ITAT Bangalore Judgments — July 2024

The Tribunal observed that the assessment order was passed without considering the return of income filed by the assessee, which was submitted before the completion of the assessment. The CIT(A) also upheld the addition without considering the return.

The Tribunal noted that there was an error in the address on the assessment order, suggesting it was not delivered. The CIT-A's action of calling for a remand report indicated an acceptance of the delay. The Tribunal also observed that the assessment was made ex-parte during the COVID period, and the assessee's illiteracy prevented access to online information.

The assessee is eligible for deduction against the interest income earned from cooperative and commercial banks under section 57 of the Act. The tribunal noted that the assessee did not press the ground for deduction under section 80P(2)(d) for interest from cooperative banks. The assessee is also entitled to deduction under section 80P(2)(c) for Rs. 50,000.

The Tribunal noted that while the assessee's behavior of withdrawing and depositing cash between accounts was peculiar, the addition could not be made solely on this basis. Since the revenue did not provide evidence that the withdrawn cash was used for purposes other than re-deposits, the issue was set aside for fresh adjudication.

The Tribunal condoned the delay in filing the appeal. Considering the violation of natural justice and the potential non-adherence to CBDT circulars, the Tribunal remitted the issue back to the Assessing Officer for fresh consideration.

The Tribunal held that the penalty to the extent of Rs. 28,43,830 was not leviable as this income was already disclosed by the assessee before detection. However, for the enhanced income of Rs. 3,98,806, the assessee was liable for penalty under section 270A for underreporting of income, as no cogent reason was provided to challenge this addition.

The Tribunal held that the CIT(A) erred in not considering the assessee's claim for re-computation of deductions, distinguishing it from a new claim. It found that the assessee had made bonafide mistakes in its return and that the time for revised return had expired.

The Tribunal condoned the delay in filing the appeals, considering the COVID period and the medical grounds presented. The Tribunal noted that the assessee also failed to appear during assessment proceedings due to reasonable causes during the COVID period. Thus, the appeals were set aside to the AO for fresh adjudication.

The Tribunal noted that the issue of disallowance of employees' contribution to provident fund paid beyond the due date is settled by the Supreme Court in the Checkmate Services Pvt. Ltd. case. However, the AO was directed to re-verify the returns and consider disallowances only for amounts paid beyond the due date.

The Tribunal condoned the delay in filing the appeal. It held that the cash deposits made during the demonetization period require verification as per CBDT instructions. The issue was remanded to the Assessing Officer for necessary verification.

The Tribunal decided on the issues as follows: Regarding the denial of deduction under section 10AA for residual foreign receipts (AY 2012-13), the Tribunal observed that the assessee relied on RBI approvals and FEMA guidelines allowing utilization of up to 30% of contract value for onsite expenses. The Tribunal noted that this aspect was not discussed by the lower authorities and, following its own prior orders for AY 2006-07 and AY 2013-14, restored the issue to the AO for fresh adjudication. The Tribunal also noted that the foreign exchange loss ground for AY 2010-11 was dismissed as not pressed. For payments made to IBM (GS) (AY 2010-11), the Tribunal found that while the AO and DRP relied on a previous ITAT order for AY 2011-12 where evidence was lacking, the assessee had submitted voluminous evidence for the current year which was not considered. Applying the principle that each year is separate and new facts must be examined, the Tribunal restored this issue to the AO for fresh examination. Regarding payments to non-residents without a PE in India (AY 2012-13 and AY 2010-11), the Tribunal, having decided this issue for AY 2012-13, applied the same reasoning mutatis mutandis to AY 2010-11, restoring the issue to the AO for fresh adjudication. For AY 2016-17, a similar issue under section 40(a)(ia) was also restored to the AO. Concerning the disallowance of expenses under section 37(1) (AY 2012-13 and AY 2010-11), the Tribunal observed that the AO had not deliberated on the reversal of expense provision entries in subsequent years. The Tribunal directed the AO to examine the matter afresh, noting that if amounts are reversed and offered for taxation in the next year, double addition should not be made. The issues related to payments made to IBM Singapore for shrink-wrapped software and assignee-related payments for AY 2012-13 were also restored to the AO for fresh adjudication, following similar reasoning as applied to other issues.

The Tribunal decided on the issues as follows: Regarding the denial of deduction under section 10AA for residual foreign receipts (AY 2012-13), the Tribunal observed that the assessee relied on RBI approvals and FEMA guidelines allowing utilization of up to 30% of contract value for onsite expenses. The Tribunal noted that this aspect was not discussed by the lower authorities and, following its own prior orders for AY 2006-07 and AY 2013-14, restored the issue to the AO for fresh adjudication. The Tribunal also noted that the foreign exchange loss ground for AY 2010-11 was dismissed as not pressed. For payments made to IBM (GS) (AY 2010-11), the Tribunal found that while the AO and DRP relied on a previous ITAT order for AY 2011-12 where evidence was lacking, the assessee had submitted voluminous evidence for the current year which was not considered. Applying the principle that each year is separate and new facts must be examined, the Tribunal restored this issue to the AO for fresh examination. Regarding payments to non-residents without a PE in India (AY 2012-13 and AY 2010-11), the Tribunal, having decided this issue for AY 2012-13, applied the same reasoning mutatis mutandis to AY 2010-11, restoring the issue to the AO for fresh adjudication. For AY 2016-17, a similar issue under section 40(a)(ia) was also restored to the AO. Concerning the disallowance of expenses under section 37(1) (AY 2012-13 and AY 2010-11), the Tribunal observed that the AO had not deliberated on the reversal of expense provision entries in subsequent years. The Tribunal directed the AO to examine the matter afresh, noting that if amounts are reversed and offered for taxation in the next year, double addition should not be made. The issues related to payments made to IBM Singapore for shrink-wrapped software and assignee-related payments for AY 2012-13 were also restored to the AO for fresh adjudication, following similar reasoning as applied to other issues.

The Tribunal condoned the delay in filing the appeal, prioritizing substantive justice over procedural technicalities. The issue regarding the addition made on cash deposits after November 14, 2016, was remanded back to the AO for necessary verification, considering relevant CBDT circulars and granting the assessee an opportunity to be heard.

The Tribunal decided on the issues as follows: Regarding the denial of deduction under section 10AA for residual foreign receipts (AY 2012-13), the Tribunal observed that the assessee relied on RBI approvals and FEMA guidelines allowing utilization of up to 30% of contract value for onsite expenses. The Tribunal noted that this aspect was not discussed by the lower authorities and, following its own prior orders for AY 2006-07 and AY 2013-14, restored the issue to the AO for fresh adjudication. The Tribunal also noted that the foreign exchange loss ground for AY 2010-11 was dismissed as not pressed. For payments made to IBM (GS) (AY 2010-11), the Tribunal found that while the AO and DRP relied on a previous ITAT order for AY 2011-12 where evidence was lacking, the assessee had submitted voluminous evidence for the current year which was not considered. Applying the principle that each year is separate and new facts must be examined, the Tribunal restored this issue to the AO for fresh examination. Regarding payments to non-residents without a PE in India (AY 2012-13 and AY 2010-11), the Tribunal, having decided this issue for AY 2012-13, applied the same reasoning mutatis mutandis to AY 2010-11, restoring the issue to the AO for fresh adjudication. For AY 2016-17, a similar issue under section 40(a)(ia) was also restored to the AO. Concerning the disallowance of expenses under section 37(1) (AY 2012-13 and AY 2010-11), the Tribunal observed that the AO had not deliberated on the reversal of expense provision entries in subsequent years. The Tribunal directed the AO to examine the matter afresh, noting that if amounts are reversed and offered for taxation in the next year, double addition should not be made. The issues related to payments made to IBM Singapore for shrink-wrapped software and assignee-related payments for AY 2012-13 were also restored to the AO for fresh adjudication, following similar reasoning as applied to other issues.

The Tribunal decided on the issues as follows: Regarding the denial of deduction under section 10AA for residual foreign receipts (AY 2012-13), the Tribunal observed that the assessee relied on RBI approvals and FEMA guidelines allowing utilization of up to 30% of contract value for onsite expenses. The Tribunal noted that this aspect was not discussed by the lower authorities and, following its own prior orders for AY 2006-07 and AY 2013-14, restored the issue to the AO for fresh adjudication. The Tribunal also noted that the foreign exchange loss ground for AY 2010-11 was dismissed as not pressed. For payments made to IBM (GS) (AY 2010-11), the Tribunal found that while the AO and DRP relied on a previous ITAT order for AY 2011-12 where evidence was lacking, the assessee had submitted voluminous evidence for the current year which was not considered. Applying the principle that each year is separate and new facts must be examined, the Tribunal restored this issue to the AO for fresh examination. Regarding payments to non-residents without a PE in India (AY 2012-13 and AY 2010-11), the Tribunal, having decided this issue for AY 2012-13, applied the same reasoning mutatis mutandis to AY 2010-11, restoring the issue to the AO for fresh adjudication. For AY 2016-17, a similar issue under section 40(a)(ia) was also restored to the AO. Concerning the disallowance of expenses under section 37(1) (AY 2012-13 and AY 2010-11), the Tribunal observed that the AO had not deliberated on the reversal of expense provision entries in subsequent years. The Tribunal directed the AO to examine the matter afresh, noting that if amounts are reversed and offered for taxation in the next year, double addition should not be made. The issues related to payments made to IBM Singapore for shrink-wrapped software and assignee-related payments for AY 2012-13 were also restored to the AO for fresh adjudication, following similar reasoning as applied to other issues.

The Tribunal noted that in the case of the assessee's son, who was a joint purchaser, the AO had accepted similar contentions. The Tribunal opined that the revenue cannot take a different view for different parties involved in the same transaction.

The Tribunal noted that both the assessment and CIT(A) orders were ex-parte. The assessee's counsel explained that the assessee, a senior citizen, had undergone eye surgery and could not attend hearings. Considering the interest of justice, the Tribunal decided to remit the issue back to the AO for fresh consideration.

The Tribunal held that the payments received by the assessee were commission on sales and marketing services and did not qualify as FTS under Section 9(1)(vii) of the Income Tax Act. Therefore, the income was not taxable in India.

The Tribunal held that the dismissal of the appeal by the NFAC for non-payment of advance tax was not justified, especially when the assessee disputed the addition and claimed the sale was of agricultural land. The stipulation regarding payment of tax before filing an appeal is directory, not mandatory. The assessment order was vacated, and the issues were restored to the AO for fresh examination.

The Tribunal held that the dismissal of the appeal by the NFAC for non-payment of advance tax was not justified, especially when the assessee disputed the addition and claimed the sale was of agricultural land. The stipulation regarding payment of tax before filing an appeal is directory, not mandatory. The assessment order was vacated, and the issues were restored to the AO for fresh examination.

The Tribunal held that the dismissal of the appeal by the NFAC for non-payment of advance tax was not justified, especially when the assessee disputed the addition and claimed the sale was of agricultural land. The stipulation regarding payment of tax before filing an appeal is directory, not mandatory. The assessment order was vacated, and the issues were restored to the AO for fresh examination.

The Tribunal held that the payments received by the assessee were commission on sales and marketing services and did not qualify as FTS under Section 9(1)(vii) of the Income Tax Act. Therefore, the income was not taxable in India.

The Tribunal held that the AO's estimation of agricultural expenditure at 30% of gross agricultural income and subsequent addition to income from other sources was based on assumptions and surmises without substantial material evidence. The tribunal found no inconsistency in the assessee's claim and found that the authorities failed to discharge their duties properly.

The Tribunal held that the dismissal of the appeal by the NFAC for non-payment of advance tax was not justified, especially when the assessee disputed the addition and claimed the sale was of agricultural land. The stipulation regarding payment of tax before filing an appeal is directory, not mandatory. The assessment order was vacated, and the issues were restored to the AO for fresh examination.

The Tribunal acknowledged the NCLT's order, which provided relief from all income-tax dues and liabilities for the corporate debtor. Consequently, the Tribunal decided to remit the issue to the Assessing Officer (AO) to pass an order in accordance with the NCLT's directions and give effect accordingly.

The Tribunal held that income from saplings and seedlings grown in a nursery is agricultural income and exempt under Section 10(1). However, due to incomplete details regarding sales provided to the AO, the matter was remanded for fresh examination.

The Tribunal held that interest earned on investments cannot be treated as operational income eligible for deduction under Section 80P(2)(a)(i). However, it directed the AO to verify eligibility for deduction under Section 80P(2)(d) for interest earned from cooperative societies and to allow relief under Section 57 if the income is taxed as 'income from other sources'.

The Tribunal condoned the delay and allowed the assessee one more opportunity to represent the case before the Assessing Officer. The Tribunal emphasized that income should be calculated as per law, even if the assessee is uncooperative.

The Tribunal remitted the issue of unexplained deposits during demonetization to the AO for re-examination. Additions related to a project not in the assessee's name and a protective addition based on a statement were deleted.

The Tribunal remitted the issue of unexplained deposits during demonetization to the AO for re-examination. Additions related to a project not in the assessee's name and a protective addition based on a statement were deleted.

The Tribunal remitted the issue of unexplained deposits during demonetization to the AO for re-examination. Additions related to a project not in the assessee's name and a protective addition based on a statement were deleted.

The Tribunal held that additions cannot be made solely on the basis of a sworn statement recorded under Section 132(4) of the Income Tax Act, 1961, without corroborative independent evidence. The assessee failed to produce partners or provide detailed cash flow statements to substantiate the cash introductions.

The Tribunal held that the addition under Section 68 was not sustainable solely on the basis of a sworn statement without corroborative material. The AO failed to produce the partners who allegedly made the cash investments and provide supporting evidence.

The Tribunal held that while sworn statements can be evidence, they require corroboration. The assessee's failure to produce partners and supporting documents weakened their case, but the addition solely on the basis of sworn statements without independent corroboration was not sustainable.

The Tribunal held that a statement recorded under Section 132(4) of the Income Tax Act cannot be the sole basis for making an addition. There must be corroborative material or evidence to support the admission made in the statement.

The Tribunal held that additions cannot be made solely on the basis of a sworn statement recorded under Section 132(4) without corroborative evidence. The assessee's failure to produce partners or cash flow statements did not automatically validate the addition.

The Tribunal held that additions cannot be made solely on the basis of a sworn statement recorded under Section 132(4) of the Income Tax Act, 1961, without corroborative independent evidence. The assessee failed to produce partners or provide detailed cash flow statements to substantiate the cash introductions.

The Tribunal held that additions under Section 153A cannot be made solely on the basis of loose sheets found during a search without corroborative evidence. Assessments must be based on unearthed material and completed assessments cannot be reopened without such material.

The Tribunal remitted the issue of unexplained deposits during demonetization to the AO for re-examination. Additions related to a project not in the assessee's name and a protective addition based on a statement were deleted.

The Tribunal noted that this was the assessee's first assessment year and it was conducted in a faceless mode, leading to a lack of awareness of procedural aspects. The assessee pleaded for another opportunity to present their case with supporting documents. The Tribunal found it appropriate to remand the issue to the AO for fresh consideration.

The Tribunal held that interest income from investments cannot be treated as operational income eligible for deduction under Section 80P(2)(a)(i). However, it directed the AO to verify and grant deduction under Section 80P(2)(d) for interest earned from investments made with cooperative societies, as per Supreme Court's ruling. If interest from banks is treated as 'Income from other sources', relief under Section 57 of the Act is to be granted.

The Tribunal noted that the AO primarily questioned payments made without bills, but the assessee explained that payments were based on contract certificates and MOUs, with TDS deducted. The Tribunal also referred to a similar case (CIT Vs. SPL Infrastructure Pvt. Ltd.) where a partial disallowance was upheld due to lack of proper evidence. However, for the cessation of liability issue, the Tribunal ruled that since the assessee hadn't written off the debt, it couldn't be considered cessation under Section 41(1).

The Tribunal held that the disallowance of provisions for NPA and Farmers Reserve should be treated as business income. Consequently, the deduction under Section 80P(2)(a) should be granted on the assessed income, which includes these disallowed provisions, rather than on the returned income.

The Tribunal held that the disallowance under Section 14A cannot exceed the exempt income earned during the relevant assessment year. The AO was directed to restrict the disallowance accordingly.

The Tribunal condoned the delay of 399 days, acknowledging the affidavit filed by the assessee's Finance Head who is elderly and not tech-savvy, and suggesting the order might have gone to spam. The Tribunal noted that the CIT(A) dismissed the appeal without delving into its merits, which Section 250(6) of the Act mandates.

The Tribunal held that for the addition related to the Joint Development Agreement, the issue should be remitted to the AO for further inquiry, including cross-examination. For other additions based on seized material, the Tribunal applied the ratio of a previous order and remitted the issues to the AO.

The Tribunal, following the decision of the Apex Court in Mavilayi Service Co-Operative Bank Ltd. and coordinate benches, restored the issue of deduction under Section 80P to the AO for fresh examination. The AO is directed to decide the allowance of cost of funds under Section 57 of the Act in accordance with law.

The Tribunal noted that income cannot be taxed twice. In the interest of justice, the assessee was given an opportunity to produce evidence before the AO.

The Tribunal held that for the addition related to the Joint Development Agreement, the issue should be remitted to the AO for further inquiry, including cross-examination. For other additions based on seized material, the Tribunal applied the ratio of a previous order and remitted the issues to the AO.

The Tribunal upheld the disallowance of purchase expenditure, agreeing with the Assessing Officer and CIT(A) that the assessee failed to provide valid proof for the purchases. The Tribunal noted that the handmade vouchers lacked essential details, making verification impossible.