Direct Tax Cases Monthly Round Up: June 2024
Mariya Paliwala
1 July 2024 7:05 AM GMT
Delhi High CourtInterest Received By Indian PE On Deposit Maintained With Head Office/Overseas Branch Is Not Taxable In India: Delhi High CourtCase Title: The Commissioner Of Income Tax-International Taxation-3 Versus The Bank Of Tokyo-Mitsubishi UFJ Ltd.The Delhi High Court has held that interest received by the Indian PE on deposits maintained with the Head Office/Overseas Branch is not...
Delhi High Court
Case Title: The Commissioner Of Income Tax-International Taxation-3 Versus The Bank Of Tokyo-Mitsubishi UFJ Ltd.
The Delhi High Court has held that interest received by the Indian PE on deposits maintained with the Head Office/Overseas Branch is not taxable in India.
Case Title: Progress Rail Locomotive Inc. (Formerly Electro Motive Diesel Inc.) Versus Deputy Commissioner Of Income-Tax
Citation: 2024 LiveLaw (Del) 671
The Delhi High Court, while quashing the reassessment proceedings initiated by the income tax department against the Caterpillar Group, held that once the issue of arm's length remuneration was settled by the Transfer Pricing Officer (TPO), the question of ascertaining the existence of a permanent establishment (PE) was academic.
Case Title: GE Capital Us Holdings Inc Versus Dy Commissioner Of Income Tax (International Taxation)
The Delhi High Court, while quashing the penalty, has held that both under-reporting and misreporting are viewed as separate and distinct misdemeanours.
Case Title: Commissioner Of Income Tax (Exemptions) Versus M/S Jamnalal Bajaj Foundation
The Delhi High Court has held that exemption is allowable on donations made by one charitable trust to other charitable institutions for a temporary period.
Case Title: Flowmore Limited Versus Deputy Commissioner Of Income Tax, Central Circle 28, New Delhi & Anr.
The Delhi High Court has held that the initiation of Section 153C of the Income Tax Act assessment proceedings falling beyond the maximum 10-year block period is unsustainable.
Case Title: Principal Commissioner Of Income Tax 1 Versus M/S Care Health Insurance Limited
Citation: 2024 LiveLaw (Del) 707
The Delhi High Court has held that the deduction under Section 37 of the Income Tax Act is allowable on unsettled claims as well as Incurred But Not Reported (IBNR), which would amount to contingent liabilities.
Case Title: Dinesh Jindal Vs ACIT and Ors
While quashing the reassessment notice issued to the Assessee, pursuant to a search operation conducted against a third party, the Delhi High Court held the same to be barred by limitation under first proviso to Section 149(1) read with Section 153C & Section 153A of Income tax Act.
Case Title: GE Capital Us Holdings Inc Vs DCIT
While quashing a show cause notice issued by the Department for initiation of penalty proceedings u/s 270A in a vague manner, the Delhi High Court held that categorical finding of 'mis-reporting/ under-reporting' is essential for levy of penalty u/s 270A.
Case Title: PCIT Vs Care Health Insurance Limited
While upholding ITAT's decision deleting disallowance of provisions for unsettled outstanding claims and 'Incurred But Not Reported' (IBNR) claims of health insurance company, the Delhi High Court held that provisions for unsettled outstanding and IBNR claims are not contingent liabilities, and hence allowable u/s 37 of Income tax Act.
Bombay High Court
Citation: 2024 LiveLaw (Bom) 303
Case Title: Vodafone India Services Pvt. Ltd. Versus Assistant Commissioner of Income Tax Circle 8(3)(2)
The Bombay High Court has upheld the order passed by the Income Tax Appellate Tribunal (ITAT) directing Vodafone India to deposit Rs. 230 crores for staying income tax demand.
Case Title: Karvy Innotech Limited Versus State of Maharashtra
The Bombay High Court, while noting the discrepancies between the dates of creation and signing of the assessment order, quashed the Maharashtra Value Added Tax Act (MVAT) Order, which was passed beyond the limitation period of 4 years.
Calcutta High Court
Case Title: Principal Commissioner Of Income Tax-9, Kolkata Vs. Bina Gupta
The Calcutta High Court has upheld the revision order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, as the AO failed to make a proper inquiry on the bogus claim of long-term capital gain (LTCG) by the sale of shares.
Punjab & Haryana High Court
Case Title: M/s Gokal Chand Rattan Chand Versus UOI
The Punjab and Haryana High Court has held that the auction proceedings based on a quashed ex-parte income tax appellate tribunal (ITAT) order by the tax recovery officer are void ab initio.
Telangana High Court
Colourable Devices To Evade Tax Can't Be Tax Planning, Rules Telangana High Court
Case Title: Ayodhya Rami Reddy Alla Versus Principal Commissioner of Incometax Central
The Telangana High Court has held that tax planning may be legitimate, provided it is within the framework of the law. Colorable devices cannot be part of tax planning, and it is wrong to encourage or entertain the belief that it is honorable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges.
Rajasthan High Court
Title: M/s Napin Impex Pvt. Ltd. v Commissioner, Commercial Taxes Department, Kar Bhawan, Ambedkar Circle, Janpath, Jaipur
The Rajasthan High Court has set aside an assessment order passed by the Commissioner, Commercial Taxes Department, Jaipur (“CCT”) under the Rajasthan Value Added Tax Act, 2003. The Court observed that the assessment order was unreasoned and was passed without any application of mind, violating the principles of natural justice.
Kerala High Court
Citation: 2024 LiveLaw (Ker) 364
Case Title: Balan Panicker Ramesh Kumar Versus Union Of India
The Kerala High Court has held that it is the prerogative of the government to fix the limit of income from the encashment of earned leave salary for the purposes of exemption from payment of income tax. Unless the government issues a notification fixing the limit of income for earned leave salary, an employee cannot claim exemption from payment of income tax on the encashment of earned leave for up to 300 days.
Citation: 2024 LiveLaw (Ker) 363
Case Title: Lakeshore Hospital And Research Centre Limited Versus The Additional/Joint/Deputy/Assistant Commissioner Of Income Tax/ Income Tax Officer, National Faceless Assessment Centre
The Kerala High Court has dismissed the writ petition challenging the assessment order and notice of demand on the grounds that they were issued in violation of the principles of natural justice.
Delay In Approaching Revision Authority Under Income Tax Act Can't Be Condoned: Kerala High Court
Citation: 2024 LiveLaw (Ker) 366
Case Title: Equity Intelligence India Pvt. Ltd Versus PCIT
The Kerala High Court has held that the delay in approaching the revision authority under the Income Tax Act cannot be condoned.
Citation: 2024 LiveLaw (Ker) 369
Case Title: M/S. Sunny Jacob Jewellers Gold Hyper Market Versus CIT
The Kerala High Court has held that based on the material obtained during the search, the Assessing Officer, who gets the jurisdiction to re-open the assessments, can do so in respect of the individual assessment years comprised in the block period of six years only if the material obtained during the search under Section 132 of the Income Tax Act, or any part thereof, relates to the assessment year in question.
Credit Available On Advance Tax Paid For Stock-Transferred: Kerala High Court
Case Title: Hillwood Furniture Pvt. Ltd Versus The Assistant Commissioner
The Kerala High Court has held that the petitioner will be entitled to credit for the entire amount paid in terms of Circular No. 50/2006 for the goods in question, which were stock-transferred to its branch office in Pollachi.
Himachal Pradesh High Court
Citation: 2024 LiveLaw (HP) 31
Case Title: M/s AMN Life Pvt. Ltd. Versus Union of India & others
The Himachal Pradesh High Court has imposed a cost of Rs. 10,000 on the Deputy CGST Commissioner for refusing to entertain the application of the assessee or petitioner for a refund of unutilized input tax credit.
Citation: 2024 LiveLaw (HP) 32
Case Title: Ultra Tech Cement Ltd. Versus UOI
The Himachal Pradesh High Court has quashed the order rejecting Ultra Tech's claim for the grant of budgetary support.
