ITAT Bangalore Judgments — December 2025

TRIFECTA PROJECTS PRIVATE LIMITED ,BENGALURU vs DCIT, CENTRAL CIRCLE-2(2), BANGALORE

ITA 918/BANG/2025[2020-21]Status: Disposed5 Dec 2025AY 2020-21Allowed

The Tribunal held that the additions made by the AO, concerning disallowances of cash expenses and revenue expenditure, could not be considered as undisclosed income for the purpose of levying penalty under Section 271AAB. Furthermore, the show cause notice for the penalty did not specify the limb under which the penalty was proposed, rendering it bad in law.

M/S INFORMATICA BUSINESS SOLUTIONS PRIVATE LIMITED,BANGALORE vs JOINT COMMISSIONER OF INCOME TAX SPECIAL RAGE-3, BANGALORE

ITA 3356/BANG/2018[2014-15]Status: Disposed5 Dec 2025AY 2014-15Allowed

The Tribunal held that since the assessee had disallowed the original expenditure in the earlier year, the reimbursement received for that expenditure could not be considered as income. Therefore, the addition made by the Assessing Officer was incorrect.

SHIMOGA URBAN DEVELOPMENT AUTHORITY ,SHIMOGA vs INCOME TAX OFFICER, WARD-5, SHIMOGA

ITA 2120/BANG/2024[2018-19]Status: Disposed5 Dec 2025AY 2018-19Partly Allowed

The Tribunal noted that the assessee's registration under Section 12AA was effective from AY 2020-21, while the exemption was claimed for earlier years. However, a Supreme Court decision regarding Ahmedabad Urban Development Authority was cited, and the assessee had also filed a condonation application for delay in filing Form 10AB. Therefore, the appeals were restored to the AO.

ESSAE SUHAGRAJA PRIVATE LIMITED,BANGALORE vs DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(1) , BANGALORE

ITA 591/BANG/2025[2021-22]Status: Disposed4 Dec 2025AY 2021-22Partly Allowed

The Tribunal held that the TDR cost should be allowed as a deduction in AY 2018-19, as the revenue had taken a contradictory stand in different assessment years. The penalty levied on the keyman insurance premium was deleted due to the debatable nature of the disallowance and procedural defects. The disallowance of interest expenditure was also deleted, as the assessee had sufficient interest-free funds available.

DEPUTY COMMISSIONER OF INCOME TAX, BENGALURU vs FLIPKART INDIA PVT LTD, BENGALURU

ITA 1395/BANG/2025[2021-22]Status: Disposed4 Dec 2025AY 2021-22Dismissed

The Tribunal held that the sale of goods at a loss did not amount to the creation of intangible assets and that ESOP expenses were allowable as revenue expenditure. The Tribunal also ruled that TDS was not applicable on these ESOP expenses.

DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(4), BENGALURU vs FLIPKART INDIA PVT LTD, BENGALURU

ITA 1394/BANG/2025[2020-21]Status: Disposed4 Dec 2025AY 2020-21Dismissed

The Tribunal held that the sale of goods at a loss did not amount to the creation of intangible assets and that ESOP expenses were allowable as revenue expenditure. The Tribunal also ruled that TDS was not applicable on these ESOP expenses.

ESSAE SUHAGRAJA PRIVATE LIMITED,BANGALORE vs DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(1), BANGALORE

ITA 592/BANG/2025[2022-23]Status: Disposed4 Dec 2025AY 2022-23Partly Allowed

The Tribunal held that the TDR cost should be allowed as a deduction in AY 2018-19, as the revenue had taken a contradictory stand in different assessment years. The penalty levied on the keyman insurance premium was deleted due to the debatable nature of the disallowance and procedural defects. The disallowance of interest expenditure was also deleted, as the assessee had sufficient interest-free funds available.

BHAWARLALDARLA HARISH KUMAR ,MYSORE vs INCOME TAX OFFICER, WARD-1(1) & TPS,, MYSORE

ITA 1529/BANG/2025[2021-22]Status: Disposed4 Dec 2025AY 2021-22Allowed

The Tribunal held that the addition for rental income constituted double taxation as it was already offered. For the capital gains, the Tribunal noted that Form 3CD indicated no actual transfer or accrual, and directed the AO to verify a certificate from the auditor before deleting the addition.

ESSAE SUHAGRAJA PRIVATE LIMITED,BANGALORE vs DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(1), BANGALORE

ITA 590/BANG/2025[2018-19]Status: Disposed4 Dec 2025AY 2018-19Partly Allowed

The Tribunal held that the TDR cost should be allowed as a deduction in AY 2018-19, as the revenue had taken a contradictory stand in different assessment years. The penalty levied on the keyman insurance premium was deleted due to the debatable nature of the disallowance and procedural defects. The disallowance of interest expenditure was also deleted, as the assessee had sufficient interest-free funds available.

NEHRU SMARAKA VIDYA KENDRA TRUST,BANGALORE vs COMMISSIONER OF INCOME TAX, EXEMPTIONS, BANGALORE

ITA 715/BANG/2025[2025-26]Status: Disposed3 Dec 2025AY 2025-26Partly Allowed

The Tribunal held that the CIT(E)'s rejection of the 80G approval was not justified solely on the basis of receiving fees, as long as the charitable activities are genuine and the fees are for sustaining the institution's operations. The matter was restored to the CIT(E) to re-examine the application.

ROOPA JAGADISH ,MYSURU vs ACIT, CIRCLE-1(1), MYSURU

ITA 972/BANG/2025[2012-13]Status: Disposed3 Dec 2025AY 2012-13Partly Allowed

The Tribunal held that the cost of Rs. 951/- per sq.ft. adopted by the AO was incorrect as it was based on a direction that was set aside by this Tribunal earlier. The Tribunal directed the AO to adopt the cost of Rs. 1,620/- per sq.ft. as a yardstick for taxing the value for AY 2012-13, considering the value adopted in AY 2008-09 and the cost incurred in AY 2012-13.

BHAVANA CO-OP CREDIT SOCIETY NIYAMITA ,SIRSI vs INCOME TAX OFFICER, WARD-1, SIRSI

ITA 1074/BANG/2025[2020-21]Status: Disposed3 Dec 2025AY 2020-21Allowed

The Tribunal held that the assessment order was neither erroneous nor prejudicial to the interest of the revenue. Following Supreme Court and High Court precedents, the Tribunal found that the AO's view was plausible and not unsustainable in law.

NANDINI CREDIT CO-OPERATIVE SOCIETY LIMITED ,BANGALORE vs INCOME TAX OFFICER, WARD-4(2)(3), BANGALORE

ITA 1649/BANG/2025[2020-21]Status: Disposed3 Dec 2025AY 2020-21Allowed

The Tribunal followed the decision of the Hon'ble Karnataka High Court dated 05.01.2017, which held that co-operative banks are eligible for deduction under Section 80P(2)(a)(i) even on interest income. The Tribunal directed the Assessing Officer to delete the impugned disallowance and grant the deduction.

GONIKOPPAL PRIMARY RURAL AGRICULTURAL CREDIT CO-OPERATIVE SOCIETY LIMITED ,KODAGU vs PR. COMMISSIONER OF INCOME TAX, BENGALURU-3, BENGALURU

ITA 1072/BANG/2025[2020-21]Status: Disposed3 Dec 2025AY 2020-21Allowed

The Tribunal held that the assessment order was neither erroneous nor prejudicial to the interest of the revenue. Following Supreme Court and High Court precedents, the Tribunal found that the AO's view was plausible and not unsustainable in law.

M/S. CPV ENGINEER PRIVATE LIMTIED,HUBBALLI vs THE INCOME TAX OFFICER, WARD-1(1), HUBBALLI

ITA 1487/BANG/2024[2015-16]Status: Disposed2 Dec 2025AY 2015-16Partly Allowed

The Tribunal held that sales commission paid to family members involved in the company's business was allowable, and notional interest on director's loan was not disallowable if interest-free funds were available. However, the provision for gratuity was confirmed as disallowed.

M/S. CPV ENGINEER PRIVATE LIMTIED ,HUBBALII vs THE INCOME TAX OFFICER, WARD-1(1), HUBBALLI

ITA 1486/BANG/2024[2014-15]Status: Disposed2 Dec 2025AY 2014-15Partly Allowed

The Tribunal held that sales commission paid to family members involved in the company's business was allowable, and notional interest on director's loan was not disallowable if interest-free funds were available. However, the provision for gratuity was confirmed as disallowed.

GIRISH SANU,MANGALURU vs INCOME TAX OFFICER, WARD-1(2), MANGALURU

ITA 804/BANG/2025[2010-11]Status: Disposed1 Dec 2025AY 2010-11Partly Allowed

The Tribunal held that the service of a notice u/s 143(2) is a jurisdictional requirement for framing a reassessment order after a return is filed in response to a notice u/s 148. Non-service of this notice is fatal and cannot be cured. Therefore, the case was restored to the AO to verify the service of notice u/s 143(2).