ITAT Bangalore Judgments — May 2022

The Tribunal held that deferred trade receivables constitute an international transaction. However, it accepted the assessee's prayer to apply the LIBOR rate on a transaction-to-transaction basis and restrict the addition to delays in the previous year relevant to AY 2010-11.

The Tribunal held that interest paid on hedge swaps for repayment of business loans is deductible under Section 36(1)(vii). The appeals were partly allowed.

The Tribunal held that interest paid on hedge swaps for repayment of business loans is deductible under Section 36(1)(vii). The Tribunal also admitted the additional ground regarding DDT, indicating it's a legal issue on existing facts.

The Tribunal held that deferred trade receivables constitute an international transaction. However, it accepted the assessee's prayer to apply the LIBOR rate on a transaction-to-transaction basis and restrict the addition to delays in the previous year relevant to AY 2010-11.

The Tribunal held that the addition made by the AO was arbitrary and based on an approximate figure of impounded stock, lacking proper material. The AO's calculation of sales quantity was also found to be without basis.

The Tribunal held that interest on sticky loans is taxable on accrual basis for assessees following the mercantile system, and the RBI circular regarding NPAs does not override the Income Tax Act. Regarding amortization, the Tribunal found that the assessee failed to provide details of security holding, thus remanding the issue to the AO.

The Tribunal partly allowed the appeals. It confirmed additions where receipts for cash payments did not refer to prior agreements from 1995, but deleted additions where receipts explicitly mentioned agreements from 1995 or were undated.

The Tribunal held that the addition made by the AO was arbitrary and based on an approximate figure of impounded stock, lacking proper material. The AO's calculation of sales quantity was also found to be without basis.

The Tribunal held that the amount received in excess of the capital account balance, which was not substantiated by entries in the assessee's books of accounts as goodwill, is taxable. The assessee's claim that the entire excess was goodwill was not supported by accounting entries.

The Tribunal held that ESOP expenditure is a revenue expenditure deductible under Section 37 and that reimbursements of salary and communication expenses without any profit element are not subject to withholding tax, thus disallowance under Section 40(a)(i) is not warranted.

The Tribunal partly allowed the appeals. It confirmed additions where receipts for cash payments did not refer to prior agreements from 1995, but deleted additions where receipts explicitly mentioned agreements from 1995 or were undated.

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

The Tribunal held that the CIT(A) erred in proceeding ex-parte and refusing to condone the delay in filing the appeal. Considering the Supreme Court's directions on limitation extension due to the Covid-19 pandemic, the assessee's inability to respond to notices was accepted as a reasonable cause. The CIT(A)'s orders were set aside.

The Tribunal held that the CIT(A) erred in proceeding ex-parte and refusing to condone the delay in filing the appeal. Considering the Supreme Court's directions on limitation extension due to the Covid-19 pandemic, the assessee's inability to respond to notices was accepted as a reasonable cause. The CIT(A)'s orders were set aside.

The Tribunal held that Section 43B is applicable only if a deduction is claimed for the sum payable. Since the assessee contended that Service Tax and Excise Duty were not debited to the profit and loss account and thus no deduction was claimed, the matter was remanded to the AO for verification of this fact.

The Tribunal held that negative working capital adjustments should not be made as the assessee did not bear working capital risk. It also confirmed the exclusion of certain companies from the list of comparables based on functional dissimilarity and brand value.

The Tribunal held that training fees paid for services that do not involve the transfer of technology do not constitute 'fees for technical services' under the Act or the DTAA. Consequently, the assessee was not liable to deduct TDS on these payments.

The Tribunal held that the payments were primarily for subscription services and not 'fees for technical services' as they did not 'make available' technology. It also found that the DTAA was applicable upon submission of the tax residency certificate, and Section 206AA was not applicable. The assessee was also held entitled to interest on the refund of TDS.

The Tribunal upheld the CIT(A)'s decision to allow the expenses as revenue expenditure, following the principle of consistency with its own previous orders on identical facts. However, one issue regarding interest on funds invested in a related concern was remanded for fresh consideration.

The Tribunal held that data automation expenses are revenue in nature as they represent usage of software tools rather than acquisition of an asset. It also upheld the exclusion of certain companies from the comparable list in transfer pricing, deeming them functionally dissimilar.

The Tribunal held that the CIT(A) erred in not admitting the additional evidence without recording specific reasons. The matter was remanded back to the Assessing Officer for proper verification of the cancellation deed and bank confirmation.

The Tribunal held that the original provisions of Rule 114E did not include 'co-operative bank', and its insertion from 1.4.2016 created ambiguity. This ambiguity constituted a bonafide belief and reasonable cause under Section 273B for non-compliance.

The Tribunal held that the original provisions of Rule 114E did not include 'co-operative bank', and its insertion from 1.4.2016 created ambiguity. This ambiguity constituted a bonafide belief and reasonable cause under Section 273B for non-compliance.

The Tribunal held that the original provisions of Rule 114E did not include 'co-operative bank', and its insertion from 1.4.2016 created ambiguity. This ambiguity constituted a bonafide belief and reasonable cause under Section 273B for non-compliance.

The Tribunal held that the original provisions of Rule 114E did not include 'co-operative bank', and its insertion from 1.4.2016 created ambiguity. This ambiguity constituted a bonafide belief and reasonable cause under Section 273B for non-compliance.

The Tribunal held that the original provisions of Rule 114E did not include 'co-operative bank', and its insertion from 1.4.2016 created ambiguity. This ambiguity constituted a bonafide belief and reasonable cause under Section 273B for non-compliance.

The Tribunal held that the original provisions of Rule 114E did not include 'co-operative bank', and its insertion from 1.4.2016 created ambiguity. This ambiguity constituted a bonafide belief and reasonable cause under Section 273B for non-compliance.

The Tribunal held that the original provisions of Rule 114E did not include 'co-operative bank', and its insertion from 1.4.2016 created ambiguity. This ambiguity constituted a bonafide belief and reasonable cause under Section 273B for non-compliance.

The Tribunal held that the CIT(A) erred in proceeding ex-parte and refusing to condone the delay in filing the appeal. Considering the Supreme Court's directions on limitation extension due to the Covid-19 pandemic, the assessee's inability to respond to notices was accepted as a reasonable cause. The CIT(A)'s orders were set aside.

The Tribunal held that the CIT(A) erred in proceeding ex-parte and refusing to condone the delay in filing the appeal. Considering the Supreme Court's directions on limitation extension due to the Covid-19 pandemic, the assessee's inability to respond to notices was accepted as a reasonable cause. The CIT(A)'s orders were set aside.

The Tribunal held that the CIT(A) erred in proceeding ex-parte and refusing to condone the delay in filing the appeal. Considering the Supreme Court's directions on limitation extension due to the Covid-19 pandemic, the assessee's inability to respond to notices was accepted as a reasonable cause. The CIT(A)'s orders were set aside.

The Tribunal held that the CIT(A) erred in proceeding ex-parte and refusing to condone the delay in filing the appeal. Considering the Supreme Court's directions on limitation extension due to the Covid-19 pandemic, the assessee's inability to respond to notices was accepted as a reasonable cause. The CIT(A)'s orders were set aside.

The Tribunal held that the CIT(A) erred in proceeding ex-parte and refusing to condone the delay in filing the appeal. Considering the Supreme Court's directions on limitation extension due to the Covid-19 pandemic, the assessee's inability to respond to notices was accepted as a reasonable cause. The CIT(A)'s orders were set aside.

The Tribunal held that the CIT(A) erred in proceeding ex-parte and refusing to condone the delay in filing the appeal. Considering the Supreme Court's directions on limitation extension due to the Covid-19 pandemic, the assessee's inability to respond to notices was accepted as a reasonable cause. The CIT(A)'s orders were set aside.

The Tribunal held that data automation expenses are revenue in nature as they represent usage of software tools rather than acquisition of an asset. It also upheld the exclusion of certain companies from the comparable list in transfer pricing, deeming them functionally dissimilar.

The Tribunal held that the original provisions of Rule 114E did not include 'co-operative bank', and its insertion from 1.4.2016 created ambiguity. This ambiguity constituted a bonafide belief and reasonable cause under Section 273B.

The Tribunal held that data automation expenses are revenue in nature as they represent usage of software tools rather than acquisition of an asset. It also upheld the exclusion of certain companies from the comparable list in transfer pricing, deeming them functionally dissimilar.

The Tribunal held that data automation expenses are revenue in nature as they represent usage of software tools rather than acquisition of an asset. It also upheld the exclusion of certain companies from the comparable list in transfer pricing, deeming them functionally dissimilar.

The Tribunal held that negative working capital adjustments should not be made as the assessee did not bear working capital risk. It also confirmed the exclusion of certain companies from the list of comparables based on functional dissimilarity and brand value.

The Tribunal held that data automation expenses are revenue in nature as they represent usage of software tools rather than acquisition of an asset. It also upheld the exclusion of certain companies from the comparable list in transfer pricing, deeming them functionally dissimilar.

The Tribunal held that data automation expenses are revenue in nature as they represent usage of software tools rather than acquisition of an asset. It also upheld the exclusion of certain companies from the comparable list in transfer pricing, deeming them functionally dissimilar.

The Tribunal held that data automation expenses are revenue in nature as they represent usage of software tools rather than acquisition of an asset. It also upheld the exclusion of certain companies from the comparable list in transfer pricing, deeming them functionally dissimilar.

The Tribunal held that a concluded assessment cannot be disturbed under Section 153A unless there is incriminating material found during the search that contradicts the finalized assessment. Since no such material was found regarding the 80IB claim, the Pr.CIT's order under Section 263 was not justified.

The Tribunal noted that while the issue regarding the levy of penalty under Section 234E for periods prior to June 1, 2015, was covered in favor of the assessee by a High Court judgment, the assessee failed to explain the inordinate delay in filing the appeals before the CIT(A). Therefore, the Tribunal did not condone the delay.

The Tribunal found that the assessee failed to provide sufficient evidence regarding the accounting of these receipts and the recognition of income. Consequently, the Tribunal remitted the entire issue back to the AO for fresh examination.

The Tribunal noted that while the issue regarding the levy of penalty under Section 234E for periods prior to June 1, 2015, was covered in favor of the assessee by a High Court judgment, the assessee failed to explain the inordinate delay in filing the appeals before the CIT(A). Therefore, the Tribunal did not condone the delay.

The Tribunal, in a miscellaneous petition, rectified its earlier order. It held that there was a direct nexus between the borrowed funds and the interest earned from the CGDA scheme, and therefore, the interest paid was deductible under Section 57(iii).

The ITAT held that the loss of materials due to pilferage was a capital loss and not a revenue loss, thus upholding the disallowance. However, the ITAT allowed the CSR expenses, finding that the relevant explanation to Section 37 was not applicable for the assessment years under appeal.

The ITAT held that the loss of materials due to pilferage was a capital loss and not a revenue loss, thus upholding the disallowance. However, the ITAT allowed the CSR expenses, finding that the relevant explanation to Section 37 was not applicable for the assessment years under appeal.