ITAT Bangalore Judgments — July 2022

The Tribunal held that the issue of charging interest on outstanding trade receivables should be set aside to the AO/TPO for fresh adjudication. This decision was based on the need to study the impact on the assessee's working capital and whether the transactions could be characterized as international transactions, considering various factors.

The Tribunal partly allowed the revenue's appeal concerning disallowance of bogus expenses, finding that genuineness of payments was not proven for a portion of the amount. For another ground regarding unexplained credits, the Tribunal remitted the issue for fresh verification of its recording in the financial statements.

The Tribunal admitted the additional ground regarding the turnover filter. It also directed the exclusion of three comparables (Killick, Digital Radio Broadcasting Ltd., and Justdial Ltd.) from the list of comparables used for transfer pricing analysis, finding them functionally dissimilar to the assessee's services.

The Tribunal held that the levy of interest under Section 234E for delayed filing of TDS returns prior to June 1, 2015, was not sustainable. This was based on the jurisdictional High Court's decision that Section 200A, as amended, had prospective effect only.

The Tribunal held that the AO's assessment order was erroneous because it failed to conduct adequate inquiries into the assessee's claim for deduction under Section 80-IA, particularly concerning interest receipts and other income. The PCIT was justified in revising the order.

The Tribunal held that the levy of interest under Section 234E for delayed filing of TDS returns prior to June 1, 2015, was not sustainable. This was based on the jurisdictional High Court's decision that Section 200A, as amended, had prospective effect only.

The Tribunal held that the AO had conducted detailed inquiries and applied his mind to the facts, making a plausible assessment. The PCIT's revisionary powers were not justified as the AO's order was not erroneous or prejudicial to the revenue, and the conditions for invoking Section 263 were not met.

The Tribunal held that the CIT was not justified in revising the AO's order under Section 263. The AO had taken a plausible view based on judicial precedents for similar provisions, and the CIT had not demonstrated that this view was unsustainable in law.

The Tribunal held that the levy of interest under Section 234E for delayed filing of TDS returns prior to June 1, 2015, was not sustainable. This was based on the jurisdictional High Court's decision that Section 200A, as amended, had prospective effect only.

The Tribunal held that the sale consideration should be considered as Rs. 789,65,89,269, which is higher than what the assessee offered but lower than the AO's computation. The Tribunal also clarified that liabilities of the company are not deductible for computing the value of shares, but net worth (assets minus liabilities) is considered for valuation.

The Tribunal held that the levy of interest under Section 234E for delayed filing of TDS returns prior to June 1, 2015, was not sustainable. This was based on the jurisdictional High Court's decision that Section 200A, as amended, had prospective effect only.

The Tribunal held that the transfer of property under the JDA did not occur in the earlier assessment year as possession was not legally transferred, and the plan sanction date was questionable. Consequently, the exemption under Section 54F was rightly denied by the AO for the year under consideration.

The Tribunal held that the cash receipt occurred before the amendment to Section 269SS became effective on June 1, 2015. Therefore, the penalty was unwarranted.

The Tribunal condoned the delay of 32 days, finding that it was due to a bonafide belief based on professional advice and not intentional negligence. The matter was remitted back to the CIT(Appeals) for adjudication on merits.

The Tribunal held that an upper turnover filter should be applied to exclude companies with turnover exceeding Rs. 200 crore, following previous rulings. It also directed that working capital adjustments should be allowed as claimed by the assessee, as denying them would render the comparables non-comparable.

The Tribunal directed the AO/TPO to grant working capital adjustment on an actual basis, following a previous order in the assessee's own case for AY 2015-16. Other grounds were dismissed as not pressed.

The Tribunal held that software engineers employed by the assessee fall within the definition of 'workmen' for Section 80JJAA. For transfer pricing issues, certain grounds were directed to be decided afresh by the AO.

The Tribunal held that software engineers employed by the assessee fall within the definition of 'workmen' for Section 80JJAA. For transfer pricing issues, certain grounds were directed to be decided afresh by the AO.

The Tribunal noted that while the assessee had declared substantial income in prior years, they failed to provide a cash/fund flow statement or balance sheet to demonstrate the availability of sufficient funds for the deposits. Therefore, the issue was remitted back to the AO for reconsideration.

The Tribunal held that certain comparables with high turnover should be excluded as they are not similar to the captive service provider assessee. The issue of interest on delayed receivables was set aside to the AO/TPO for fresh determination, considering the impact on working capital and specific case facts.

The Tribunal held that the cash deposits belonged to the firm, Vinay Wines, and the assessee's PAN was inadvertently linked. The AO's order was not erroneous or prejudicial to the revenue, as the explanation and evidence provided by the assessee were considered. Therefore, the PCIT's revision order was set aside.

The Tribunal accepted the assessee's request for withdrawal. Consequently, the appeal filed by the assessee was dismissed as withdrawn.

The Tribunal held that the AO had made detailed inquiries and applied his mind before accepting the assessee's explanation. The PCIT's view that the assessment was erroneous and prejudicial to revenue was not sustainable as the AO's conclusion was a plausible one.

The Tribunal held that ESOP expenditure is a revenue expenditure deductible for business purposes. It also ruled that reimbursements for salary costs of seconded employees and communication expenses to a foreign entity, when made on a cost-to-cost basis without profit, are not FTS or royalty and do not attract TDS obligations.

The Tribunal held that the PCIT failed to satisfy the twin conditions of 'erroneous' and 'prejudicial to the interest of revenue' required for revision under Section 263. The AO had made enquiries and applied his mind, and the PCIT's view was merely a difference of opinion without sufficient material.

The Tribunal directed the exclusion of certain companies from the comparable set based on turnover and related party transaction filters. It also held that depreciation on goodwill arising from amalgamation is allowable, following previous decisions.

The Tribunal held that education cess is not an allowable deduction as it is considered part of the 'tax' under Section 40(a)(ii) of the Income Tax Act, following Supreme Court precedent. The issue of credit for self-assessment tax was restored to the AO for examination.

The Tribunal held that the interest paid on NCDs was at arm's length, following a coordinate bench's decision. Similarly, for RDBs, the Tribunal found that the liability was fixed in INR and the foreign exchange risk was borne by the AE, thus deleting the TP adjustment.

The Tribunal held that the interest paid on NCDs was at arm's length, following a coordinate bench's decision. Similarly, for RDBs, the Tribunal found that the liability was fixed in INR and the foreign exchange risk was borne by the AE, thus deleting the TP adjustment.

The Tribunal held that the interest paid on NCDs was at arm's length, following a coordinate bench's decision. Similarly, for RDBs, the Tribunal found that the liability was fixed in INR and the foreign exchange risk was borne by the AE, thus deleting the TP adjustment.

The Tribunal held that the AO could not alter the WDV of buildings based on a valuation report for a different purpose, and depreciation should be calculated on the WDV as per books. It also held that Section 43B applies only when a deduction is claimed, and since the assessee did not claim a deduction for unpaid service tax, it could not be disallowed.

The Tribunal found that the confirmation from one donor of Rs. 10 lakhs was filed with the appeal form but overlooked by the CIT(Appeals). Therefore, the issue of this specific donation was set aside to the AO for fresh consideration.

The Tribunal held that the principles and methods used by the Settlement Commission for AY 2006-07 to 2011-12, based on the same seized material, were applicable to AY 2005-06. The assessee's income was determined based on the peak credit method, as accepted by the Settlement Commission.

The Tribunal condoned the delay of 32 days, finding that it was not intentional and was due to a bonafide belief based on professional advice. The case was remitted back to the CIT(A) to decide the appeal on merits.

The Tribunal held that the assessee is entitled to the deduction under Section 80P(2)(a)(i). It relied on Supreme Court and Karnataka High Court judgments stating that a co-operative society providing credit facilities to its members is eligible for deduction, and Section 80P(4) is intended to exclude only co-operative banks operating like commercial banks.

The Tribunal held that AMP expenses incurred by the assessee, a licensed distributor, for promoting its products in the ordinary course of business, without an agreement with its Associated Enterprise (AE) for brand development, are not international transactions. The Tribunal also held that expenses incurred for refurbishing retail showrooms to make them attractive for customers are revenue in nature, following its earlier decision.

The Tribunal found that the assessee is entitled to interest under section 244A for the delay in refund. However, due to a procedural issue with the appeal filing, the matter was remitted back to the AO.

The Tribunal held that the interest paid on NCDs was at arm's length, following a coordinate bench's decision. Similarly, for RDBs, the Tribunal found that the liability was fixed in INR and the foreign exchange risk was borne by the AE, thus deleting the TP adjustment.

The Tribunal held that while the interest calculated in the 143(1) intimation was correct up to the date of intimation, the assessee is entitled to interest under section 244A for the period of delay in granting the refund, as per CBDT circular. The issue was remitted back to the AO for reconsideration.

The Tribunal held that the assessee is entitled to the deduction under Section 80P(2)(a)(i). It relied on Supreme Court and Karnataka High Court judgments stating that a co-operative society providing credit facilities to its members is eligible for deduction, and Section 80P(4) is intended to exclude only co-operative banks operating like commercial banks.

The Tribunal condoned the delay of 32 days, finding that it was due to a bonafide belief based on professional advice and not intentional negligence. The matter was remitted back to the CIT(A) to decide the appeal on merits.

The Tribunal, while deprecating the assessee's lack of cooperation, granted one more opportunity in the interest of justice and equity. The issues were restored to the AO for fresh consideration, with directions for the assessee to cooperate and furnish proof for the expenses.

The Tribunal held that cost contribution charges for intra-group services should be aggregated with other international transactions and benchmarked using TNMM, referencing a prior decision in the assessee's own case. The issue of notional interest on receivables was remitted to the TPO/AO for benchmarking the interest rate. The issue of reimbursement of expenses was also remitted to the AO/TPO for consideration of evidence.

The Tribunal deleted the transfer pricing adjustment made towards cost contribution charges, following a coordinate bench decision. It also admitted an additional ground regarding the set-off of brought forward losses and directed the AO to recompute the income accordingly.

The Tribunal held that foreign exchange losses arising from year-end restatement of receivables and EEFC accounts are allowable as per Section 43AA and ICDS VI. The issue of miscellaneous expenditure was remanded back to the Assessing Officer for further verification.

The Tribunal held that the Assessing Officer had verified the details of the capital gains and that the AO's power to examine books of account for Section 115JB computation is limited. Therefore, the PCIT's order was set aside.

The Tribunal found that the CIT(A) passed the order without considering the assessee's online adjournment requests, violating principles of natural justice. Therefore, the case was remitted back to the CIT(A) for fresh consideration.

The Tribunal found that the CIT(A) order was passed ex-parte without the assessee's participation. Therefore, in the interest of justice, the issues were remitted back to the CIT(A) for a fresh decision after providing an opportunity of hearing to the assessee.

The Tribunal held that the AO had made sufficient inquiries and applied his mind to the facts, making a plausible assessment. Therefore, the twin conditions for invoking Section 263 (erroneous and prejudicial to revenue) were not met, and the PCIT's order was not justified.

The Tribunal held that the accumulation of 15% under Section 11(1)(a) should be calculated on gross receipts, not net receipts, following a coordinate bench decision. It also ruled that foreign travel expenses for students and faculty, and outstanding liabilities for expenses incurred within the year, should be treated as application of income.