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108 orders · Page 2 of 3
The Tribunal decided the issues as follows: 1. Regarding the notional interest on overdue receivables, the Tribunal noted an identical issue decided by the ITAT Bangalore Bench in ON Semiconductor Technology India Private Limited vs. DCIT. Following that precedent, the Tribunal set aside the issue to the file of the TPO for fresh adjudication. The TPO was directed to examine the factual aspect, including the debtors' holding period of comparables versus the assessee's. If the comparable holding period is higher, no TP adjustment is required. The interest, if any, should be limited to the end of the financial year. This ground was allowed for statistical purposes. 2. Concerning the disallowance of CSR expenses under Section 80G, the Tribunal disagreed with the AO and DRP. It held that expenditure under Sections 30 to 36 are computed under 'Income from Business and Profession', while Section 80G deductions are for 'Total Taxable Income'. Even if CSR payments form part of CSR, they can still be eligible for deduction under Section 80G if they meet the conditions, provided they are not expressly excluded. Denying this benefit would lead to double disallowance. The Tribunal noted that the authorities below had not verified the nature of payments qualifying for exemption under Section 80G and the quantum of eligibility. Therefore, the finding of the DRP was set aside, and the AO was directed to delete the addition, subject to compliance with Section 80G. This ground was allowed for statistical purposes. 3. Regarding the short benefit of TDS, the Tribunal directed the AO to grant the benefit of TDS in toto after necessary verification as per law, as the learned DR did not object. This ground was allowed for statistical purposes.
The Tribunal found sufficient cause for the delay in filing the appeal before the CIT(A), relying on the judgment in Collector, Land Acquisition Vs. MST. Katiji and Others. The delay was condoned, and the matter was restored to the CIT(A) for fresh adjudication.
The Tribunal noted that the addition was made due to the assessee's non-response and exploitation of their background. The Tribunal referred to CBDT Circular No. 14/XL-35 dated 11.04.1955, emphasizing that tax officers should not take advantage of an assessee's ignorance and should assist them in determining correct income. The Tribunal found that the AO erred by considering gross receipts and not verifying the correct income.
The Tribunal held that since the assessee settled its dispute with the competent authority under MAP and accepted the adjustments, the protective additions made by the AO and DRP were not tenable and deserved to be deleted. The confirmed/settled additions under MAP have precedence over protective additions.
The Tribunal held that since the assessee settled its dispute with the competent authority under MAP and accepted the adjustments, the protective additions made by the AO and DRP were not tenable and deserved to be deleted. The confirmed/settled additions under MAP have precedence over protective additions.
The Tribunal held that since the assessee settled its dispute with the competent authority under MAP and accepted the adjustments, the protective additions made by the AO and DRP were not tenable and deserved to be deleted. The confirmed/settled additions under MAP have precedence over protective additions.
The Tribunal held that filing Form 67 is a directory and not a mandatory requirement, and its belated filing does not preclude the claim of FTC. It was also held that Double Taxation Avoidance Agreement (DTAA) provisions prevail over domestic law when beneficial to the assessee.
The Tribunal condoned the delay in filing the appeal after noting a dispute among partners and acknowledging the assessee became aware of the situation after the dismissal of the other year's appeal by CIT(A). However, the Tribunal observed the assessee's consistent non-appearance before lower authorities.
The Tribunal held that the assessee had provided sufficient evidence, including lease agreements and affidavits, to substantiate the existence and operations of the processing unit. The delay in cash deposit was also considered plausible due to religious customs and business closures.
The Tribunal held that the order issued in the name of the deceased person was legally invalid. The Tribunal also noted that an additional document (sale deed) was crucial for resolving the issue but was not considered by the lower appellate authority.
The Tribunal condoned the delay in filing the appeal after noting a dispute among partners and acknowledging the assessee became aware of the situation after the dismissal of the other year's appeal by CIT(A). However, the Tribunal observed the assessee's consistent non-appearance before lower authorities.
The Tribunal held that interest income earned by the assessee from placing surplus funds with co-operative banks is not eligible for deduction under Section 80P(2)(d) as it's not part of the main business activity. The Tribunal also observed that the assessee is entitled to deduction of the cost of funds in this regard.
The Tribunal held that filing Form 67 is a directory and not a mandatory requirement, and its belated filing does not preclude the claim of FTC. It was also held that Double Taxation Avoidance Agreement (DTAA) provisions prevail over domestic law when beneficial to the assessee.
The Tribunal noted that the assessee had provided evidence of GST payment for purchases from M/s Ratan Enterprises, and therefore, these purchases could not be treated as bogus. However, the issue was set aside to the AO for fresh adjudication. For purchases from M/s Royal Enterprises, the Tribunal granted an opportunity to the assessee to provide evidence of GST payment, while also allowing the AO to investigate.
The Tribunal noted that the transaction of sale of software between the assessee and its subsidiary was subject to TPO adjustment, and therefore, the issue of the Indian subsidiary being a dependent agency permanent establishment did not arise. The issue concerning interest on income tax refund was dismissed as covered against the assessee.
The Tribunal observed that the lower authorities had categorically found that the assessee failed to establish the rendition of services by its AE. The Tribunal also noted the assessee's failure to establish itself as the legal and economic employer of secondment employees. While the Tribunal agreed that the benefit test as applied by lower authorities was not relevant and disallowances cannot be made solely on the failure to prove benefit, it remitted the issues back to the AO for fresh examination.
The Tribunal held that the facts of this case are similar to the Overseas Leathers case, where excess cash and stock were considered as business income. The Tribunal distinguished this case from the SVS Oil Mills case, where a survey resulted in different circumstances. The assessee's explanation for the excess cash and stock was not disproved by the revenue.
The Tribunal held that the severance fee received on termination of employment under a compulsory retirement scheme is in the nature of compensation for loss of the source of income and should be treated as a capital receipt, not taxable under the head 'salary'.
The Tribunal quashed the reassessment proceedings, finding that the Assessing Officer failed to establish the necessary jurisdictional facts, specifically the assessee's failure to disclose material facts, as required for reassessment after four years. Consequently, other grounds became infructuous.
The Tribunal held that assets received on a returnable basis for testing, where depreciation is considered in the cost base for remuneration under an Advance Pricing Agreement, do not constitute income under Section 28(iv). The Tribunal also noted that the issue of reimbursement to seconded employees was not an addition made by the AO.
The Tribunal quashed the reassessment proceedings, finding that the Assessing Officer failed to establish the necessary jurisdictional facts, specifically the assessee's failure to disclose material facts, as required for reassessment after four years. Consequently, other grounds became infructuous.
The Tribunal observed that for the assessment year 2018-19, the time limit for issuing a notice under section 148 was March 30, 2022. Although the law permits issuing a notice beyond three years if the escaped income exceeds Rs. 50 lakhs, in this case, the escaped income was admittedly Rs. 12,38,000/-. Therefore, the notice issued under section 148 was barred by limitation.
The Tribunal held that the DRP's and TPO's view that the assessee failed to derive any benefit from intra-group services is not tenable, citing the Delhi High Court decision in EKL Appliances. Regarding the rendition of services, the assessee's counsel undertook to produce all relevant documentary evidence. For the deductions under Sections 10AA and 80JJA, the assessee placed additional evidence on record, to which the revenue did not object. Therefore, the Tribunal decided that these issues require fresh consideration by the AO. Consequently, all these issues (disallowance of payments to AE for services, and Sections 10AA and 80JJA) were remitted to the AO for fresh adjudication. Regarding the royalty issue (Ground No. 9), the Tribunal found no force in the assessee's arguments and dismissed this ground.
The Tribunal held that the assessee had filed the original return and audit report (though in the wrong format) within the extended due date. The subsequent filing of the revised return with the correct audit report in Form 10B was a prompt rectification of an inadvertent error. The authorities below were not correct in denying the exemption based on a procedural technicality.
The Tribunal observed that the CIT(A) issued several notices, but it was unclear if they were served. The CIT(A) dismissed the appeal in limine, ignoring the mandatory provisions of section 250(6) of the Act, which requires a reasoned order on each ground. Therefore, the matter was restored to the file of the CIT(A) for a fresh adjudication.
The Tribunal noted that a previous ITAT order had already remanded the entire issue of cash deposits to the AO for fresh verification. Consequently, the penalty proceedings, which are based on the quantum assessment, cannot sustain if the assessment itself is set aside or remanded.
The Tribunal noted that the assessee has filed a declaration under the Vivad Se Vishwas Scheme and that the appeal would be deemed withdrawn upon receipt of Form-2.
The Tribunal held that the assessee had explained the source of cash deposits with supporting evidence and that the authorities below had not rejected the assessee's books of accounts. Therefore, the addition made under Section 68 was not sustainable.
The Tribunal noted that the assessee has filed a declaration under the Vivad Se Vishwas Scheme and that the appeal would be deemed withdrawn upon receipt of Form-2.
The Tribunal held that the CIT(A) failed to direct the AO to verify if the advances were offered to tax in the subsequent year. This lack of verification created a risk of double addition. Therefore, the Tribunal inferred that the advances were likely offered to tax in the subsequent year and set aside the addition.
The Tribunal observed that the assessee had surplus funds for the disallowance under section 36(1)(iii) and had acted in good faith regarding TDS for section 40(a)(i). The Tribunal also noted that the application for immunity under section 270AA was a procedural compliance and the assessee had substantially complied with tax payments. The penalty was deemed not tenable in law.
The Tribunal dismissed both appeals on the grounds of inordinate delay and lack of sufficient cause for condonation. The assessee failed to provide adequate justification for the extensive delays, and ignorance of law was not accepted as a valid ground.
The Tribunal dismissed both appeals on the grounds of inordinate delay and lack of sufficient cause for condonation. The assessee failed to provide adequate justification for the extensive delays, and ignorance of law was not accepted as a valid ground.
The Tribunal held that the revenue cannot discriminate among co-owners of the same transaction and must adopt a uniform approach. The AO had accepted the cost of acquisition in the husband's case, making it inconsistent to alter it for the assessee.
The Tribunal, in relation to the leave encashment issue (Issue 9), acknowledged that the assessee's claim for leave encashment on a payment basis is legally valid and that the Tribunal has the discretion to entertain new claims not made in the original or revised return, provided they are legal and supported by evidence. The judgment in Goetz India Ltd. was noted to restrict the AO but not the Tribunal. However, for the sake of fairness and justice, the Tribunal decided to remand the matter to the Assessing Officer (AO) for fresh verification of the payment details, supporting documentation, and to ensure the payment was made during the year under consideration. The AO was directed to verify the claim in accordance with the law and pass an appropriate order. The ground of appeal concerning leave encashment was allowed for statistical purposes. The judgment does not explicitly detail the findings on all other grounds raised by the assessee, particularly those concerning AMP expenses, the Bright Line Test, and the trading segment's PLI, as the provided text focuses on the leave encashment issue and concludes with a partial allowance for statistical purposes.
The Tribunal held that suspicion alone cannot replace evidence. The assessee had explained the source of cash deposits by referring to income declared in earlier years, and the revenue failed to provide contrary evidence. The AO's findings were based on assumptions, not concrete evidence.
The Tribunal observed that since the quantum addition, which formed the basis for the penalty, was set aside, the penalty order was no longer sustainable. The penalty proceedings are dependent on the outcome of the fresh assessment ordered by the CIT-A.
The Tribunal noted that online filing is mandatory and that the assessee faced genuine technical difficulties. Considering the short delay and the assessee's charitable nature, the Tribunal condoned the delay.
The Tribunal, in the interest of justice and to uphold principles of natural justice, decided to give the assessee one more opportunity to present its case before the CIT-A. The matter was restored to the CIT-A for fresh adjudication on merits.
The Tribunal held that the services rendered did not qualify as Fees for Technical Services (FTS) under the 'Make Available' clause of the India-US DTAA. However, due to the absence of specific agreement details to justify the indefinite period, the issue was remitted to the AO for fresh adjudication.
The Tribunal admitted the additional grounds regarding dividend distribution tax and directed the AO to re-adjudicate it. The claim for deduction of cess was dismissed. The revenue's appeal regarding provision for doubtful debts was dismissed.
The Tribunal admitted the additional grounds as legal in nature. It directed the AO to re-adjudicate the dividend distribution tax issue and dismissed the claim for deduction of cess as non-allowable due to retrospective amendment.
The Tribunal held that the assessee's explanation for the SBN deposits, which were received from liquor sales during the demonetization period and deposited within the prescribed time, was acceptable. The Tribunal noted that the assessee had accounted for sales and receipts, and the deposits were made according to government guidelines.
The Tribunal held that both the assessee's original TPSR and the TPO's analysis were based on an incorrect characterization of the assessee's business. The assessee imports cable carriers in Semi-Knocked Down (SKD) condition and sells them, thus its business is primarily importing and trading cable carriers, not manufacturing cables as assumed. The comparable companies selected by both parties were engaged in cable manufacturing, which was not related to the assessee's business of cable carriers. The Tribunal noted that the DRP erred in not seeking a remand report or determining the ALP itself when a significant error in business profile characterization was demonstrated. Citing the Aztec Software case, the Tribunal stated that it is required to determine the ALP. However, as the basic information for the current year was not available and the revised TP analysis was not before the TPO, the Tribunal restored the issue back to the file of the learned AO/TPO. The assessee was directed to submit a revised TP analysis, and the TPO was to examine it and determine the ALP. The Tribunal also directed that the TP Order for AY 2021-22 be examined for determining the correct business profile for the current year. Regarding Ground No. 11, the AO was directed to intimate the date of service of the intimation under section 143(1).
The Tribunal observed that the assessee had clearly stated in Form 35 that notices should not be sent via mail and the CIT(A)'s office could not prove that notices were sent via any other mode. The Tribunal also noted that the appeal was decided without addressing the merits, which is contrary to Section 250(6) of the Income Tax Act, 1961.
The Tribunal held that overdue receivables exceeding the agreed period constitute a separate international transaction, akin to providing capital financing. However, the rate of interest applied (SBI PLR) was found to be incorrect as the invoices were raised in foreign currency (Euro). The Tribunal directed the TPO to re-benchmark the interest rate using LIBOR plus an appropriate mark-up, considering the associated risks.
The Tribunal held that the AO's order was passed when the matter was sub-judice before the ITAT, making all consequential proceedings void. Therefore, the appeals arising from this void order were dismissed.
The Tribunal held that the income from the sale of saplings and seedlings is agricultural income exempt under Section 10(1). However, income from maintenance, supply of containers, and transportation charges at customer sites are business income. The matter was remanded to the AO for fresh adjudication.
The Tribunal noted that the assessee had obtained registration under section 12A and applied for 80G approval. Despite opportunities and notices, the assessee could not substantiate its genuine activities with documentary evidence. The Tribunal decided to remit the issue back to the CIT(E) for de novo consideration.
The Tribunal condoned the delay in filing the appeal. It was held that the reliance placed by the AO and CIT(A) on a previous Karnataka High Court judgment was incorrect as it dealt with a different section. The issue of whether interest income is attributable to business activities was restored to the AO for fresh examination.