deleted.

The Tribunal held that the employee's contribution paid before the due date for filing the return of income under Section 139(1) is allowable as a deduction. The amendment by the Finance Act, 2021, to Section 36(1)(va) and Section 43B was considered prospective and not applicable to the relevant assessment years.

The Tribunal held that the Assessing Officer was not justified in valuing the closing stock of dump material at the same rate as good stock, especially when the assessee consistently treated its realizable value as nil. The addition made on this account was therefore deleted.