ITAT Bangalore Judgments — May 2025

The ITAT found that the revenue authorities had not specifically queried the assessee regarding patient selection criteria. Consequently, the tribunal set aside the matter to the CIT (Exemptions) for fresh verification, directing the assessee to submit all necessary details, particularly concerning patient selection criteria.

The Tribunal noted that the appeal was ex parte due to the assessee's non-compliance and could be dismissed on technical grounds. However, to avoid undue hardship, the Tribunal set aside the order and remanded the matter to the AO for fresh adjudication.

The ITAT found that the revenue authorities had not specifically queried the assessee regarding patient selection criteria. Consequently, the tribunal set aside the matter to the CIT (Exemptions) for fresh verification, directing the assessee to submit all necessary details, particularly concerning patient selection criteria.

The Tribunal held that if the reasons for reopening the assessment are found to be incorrect or unsustainable, and no additions are made on those grounds, then the entire reassessment proceedings become infructuous. Any other additions made in such proceedings cannot survive legal scrutiny.

The Tribunal held that the preconditions for issuing search warrants under Section 132(1) of the Income Tax Act were not met, as the department already had knowledge of the bank accounts and the cash deposits. The search was conducted at bank accounts, not at the assessee's premises, and the revenue had other avenues like reassessment proceedings.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that the reassessment proceedings were infructuous and invalid because the Assessing Officer did not challenge the CIT(A)'s deletion of quantum additions. The CIT(A)'s findings, which ran contrary to the reasons for reopening, remained unchallenged.

The Tribunal held that the reassessment proceedings were infructuous and invalid because the Assessing Officer did not challenge the CIT(A)'s deletion of quantum additions. The CIT(A)'s findings, which ran contrary to the reasons for reopening, remained unchallenged.

The Tribunal held that the reassessment proceedings were infructuous and invalid because the Assessing Officer did not challenge the CIT(A)'s deletion of quantum additions. The CIT(A)'s findings, which ran contrary to the reasons for reopening, remained unchallenged.

The Tribunal held that the search action was legally unsustainable as it was based solely on known and admitted bank accounts without any new incriminating material found. Consequently, the proceedings under section 153A and the consequent assessment orders were quashed.

The Tribunal held that interest income earned from statutory deposits mandated by the Karnataka Cooperative Societies Act should be considered operational income eligible for deduction under Section 80P(2)(a)(i). The case was remanded to the AO for fresh adjudication.

The Tribunal set aside the order of the CIT(A) and restored the issue to the file of the AO for fresh adjudication. The AO was directed to verify and reconcile the source of cash deposits with ticket sales and fund transfers, and the assessee was to provide documentary evidence of authorization and fund flow.

The Tribunal set aside both the issue of the demonetization cash deposit and the estimation of business income to the AO for fresh adjudication. The AO is directed to verify the source of the cash deposit with reference to the cash book and explanations. For business income, the AO must recompute business receipts after excluding non-revenue credits and estimate profit using the assessee's average net profit rate from the preceding three assessment years, ensuring the assessee is given a proper opportunity.

The Tribunal condoned the delay of 201 days, considering the assessee's explanation as genuine and the institution's non-profit status. The ex-parte order of the CIT(A) was set aside, and the matter was restored to the Assessing Officer for fresh adjudication.

The Tribunal condoned the delay after finding reasonable cause. The Tribunal set aside the issue to the AO for fresh adjudication, allowing the assessee to file additional evidence, and allowed the appeal for statistical purposes.

The Tribunal admitted the additional evidence filed by the assessee. It reasoned that Rule 29 of the IT Rules, 1963, allows for the admission of additional evidence if the Tribunal requires it for passing orders, for substantial cause, or if the lower authorities failed to provide sufficient opportunity. The Tribunal found that the assessee could not represent her case or produce documents before the AO, and the DRP refused to consider additional evidence submitted late. Therefore, there were good and sufficient reasons to admit the evidence. However, since the AO and DRP had not examined these additional documents, the Tribunal, in the interest of justice and fair play, remitted the entire issue in dispute back to the file of the AO for de-novo consideration. The AO was directed to consider all additional evidence and decide the matter in accordance with the law, granting the assessee a reasonable opportunity of being heard. The assessee was also directed to produce further documents as required by the AO. The appeal was allowed for statistical purposes.

The Tribunal held that the AO and CIT(A) erred in making additions based on 'dumb' documents without proper corroboration. It also noted that the trust's activities were genuine and aligned with its objects, and therefore, exemption under Section 11 could not be denied.

The Tribunal held that the reassessment proceedings were infructuous and invalid because the CIT(A)'s findings, which ran contrary to the reasons recorded for reopening, remained unchallenged by the revenue. Consequently, any additions made by the AO were deleted.

The Tribunal held that the statements recorded during survey and search proceedings have significant evidentiary value. Since the assessee admitted to not maintaining books of accounts and offered the cash deposits as income, the additions made by the AO were upheld.

The Tribunal noted that the assessee admitted to not maintaining books of accounts and offered the cash deposits as unaccounted income. The additions were based on statements recorded during survey and search proceedings, which have evidentiary value.

The Tribunal held that the appeal against the rectification order was not maintainable, as the scope of such an appeal is limited to apparent mistakes, and the assessee was challenging the merits of the addition. The Tribunal clarified that the assessee's proper remedy was to appeal against the original order of the CIT(A) dated June 12, 2024. The appeal was accordingly dismissed, with liberty granted to the assessee to file an appeal against the correct order.

The Tribunal held that the AO could not have invoked Section 115BBE on the survey disclosure as the case was selected for limited scrutiny. It also held that the addition of Rs. 24,00,000 as unexplained cash credit was not justified as the assessee had sufficient cash withdrawals from the bank to cover the tax payment.

The Tribunal held that the department failed to collect proper corroborating information to substantiate the alleged capitation fees. It was also noted that the trust's activities were genuine and in line with its charitable objects, thus exemption under Section 11 should not be denied.

The Tribunal held that Section 56(2)(vii)(b)(ii) is not attracted when the property is acquired in the course of business or as stock-in-trade. The subsequent sale of the developed land and acceptance of business income by the revenue confirmed this.

The Tribunal decided Ground No. 1 (limitation of time) as not argued and dismissed it. Regarding Ground No. 3.2 concerning the upper turnover filter, the Tribunal allowed the assessee's appeal. It held that while the TPO correctly identified the need for an upper turnover filter, the specific filter of Rs. 200 crores is not universally mandated. However, the principle of applying an upper turnover filter to exclude excessively large companies, which can distort comparability analysis, is accepted, citing Bombay High Court in Pentair Water (India) Pvt. Ltd. and Delhi High Court in Agnity. The Tribunal noted that an upper turnover filter is applied to limit the number of comparables and prevent cumbersome analysis. It acknowledged that comparing a 'goliath' with a 'david' distorts the ALP determination. The Tribunal restored the issue to the TPO with a direction to apply an appropriate upper turnover filter in the TP analysis. As the assessee claimed other grounds would become academic if this ground was decided, all other grounds of appeal (Grounds 2, 3.1, 3.3 to 3.6, and 4) were disposed of as dismissed. The operative direction is to remand the issue of the upper turnover filter to the TPO for fresh analysis.

The Tribunal condoned the delay in filing the appeal, finding sufficient cause due to the assessee's reliance on consultants and the lack of proper guidance from lower authorities. The Tribunal also held that the CIT(Appeals) erred in dismissing the appeal for want of prosecution without deciding on merits.

The Tribunal held that acquiring shares leading to ownership of land for educational purposes, and obtaining government recognition for establishing a university, demonstrates the assessee is pursuing its charitable objects. Minor discrepancies in shareholding values do not warrant cancellation of registration.

The Tribunal found that the CPC had committed an arithmetical error by disallowing the same sums twice. One disallowance was made in the initial computation of income (u/s 40A(7) and 40A(9)), and another was made by the CPC during processing. The Tribunal held that this resulted in double addition and was unwarranted.

The Tribunal held that the assessee was not aware of the appellate order being passed until they downloaded it shortly before filing the appeal. Therefore, considering the circumstances, the delay in filing the appeal was condoned, and the appeal was admitted for hearing on its merits.

The Tribunal held that the cash receipt on January 31, 2015, did not violate Section 269SS as the amendment to include 'specified sum' was effective from June 1, 2015. The Tribunal also found that the CIT(A) had erroneously dismissed the appeal on grounds of delay.

The Tribunal acknowledged the assessee's non-responsiveness to the CIT(A)'s notices but, in the interest of justice, allowed the appeal for statistical purposes. The matter was restored to the CIT(Appeals) to decide the issue on merits after providing the assessee with another reasonable opportunity of being heard.

The Tribunal condoned the delay in filing the appeals in the interest of justice. The Tribunal set aside the order of the CIT(A) and restored the matters for considering the issue on merits after giving the assessee one opportunity to appear with supporting documents.

The Tribunal held that the assessee is eligible for deduction under Section 54F. Despite not strictly adhering to the capital gains account scheme, the assessee demonstrated bonafide intent and substantial compliance, especially considering external factors like the COVID-19 pandemic and attachment of bank accounts.

The Tribunal decided the issues as follows: Regarding the delay in filing the return and Form 10-IC, the judgment indicates that the issue of condonation under section 119(2)(b) was raised but the operative part of the order does not explicitly state a finding or decision on this specific ground. However, the final outcome suggests that the appeal was partly allowed, implying some relief or decision on at least one of the grounds. Regarding the interest on delayed receivables, the Tribunal held that the extra credit period allowed to Associated Enterprises (AEs) constitutes an independent international transaction. This decision was based on the reasoning that outstanding sums of invoices are akin to loans advanced by the assessee to foreign AEs, making them international transactions as per the Explanation to Section 92B of the Act. The Tribunal referred to the decision of the Hon'ble Karnataka High Court in PCIT v. AMD (India) Pl. Ltd. and the Bombay High Court in CIT v. Aurionpro Solutions Ltd. It was held that the transaction would have to be looked upon by applying commercial principles, and the interest rate should be determined using the London Inter Bank Offer Rate (LIBOR) plus 2%. The Tribunal concluded that the treatment of interest on deferred receivables was rightly considered as an independent international transaction and benchmarked separately by the revenue authorities. Consequently, this ground of the assessee was dismissed.

The Principal Commissioner (PCIT) initiated revision proceedings under Section 263, holding that the original assessment order was erroneous and prejudicial to the revenue due to lack of proper verification of cash deposit sources. The Tribunal held that the AO had conducted sufficient verification and the revisionary order was not sustainable.

The Tribunal noted that while the assessee did not diligently prosecute the proceedings before the AO and CIT(A), the order of the CIT(A) was cryptic and did not address the merits. Therefore, the Tribunal set aside both the AO's and CIT(A)'s orders and remitted the issue to the AO for fresh consideration, subject to the assessee paying a cost of Rs. 20,000 to the Prime Minister's National Relief Fund.

The Tribunal condoned the delay in filing the appeals in the interest of justice. The Tribunal set aside the order of the CIT(A) and restored the matters for considering the issue on merits after giving the assessee one opportunity to appear with supporting documents.

The ITAT upheld the CIT(A)'s decision, referencing its own previous ruling in the case of Global Star Realtors Private Limited (the vendor), which found no cash element requiring addition from the assessee. Citing Supreme Court precedents (Common Cause and Krutika Land), the ITAT ruled that entries in loose sheets, not being regularly kept books of account, are inadmissible under Section 34 of the Indian Evidence Act and insufficient for additions without corroborative evidence.

The Tribunal noted the assessee's consistent non-response to notices, even after multiple opportunities. However, considering the interest of natural justice and an undertaking from the assessee's counsel to provide evidence if given another chance, the case was remitted back to the Assessing Officer.

The ITAT upheld the CIT(A)'s decision, referencing its own previous ruling in the case of Global Star Realtors Private Limited (the vendor), which found no cash element requiring addition from the assessee. Citing Supreme Court precedents (Common Cause and Krutika Land), the ITAT ruled that entries in loose sheets, not being regularly kept books of account, are inadmissible under Section 34 of the Indian Evidence Act and insufficient for additions without corroborative evidence.