ITAT Bangalore Judgments — March 2022

The Tribunal noted that the CIT(A) deleted the addition based on unelaborated confirmation letters. Therefore, the Tribunal set aside the issue back to the CIT(A) for a detailed verification of the evidence filed.

The Tribunal held that the ratification by the Board of Approval relates back to the date of the Development Commissioner's approval, making the assessee eligible for Section 10B deduction. However, the deduction is only for income earned from the manufacturing segment, not R&D.

The Tribunal allowed the provision for warranty expenses as a deduction, following its own previous orders. For Section 14A, it deleted the disallowance related to interest expenditure as the assessee had sufficient interest-free funds, and restored the disallowance related to other expenses to the AO for re-determination.

The Tribunal allowed the provision for warranty expenses as a deduction, following its own previous orders. For Section 14A, it deleted the disallowance related to interest expenditure as the assessee had sufficient interest-free funds, and restored the disallowance related to other expenses to the AO for re-determination.

The Tribunal held that the employees' contribution to PF and ESI, if paid before the due date of filing the return of income under Section 139(1), is eligible for deduction. The amendment brought by the Finance Act, 2021, to Sections 36(1)(va) and 43B was held to be prospective and not applicable to the assessment year in question.

The Tribunal upheld the denial of exemption under Section 11. It found that the trust's primary activity was renting out the Kalyana Mandapa on a commercial basis, and there was no evidence of income being applied for other stated charitable purposes.

The Tribunal found that the assessee failed to provide evidence for the purchase and sale of fruits, which was the basis for the AO's addition. Therefore, the issue needed to be revisited by the AO.

The Tribunal held that working capital adjustment is necessary to bring the tested party and comparable companies on the same footing. It directed the TPO/AO to re-examine the issue of working capital adjustment after providing the assessee an opportunity to be heard.

The Tribunal directed the Assessing Officer to re-verify the details regarding the application of funds, considering the principles laid down by the Karnataka High Court. The issue of denial of exemption was remanded for fresh consideration.

The Tribunal held that certain companies with significantly higher turnover should be excluded from the list of comparables in transfer pricing analysis. It also directed the AO to verify TDS payments for software expenses and allow depreciation accordingly.

The Tribunal held that the demand raised under section 201(1) is liable to be cancelled if TDS was deducted at the time of accounting invoices or making payment in the succeeding year. However, the assessee would be liable to pay interest under section 201(1A) for the delay in deduction/remittance.

The Tribunal held that the assessee cannot be held liable under Section 201(1) if no benefit has accrued to the assessee and if the payee has paid taxes. The AO was directed to verify the payee's tax payment before levying interest.

The Tribunal held that certain companies with significantly higher turnover should be excluded from the list of comparables in transfer pricing analysis. It also directed the AO to verify TDS payments for software expenses and allow depreciation accordingly.

The Tribunal held that the assessee cannot be held liable under Section 201(1) if no benefit has accrued to the assessee and if the payee has paid taxes. The AO was directed to verify the payee's tax payment before levying interest.

The Tribunal held that despite the conversion order, the land continued to be used for agricultural purposes and was classified as agricultural land in revenue records. Therefore, the sale of the land was exempt from capital gains tax.

The Tribunal held that the assessee cannot be held liable under Section 201(1) if no benefit has accrued to the assessee and if the payee has paid taxes. The AO was directed to verify the payee's tax payment before levying interest.

The Tribunal held that the assessee had appeared before the AO and agreed to the additions without raising objections regarding the non-issuance of notice under Section 143(2). Therefore, Section 292BB of the Income Tax Act was applicable, deeming the notice to be duly served. The assessee was precluded from raising this objection later.

The Tribunal held that Section 234E, which levies a fee for delayed filing of TDS statements, cannot be enforced without the machinery provision under Section 200A. The amendment to Section 200A, which enabled the computation and levy of such fees, was held to be prospective, not retrospective.

The Tribunal deleted the transfer pricing adjustment on cost contribution charges, following a coordinate bench decision and holding that CUP was not the appropriate method. For corporate tax disallowances, the Tribunal admitted additional evidence (invoices) and remanded the matter back to the AO for fresh adjudication.

The Tribunal held that the AO had taken a plausible view in estimating the income and allowing deductions, and the PCIT was not justified in initiating revision proceedings on this ground. However, the Tribunal did not find it necessary to interfere with the PCIT's observations regarding the dropping of penalty proceedings.

The Tribunal held that the AO took a plausible view in estimating the income and allowing deductions, and the PCIT was not justified in initiating revision proceedings on this ground. However, the Tribunal found no reason to interfere with the PCIT's observations regarding the dropping of penalty proceedings under Section 271A.

The tribunal held that the assessee failed to explain the delay from the date of the ITAT's order to the filing of the appeal before the CIT(A), which was approximately 10 months. This inaction was considered negligence, and thus, the delay was not condoned.

The Tribunal held that the employees' contribution paid before the due date of filing the return 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 and do not apply to the assessment year in question.

The tribunal held that the assessee failed to explain the delay from the date of the ITAT's order to the filing of the appeal before the CIT(A), which was approximately 10 months. This inaction was considered negligence, and thus, the delay was not condoned.

The tribunal held that the assessee failed to explain the delay from the date of the ITAT's order to the filing of the appeal before the CIT(A), which was approximately 10 months. This inaction was considered negligence, and thus, the delay was not condoned.

The Tribunal held that the non-issuance of a notice under Section 143(2) makes the assessment unsustainable in law. The Tribunal upheld the assessee's contention raised under Rule 27, stating that the assessment order is quashed.

The tribunal held that the assessee failed to explain the delay from the date of the ITAT's order to the filing of the appeal before the CIT(A), which was approximately 10 months. This inaction was considered negligence, and thus, the delay was not condoned.

The tribunal held that the assessee failed to explain the delay from the date of the ITAT's order to the filing of the appeal before the CIT(A), which was approximately 10 months. This inaction was considered negligence, and thus, the delay was not condoned.

The tribunal held that the assessee failed to explain the delay from the date of the ITAT's order to the filing of the appeal before the CIT(A), which was approximately 10 months. This inaction was considered negligence, and thus, the delay was not condoned.

The tribunal held that the assessee failed to explain the delay from the date of the ITAT's order to the filing of the appeal before the CIT(A), which was approximately 10 months. This inaction was considered negligence, and thus, the delay was not condoned.

The tribunal held that the assessee failed to explain the delay from the date of the ITAT's order to the filing of the appeal before the CIT(A), which was approximately 10 months. This inaction was considered negligence, and thus, the delay was not condoned.

The Tribunal held that the assessee's claim regarding gross interest income and corresponding expenditure requires examination by the Assessing Officer. The order of the CIT(A) was set aside and the issue was restored to the file of the AO.

The Tribunal found confusion in the AO's approach, particularly in treating cash balance as a cash credit and making an addition on a protective basis when it wasn't assessed substantively elsewhere. The CIT(A) had deleted the addition, but the Tribunal felt the issue needed fresh examination.

The Tribunal held that disallowance under Section 40(a)(i)/40(a)(ia) does not absolve the assessee from TDS liability under Section 201. However, if TDS is deducted in the subsequent year when payments are made, the demand under Section 201(1) is liable to be cancelled, but interest under Section 201(1A) is payable due to delay.

The Tribunal held that the employees' contribution to PF/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 held that disallowance under Section 40(a)(i)/40(a)(ia) does not absolve the assessee from TDS liability under Section 201. However, if TDS is deducted in the subsequent year when payments are made, the demand under Section 201(1) is liable to be cancelled, but interest under Section 201(1A) is payable due to delay.

The Tribunal found a potential flaw in the TPO's approach of clubbing expenses from unrelated segments. It held that the issue of whether expenses in the Residential Solutions segment were connected to the AE segment was crucial and needed fresh examination.

The Tribunal allowed the exclusion of comparable companies with significantly higher turnover than the assessee, following precedents. It also directed the deletion of negative working capital adjustment, considering the assessee as a captive service provider.

The Tribunal held that the transactions were not in the normal course of business and thus not outside the scope of Section 2(22)(e). It also followed a Special Bench decision that business profits accrue only at the end of the financial year, rejecting the assessee's argument about including current year's profits.

The Tribunal held that the amendments to Sections 36(1)(va) and 43B by the Finance Act, 2021, are not retrospective and do not apply to the assessment years in question. Following the jurisdictional High Court's decision, employees' contribution paid before the due date of filing the return under Section 139(1) is an allowable deduction.

The Tribunal held that working capital adjustment should be allowed as claimed by the assessee, directing the TPO/AO accordingly. It also held that the protective disallowance of management fees under Section 37 needed to be considered afresh.

The Tribunal held that the amendments to Sections 36(1)(va) and 43B by the Finance Act, 2021, are not retrospective and do not apply to the assessment years in question. Following the jurisdictional High Court's decision, employees' contribution paid before the due date of filing the return under Section 139(1) is an allowable deduction.

The Tribunal held that the amendments to Sections 36(1)(va) and 43B by the Finance Act, 2021, are not retrospective and do not apply to the assessment years in question. Following the jurisdictional High Court's decision, employees' contribution paid before the due date of filing the return under Section 139(1) is an allowable deduction.

The Tribunal held that the Dispute Resolution Panel (DRP) erred in sustaining part of the addition without sufficient evidence, placing an undue burden on the assessee. The addition made on the ground that the assessee earned commission on wire transfers was directed to be deleted.

The Tribunal restored the issue of depreciation on the capitalized service payment to the AO for verification of whether depreciation was claimed for income tax purposes. Regarding the loan to the AE, the Tribunal upheld the need for a transfer pricing adjustment but restored the issue to the AO/TPO for re-computation of interest on a time basis.

The Tribunal held that the Dispute Resolution Panel (DRP) erred in sustaining part of the addition without sufficient evidence, placing an undue burden on the assessee. The addition made on the ground that the assessee earned commission on wire transfers was directed to be deleted.

The Tribunal held that working capital adjustment should be allowed as claimed by the assessee, directing the TPO/AO accordingly. It also held that the protective disallowance of management fees under Section 37 needed to be considered afresh.

The Tribunal held that the Profit Level Indicator (PLI) should be OP/Sales, following its own prior ruling. It also ruled that transfer pricing adjustments must be restricted only to transactions with Associated Enterprises (AEs), not the entire segment including non-AE transactions.