Direct Tax Judgements

• Sec. 292B couldn't be invoked to cure a mistake of issuing notice in the name of diff. entity: Delhi HC
• Sum received for giving up rights to buy a property is taxable under head capital gains: ITAT
• Excess stock can't be treated as undisclosed income if assessee identified diff. much prior to commencement of search
• No TP adjustment if interest cost was negligible in comparison to benefit derived by assessee from AE
• CIT(E) can't reject trust application merely due to inadvertent error of mismatch in name as appearing on PAN: ITAT
• No provisions in Benami law for cross-examination of witnesses by assessee in preliminary stage: HC Marg Projects and Infrastructure Ltd. v. Deputy Commissioner of Income-tax - [2023] (Madras)
• Assessee can’t file writ against recovery notice if it didn’t challenge intimation of demand issued u/s 200A: HC - Construction Engineers v. Union of India - [2023] (Jammu & Kashmir and Ladakh
• TOLA won’t save time-barring reassessment even if notice issued under old provision is deemed as notice u/s 148A: HC Rajeev Bansal v. Union of India - [2023] (Allahabad)
• Sec. 50C won't apply on compulsory acquisition of land by NHAI as stamp duty isn’t payable on such transfer: HC - PCIT v. Durgapur Projects Ltd - [2023] (Calcutta)
• AO to release refund beyond 20% of tax demand even if 65% of tax demand adjusted by CPC: HC - Neo Structo Construction (P.) Ltd. v. ACIT - [2023] (Gujarat)
• AO can’t disregard TRC as same is sufficient evidence to claim treaty eligibility: Delhi HC - Blackstone capital partners (singapore) vi fdi three pte. Ltd v. ACIT - [2023] (Delhi)
• AO can’t deny sec. 11 benefits to trust in case of capitation fee violation as long as Sec. 12A certificate is in force: HC - Kammavari Sangham v. DDIT (Exemptions) - [2023] (Karnataka)
• Transfer of PAN jurisdiction follows jurisdiction transfer order; AO can't claim jurisdiction if PAN transferred later: HC - PCIT v. Capstone Securities Analysis (P.) Ltd. - [2023] (Bombay)
• Exp. incurred on development of a new product is revenue in nature if product was abandoned: HC - Principal Commissioner of Income-tax-5 v. Trigent Software Ltd. - [2023] (Bombay)
• Exp. incurred to obtain legally enforceable agreement with the Ministry of Civil Aviation is to be capitalised: HC - Bangalore International Airport Ltd. v. DCIT - [2023] (Karnataka)
• Dividend received by FII on Indian Depository Receipts in its UK bank can’t be taxed in India: ITAT - Barclays Capital Mauritius Ltd. v. ACIT - [2023] (Mumbai - Trib.)
• No Sec. 68 additions solely based on MOU found during search if assessee wasn’t even remotely connected to MOU: PCIT v. Trilok Chand Choudhary - [2023] (Delhi)
• Notice issued in name of struck off Co. is valid if NCLT restored its name after issue of notice - Ravinder Kumar Aggarwal v. ITO - [2023] (Delhi)
• Exp. incurred to obtain legally enforceable agreement with the Ministry of Civil Aviation is to be capitalised: Bangalore International Airport Ltd. v. DCIT - [2023] (Karnataka)
• Sec. 41(1) can’t be invoked for liability against purchase of defective machinery that was never put to use: ITAT - Marvelore Mining & Allied Industries (P.) Ltd. v. ITO - [2023] (Surat-Trib.)
• Sec. 80-IB relief not available to assessee manufacturing polyurethane foam in diff. designs for car seats: SC - Polyflex (India) (P.) Ltd. v. CIT - [2022] (SC)
• Sec. 43CA amendment increasing safe harbour limit from 5% to 10% on sale of immovable property has retro-effect - Sai Bhargavanath Infra v. ACIT - [2022] (Pune - Trib.
• Assessee eligible to get interest on refund arising due to recomputation of income by AO: PCIT v. Punjab & Sind Bank - [2022] (Delhi) HC
• Sec. 263 revision initiated by CIT second time to cancelling non-existing original assessment order isn’t tenable: PCIT v. Padma Kumar Jain - [2022] HC (Jharkhand)
• Gold wastage during creation of ornaments can’t be treated as ‘making charges’; Sec. 194C TDS not applicable - P.R. Gold and Silver Craft v. DCIT - [2022] (Chennai - Trib.)
• Time-barred appeal should be allowed if it involves a substantial question of law - PCIT v. Soorajmul Nagarmull - [2022] (Calcutta) HC
• Any amount due against permission to use trademark in relation to licensed products shall be treated as operational debt- Somesh Choudhary, Suspended Director at Global Fragrances (P.) Ltd. v. Knight Riders Sports (P.) Ltd. - [2022] (NCLAT- New Delhi)
• Marked-to-market loss from forward contracts deductible under Section 37(1) - PCIT v. Simon India Ltd. – [2022] (Delhi) HC
• High Court releases attached bank accounts as Fixed deposit suffices to protect revenue interest - FCS Manufacturing (India) (P.) Ltd. v. Deputy Director of Income-tax, (Investigation) - [2022] (Gujarat)
• Demerger sanctioned by NCLT is tax-compliant only if conditions in Sec. 2(19AA) are satisfied - Grasim Industries Ltd. Vs. DCIT [2022] (Mumbai - Trib.)
• 1st Judgement to be added with caption "‘Solely’ in Sec. 10(23C)(vi) means exclusively; Profit-oriented institutions can’t claim exemption SC" (pdf naming ‘Solely’ in Sec. 10(23C)(vi) means exclusively; Profit-oriented institutions can’t claim exemption SC)
• 2nd Judgement to be added with caption - "Apex Court interprets definition of ‘Charitable Purpose’ used in Sec. 2(15) for tax exemption" (pdf naming Apex Court interprets definition of ‘Charitable Purpose’ used in Sec. 2(15) for tax exemption).
• 3rd Judgement to be added with caption - "Farming on leased land ipso facto isn’t ‘contract farming’; Co. is entitled to claim exemption us 10(1) ITAT" (pdf naming Farming on leased land ipso facto isn’t ‘contract farming’; Co. is entitled to claim exemption us 10(1) ITAT)
• 4th Judgement to be added with caption - "Profits, when co. was declared as sick, can’t be set off with BF loss or unabsorbed dep. for MAT purposes" (pdf naming Profits, when co. was declared as sick, can’t be set off with BF loss or unabsorbed dep. for MAT purposes).
• 5th Judgement to be added with caption - "Sec. 69C additions on bogus purchase justified as assessee failed to produce any documentary evidence" (pdf naming Sec. 69C additions on bogus purchase justified as assessee failed to produce any documentary evidence).
• Quoted Equity shares which are in lock-in period are not quoted shares but unquoted shares, for the purposes of valuation under the WT Act
• No provision allows AO to retain documents of title as security for any tax liability that may arise in future - HC
• For Assessment Years prior to 2021-22 also due date us 36(1)(va) not us 43B applies for deductibility of employees contributions to PF ESI etc
• Assessee can’t insist for physical hearing as same isn’t permissible under faceless assessment scheme HC
• Additions us 68 is justified in respect of gifts where some donors stated these were arranged for a commission & other donors denied the gifts
• ITAT directs to delete Disallowance of Employees’ Contribution to EPF and ESI as contribution was made before due date for Filing Income Tax Return
• AO cannot retain documents of title as security for any tax liability that may arise in future: HC
• ‘Agreement to Sale’ can’t be considered as date of purchase of property for computing Sec. 54 deduction: ITAT
• Arbitral award received for release of right to sue due to breach of contract is capital receipt not taxable: ITAT
• Assessee paying rent to wife entitled to claim HRA benefit: ITAT
• Date of possession of new flat to be considered to calculate threshold limit to allow sec. 54F deduction: ITAT
• No tax liability on the Receipt of security deposit under Joint Development Agreement (JDA) unless possession of the property is transferred: NCLAT
• Lessee entitled for Sec. 35AD deduction though lessor constructed basic civil structure of building: ITAT
• No capital gains if only licence was given to developer to enter property for construction under JDA: ITAT
• Fertilizer Subsidy Income derived from Business of Industrial undertaking eligible for Income Tax Deduction: ITAT
• Sum recovered from Indian affiliate for software used to provide services to various group entities is royalty: ITAT
• Acknowledgement of debt in the balance sheet triggers a fresh period of limitation on each acknowledgement: NCLAT
• Depreciation being statutory allowance cannot be restricted on basis of Personal use: ITAT
• Transponder Charges are not in the nature of Royalty Income: ITAT
• TDS pertaining to previous years deducted on income accrued in current year claimed in Current Year should not be denied
• Notice of Income Tax Assessment made in the name of a deceased individual is not legal: Delhi HC
• Bombay HC held that Vodafone Idea Ltd did not escaped the assessment on account of failure to disclose all material facts necessary for computation of income
• Relief to Senior Advocate Harish Salve: ITAT allows Credit of Taxes paid on Overseas Income
• Payment for Facebook Ads and Other Digital Advertising Companies not subject to TDS as per DTAA: ITAT
• Assessee entitled to Deduction of Employees’ Contribution of PF, ESI as contribution made was prior to due date of Final Return: ITAT
• ITAT deletes Disallowance made on account of Depreciation on Right to Collect Annuity on Toll Roads
• Relief to Nokia India: ITAT deletes Disallowance worth Rs. 41.6 Cr
• License Fee paid for Long Term Right to use Telecommunication Spectrum is Capital Expenditure
• Transactions in Client Ledger Account are Transactions entered in Ordinary Course of Business
• ITAT upholds Addition as Assessee has failed to offer any explanation with regard to Nature and Source of Credit in his Bank Account
• Capital Gains arising on Sale of Rural Agricultural Land outside the purview of Income Tax
• UAE Company is an Independent Entity: Indian Company can’t be Taxed for Its’ Profit, rules ITAT
• Relief to Karur Vysya Bank: ITAT allows Income Tax Deduction on Education Cess
• Rental Income from Sub-Lease shall be treated as Business Income since same was Business of Assessee: ITAT
• Any Investment by Dubai business not Taxable under India-UAE DTAA: Bombay High Court grants Relief to ADIA, quashes AAR Ruling
• Surplus with deficit as per Shareholders’ Account should be aggregated with Policyholders’ Account for determining Profit or Loss: Karnataka HC grants Relief to PNB Metlife
• Setback to Lite-on Mobile: ITAT disallows grossed up portion of TDS deducted on Interest paid to AE on External Commercial Borrowings
• Calcutta High Court deletes disallowance on account of Slump Sale of Chemical Undertaking
• ITAT deletes Addition on Account of Investment made from Undisclosed Sources as all Transactions were made through Banking Channels
• Agricultural Income excluded from purview of Central Act: Kerala High Court disallows Deduction to Oil Palm India
• Mere deduction of TDS doesn’t close Chapter of Tax Liability unless deposited in Govt treasury: Gujarat HC allows Income Tax Refund to Pilot of Kingfisher Airlines
• ITAT accepts Lease Income as ‘Business Income’ as Business Investments were mostly in nature of Properties
• Relief to Inter Globe Aviation: ITAT deletes Disallowance on Lease Rental Payments to tune of Rs. 366.32 Cr
• Setback To Axis Bank: ITAT upholds Disallowance on account of Interest Expenses incurred on Capital Work in progress
• Capital Subsidy received by Assessee liable to be excluded from Computation of Book Profit: ITAT grants relief to Sunrise Biscuit
• No TDS deductible on consideration for Use of Computer Software by Resident Indian distributors to Non-Resident Manufacturers
• Burden lies on Assessee to Prove no wilful intention not to file Income Tax Return
• ITAT allows Section 12A Registration to a Educational Welfare Society as Leasehold Land and Fee Concession was verified
• 10% Presumptive Tax on Business of Hiring Security Guards for Customers
• Deduction allowable on Employee’s Contribution if made on or before Due Date for furnishing Income Tax Return
• Capital Gain Exemption available for Multiple Flats obtained under JDA
• Telecom Distributor need not pay TDS on Commission directly paid to Retailers by Telecom Service Provider: ITAT
• Private Parties can’t apportion Income Tax Liabilities By Private Agreements: Delhi High Court
• No Disallowance of Interest for earning exempt Income u/s 14A: ITAT grants relief to Bajaj
• No Disallowance merely when Assessee has not earned any Business Income but Office, Infrastructure is Ready for Future Business
• Relief to Toyota: ITAT allows Income Tax Deduction of CSR Expenses towards provision of Toilet facilities in Govt. Schools
• Receipts from Sale of Scraps is part of Gains derived from Industrial undertaking for Computing Deduction: ITAT
• TDS not deductible on Commission paid to Overseas Agents: ITAT
• Consideration for Sale of Software cannot be treated as Royalty, no TDS to be deducted: Madras High Court
• Relief to Tulip Star Hotel: ITAT deletes Disallowance of Expenses amounting to 3.6 Cr
• Section 14A Disallowance not maintainable merely on failure to Maintain Separate Accounts for Expenditures Incurred for Tax-Free Income: SC grants relief to South Indian Bank
• Assessee can’t receive Payments from its Old Sundry Debtors after a gap of Two to Three years
• Merely claiming of lessor 100% Depreciation on Asset can’t make the asset as ‘previously used’ to disqualify the asset from claiming Deduction
• Expenditure incurred allowable to Company on Lands purchased from its Directors as substantial profits were earned by company
• Assessee entitled to Carry Forward Depreciation loss beyond 8 Years
• Brought forward Unabsorbed Depreciation shall be treated as Depreciation of the Current Year u/s 32 of the Income Tax Act
• BBMP NOT REQUIRED TO DEDUCT TDS ON PROVIDING DEVELOPMENT RIGHTS CERTIFICATE ON LAND ACQUISITION: ITAT
• Lease Rent Income received from Letting out modules of Software Technology Park to constitute Income from Business, eligible for Deduction
• Income Tax Deduction not claimed in Original Assessment Proceedings can’t be claimed during Re-assessment: Karnataka High Court
• Charitable Society eligible for Income Tax Exemption for providing Hostel facilities to Staff and Students, being integral part of ‘Educational Activities’: ITAT
• Developer entitled to Claim Depreciation of Public Roads, Treating Same as Building: Madras High Court
• Section 10A deductions to be made from Gross Total Income and not from Total Income: ITAT
• Consultant Doctors are not ‘Employees’: Hospitals need to deduct TDS on payment of Professional Fee, rules ITAT
• Notional Rent not applicable on a flat which is inhabitable and in a ruinous condition: ITAT
• Interest earned on FD maintained with Bank for availing Credit Facility couldn’t be treated as Business Income, not entitled to Deduction
• No addition of Share Application Money be made if enquiries conducted have not been confronted to Assessees: ITAT deletes addition of Rs. 36 Cr against Bhushan Group
• Beneficiaries not Taxable for Fund invested by Trust in Swiss Bank: ITAT
• Assessment can’t be made on Dead Entity: ITAT
• Reason to suspect’ can’t be a Reason to Re-open Assessment: ITAT
• Assessee can’t be penalized for wrong statement given by payee, ITAT Indore Bench
• Running Hospital and Nursing School is Inseparable Activity, Eligible for Tax Exemption: ITAT
• Capital Gain Deduction allowable for Purchase of House Property Abroad
• Cess paid can be deducted while computing Income chargeable under the head ‘Profits and Gains of Business or Profession
• CIT(A) rightly treated the fixed deposit interest income under the “Income from Business & Profession” instead of “Income from Other Sources”: ITAT
• Explanation to Indirect Share Transfer provisions inserted by Finance Act, 2015 applicable retrospectively
• Foreign Exchange fluctuation gain / loss should be treated as operating in profit margin computation
• ITAT confirms disallowance of Advertisement Expenses relating to Construction of Swimming Pool
• No Deduction can be claimed if Bad Debt not written off
• No Tax on Compensation received for loss of Trees
• Payment for Acquisition of Leasehold Rights over an Immovable Property is not Rental Income, No TDS applicable
• Penalty can’t be imposed where Concealment of Income has not been proven
• Relief to Tata Trusts: ITAT quashes Revised Assessment order passed by Tax Department
• Royalty paid for Licence to Manufacturing/Sale & Technical Know-How having enduring benefit is Capital Expense
• Sale made out of Opening Stock can’t be treated as Unexplained Income to be taxed as Income from Other Source
• Bombay HC allows Deduction on Interest Paid on amount borrowed for purpose of machinery even if machinery is not actually used in Business
• Indian Youth Center Trust eligible for Income Tax Benefits: ITAT
• Payment received by EY located in UK for providing access to Computer Software to Indian Member firms doesn’t amount to Royalty, liable to be Taxed: Delhi HC quashes AAR’s Ruling
• ITAT deletes Additions for Unexplained Cash Credit as it was not based on Incriminating Material found during course of Search Operations
• Capital Gains arising on Sale of Agricultural Land which is not a Capital Asset shall not be chargeable to Income Tax: ITAT