ITAT Bangalore Judgments — May 2026

The Tribunal condoned the delay in filing appeals before the CIT(A) due to sufficient cause shown by the assessee and the fact that the tax demand was paid. The appeals were remitted back to the CIT(A) for a decision on merits, with a direction for a personal hearing.

The Tribunal condoned the delay in filing appeals before the CIT(A) due to sufficient cause shown by the assessee and the fact that the tax demand was paid. The appeals were remitted back to the CIT(A) for a decision on merits, with a direction for a personal hearing.

The Tribunal held that the AO's estimation of profit at 15% was arbitrary and unjustified. It directed the AO to recompute the net profit at 7% of the turnover. The Tribunal also remanded the issue of Chapter VI-A deductions and credit for TDS and self-assessment tax to the AO for verification.

The Tribunal held that the AO's estimation of profit at 15% was arbitrary and unjustified. It directed the AO to recompute the net profit at 7% of the turnover. The Tribunal also remanded the issue of Chapter VI-A deductions and credit for TDS and self-assessment tax to the AO for verification.

The Tribunal condoned the delay in filing the appeal, finding sufficient cause due to the assessee's business closure and lack of awareness of the order. On merits, the Tribunal held that there was a reasonable cause for the delayed filing of the tax audit report, and since the returned income matched the assessed income, the penalty under Section 271B was not sustainable.

The Tribunal upheld the CIT(A)'s decision to exclude two comparable companies (Poly Medicure Ltd and Opto Circuits (I) Ltd) as they were predominantly manufacturers, while the assessee's healthcare segment was primarily trading. The Tribunal also upheld the deletion of the IT support service adjustment, noting consistency with prior years.

The tribunal held that the presence of associate members does not disentitle the society from claiming deduction under Section 80P(2)(a)(i). Regarding cash deposits, the tribunal found the CIT(A)'s rejection of additional evidence incorrect and remitted the issue to the AO for fresh consideration.

The Tribunal held that the classification of income under Section 194-I does not automatically make it income from house property. It further noted that the CIT(A) had not considered the assessee's submissions regarding the income being business income and the validity of the reassessment notice.

The Tribunal found that the present appeal was a duplicate of an earlier appeal. Therefore, there was nothing further to adjudicate in the current appeal.

The Tribunal held that the assessee had adequately explained the nature of services and provided evidence of their rendition, including the use of a trademark owned by the service provider. The expenditure was considered wholly and exclusively for business purposes.

The Tribunal held that the assessee did not challenge the stamp duty valuation. Therefore, the Assessing Officer was justified in invoking Section 50C and computing the capital gain based on the stamp duty value.

The Tribunal restored the appeal to the file of the CIT(A) with a direction to consider the assessee's petition for condonation of delay. If the delay is condoned, the CIT(A) should decide the penalty issue on merits.

The Tribunal held that the lower authorities did not consider the assessee's plea that deposits were made in compliance with Sections 57 and 58 of the Karnataka Co-operative Societies Act. The issue requires reconsideration by the AO.

The Tribunal condoned the delay in filing the appeal and restored the matter to the CIT(A). The CIT(A) was directed to issue fresh notices to the correct email address and decide the appeal on merits after providing a reasonable opportunity of hearing.

The Tribunal condoned the delay in filing the appeal, finding sufficient cause due to the assessee's unawareness of exit tax provisions. The Tribunal also noted that the CIT(Exemptions) failed to provide an opportunity of hearing and show cause notice before rejecting the application.

The Tribunal held that the diminution in inventory value, when consistently followed as per accounting standards and supported by High Court precedents, is allowable. It also held that addition on account of non-confirmation from creditors is not justified if the genuineness of transactions is not doubted.

The Tribunal found that the lower authorities erred in dismissing the assessee's explanation solely based on his education and the nature of withdrawals. The affidavit of Mr. Eshwarappa and the provision of his PAN were considered significant.

The Tribunal condoned the delay in filing the appeal due to the assessee's prolonged illness and health problems. The Tribunal found that the assessee did not get a proper opportunity to represent himself before the lower authorities due to his health issues.

The Tribunal held that the sale of 25 plots was an investment and not an adventure in trade, and therefore, the gains were capital gains. Similarly, gains from agricultural lands were also not chargeable to tax as business income.

The Tribunal dismissed both grounds of appeal filed by the Revenue. Regarding the deletion of comparable companies (Poly Medicure Ltd. and Opto Circuits (I) Ltd.), the Tribunal upheld the CIT(A)'s decision. It reasoned that the Assessee's healthcare segment was predominantly trading, and the comparable companies were indeed primarily engaged in manufacturing, with minimal trading revenue. The Tribunal found no infirmity in the CIT(A)'s exclusion of these comparables, aligning with the functional differences between the Assessee and the comparables. For the IT support services adjustment, the Tribunal noted that the issue was contested in AY 2005-06 on identical facts, where the claim of expenditure was accepted. As no contrary evidence was presented by the Revenue, and the services were deemed to be at arm's length in the earlier year, the Tribunal found no reason to interfere with the CIT(A)'s deletion of the adjustment. The ratio decidendi is that when comparable companies have significantly different functional profiles (manufacturing vs. trading) and similar issues regarding IT support services have been accepted in prior years based on judicial consistency, the CIT(A)'s order should be upheld.

The Tribunal noted that while the assessee did not respond to notices, principles of natural justice require that benefits available to the assessee be considered. The AO should have considered the cost of acquisition and selling expenses when computing capital gains.

The Tribunal noted that cash deposits could be from members' deposits or loan repayments, and withdrawals could be properly recorded. Since the assessee claimed not to have received notices and was not given a reasonable opportunity, the orders of the AO and CIT(A) were set aside for de novo consideration.

The Tribunal noted that cash deposits could be from members' deposits or loan repayments, and withdrawals could be properly recorded. Since the assessee claimed not to have received notices and was not given a reasonable opportunity, the orders of the AO and CIT(A) were set aside for de novo consideration.

The Tribunal held that the lower authorities did not consider the assessee's plea that deposits were made in compliance with Sections 57 and 58 of the Karnataka Co-operative Societies Act. The issue requires reconsideration by the AO.

The Tribunal condoned the delay in filing the appeal before the CIT(A) based on the medical evidence provided by the assessee. The order of the CIT(A) was set aside, and the matter was remitted back for a decision on merits.

The Tribunal condoned the delay in filing the appeal before the CIT(A) and set aside the orders of the lower authorities. The issue was remitted to the AO for fresh consideration, granting the assessee an opportunity to explain the cash deposits.

The Tribunal found that the assessee had indeed responded to notices and provided documents. The CIT(E) had also mistakenly referred to an 80G application instead of the 12AB application. The Tribunal held that the CIT(E) had not properly adjudicated the issues.

The tribunal allowed the withdrawal of grounds related to the transfer pricing adjustment due to the APA. It directed the Assessing Officer to verify and grant the correct TDS credit. The issue of interest under section 234A was restored to the Assessing Officer for decision, while the interest under section 234B was dismissed as consequential.

The Tribunal set aside the order of the CIT(A) due to the assessee's inability to respond to notices because of a partner's accident. The matter was restored to the CIT(A) for a fresh decision on merits, granting the assessee an opportunity to be heard.

The Tribunal condoned the 7-day delay in filing the appeal before the CIT(A), citing the principle of substantial justice over technical considerations. The matter was restored to the CIT(A) for fresh adjudication on merits.

The Tribunal held that unsold units held as stock-in-trade are not taxable under 'Income from House Property'. Maintenance charges incurred on these unsold units are deductible under 'Profits & Gains from Business or Profession'.

The Tribunal held that the assessee was not provided sufficient time to respond to notices from both the AO and CIT(A), violating the principle of natural justice. Therefore, the matter was restored to the AO for a fresh assessment.

The Tribunal restored the matter to the CIT(E) for fresh consideration, granting the assessee one more opportunity to furnish all necessary details and evidence to substantiate its claim for registration.

The Tribunal condoned the delay in filing appeals and, considering the principles of natural justice and the need for fresh adjudication, restored both the quantum addition and the penalty to the file of the Assessing Officer for fresh assessment. A cost of Rs. 11,000 was imposed on the assessee for non-compliance.

The Tribunal condoned the delay in filing appeals and, considering the principles of natural justice and the need for fresh adjudication, restored both the quantum addition and the penalty to the file of the Assessing Officer for fresh assessment. A cost of Rs. 11,000 was imposed on the assessee for non-compliance.

The Tribunal held that disallowance of expenditure, even if it enhances business profit, should not deny the deduction under Section 80P if the enhanced profit arises from the eligible activity. The deduction should be allowed on the increased profit.

The Tribunal held that disallowance of expenditure, even if it enhances business profit, should not deny the deduction under Section 80P if the enhanced profit arises from the eligible activity. The deduction should be allowed on the increased profit.

The Tribunal set aside the orders of the lower authorities and restored the matter to the Assessing Officer (AO) for fresh adjudication. The AO is directed to examine the assessee's claim regarding the source of cash deposits after considering all supporting evidence.

The Tribunal set aside the orders of the lower authorities and restored the matter to the Assessing Officer (AO) for fresh adjudication. The AO is directed to examine the assessee's claim regarding the source of cash deposits after considering all supporting evidence.

The Tribunal held that the AO failed to properly establish the charge of under-reporting and misreporting income as per the specific provisions of Section 270A. The AO was confused about whether the assessee had under-reported or misreported income, violating natural justice principles.

The Tribunal held that the interest earned from cooperative banks on statutory deposits, maintained due to legal compulsion under the Karnataka Co-operative Societies Act, 1959, is attributable to the business activity of the cooperative society and is therefore eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. The Tribunal noted that the assessee has to comply with statutory requirements like maintaining a statutory liquid ratio (SLR) and transferring profits to a reserve fund, which necessitates deposits in cooperative banks. The Tribunal also observed that the interest earned on investments over and above the required statutory limits, from entities falling under the definition of a 'banking company', would be considered income from other sources, and Section 80P(2)(d) would not be available for such interest. However, the cost of funds and related administrative expenses incurred in earning such interest income should be allowed as a deduction under Section 57. The Tribunal restored the issue of deduction under Section 57 to the AO for examination, directing the AO to allow proportionate expenditure and administrative expenses incurred in mobilizing deposits. The AO was directed to compute business income, income from other sources, and eligible deduction under Section 80P, treating interest from credit facilities to members and interest from statutory deposits as eligible for deduction under Section 80P(2)(a)(i).

The Tribunal held that the interest earned from cooperative banks on statutory deposits, maintained due to legal compulsion under the Karnataka Co-operative Societies Act, 1959, is attributable to the business activity of the cooperative society and is therefore eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961. The Tribunal noted that the assessee has to comply with statutory requirements like maintaining a statutory liquid ratio (SLR) and transferring profits to a reserve fund, which necessitates deposits in cooperative banks. The Tribunal also observed that the interest earned on investments over and above the required statutory limits, from entities falling under the definition of a 'banking company', would be considered income from other sources, and Section 80P(2)(d) would not be available for such interest. However, the cost of funds and related administrative expenses incurred in earning such interest income should be allowed as a deduction under Section 57. The Tribunal restored the issue of deduction under Section 57 to the AO for examination, directing the AO to allow proportionate expenditure and administrative expenses incurred in mobilizing deposits. The AO was directed to compute business income, income from other sources, and eligible deduction under Section 80P, treating interest from credit facilities to members and interest from statutory deposits as eligible for deduction under Section 80P(2)(a)(i).

The Tribunal held that the cash deposits were explained as proceeds from cash sales, which were duly recorded in the assessee's audited books of account and accepted by the AO. The Tribunal found that the AO's invocation of Section 68 was incorrect as the source and nature of the credit were explained, and taxing it again would amount to double taxation.

The Tribunal held that since the additions made in the quantum assessment were deleted by this Tribunal, the penalties levied under Section 271B and Section 270A are not sustainable. The penalty under Section 270A(9) was also not properly invoked.

The Tribunal held that the Citizen Co-operative Society Ltd. judgment was not applicable as the assessee was registered under the Karnataka Co-operative Societies Act, not the Mutually Aided Co-operative Societies Act. It also considered the nature of interest income from investments in co-operative banks and mandatory deposits with BESCOM.

The Tribunal held that the additions made by the Assessing Officer were invalid as no incriminating material was found during the search. The Tribunal also noted that the additions could not be sustained on merits.

The Tribunal held that the additions made by the Assessing Officer were invalid as no incriminating material was found during the search. The Tribunal also noted that the additions could not be sustained on merits.

The Tribunal held that the additions made by the Assessing Officer were invalid as no incriminating material was found during the search. The Tribunal also noted that the additions could not be sustained on merits.

The Tribunal allowed the appeal regarding the disallowance of interest on capital work-in-progress, stating that the borrowing was for working capital and not asset acquisition. For other expenses, the Tribunal restored the issue to the AO for verification of details and to decide afresh, while confirming a disallowance of CSR expenditure.

The Tribunal held that the additions made by the Assessing Officer were invalid as no incriminating material was found during the search. The Tribunal also noted that the additions could not be sustained on merits.