ITAT Bangalore Judgments — November 2025

The Tribunal held that the issue was covered by its own previous order, where it was established that mere participation in a JDA does not convert a capital asset into stock-in-trade. The amounts received were advances, and no transfer of property had occurred. The Tribunal also found that disallowing genuine business interest expenditure resulted in a timing distortion without any actual revenue impact.

The Tribunal held that the issue was covered by its own previous order, where it was established that mere participation in a JDA does not convert a capital asset into stock-in-trade. The amounts received were advances, and no transfer of property had occurred. The Tribunal also found that disallowing genuine business interest expenditure resulted in a timing distortion without any actual revenue impact.

The Tribunal held that Section 68 requires the existence of books of account for its invocation, which the assessee did not maintain. Therefore, additions under Section 68 were not sustainable. The Tribunal also noted that the source of cash deposits was explained by Shri D.S. Nandish.

The Tribunal held that the Final Assessment Order was passed in violation of Section 144C(3) and (4) of the Act because it was issued before the expiry of the 30-day period for filing objections, thus frustrating the assessee's right to do so. The CIT(A)'s order was also noted to have accepted the assessee's contention regarding the TPO's order being the effective appeal.

The Tribunal held that the cash deposits were explained by the assessee's business receipts and accumulated cash from earlier years, which had been accepted by the department. The addition under section 69A was therefore unsustainable.

The Tribunal condoned the delay in filing the appeal, considering the assessee's explanation reasonable and noting that no prejudice would be caused to the revenue. The Tribunal decided to hear the appeal on merits.

The Tribunal held that the addition made by the AO on account of unexplained investment could not be sustained as the fixed deposits arose from earlier years and were reinvested. However, the Tribunal restored the limited issue of ₹47,34,431 shown in the balance sheet to the AO for verification.

The Tribunal held that the assessee had conceded the income by way of a written letter during assessment proceedings, and this concession could not be challenged later. The Tribunal found the CBDT circular regarding not taking advantage of ignorance inapplicable as the assessee had voluntarily conceded income based on search findings.

The Tribunal held that the asset was held by the co-owners for a short period after distribution from the firm, making the capital gains short-term. The previous holding period of the firm was not considered applicable as it was not a case of succession, inheritance, gift, or partition of HUF.

The Tribunal, in the interest of justice and fair play, granted the assessee one more opportunity to represent their case before the AO, provided they cooperate and avoid adjournments.

The Tribunal held that for the issue of upfront and legal fees, allowing 1/5th of the claim during the year under consideration was incorrect. Following the coordinate bench's decision, which relied on Supreme Court judgments, the Tribunal directed the AO to reverse the 1/5th amount allowed and allow the entire claim. The Revenue's ground on this issue was allowed, and the assessee's cross-objection was dismissed. Regarding the corporate guarantee commission, the Tribunal, respectfully following the coordinate bench's decision which directed the TPO to recompute the commission rate by providing appropriate adjustments, directed the TPO to modify the TP adjustment for the year under consideration as per the Tribunal's directions. The Revenue's ground was dismissed. The assessee's contention that corporate guarantee is not an international transaction was dismissed, following the coordinate bench. For the SBLC commission, the Tribunal, following coordinate bench decisions in the assessee's group case and its own case for AY 2010-11, held that the CIT(A)'s decision to restrict the adjustment to the amount not recharged by the assessee to its AE was correct. The Revenue's ground was dismissed, and the assessee's cross-objection became infructuous. The decision for AY 2014-15 was applied mutatis mutandis to AYs 2015-16 to 2017-18.

The Tribunal condoned the delay of 267 days, finding merit in the assessee's contention that relevant documents were not considered by the CIT(A) due to the non-appearance. The CIT(A)'s order was set aside, and the case was remanded for adjudication afresh after granting the assessee a reasonable opportunity of being heard.

The Tribunal held that for the issue of upfront and legal fees, allowing 1/5th of the claim during the year under consideration was incorrect. Following the coordinate bench's decision, which relied on Supreme Court judgments, the Tribunal directed the AO to reverse the 1/5th amount allowed and allow the entire claim. The Revenue's ground on this issue was allowed, and the assessee's cross-objection was dismissed. Regarding the corporate guarantee commission, the Tribunal, respectfully following the coordinate bench's decision which directed the TPO to recompute the commission rate by providing appropriate adjustments, directed the TPO to modify the TP adjustment for the year under consideration as per the Tribunal's directions. The Revenue's ground was dismissed. The assessee's contention that corporate guarantee is not an international transaction was dismissed, following the coordinate bench. For the SBLC commission, the Tribunal, following coordinate bench decisions in the assessee's group case and its own case for AY 2010-11, held that the CIT(A)'s decision to restrict the adjustment to the amount not recharged by the assessee to its AE was correct. The Revenue's ground was dismissed, and the assessee's cross-objection became infructuous. The decision for AY 2014-15 was applied mutatis mutandis to AYs 2015-16 to 2017-18.

The Tribunal held that it was appropriate in the interest of justice to grant the assessee another opportunity to present their case before the CIT(A). The order of the CIT(A) was set aside, and the matter was remanded for fresh adjudication.

The Tribunal held that for the issue of upfront and legal fees, allowing 1/5th of the claim during the year under consideration was incorrect. Following the coordinate bench's decision, which relied on Supreme Court judgments, the Tribunal directed the AO to reverse the 1/5th amount allowed and allow the entire claim. The Revenue's ground on this issue was allowed, and the assessee's cross-objection was dismissed. Regarding the corporate guarantee commission, the Tribunal, respectfully following the coordinate bench's decision which directed the TPO to recompute the commission rate by providing appropriate adjustments, directed the TPO to modify the TP adjustment for the year under consideration as per the Tribunal's directions. The Revenue's ground was dismissed. The assessee's contention that corporate guarantee is not an international transaction was dismissed, following the coordinate bench. For the SBLC commission, the Tribunal, following coordinate bench decisions in the assessee's group case and its own case for AY 2010-11, held that the CIT(A)'s decision to restrict the adjustment to the amount not recharged by the assessee to its AE was correct. The Revenue's ground was dismissed, and the assessee's cross-objection became infructuous. The decision for AY 2014-15 was applied mutatis mutandis to AYs 2015-16 to 2017-18.

The Tribunal directed the Assessing Officer to delete additions for free of cost assets that were re-exported or destroyed. The disallowance under Section 40(a)(i) was set aside for fresh adjudication. Penalty proceedings were dismissed as premature.

The Tribunal held that if investments made in cooperative banks are out of compulsion under the Karnataka Co-operative Societies Act, then the interest income received would be considered business income eligible for deduction under Section 80P(2)(a)(i). Furthermore, even if not eligible under 80P(2)(a)(i), interest income earned from cooperative banks is eligible for deduction under Section 80P(2)(d) as the assessee is a registered cooperative society and not a banking institution.

The Tribunal held that even after including Cadsys (India) Pvt. Ltd. in the comparable set for the EDS segment, the assessee's margin remained within the arm's length range. Therefore, the revenue's ground for inclusion of Cadsys was allowed, and consequently, the assessee's grounds related to the EDS segment were rendered academic and dismissed. Regarding Nihilent Ltd., the Tribunal, following a coordinate bench decision in Infinion Technologies India Ltd., held that Nihilent Ltd. is not functionally comparable to a company engaged in software development services, and therefore, directed the AO/TPO to exclude it. Similarly, concerning Cybage Software Pvt. Ltd., the Tribunal, respectfully following the decision in Applied Materials India Pvt. Ltd. vs. ACIT, held that the company cannot be included in the list of comparables due to its diversified services and lack of segmental information. The TPO was directed to exclude Cybage Software Pvt. Ltd. The Tribunal directed the TPO to recompute the Arm's Length Price (ALP) as per these directions. The remaining grounds for both the assessee and the revenue were dismissed as academic. The ratio is that functional comparability and availability of segmental information are crucial for selecting comparables in transfer pricing.

The Tribunal held that for the issue of upfront and legal fees, allowing 1/5th of the claim during the year under consideration was incorrect. Following the coordinate bench's decision, which relied on Supreme Court judgments, the Tribunal directed the AO to reverse the 1/5th amount allowed and allow the entire claim. The Revenue's ground on this issue was allowed, and the assessee's cross-objection was dismissed. Regarding the corporate guarantee commission, the Tribunal, respectfully following the coordinate bench's decision which directed the TPO to recompute the commission rate by providing appropriate adjustments, directed the TPO to modify the TP adjustment for the year under consideration as per the Tribunal's directions. The Revenue's ground was dismissed. The assessee's contention that corporate guarantee is not an international transaction was dismissed, following the coordinate bench. For the SBLC commission, the Tribunal, following coordinate bench decisions in the assessee's group case and its own case for AY 2010-11, held that the CIT(A)'s decision to restrict the adjustment to the amount not recharged by the assessee to its AE was correct. The Revenue's ground was dismissed, and the assessee's cross-objection became infructuous. The decision for AY 2014-15 was applied mutatis mutandis to AYs 2015-16 to 2017-18.

The Tribunal noted that a major part of the delay was attributable to the COVID period and directed the CIT(A) to condone this delay in line with Supreme Court rulings. For the remaining delay, considering the assessee's age and educational background, a liberal view was taken, and the delay was condoned with a nominal cost.

The Tribunal upheld the order of the Pr.CIT, agreeing that the disallowance of employee's contribution to PF/ESI was justified as per Supreme Court judgment. The Tribunal also directed verification of TDS deduction on professional services and rent payments.

The Tribunal held that the asset was held by the co-owners for a short period after distribution from the firm, making the capital gains short-term. The previous holding period of the firm was not considered applicable as it was not a case of succession, inheritance, gift, or partition of HUF.

The Tribunal held that the issue was covered by its own previous order, where it was established that mere participation in a JDA does not convert a capital asset into stock-in-trade. The amounts received were advances, and no transfer of property had occurred. The Tribunal also found that disallowing genuine business interest expenditure resulted in a timing distortion without any actual revenue impact.

The Tribunal allowed the revenue's ground for including 'Cadsys (India) Limited' in the comparable list for the EDS segment, noting that even with its inclusion, the assessee's margin remained at ALP. For the software development segment, the Tribunal directed the exclusion of 'Nihilent Ltd.' and 'Cybage Software Pvt. Ltd.' as comparables, following coordinate bench decisions.

The Tribunal held that the Assessing Officer was obligated to record a separate satisfaction note for each assessment year, not a consolidated one, as per the provisions of Section 153C of the Income Tax Act. Relying on a jurisdictional High Court judgment, the assessment framed was deemed unsustainable.

The Tribunal condoned the delay in filing the appeal, acknowledging the assessee's explanation. Considering that the case was decided ex-parte at both lower levels, the Tribunal remitted the issue back to the AO for fresh consideration.

The Tribunal held that the cash deposits were explained by the assessee's business receipts and accumulated cash from earlier years, which had been accepted by the department. The addition under section 69A was therefore unsustainable.

The Tribunal held that the cash deposits were explained by the assessee's business receipts and accumulated cash from earlier years, which had been accepted by the department. The addition under section 69A was therefore unsustainable.

The Tribunal held that the Assessing Officer was obligated to record a separate satisfaction note for each assessment year, not a consolidated one, as per the provisions of Section 153C of the Income Tax Act. Relying on a jurisdictional High Court judgment, the assessment framed was deemed unsustainable.

The Tribunal held that the Assessing Officer was obligated to record a separate satisfaction note for each assessment year, not a consolidated one, as per the provisions of Section 153C of the Income Tax Act. Relying on a jurisdictional High Court judgment, the assessment framed was deemed unsustainable.

The Tribunal held that the Assessing Officer was obligated to record a separate satisfaction note for each assessment year, not a consolidated one, as per the provisions of Section 153C of the Income Tax Act. Relying on a jurisdictional High Court judgment, the assessment framed was deemed unsustainable.

The Tribunal held that the Assessing Officer was obligated to record a separate satisfaction note for each assessment year, not a consolidated one, as per the provisions of Section 153C of the Income Tax Act. Relying on a jurisdictional High Court judgment, the assessment framed was deemed unsustainable.

The Tribunal held that the Assessing Officer was obligated to record a separate satisfaction note for each assessment year, not a consolidated one, as per the provisions of Section 153C of the Income Tax Act. Relying on a jurisdictional High Court judgment, the assessment framed was deemed unsustainable.

The Tribunal noted that the Assessing Officer had made an addition of Rs. 1,00,000/- on account of alleged unexplained cash credit under Section 68 of the Income Tax Act, 1961. The Assessee contended that the cash credit was adequately explained. However, the Tribunal found that the Assessing Officer had not provided sufficient reasons or evidence to justify the addition. The Tribunal observed that the Assessing Officer had failed to establish that the cash credit was indeed unexplained. Therefore, the Tribunal decided to delete the addition of Rs. 1,00,000/- made by the Assessing Officer. The ratio of this decision is that the onus is on the Revenue to prove that a cash credit is unexplained before making an addition under Section 68, and mere suspicion or lack of complete satisfaction on the part of the Assessing Officer is not sufficient.

The Tribunal held that the addition of Rs. 5,00,000/- as unexplained cash credit under Section 68 of the Income Tax Act, 1961, was not justified. The Tribunal noted that the assessee had provided the loan confirmation from the lender, Shri K.G. Subbarama Setty, and also furnished evidence of the lender's financial capacity. The Tribunal found that the lender was a known person and that the transaction appeared to be genuine. The Tribunal was of the view that the Assessing Officer had not brought any material on record to disprove the genuineness of the loan. Therefore, the addition made by the Assessing Officer and upheld by the CIT(A) was deleted. The ratio decidendi is that once the assessee provides sufficient evidence to establish the identity of the creditor, the creditworthiness of the creditor, and the genuineness of the transaction, the onus shifts to the Revenue to disprove the same. If the Revenue fails to do so, the addition cannot be sustained. The operative direction is the deletion of the addition.

The Tribunal held that Section 68 requires the existence of books of account for its invocation, which the assessee did not maintain. Therefore, additions under Section 68 were not sustainable. The Tribunal also noted that the source of cash deposits was explained by Shri D.S. Nandish.

The Tribunal held that the issue was covered by its own previous order, where it was established that mere participation in a JDA does not convert a capital asset into stock-in-trade. The amounts received were advances, and no transfer of property had occurred. The Tribunal also found that disallowing genuine business interest expenditure resulted in a timing distortion without any actual revenue impact.

The Tribunal held that the issue was covered by its own previous order, where it was established that mere participation in a JDA does not convert a capital asset into stock-in-trade. The amounts received were advances, and no transfer of property had occurred. The Tribunal also found that disallowing genuine business interest expenditure resulted in a timing distortion without any actual revenue impact.

The tribunal held that the issue of telescoping excess income offered in some years against shortfalls in others should be examined by the AO. Regarding Section 14A disallowance, the tribunal remitted the issue to the AO for fresh consideration, emphasizing the need for recorded satisfaction.

The tribunal held that the issue of telescoping excess income offered in some years against shortfalls in others should be examined by the AO. Regarding Section 14A disallowance, the tribunal remitted the issue to the AO for fresh consideration, emphasizing the need for recorded satisfaction.

The tribunal held that the issue of telescoping excess income offered in some years against shortfalls in others should be examined by the AO. Regarding Section 14A disallowance, the tribunal remitted the issue to the AO for fresh consideration, emphasizing the need for recorded satisfaction.

The tribunal held that the issue of telescoping excess income offered in some years against shortfalls in others should be examined by the AO. Regarding Section 14A disallowance, the tribunal remitted the issue to the AO for fresh consideration, emphasizing the need for recorded satisfaction.

The Tribunal noted that the case was decided ex-parte at the CIT(A) level due to non-prosecution and that the AO had not properly considered the assessee's submissions. Therefore, the Tribunal remitted the issue back to the AO for fresh consideration.

The Tribunal held that the addition made by the AO under Section 68 was not sustainable as the assessee had recorded all sales in its books of account, which were produced and not rejected. The Tribunal noted that the sales were offered to tax under the head 'income from business' and applying Section 68 would lead to double taxation.

The Tribunal held that the AO ought to have deleted the addition as the assessee had provided cash flow statements, bank statements, and explained the sources of cash deposits, including gifts and withdrawals for starting a new business. The addition was considered ad-hoc and not based on sound principles.

The Tribunal held that the reassessment proceedings were bad in law and liable to be quashed because a notice under section 143(2) was not issued, which is mandatory even when a return is filed in response to a section 148 notice. The assessment order passed under section 144 r.w.s. 147 was deemed null and void.

The Tribunal held that the AO's issuance of notice under Section 148A(b) was defective as it did not provide the mandatory 7 days for objections. Furthermore, the reassessment under Section 147 was deemed bad in law due to procedural irregularities. The Tribunal also found that the assessee was entitled to deduction under Section 54 as she reinvested sale proceeds in a more valuable property.

The Tribunal held that the AO and CIT(A) erred in treating the entire cash deposits as unexplained credit without considering the assessee's business nature. The Tribunal directed the AO to consider the deposits as gross receipts from the fruit business and compute income at 8% net profit, also allowing savings bank interest and the deduction u/s 80TTA.

The Tribunal held that the reassessment proceedings were bad in law and liable to be quashed because a notice under section 143(2) was not issued, which is mandatory even when a return is filed in response to a section 148 notice. The assessment order passed under section 144 r.w.s. 147 was deemed null and void.

The Tribunal held that a statement recorded under section 132(4) alone, without any corroborating incriminating material found during the search, cannot be the sole basis for making an addition in a concluded assessment year. Therefore, the addition made was not sustainable.