Direct Tax Weekly Round-Up: 7 To 13 July 2024

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.

Bombay High Court

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.

Karnataka High Court

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.

Kerala High Court

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.

Calcutta High Court

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.

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.

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.

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.

ITAT

Income Tax Addition Can't Be Made On Cash Deposits During Demonetization Period: Delhi ITAT

Case Title: Durga Fire Work Versus ITO

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the department is precluded from making any addition under Section 68 of the Income Act in respect of the cash deposits made into bank accounts during the demonetization period.

Scrip Can't Be Called Penny Stock When Shares Retained For More Than 10 Years; ITAT Deletes Addition

Case Title: M/s. Elara India Opportunities Fund Limited Versus Dy. CIT (International Taxation)- 2(2)(1)

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT), while deleting the addition, held that scrip cannot be called penny stock when shares are retained for more than 10 years.

Section 254(2) Applies Only Rectification Of Mistake, Can't Be Utilised For Recall And Review Order: ITAT

Case Title: ITO Versus Neetaben Snehalkumar Patel

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the provision of Section 254(2) of the Income Tax Act is intended to only rectify the mistake apparent from the records, and the power of Section 254(2) of the Income Tax Act cannot be utilized to recall and review the order on its merit.