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273 orders · Page 6 of 6
The Tribunal held that while the denial of exemption under Section 11 due to non-registration under Section 12AB was upheld, the gross receipts should not be taxed. Instead, the matter was restored to the Assessing Officer to tax only the net profit after allowing eligible expenditures.
The Tribunal upheld the addition of ₹60 lakh (initially ₹1,600,000 was confirmed by CIT(A) but the Tribunal discussed ₹60 lakh in its findings) as unexplained cash credit under Section 68, as the assessee failed to substantiate the claim of advances from hawkers. The disallowance of salary for March 2016, paid in April 2016, was also upheld as it did not accrue in the year under consideration following the mercantile system of accounting.
The Tribunal held that the TPO's action in determining the ALP of intra-group service charges at NIL and the confirmation thereof by the DRP could not be sustained. The Tribunal noted that the assessee had provided detailed information regarding the nature of services, supporting agreements, invoices, and party-wise breakups, totaling INR 4,12,92,788. These services were considered operational and business support, not merely shareholder activities. The Tribunal emphasized that the TPO cannot step into the shoes of the businessman to decide if services were required or commercially prudent; the TPO's jurisdiction is limited to determining the arm's length price. The Tribunal found that the ALP was determined at NIL without proper benchmarking or identifying comparable uncontrolled transactions, which is contrary to the statutory framework. Furthermore, no specific service was analyzed to demonstrate it was performed solely in the capacity of a shareholder. The Tribunal also noted that an identical issue for AY 2021-22 in the assessee's own case (IT(TP)A No. 870/Bang/2025) was decided in favor of the assessee. Respectfully following that decision and in the absence of distinguishing facts from the Revenue, the Tribunal directed the AO/TPO to delete the adjustment made on account of intra-group service charges. The issue of transfer pricing documentation rejection and other grounds related to margin computation, filters, and comparability analysis were not explicitly decided in this extract, but the appeal was partly allowed.
The Tribunal held that no adjustment on account of notional interest on delayed receivables is warranted. The Tribunal noted that it is an undisputed fact that the assessee is a debt-free company, and the Revenue has not brought any material on record to show that the assessee has incurred any interest cost or passed on any benefit to the AE. Mere delay in realization of receivables, without demonstrating any impact on profitability or existence of a financing arrangement, cannot justify a TP adjustment. The Tribunal respectfully followed the binding decisions of the Hon'ble Delhi High Court in Inductis India (P.) Ltd. (as affirmed by the Hon'ble Supreme Court) and the Bangalore ITAT in Wipro GE Healthcare Private Limited and Infosys BPM Limited. Accordingly, the addition made by the TPO was directed to be deleted. The ground raised by the assessee was allowed. The ground relating to initiation of penalty proceedings under section 270A was dismissed as consequential and infructuous.
The Tribunal condoned the delay in filing Form 10B, following various High Court judgments that held such delays to be procedural and curable. The issue was restored to the Assessing Officer for verification of the exemption claim on merits.
The Tribunal held that the reopening was based on a change of opinion, as the original AO had already examined the issue of sundry creditors and made an addition. The subsequent AO's view that the addition was inadequate did not constitute fresh tangible material for reopening.
The Tribunal condoned the delay in the first appeal, subject to a cost, and restored the matter to the CIT(A) for adjudication on merits. For the second appeal, the Tribunal also restored the matter to the CIT(A) for fresh adjudication, subject to a cost, to grant one more opportunity.
The Tribunal noted that the assessee's submissions uploaded on 09.05.2025 were not considered by the CIT(A)/NFAC. Therefore, in the interest of justice, the matter was remitted back to the CIT(A)/NFAC for fresh adjudication.
The Tribunal condoned the delay in filing the appeal, finding sufficient cause. It held that the CIT (Exemptions) erred in rejecting the application as the assessee had indeed received donations and incurred expenses towards its charitable objects, which were evident from the CIT's own order.
The Tribunal held that since the issue of delayed payment of employees' PF and ESI contributions was debatable on the date of the rectification order, it did not constitute a 'mistake apparent from record'. Therefore, the rectification was beyond the scope of Section 154.
The Tribunal held that the cost of improvement should be accepted based on the engineer's valuation report as the lower authorities failed to point out defects and arbitrarily estimated costs. However, the claim for interiors was dismissed due to lack of supporting evidence.
The Tribunal held that the cash withdrawal of Rs. 25 Lakh was from an explained source (advance for land sale). The subsequent redeposits were reasonably explained by this earlier withdrawal, and the Revenue failed to prove the cash was utilized elsewhere.
The Tribunal found that the compulsory deductions were genuine and separately deducted from the bill amount. The difference in contract income between the P&L account and ledger was due to GST, not these deductions.
The Tribunal held that the delay in filing the return was due to circumstances beyond the assessee's control, specifically the mandatory statutory audit process for government companies. Therefore, the penalty under section 270A was not leviable as the conditions for under-reported income were not met.
The Tribunal held that the opening balance of ₹17,12,893/- was accepted by the AO in his remand report as a carried forward balance. The Tribunal also found that the ₹3,00,000/- introduction was explained by withdrawals from the granite business, duly recorded in the books.
The Tribunal condoned the delay in filing the appeal, acknowledging the assessee's reasons for non-compliance. The matter was restored to the Assessing Officer for de novo adjudication to provide the assessee with an opportunity to present its case and furnish supporting documents.
The Tribunal held that the assessee had provided substantial documentary evidence, including bills, vouchers, and source of funds, to substantiate the improvement expenditure. The AO's disallowance was considered ad hoc and not based on specific defects in the expenditure claimed.
The Tribunal held that the notice under section 143(2) issued by the Assessment Unit was valid, as Assessment Units are empowered to act as Assessing Officers in the faceless regime. The Tribunal also allowed the ground related to the disallowance of ESOP expenses and the disallowance for non-deduction of TDS, finding that the conditions for disallowance were not met.
The Tribunal condoned the delay of 433 days, finding the assessee's explanation to be bona fide and constituting sufficient cause. The Tribunal distinguished the present case from a Supreme Court decision where the litigant had prior knowledge and deliberately suppressed facts.
The Tribunal condoned the delay in filing the appeal. It held that the addition on account of GST turnover difference was not sustainable as the GST returns matched the income tax return. The disallowance of commission expenses was also deleted as the recipients had filed their returns.
The Tribunal held that the claim of agricultural activity could not be rejected outright, but the quantum required verification. The matter was restored to the AO for fresh adjudication, considering the land's extent, crop yield, and sale price, and also verifying the car sale proceeds.
The Tribunal held that if the original basis for reopening the assessment under Section 147 does not result in any addition, the AO cannot make an addition on an entirely different issue. The power to assess 'any other income' is supplementary and cannot survive independently.
The Tribunal held that the deduction under Section 80-IA was correctly disallowed because the necessary approvals and agreements were not in the name of the entity claiming the deduction, as required by law and rules. The assessee failed to furnish the audit report with the requisite approvals in the name of M/s. Azure Energy.