ITAT Bangalore Judgments — July 2024

The Tribunal held that Section 43CA is applicable to the owner of the asset, not a confirming party in sale deeds. The Pr. CIT wrongly assumed jurisdiction under Section 263 as the assessee was not the owner of the land at the time of transfer, and the sale deeds were executed by another entity.

The Tribunal noted that CBDT circulars have extended the timeline for filing Form 10AB, considering the genuine hardship faced by charitable institutions. Therefore, the issue of condoning the delay in filing Form 10B was remitted to the CIT(A) for consideration as per CBDT circulars and in accordance with law.

The Tribunal, referencing previous decisions of the Coordinate Bench and the Apex Court's ruling in Mavilayi Service Co-operative Bank Ltd., held that the definition of 'member' should be considered in light of the respective co-operative societies' bye-laws. Since the authorities below did not discuss the bye-laws, the matter was restored to the AO for fresh adjudication.

The Tribunal held that the issue of including excise duty in turnover for determining the tax rate is debatable and cannot be resolved under Section 143(1). Therefore, the adjustment made by the revenue was not sustainable.

The Tribunal, referencing previous decisions of the Coordinate Bench and the Apex Court's ruling in Mavilayi Service Co-operative Bank Ltd., held that the definition of 'member' should be considered in light of the respective co-operative societies' bye-laws. Since the authorities below did not discuss the bye-laws, the matter was restored to the AO for fresh adjudication.

The Tribunal held that the PCIT (Central) lacked the jurisdiction to cancel the registration. Furthermore, it was found that the cancellation was applied retrospectively and based on provisions that were not applicable to the assessment year in question. The Tribunal referred to several judicial precedents to support its decision.

The Tribunal condoned the delay in filing the appeal. Considering the interest of justice and the assessee's claim of non-service of notices, the matter was remitted back to the CIT(A) for fresh consideration.

The Tribunal held that the term 'otherwise' in Section 269SS, when interpreted using the doctrine of Ejusdem Generis, does not extend to include 'sale consideration'. Therefore, the receipt of cash as sale consideration did not violate Section 269SS.

The Tribunal held that the assessment order is illegal and unsustainable because the AO failed to issue a notice under Section 143(2) after the assessee requested her original return be treated as a response to the Section 148 notice. The non-issuance of this notice is considered fatal to the assessment.

The Tribunal held that the AO cannot change the method of valuation adopted by the assessee. The AO can scrutinize the valuation report but must use the same method if a fresh valuation is required. The Tribunal also noted a prior transaction between independent parties at the same valuation.

The Tribunal held that the Assessing Officer (AO) and Dispute Resolution Panel (DRP) erred in framing the assessment concerning the transfer pricing adjustments. For the first issue, applying the ratio of the co-ordinate bench's decision in the assessee's own case, the Tribunal found that the assessee is a subsidiary distributor selling products without value addition. Therefore, the Revenue Tarifi (RPM) method is the most appropriate method and should be preferred over the Transactional Net Margin Method (TNMM). The Tribunal set aside the AO's order and directed the AO/TPO to adopt RPM for trading activities and CPM (Cost Plus Method) for the manufacturing unit, restoring the matter to the AO for fresh decision. For the second issue concerning AMP expenses, the Tribunal relied on the co-ordinate bench's decision in Apple India Private Limited v. DCIT and other precedents, holding that for TP adjustment on AMP expenses, an arrangement for brand building between the assessee and its AE must exist, with the burden on the revenue. As no such arrangement was demonstrated and the distribution segment margin was accepted as arm's length, the adjustment for AMP expenses was deleted. The grounds related to TP adjustments (Ground Nos. 11-18) were allowed for statistical purposes, and grounds related to AMP expenses were allowed.

The Tribunal admitted the additional ground raised by the assessee concerning the absence of transactions with certain contractors in AYs 2013-14 and 2015-16. The Tribunal reasoned that all facts were on record, no fresh investigation was required, and the assessee's action was bona fide, relying on the judgment in NTPC Vs. CIT. Consequently, the Tribunal decided that if there were indeed no transactions with these contractors as narrated in the assessment order, no addition could be made, and this ground should be sent back to the AO for consideration. The Tribunal also accepted the assessee's application to admit additional evidences under Rule 29, citing the same reasoning that the facts were on record and no fresh investigation was needed. The judgment indicates that these additional evidences, along with the additional ground, are to be considered for adjudication, implying a potential re-examination of the additions made by the AO. The specific findings on the merits of the additional ground and the impact of the admitted evidence are not fully detailed in the provided excerpt, but the direction suggests a remand or further consideration by the AO.

The Tribunal held that the issue in dispute, concerning additions based on statements recorded under Section 132(4)/131(1A) of the Act, including income admitted during search action, should be remitted back to the Assessing Officer (AO). The assessment should be framed solely on the basis of incriminating/seized material found during the search, not on statements recorded or income admitted. This decision is in line with a departmental circular (F.No.286/98/2013(IT) (Investigation.II) dated 18.12.2014). Therefore, the issue is remitted to the AO to frame the assessment in accordance with the law as discussed in the order, specifically referencing the decision in the case of M/s. John Distilleries Pvt. Ltd. The Tribunal did not decide the merits of the additions but directed a re-evaluation based on proper evidence.

The Tribunal admitted the additional ground of appeal raised by M/s. John Distilleries Pvt. Ltd. for AYs 2013-14 and 2015-16. The reasoning was that all necessary facts were already on record, and no fresh investigation was required for adjudication. The Tribunal placed reliance on the Supreme Court's judgment in NTPC Vs. CIT (2009) 229 ITR 383 (SC), stating that the assessee's action was bona fide. The Tribunal also accepted the assessee's application to admit additional evidence under Rule 29 of the ITAT Rules, 1962, for consideration in all the appeals. This evidence included applications, letters, revised computation of income, and copies of bills and vouchers for expenses like 'Promotion-Sales schemes and discounts expenses' and 'Carriage outward expenses'. The Tribunal did not decide the substantive issue regarding the additions made by the AO, as the matter was being remanded for further consideration with the admitted evidence.

The Tribunal noted that while the CIT(A) allowed the claim in part for the assessee, there was a lack of proper consideration of Supreme Court decisions regarding mutuality and Souharda Sahakaris. For interest income, the Tribunal found that the AO/CIT(A) did not verify the claim under Section 80P(2)(d) in light of Supreme Court rulings.

The Tribunal noted that substantial justice had not been rendered to the assessee due to their inability to represent themselves. Therefore, the appeal was remitted back to the Assessing Officer (AO) for a de novo consideration of the issues.

The Tribunal admitted the additional grounds of appeal raised by the assessee. The reasoning was that all the necessary facts were already on record, and no fresh investigation was required for the adjudication of these grounds. The Tribunal placed reliance on the judgment of the Hon'ble Supreme Court in the case of NTPC Vs. CIT (229 ITR 383), which permits admission of additional grounds when no fresh facts need to be investigated and the assessee's action is bona fide. The Tribunal found the assessee's action to be bona fide. The specific finding on the merits of the additional grounds, i.e., whether there were indeed no transactions with the contractors, is not detailed in the provided excerpt, as the focus is on the admission of the grounds and the subsequent filing of additional evidence. The operative direction regarding these specific grounds is to consider them further, as they have been admitted for adjudication.

The Tribunal held that the delay in filing the audit report was a venial technical breach without any malafide intention, especially since the report was made available to the AO before the completion of the assessment. Relying on previous decisions, the Tribunal stated that penalty under section 271B of the Act cannot be levied for such breaches when there is no monetary loss to the revenue.

The Tribunal held that the requirement to file Form 67 before filing the return, as per Rule 128, is directory and not mandatory. Double Taxation Avoidance Agreements (DTAA) override the Act and Rules, and a procedural delay should not disallow the FTC claim. The case was remanded to the AO for fresh consideration.

The Tribunal decided to admit the additional grounds and evidence filed by the assessee, citing the judgment of NTPC Vs. CIT and noting that all facts were on record, requiring no fresh investigation. The Tribunal held that additions made under Section 153A of the Income Tax Act must be based on seized or incriminating material found during the search, not solely on statements recorded under Section 132(4). The Tribunal acknowledged that the admissions of undisclosed income during the search were made on a lumpsum basis due to the voluminous records and lack of verification time. It also noted that the assessee had continuously requested assessments based on books of accounts and evidence. Therefore, the Tribunal directed the AO to re-examine the issue of admitted income and additions made under Section 153A in light of the additional evidence filed by the assessee, determining income solely on the basis of seized material for assessment years 2011-12 to 2016-17. The Tribunal also relied on CBDT Circular F.No.286/98/2013-IT(Inv.II) dated 18.12.2014, emphasizing that admissions should not be obtained under coercion and that third-party statements require proper inquiry and cross-examination.

The Tribunal condoned the delay in filing the appeal, noting that the delay was not attributable to the assessee and was due to a reasonable cause, emphasizing substantive justice over procedural technicalities. The issue of disallowance of deduction u/s 80P was remitted back to the CIT(A) for a decision on merits.

The Tribunal held that income admitted during search cannot be brought to tax solely on the basis of a statement, especially if it contradicts seized material. The issue was remitted back to the Assessing Officer for assessment based on incriminating material.

The Tribunal admitted the additional grounds raised by the assessee, finding that all necessary facts were already on record and no fresh investigation was required for their adjudication. The Tribunal placed reliance on the judgment of the Hon'ble Supreme Court in NTPC Vs. CIT (229 ITR 383) to support its decision, considering the assessee's action to be bona fide. The judgment also details the assessee's application to admit additional evidence under Rule 29, listing various documents like letters, revised computation of income, and copies of bills and vouchers for expenditure under 'Promotion-Sales schemes and discounts expenses' and 'Carriage outward expenses' for different assessment years. The Tribunal's decision on the admission of this additional evidence is not explicitly stated in the provided excerpt, but the context suggests it was considered alongside the additional grounds. The Tribunal also referred to several High Court and Supreme Court judgments concerning the admissibility and weight of seized materials, diary entries, and retracted statements, including cases like Mahabir Prasad Rungta, Roshanlal Sanchiti, CIT Vs. Chetan Das Lachman Das, CIT Vs. T. Rangroopchand Chordia, and H M Esufali H. M. Abdulali. The core reasoning for admitting the additional grounds was the availability of facts on record and the bona fide nature of the assessee's action, aligning with the NTPC judgment.

The Tribunal held that income admitted during search cannot be brought to tax solely on the basis of a statement, especially if it contradicts seized material. The issue was remitted back to the Assessing Officer for assessment based on incriminating material.

The Tribunal noted that the assessee was not granted an opportunity of being heard, which violates the principles of natural justice. Therefore, the Tribunal decided to remit the appeal back to the Ld.CIT(A)/NFAC to decide the issues on merits.

The Tribunal held that income admitted during search cannot be brought to tax solely on the basis of a statement, especially if it contradicts seized material. The issue was remitted back to the Assessing Officer for assessment based on incriminating material.

The Tribunal held that income admitted during search cannot be brought to tax solely on the basis of a statement, especially if it contradicts seized material. The issue was remitted back to the Assessing Officer for assessment based on incriminating material.

The Tribunal held that additions under Section 68 cannot be made for opening balances of unsecured loans brought forward from earlier years. For the loans taken during the current year, the issue was restored to the AO for fresh verification of identity, genuineness, and creditworthiness of the parties.

The Tribunal held that income admitted during search cannot be brought to tax solely on the basis of a statement, especially if it contradicts seized material. The issue was remitted back to the Assessing Officer for assessment based on incriminating material.

The Tribunal held that income admitted during search cannot be brought to tax solely on the basis of a statement, especially if it contradicts seized material. The issue was remitted back to the Assessing Officer for assessment based on incriminating material.

The Tribunal held that income admitted during search cannot be brought to tax solely on the basis of a statement, especially if it contradicts seized material. The issue was remitted back to the Assessing Officer for assessment based on incriminating material.

The Tribunal admitted the additional grounds of appeal filed by M/s. John Distilleries Pvt. Ltd. for adjudication, relying on the Supreme Court's decision in NTPC Vs. CIT, as all facts were on record and no fresh investigation was necessary. The Tribunal also admitted the additional evidence filed under Rule 29 of the ITAT Rules, 1962. The judgment indicates that the core issue regarding the disallowance of expenses under 'Promotion-Sales schemes and discounts expenses' and 'Carriage outward expenses' was remitted back to the file of the AO for reconsideration of the assessee's books of accounts. The Tribunal's reasoning for admitting the additional grounds was that the action of the assessee was bona fide and the facts were already on record. The operative direction for the disputed expenses is a remand to the AO.

The Tribunal condoned the delay in filing the appeal, acknowledging the technical glitches and communication issues raised by the assessee. The Tribunal noted that the CIT(A) had dismissed the appeal ex-parte, overlooking the provisions of section 250(6) of the Act and failing to consider the latest judgment of the Apex Court in the case of Mavilayi Service Co-operative Bank Ltd.

The Tribunal admitted the additional grounds raised by the assessee, relying on the Supreme Court judgment in NTPC Vs. CIT, as all facts were on record and no fresh investigation was required. The Tribunal also admitted the additional evidence filed under Rule 29, considering the circumstances of the case and the search action. Regarding the disallowance of expenses, the Tribunal, after considering the evidence, found that the expenses claimed under 'Promotion-Sales schemes and discounts expenses' and 'Carriage outward expenses' were genuine and supported by bills and vouchers. The Tribunal held that the claim of deduction under Section 43B on a payment basis should be allowed, even if not reported in the tax audit report, as the assessee had provided sufficient evidence. Citing S.R. Koshti Vs. CIT and Sharp Tools, the Tribunal emphasized that legitimate deductions should not be denied due to technicalities or mistakes. Accordingly, the Tribunal set aside the findings of the CIT(A) and directed the AO to delete the additions made. The appeals concerning these issues were allowed in favor of the assessee.

The Tribunal noted that the AO and CIT(A) did not consider relevant CBDT circulars concerning the verification of demonetized cash deposits. The Tribunal decided to remit the issue back to the AO for verification of sales and deposits in accordance with applicable circulars.

The Tribunal decided to admit the additional ground raised by the assessee for AYs 2013-14 and 2015-16. The reasoning was that all the facts were already on record, and no fresh investigation was required. The Tribunal relied on the judgment of the Hon'ble Supreme Court in NTPC Vs. CIT (2009) 318 ITR 1 (SC), stating that the assessee's action was bona fide. The Tribunal also admitted the additional evidence filed by the assessee under Rule 29 of the ITAT Rules, 1962, for AYs 2011-12 to 2013-14. The Tribunal found that the additional evidence, including bills and vouchers for 'Promotion-Sales schemes and discounts expenses' and 'Carriage outward expenses', was necessary for a proper adjudication of the issues. The Tribunal did not explicitly state the finding on the merits of the additional ground or the evidence at this stage, but their admission indicates they will be considered. The operative direction at this juncture is the admission of the additional ground and evidence for further consideration.

The Tribunal admitted the additional grounds raised by the assessee, relying on the Supreme Court judgment in NTPC Vs. CIT (229 ITR 383), as all facts were on record and no fresh investigation was required, deeming the assessee's action bona fide. The Tribunal also considered the applications for admission of additional evidences filed under Rule 29 of the ITAT Rules. The judgment details the extensive list of documents submitted as additional evidence for various assessment years, including applications, letters, revised computations of income, and copies of bills and vouchers for specific expenditure heads. The Tribunal's decision on the merits of these additional evidences and grounds, beyond their admission, is not fully detailed in the provided excerpt, but the intention is to adjudicate them.

The Tribunal held that the issue in dispute, concerning additions based on statements recorded under Section 132(4)/131(1A) of the Act, including income admitted during search action, should be remitted back to the Assessing Officer (AO). The assessment should be framed solely on the basis of incriminating/seized material found during the search, not on statements recorded or income admitted. This decision is in line with a departmental circular (F.No.286/98/2013(IT) (Investigation.II) dated 18.12.2014). Therefore, the issue is remitted to the AO to frame the assessment in accordance with the law as discussed in the order, specifically referencing the decision in the case of M/s. John Distilleries Pvt. Ltd. The Tribunal did not decide the merits of the additions but directed a re-evaluation based on proper evidence.

The Tribunal held that the issue in dispute, concerning additions based on statements recorded under Section 132(4)/131(1A) of the Act, including income admitted during search action, should be remitted back to the Assessing Officer (AO). The assessment should be framed solely on the basis of incriminating/seized material found during the search, not on statements recorded or income admitted. This decision is in line with a departmental circular (F.No.286/98/2013(IT) (Investigation.II) dated 18.12.2014). Therefore, the issue is remitted to the AO to frame the assessment in accordance with the law as discussed in the order, specifically referencing the decision in the case of M/s. John Distilleries Pvt. Ltd. The Tribunal did not decide the merits of the additions but directed a re-evaluation based on proper evidence.

The Tribunal held that voluntary disallowances made by the assessee, which exceeded the exempt income, satisfied the requirements of Section 14A. Therefore, no further disallowance by the AO was warranted.

The Tribunal held that the voluntary disallowance made by the assessee, which exceeded the exempt income, met the requirements of Section 14A. Therefore, no further disallowance by the AO was warranted.

The Tribunal held that if the assessee voluntarily makes a disallowance under Section 14A that exceeds the exempt income, it meets the requirements of the section. The Tribunal also discussed the scope of Section 153A assessments following a search.

The Tribunal followed its own precedent and the jurisdictional High Court's decision, holding that a voluntary disallowance made by the assessee that exceeds the exempt income meets the requirements of Section 14A.

The Tribunal held that if the assessee voluntarily makes a disallowance under Section 14A that exceeds the exempt income, it meets the requirements of the section. The Tribunal also discussed the scope of Section 153A assessments following a search.

The Tribunal held that the voluntary disallowance made by the assessee, which was more than the exempt income, met the requirements of Section 14A. Therefore, no further disallowance by the Assessing Officer was warranted.

The Tribunal held that if the assessee voluntarily makes a disallowance under Section 14A that exceeds the exempt income, it meets the requirements of the section. The Tribunal also discussed the scope of Section 153A assessments following a search.

The Tribunal held that the voluntary disallowance made by the assessee, which exceeded the exempt income, met the requirements of Section 14A. Therefore, no further disallowance by the AO was warranted.

The Tribunal held that the disallowance made by the assessee voluntarily, which exceeded the exempt income, met the requirements of Section 14A. Therefore, no further disallowance by the AO was warranted.

The Tribunal held that if the voluntary disallowance made by the assessee exceeds the exempt income, no further disallowance under Section 14A is warranted. The Tribunal relied on its own previous order and a High Court judgment in similar circumstances.

The Tribunal condoned the delay, holding that substantial justice should be preferred over technicalities and that the assessee had sufficient cause for the delay. The matter was restored to the Assessing Officer for fresh adjudication.