Direct Tax Cases Monthly Round Up: July 2024

Update: 2024-08-01 09:39 GMT
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Supreme CourtState Not Liable To Collect Tax At Source While Giving Contractors Permit To Vend Liquor At Fixed Retail Price : Supreme CourtCase Details : THE EXCISE COMMISSIONER KARNATAKA & ANR. v. MYSORE SALES INTERNATIONAL LTD. & ORS CIVIL APPEAL NO. 2168 OF 2007Citation : 2024 LiveLaw (SC) 496The Supreme Court recently held that any vendor who buys liquor from state...

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Supreme Court

State Not Liable To Collect Tax At Source While Giving Contractors Permit To Vend Liquor At Fixed Retail Price : Supreme Court

Case Details : THE EXCISE COMMISSIONER KARNATAKA & ANR. v. MYSORE SALES INTERNATIONAL LTD. & ORS CIVIL APPEAL NO. 2168 OF 2007

Citation : 2024 LiveLaw (SC) 496

The Supreme Court recently held that any vendor who buys liquor from state manufacturers without obtaining it through auction and sells in retail at a fixed price would be excluded from the definition of 'buyer' under Section 206C of the Income Tax Act. Such a trade would be exempted from TCS (Tax Collected at Source).

Regular Entries In 7th Schedule Of Constitution Can't Be Given Wider Interpretation To Include Taxation Powers : Supreme Court

Case Details : Mineral Area Development v. M/S Steel Authority Of India & Ors (CA N0. 4056/1999)

Citation : 2024 LiveLaw (SC) 512

The Supreme Court has recently held that regular entries under List I and II of the 7th Schedule of the Constitution cannot be given a wider interpretation to include taxation powers which are covered under the domain of specific tax entries under the 7th Schedule.

Vodafone Idea Not Liable To Deduct TDS On Charges Paid To Non-Resident Telecom Operators : Supreme Court

Case Title: Deputy Director of Income Tax & Anr. v. M/S. Vodafone Idea Ltd.

Citation :2024 LiveLaw (SC) 522

Dismissing a petition filed by the Income Tax Department, the Supreme Court recently upheld the view that Vodafone Idea is not liable to deduct TDS (tax deducted at source) on interconnectivity usage and bandwidth charges paid to non-resident telecom operators.

Delhi High Court

Not Permissible For TPO To Engage In Restructuring Of Transaction: Delhi High Court

Case Title: CIT Versus A.T. Kearney Ltd.

The Delhi High Court has held that it is not permissible for the Transfer Pricing Officer (TPO) to engage in the restructuring of a transaction.

Services Provided Outside To Indian Customers In Connection With Right To Use Of Process Can't Be Taxed : Delhi High Court

Case Title: The Commissioner Of Income Tax - International Taxation Versus Telstra Singapore Pte Ltd.

The Delhi High Court has held that the receipts from Indian customers for services provided outside' Indian Territory in connection with use or right to use of process or equipment by the assessee company cannot be taxed as royalty.

Educational Activities Neither Business Nor Profession, Covered Under Section 2 (15) Of Income Tax Act: Delhi High Court

Case Title: CIT(E) Versus NIIT Foundation

The Delhi High Court has held that the assessee is carrying on educational activities that are covered by the provisions of Section 2 (15) of the Income Tax Act, and it is neither business nor profession of the assessee.

Loans Extended By NOIDA Is Not Commercial Activity, Eligible For Section 10(46) Exemption: Delhi High Court

Case Title: New Okhla Industrial Development Authority Versus Union Of India & Ors.

The Delhi High Court has held that the loans and advances extended by the New Okhla Industrial Development Authority (NOIDA) are not commercial activities and are eligible for exemption under Section 10(46) of the Income Tax Act.

TPO Lacks Jurisdiction To Question Commercial Expediency Or Genuineness Of Need: Delhi High Court

Case Title: PCIT Versus Samsung India Electronics Pvt. Ltd.

The Delhi High Court has held that the statutory authority conferred upon the Transfer Pricing Officer (TPO) can only extend to an examination of the appropriateness of the method adopted for the purposes of determining arm's length pricing (ALP) or evaluating the enlistment of comparables. However, the TPO would neither be justified nor could it be countenanced to have the jurisdiction to question commercial expediency or genuineness of need.

Services Provided By IMG Utilized By BCCI Outside India, Income Not Liable To Be Taxed: Delhi High Court

Case Title: International Management Group (Uk) Limited Versus Commissioner Of Income Tax-2, International Taxation, New Delhi

The Delhi High Court has held that services provided by International Management Group (IMG) are utilized by the Board of Control for Cricket in India (BCCI) outside India, so the income determined as Fee for Technical Services (FTS) cannot be deemed to accrue in India and therefore cannot be taxed in India.

Order Of ITSC Final And Conclusive For AY For Which Application Has Been Filed: Delhi High Court

Case Title: Pr. Commissioner Of Income Tax -Central -1 Versus Maharaji Education Trust

The Delhi High Court has held that the order of the Income Tax Settlement Commission (ITSC) is final and conclusive for a particular assessment year (AY) for which the application has been filed.

ITSC Empowered To Make Income Tax Addition: Delhi High Court

Case Title: Harsh Dhanuka HUF Versus PCIT

The Delhi High Court has held that the Income Tax Settlement Commission (ITSC) does not lack jurisdiction to make an addition, which has also been duly recorded in the terms of settlement.

AO Can't Review Its Own Order: Delhi High Court

Case Title: Aarti Fabricott Private Limited Versus Income Tax Officer, Ward 1(1), Delhi & Anr.

The Delhi High Court has held that the Assessing Officer (AO) cannot review its own order.

Bombay High Court

'Built Up Area' Definition Can't Have Retrospective Application, Bombay High Court Dismisses Dept. Appeal

Case Title: PCIT Versus G.K. Developers

The Bombay High Court has held that the expression 'built up area' introduced with effect from April 1, 2005, could not be applied retrospectively, and the Tribunal was justified in holding that up to April 1, 2005, the expression 'built up area' would exclude the balcony area.

JAO Cease To Have Jurisdiction To Issue Reassessment Notice Outside Faceless Assessment: Bombay High Court

Case Title: Royal Bitumen Private Limited, Mumbai Vs. Assistant Commissioner of Income-Tax

The Bombay High Court has held that the Jurisdictional Assessing Officer (JAO) would cease to have jurisdiction to issue any notice under Section 148A(b) and to take further actions under Section 148A(d) and Section 148 of the Act, outside the faceless assessment.

Investment Allowance Available On Exchange Rate Fluctuation: Bombay High Court

Case Title: M/s. Tolani Ltd. Versus DCIT

The Bombay High Court has held that investment allowance is available on exchange rate fluctuations.

Investment Allowance Available On Exchange Rate Fluctuation: Bombay High Court

Case Title: M/s. Tolani Ltd. Versus DCIT

The Bombay High Court has held that investment allowance is available on exchange rate fluctuations.

Section 148A(d) Order Passed Without Section 151 Sanction Is Illegal: Bombay High Court

Case Title: Umang Mahendra Shah Versus Union of India & Ors.

The Bombay High Court has held that if an order is passed under Section 148A(d) of the Income Tax Act in the absence of an appropriate sanction in terms of the provisions of Section 151 of the Income Tax Act, the order and the consequent notice under Section 148 would be required to be declared illegal.

JAO Not Empowered To Issue Section 148A(b) Notice Under Faceless Assessment: Bombay High Court

Case Title: Venus Jewel Versus ACIT

The Bombay High Court has held that it was not permissible for the Jurisdictional Assessing Officer (JAO) to issue a notice under Section 148A(b), as the same would amount to a breach of the provisions of Section 151A of the Income Tax Act.

Assessee Can't Be Expected To Deduct TDS From Payments Which Became Taxable Owing To Retrospective Amendment: Bombay High Court

Case Title: ACIT Versus Sociedade de Fomento Industrial Pvt. Ltd.

The Bombay High Court at Goa, while upholding the order of the Income Tax Appellate Tribunal (ITAT), has held that the assessee cannot be expected to deduct tax at source from payments that became taxable owing to a retrospective amendment.

Reassessment Notice Not Complying Section 148 Pre-Conditions Is Beyond Jurisdictional: Bombay High Court

Case Title: Smt. Sunita Purushottam Virgincar Versus ITO

The Bombay High Court at Goa has held that the reassessment notice issued without complying with the pre-conditions mentioned in Section 148 of the Income Tax Act was beyond jurisdiction.

Assessee Can't Be Expected To Deduct TDS From Payments Which Became Taxable Owing To Retrospective Amendment: Bombay High Court

Case Title: ACIT Versus Sociedade de Fomento Industrial Pvt. Ltd.

The Bombay High Court at Goa, while upholding the order of the Income Tax Appellate Tribunal (ITAT), has held that the assessee cannot be expected to deduct tax at source from payments that became taxable owing to a retrospective amendment.

Reassessment Notice Not Complying Section 148 Pre-Conditions Is Beyond Jurisdictional: Bombay High Court

Case Title: Smt. Sunita Purushottam Virgincar Versus ITO

The Bombay High Court at Goa has held that the reassessment notice issued without complying with the pre-conditions mentioned in Section 148 of the Income Tax Act was beyond jurisdiction.

Madras High Court

Foreign Tax Credit Can't Be Denied In Spite Of Accepting Computation: Madras High Court

Case Title: Thejo Engineering Limited Versus The Deputy Director of Income Tax

The Madras High Court has held that the claim of foreign tax credit cannot be denied in spite of accepting the computation.

Karnataka High Court

Income Tax Dept's Appeal Against Inadequate Sentence Lies Before Sessions Court: Karnataka High Court

Case Title: The Income Tax Department Versus M/S. Jenious Clothing Private Ltd

Citation: 2024 LiveLaw (Kar) 340

The Karnataka High Court has dismissed the appeals preferred by the Income Tax Department under Section 377 of Cr.P.C.

Reassessment Notice To Non-Existing Entity Is Not Legally Tenable: Karnataka High Court

Case Title: Informatica Business Solutions Private Limited Versus Acit

The Karnataka High Court has held that the reassessment notice to a non-existing entity is not legally tenable.

Reassessment Notice Not Issued In Terms Of Procedure Prescribed Under Faceless Assessment; Karnataka High Court Grants Interim Stay

Case Title: Suresh Chatrabhoj Bhanushali Versus UOI

The Karnataka High Court has granted an interim stay on a reassessment notice issued under Section 148 of the Income Tax Act, 1961 which was not issued in terms of the procedure prescribed under Faceless Assessment.

Calcutta High Court

Dept. Failed To Put Assessee On Notice In Respect Of Section 69A Addition, Assessment Order Not Sustainable: Calcutta High Court

Case Title: Vishal Jhajharia Versus The Assessment Unit, Income Tax Department Faceless Assessment Centre & Ors.

The Calcutta High Court has quashed the assessment order on the grounds that the department has failed to put the assessee on notice in respect of addition under Section 69A of the Income Tax.

Cellular Mobile Service Providers Not Obliged To Deduct TDS On Income Received By Distributors: Calcutta High Court

Case Title: Vodafone Idea Limited Vs Comissioner Of Income Tax

The Calcutta High Court has held that the cellular mobile service providers are not obliged to deduct the tax at source (TDS) on income received by distributors/franchisees from customers.

Cellular Mobile Service Providers Not Obliged To Deduct TDS On Income Received By Distributors: Calcutta High Court

Case Title: Vodafone Idea Limited Vs Comissioner Of Income Tax

The Calcutta High Court has held that the cellular mobile service providers are not obliged to deduct the tax at source (TDS) on income received by distributors/franchisees from customers.

Kerala High Court

Gain From Selling Of Property Kept For Investment To Be Taxed Under 'Capital Gains': Kerala High Court

2024 LiveLaw (Ker) 467

Case Title: PCIT Versus Arun Majeed

The Kerala High Court has held that when a property kept not for trade but for investment purposes is sold, the gain has to fall under the head 'capital gains' and such a transaction is only taxable under capital gain and not under adventure of trade.

Assessments Getting Time Barred By 31.03.2017 Can Continue Only Upto 31.03.2018: Kerala High Court

Case Title: Intersource Exports (P) Ltd. Versus Deputy Commissioner Of State Tax

Citation: 2024 LiveLaw (Ker) 483

The Kerala High Court has held that the assessments that were getting time barred by 31.03.2017 can continue only up to 31.03.2018.

Tax Effect In Appeals Below Monetary Limit Of Rs.1 Crore; Kerala High Court Dismisses ​​Dept's Appeal

2024 LiveLaw (Ker) 445

Case Title: PCIT Versus Kunhitharuvai Memorial Charitable Trust

The Kerala High Court has held that the tax effect in the appeals filed by the income tax department pertaining to assessment years 2006–07, 2007–08, 2008–09, 2009–10, and 2010–11 is well below the monetary limit of Rs. 1 crore and is liable to be dismissed.

Assessment Order Downloaded From Common Portal Amounts To A Valid Service: Kerala High Court

2024 LiveLaw (Ker) 444

Case Title: Sunil Kumar K Versus The State Tax Officer-I, Kottarakkara

The Kerala High Court has held that the assessment order downloaded from the common portal amounts to a valid service.

Disallowance Operate Against Erring Employer Assessee When Employees' Contribution To EPF/ESI Not Made Within Due Date: Kerala High Court

Case Title: Unitac Energy Solutions (India) Pvt.Ltd. Versus The Assistant Commissioner Of Income Tax

The Kerala High Court has held that the disallowance operates against erring employer assessee when employees' contribution to EPF/ESI not made within the due date.

Long Term Finance Provided For Purchase Of Residential House, Bank Entitled For Deduction ; Kerala High Court

Case Title: The South Indian Bank Ltd Versus ACIT

The Kerala High Court has held that the South Indian Bank is entitled to the deduction envisaged under Section 36(1)(viii) of the Income Tax Act in respect of the long-term finance provided by it for the construction and purchase of houses in India for residential purposes.

Decision By Income Tax Officer Who Did Not Hear The Case; Kerala High Court Quashes The Order

Case Title: Sri. Johnson Koomullil Thomas Versus The Income Tax Officer

The Kerala High Court has held that if the income tax officer who hears the case does not render the decision, it would amount to a violation of the principles of natural justice.

Assessment Based On Best Judgement Basis , Non-Filing Of Returns After Receipt Of Order, Fatal For Assessee: Kerala High Court

Case Title: Aaron Construction Co. Versus Union Of India

The Kerala High Court has held that the non-filing of returns even after receipt of the assessment order is fatal for the assessee.

Decision By Income Tax Officer Who Did Not Hear The Case; Kerala High Court Quashes The Order

Case Title: Sri. Johnson Koomullil Thomas Versus The Income Tax Officer

The Kerala High Court has held that if the income tax officer who hears the case does not render the decision, it would amount to a violation of the principles of natural justice.

Assessment Based On Best Judgement Basis , Non-Filing Of Returns After Receipt Of Order, Fatal For Assessee: Kerala High Court

Case Title: Aaron Construction Co. Versus Union Of India

The Kerala High Court has held that the non-filing of returns even after receipt of the assessment order is fatal for the assessee.

Filing Appeal In Tax Matters Require Legal, Technical Assistance: Kerala High Court Condones 11 Days Delay

Citation: 2024 LiveLaw (Ker) 415

Case Title: The Meenachil Taluk Cooperative Employees Cooperative Society Limited Versus Commissioner Of Income Tax (Appeals)

The Kerala High Court, while condoning the delay of 11 days, observed that filing an appeal in tax matters may require legal and technical assistance.

Transfer Of Depreciable Capital Assets Attracts Capital Gains Tax: Kerala High Court

Citation: 2024 LiveLaw (Ker) 414

Case Title: PVR Tourist Home Versus CIT

The Kerala High Court has held that the transfer of the depreciable capital assets attracted capital gains tax under Section 45(4) of the Income Tax Act, in the absence of distribution of any capital asset among the partners following a dissolution of the appellant firm.

Manipur High Court

Non-Communication Of Reassessment And Demand Notice Within Time: Manipur High Court Quashes Assessment

Case Title: Smt. Mema Paul Versus Income Tax Officer

The Manipur High Court has held that the reassessment made by the Income Tax Officer without communicating the order of reassessment and the demand notice of the reassessment within time cannot be treated as a valid assessment.

Object Of Introduction Of Faceless Assessment Stands Defeated If Show Cause Notice U/s 148 Is Issued By Jurisdictional AO: Punjab & Haryana HC

Case Title: Jatinder Singh Bhangu verses Union of India and others

Citation: 2024 LiveLaw (PH) 165

While pointing that scheme of faceless assessment is applicable from the stage of show cause notice u/s 148 as well as 148A, the Punjab & Haryana High Court ruled that notice u/s 148 cannot be issued by Jurisdictional Assessing Officer after introduction of faceless assessment scheme.

Jharkhand High Court

Jharkhand High Court Dismisses Dept's Appeals For Not Filing Delay Condonation Application Along With Appeal Memo

Case Title: PCIT Versus Tripta Sharma

LL Citation: 2024 LiveLaw (Jha) 124

The Jharkhand High Court, while dismissing the appeal filed by the department, held that a delayed condonation application not filed with an appeal memo and subsequent filing cannot cure defects.

Rajasthan High Court

Depression, Old Age, Assessee's Status As Small-Scale Surveyor To Be Considered As Genuine Hardship; Rajasthan High Court Condones Delay

Case Title: Padam Raj Bhandari Versus UOI

Citation: 2024 LiveLaw (Raj) 182

The Rajasthan High Court has allowed the application seeking condonation of delay under Section 119(2)(b) of the Income Tax Act in order to claim a refund for the assessment year 2009-10 to 2014-15 on the grounds of genuine hardship.

Gujarat High Court

Admission Fee Charged From Students Forms Part Of Corpus Donation: Gujarat High Court

Case Title: N H Kapadia Education Trust Versus The Assistant Commissioner Of Income Tax (Exemptions)

The Gujarat High Court has held that the admission fee charged by the students forms part of the corpus donation of the trust.

Admission Fee Charged From Students Forms Part Of Corpus Donation: Gujarat High Court

Case Title: N H Kapadia Education Trust Versus The Assistant Commissioner Of Income Tax (Exemptions)

The Gujarat High Court has held that the admission fee charged by the students forms part of the corpus donation of the trust.

Gujarat High Court Allows Section 54 Deduction On Cash Transaction Of Sell And Purchase Of Residential Property

Citation: 2024 LiveLaw (Guj) 84

Case Title: Ashwinbhai Babubhai Dudhat Versus The Interim Board For Settlement

The Gujarat High Court has allowed the deduction under Section 54 of the Income Tax Act on the cash transaction of the sale and purchase of residential property.

Telangana High Court

Deduction Can't Be Availed On Expenditure Incurred For Overseeing Project Of Holding Company: Telangana High Court

Case Title: M/s.Pipelic Energy Software India Pvt.Ltd. Versus The Deputy Commissioner of Income Tax

The Telangana High Court has held that deductions cannot be availed on expenditures incurred for overseeing the project of holding a company.

Deduction Can't Be Availed On Expenditure Incurred For Overseeing Project Of Holding Company: Telangana High Court

Case Title: M/s.Pipelic Energy Software India Pvt.Ltd. Versus The Deputy Commissioner of Income Tax

The Telangana High Court has held that deductions cannot be availed on expenditures incurred for overseeing the project of holding a company.

Meghalaya High Court

Once Revision Order Become Final, No Question Of Passing Another Order Will Arise: Meghalaya High Court

Case Title: Pr. Commissioner of Income Tax, Shillong Versus M/s North Eastern Electric Power Corporation Limited

The Meghalaya High Court has held that once the revision order becomes final, no question of passing another order will arise.

Once Revision Order Become Final, No Question Of Passing Another Order Will Arise: Meghalaya High Court

Case Title: Pr. Commissioner of Income Tax, Shillong Versus M/s North Eastern Electric Power Corporation Limited

The Meghalaya High Court has held that once the revision order becomes final, no question of passing another order will arise.

Himachal Pradesh High Court

Assessment Re-Opened By Dept. Based On 'Change Of Opinion'; Himachal Pradesh High Court Quashes Reassessment

Case Title: J.B.J. Perfumes Private Limited Versus Principal Commissioner of Income Tax and another

Citation: 2024 Livelaw (HP) 32

The Himachal High Court quashed the reassessment order on the grounds that the assessment was re-opened by the department based on 'change of opinion'.

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