ITAT Bangalore Judgments — August 2022

The Tribunal held that the PCIT's order under Section 263 was not properly exercised. The AO's inquiry was deemed proper and the view taken was a possible and pragmatic one, and the PCIT could not substitute their view for the AO's. The Tribunal also noted that issues not mentioned in the show cause notice could not be taken up without proper notice.

The tribunal noted that the assessee did not press the grounds of appeal. Consequently, the appeal was dismissed as not pressed.

The Tribunal held that for Section 263 to apply, the order must be both erroneous and prejudicial to the revenue. Since the AO had already made the disallowance, the order was not prejudicial to the revenue, even if the AO's action was questionable regarding the AAR proceedings.

The Tribunal found that the PCIT had confused the HUF's property with the individual property of Mr. Shivanna. The HUF owned only one commercial property, not multiple residential properties. Therefore, the PCIT's direction to re-examine the Section 54F deduction based on owning multiple residential properties was set aside.

The Tribunal held that the assessee satisfied the conditions for exemption from penalty under section 271AAA(2). The assessee had offered undisclosed income in the statement recorded under section 132(4) and paid the tax on it. The Tribunal also noted that the AO did not specifically query the manner of derivation of income and rejected the assessee's reply without consideration.

The Tribunal held that the AO failed to conduct necessary inquiries regarding the genuineness of sundry creditors and the excess PF contribution. The PCIT correctly exercised revisional jurisdiction as the assessment order was erroneous and prejudicial to the interest of revenue.

The Tribunal held that the assessee satisfied the conditions for exemption from penalty under section 271AAA(2). The assessee had offered undisclosed income in the statement recorded under section 132(4) and paid the tax on it. The Tribunal also noted that the AO did not specifically query the manner of derivation of income and rejected the assessee's reply without consideration.

The Tribunal noted that the DRP and AO had not thoroughly verified the documents submitted by the assessee. Citing a similar issue in the assessee's own case for a previous AY which was remanded, the Tribunal decided to remand the issue back to the AO for fresh consideration.

The Tribunal found that the appeal before the CIT(A) was dismissed on technical grounds. Given that the original quantum addition was also pending before the CIT(A), the Tribunal remanded the entire issue to the CIT(A) for fresh consideration along with the pending quantum appeal.

The Tribunal held that the addition of Rs. 30 lakh was an accounting correction already included in the Rs. 3.88 crore addition and not a mistake apparent from the record warranting rectification under Section 154.

The Tribunal held that working capital adjustment is necessary for determining the arm's length price and that the denial of such adjustment by the lower authorities was not justified. The issue of working capital adjustment was remitted to the Assessing Officer/Transfer Pricing Officer for re-computation.

The Tribunal held that the PCIT has the power to revise an assessment order even if it was passed pursuant to DRP directions, provided the specific issue was not considered and decided by the DRP. The Tribunal found that the AO had not made any inquiry regarding the assets received free of cost, making the assessment order erroneous.

The Tribunal held that the assessee had collected capitation fees and made unexplained expenditures, thus not being entitled to exemption under Section 11. The penalty appeal was remitted to the CIT(A) for reconsideration.

The Tribunal held that the assessee had collected capitation fees and made unexplained expenditures, thus not being entitled to exemption under Section 11. The penalty appeal was remitted to the CIT(A) for reconsideration.

The Tribunal held that the assessee had collected capitation fees and made unexplained expenditures, thus not being entitled to exemption under Section 11. The penalty appeal was remitted to the CIT(A) for reconsideration.

The Tribunal held that the assessee had collected capitation fees and made unexplained expenditures, thus not being entitled to exemption under Section 11. The penalty appeal was remitted to the CIT(A) for reconsideration.

The Tribunal noted that the issue involved the same scrip (Blue Circle Services Ltd.) and identical arguments as in a previous case decided by a Coordinate Bench. Following that precedent, the Tribunal remanded the case back to the Assessing Officer.

The Tribunal held that the assessee had collected capitation fees and made unexplained expenditures, thus not being entitled to exemption under Section 11. The penalty appeal was remitted to the CIT(A) for reconsideration.

The Tribunal noted that the issue involved the same scrip (Blue Circle Services Ltd.) and identical arguments as in a previous case decided by a Coordinate Bench. Following that precedent, the Tribunal remanded the case back to the Assessing Officer.

The Tribunal held that the assessee had collected capitation fees and made unexplained expenditures, thus not being entitled to exemption under Section 11. The penalty appeal was remitted to the CIT(A) for reconsideration.

The Tribunal held that the assessee had collected capitation fees and made unexplained expenditures, thus not being entitled to exemption under Section 11. The penalty appeal was remitted to the CIT(A) for reconsideration.

The Tribunal held that the Assessing Officer is bound by CBDT instructions and cannot travel beyond the scope of limited scrutiny. Therefore, the Principal CIT was not justified in holding the assessment order erroneous for not considering issues outside the limited scrutiny.

The Tribunal held that the assessee had collected capitation fees and made unexplained expenditures, thus not being entitled to exemption under Section 11. The penalty appeal was remitted to the CIT(A) for reconsideration.

The Tribunal held that the assessee had collected capitation fees and made unexplained expenditures, thus not being entitled to exemption under Section 11. The penalty appeal was remitted to the CIT(A) for reconsideration.

The Tribunal found that the assessee was not granted an adequate opportunity of hearing, violating the principles of natural justice. Therefore, the issue was remanded to the Assessing Officer for de novo consideration with proper opportunity.

The Tribunal found that the evidence filed by the assessee was not considered by the revenue authorities. Therefore, the issue of secondment charges was remanded to the Assessing Officer for reconsideration.

The Tribunal directed the Principal CIT to pass a reasoned order after considering the assessee's submissions and granting a proper opportunity of being heard. The appeal was allowed for statistical purposes.

The Tribunal held that payments made to non-resident attorneys for legal/professional services rendered outside India are not income deemed to accrue or arise in India. Therefore, withholding tax under Section 195 was not mandatory, and the disallowance under Section 40(a)(i) was incorrect.

The Tribunal decided that the foreign exchange fluctuation loss claimed by the assessee on a loan should be allowed as a deduction, following its own prior ruling on identical facts. For other grounds not pressed, they were not adjudicated. For a ground regarding credit for taxes collected at source, the AO was directed to examine it.

The Tribunal noted the assessee's non-compliance but, in the interest of justice, granted one more opportunity. The matter was restored to the AO for fresh consideration after the assessee furnishes necessary documents and submissions.

The Tribunal held that the delay in filing Form 67 is a procedural lapse and not a mandatory condition for disallowing FTC, especially when the DTAA provisions override the Act. The FTC cannot be denied solely for this reason.

The Tribunal held that the CIT(A) disposed of the appeal without granting sufficient opportunity to the assessee and without following principles of natural justice. Therefore, the matter was remitted back to the CIT(A).

The Tribunal held that depreciation on goodwill is an allowable claim under Section 32(1) of the Income-tax Act. The specific issues regarding transfer pricing adjustments were not fully detailed in the provided excerpt, but the depreciation on goodwill was allowed.

The Tribunal held that the disallowance of deductions under sections 35AC and 80G, where payments formed part of CSR, was erroneous. It also directed the Assessing Officer to verify the levy of interest under section 234A.

The Tribunal held that if the assessee deducts and deposits TDS in the subsequent year when invoices are accounted for, the demand under section 201(1) should be cancelled. However, interest under section 201(1A) is leviable due to the delay in deduction and remittance.

The Tribunal upheld the PCIT's order, finding the original assessment order erroneous and prejudicial to revenue. However, it directed the AO to examine the genuineness of cash deposit transactions and the nexus of interest income with the assessee's business activities.

The Tribunal held that the delay in filing Form 67 is a procedural lapse and not a mandatory condition for disallowing FTC, especially when the DTAA provisions override the Act. The FTC cannot be denied solely for this reason.

The Tribunal held that the requirement to file Form 67 is directory, not mandatory, and foreign tax credit cannot be denied for a delay in filing. The issue was remanded to the AO for consideration based on proper verification of supporting documents.

The Tribunal found that the revenue authorities had not considered the evidence filed by the assessee. Consequently, the Tribunal remanded the issue of reimbursements to Infineon Singapore and Germany back to the Assessing Officer for reconsideration.

The Tribunal held that the valuation of preference shares should consider the guidance value of land and building, not just the book value. It further held that the excess premium paid on redemption of preference shares does not constitute 'deemed dividend' under Section 2(22)(d) or 2(22)(e) of the Income Tax Act.

The Tribunal found that the assessee had submitted detailed invoices and sample invoices for the provisions. Since the lower authorities had not factually verified these submissions, the issue was remitted back to the AO for proper examination.

The Tribunal held that the ALP of international transactions must be determined by following prescribed methods and conducting a proper benchmarking study. It also directed the AO/TPO to rectify the computational mistakes made in the interest adjustment.

The Tribunal held that the valuation of preference shares should consider the guidance value of land and building, not just the book value. It further held that the excess premium paid on redemption of preference shares does not constitute 'deemed dividend' under Section 2(22)(d) or 2(22)(e) of the Income Tax Act.

The Tribunal held that expenditure incurred for refurbishing showrooms to make them attractive to customers is revenue expenditure. It also directed the Assessing Officer to ensure no double taxation of income related to trade samples.

The Tribunal held that the PCIT was not justified in setting aside the AO's order. The Rs. 3 crore was offered as business income and not recorded as a cash credit in the books, making Section 68 inapplicable. The AO's inquiry and acceptance of the explanation were deemed sufficient.

The Tribunal held that the assessee had indeed filed the original return within the due date under Section 139(1), and the subsequent revised return did not negate this fact. Therefore, the assessee was entitled to the benefit of Section 115BAA.

The Tribunal found that the CIT(Appeals) had not verified whether the capital balance was correctly reflected in the assessee's books of accounts. Citing a previous decision for a similar issue, the Tribunal remitted the matter back to the Assessing Officer for de novo examination.

The Tribunal found that the Principal CIT's assumption about 'associate members' was factually incorrect. However, it noted that the Assessing Officer had not properly verified the deduction claimed under Section 80P. Therefore, the matter was set aside for fresh assessment.

The Tribunal found the assessee's explanation for scrap sales to be a make-believe story due to the lack of evidence regarding buyers and scrap generation. However, it directed the AO to exclude the scrap sales and related expenses from the Profit and Loss account before making additions.