Tax
Direct Tax Cases Weekly Round-Up: 09 To 15 June 2024
Delhi High CourtUnsettled Claims As Well As IBNR Would Amount To Contingent Liabilities; Section 37 Deduction Allowable: Delhi High CourtCase Title: Principal Commissioner Of Income Tax 1 Versus M/S Care Health Insurance LimitedCitation: 2024 LiveLaw (Del) 707The Delhi High Court has held that the deduction under Section 37 of the Income Tax Act is allowable on unsettled claims as well...
Provisions For Unsettled Outstanding & IBNR Claims Allowable U/s 37 Being Ascertained Liabilities: Delhi High Court
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. Section 37 of Income Tax Act states that any...
Assessments Concluded U/s 153A Without Mandatory Approval U/s 153D Would Be Void: Delhi ITAT
The Delhi ITAT allowed the Assessee's appeal challenging assessments completed u/s 153A r/w Section 143(3) as void, in absence of mandatory approval u/s 153D. Section 153D of the Income Tax Act, mandates that no order of assessment or reassessment shall be passed by an AO below the rank of Joint Commissioner without the prior approval of the Joint Commissioner or...
Non-Payment Of Tax Due To Uncertain Legal Position Existing At Time Of Filing Return Is Outside Scope Of 'Mis-Reporting': Delhi HC Deletes Penalty U/s 270A
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. The High Court also set aside an order dismissing immunity claimed by the assessee u/s 270AA and dropped the penalty proceedings...
Absence Of 'FTS' In Treaty Is No Basis To Tax Technical Services Rendered To AE, In Absence Of Its PE In India: Delhi ITAT
The Delhi ITAT ruled that though income received by a non-resident entity towards services provided to Indian associate enterprises (AE) are in nature of 'fees for technical service' (FTS), but same cannot be taxed in India simply in absence of FTS clause under respect treaty provisions. The Division Bench comprising G.S. Pannu (Vice-President) and Anubhav Sharma (Judicial Member)...
Reassessment On Non-Searched Entity Is Governed By Limitation In First Proviso To Sec 149(1) R/w Sec 153C & 153A: Delhi High Court
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. The High Court rejected the AO's contention that Section 148 notice would not be beyond the...
ITAT Calcutta Allows Exemption Registration To Income Tax Bar Association, Sets Aside CIT Order
The Calcutta Bench of Income Tax Appellate Tribunal (ITAT) has allowed the exemption registration to the income tax bar association as the registration application was not time-barred.The bench of Rajpal Yadav (Vice President) and Sanjay Awasthi (Accountant Member) has observed that the procedure adopted by the CIT (Exemption) was incorrect to grant a provisional certificate to the assessee...
RPM Is Most Appropriate Method To Benchmark Transaction Of Purchase Of Solar Goods: ITAT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the Resale Price Method (RPM) is the most appropriate method to benchmark the transaction of the purchase of solar goods.The bench of Vikas Awasthy (Judicial Member) and Pradip Kumar Kedia (Accountant Member) has observed that where there is no value addition made before reselling the product, RPM is the most...
Income Tax Deduction Allowable On Expenditure Incurred On Warranty Claim: ITAT
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the income tax deduction is allowable on expenditures incurred on warranty claims.The bench of Kul Bharat (Judicial Member) and M. Balaganesh (Accountant Member) has relied on the decision of the Supreme Court in the case of Rotork Controls India (P) Ltd., in which it was held that if the facts establish or show that...
Unreasoned Orders By Judicial/ Quasi-Judicial Authorities Violate Natural Justice: Rajasthan High Court Quashes Commercial Tax Assessment Order
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.The assessee had filed his returns for the assessment...
Service Tax Exemption On Services Of Providing Vehicles On Hire Basis To GTA: CESTAT
The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the service tax exemption on services of providing vehicles on a hire basis to the Goods Transport Agency (GTA).The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the definition of GTA is given under Section 65B(26) of the Finance Act. A person can...
Deduction Of Trade Discount From Assessable Value Is Admissible On Sale Transactions: CESTAT
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the deduction of trade discount from assessable value is admissible on sale transactions.The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that the transaction value should be considered as the price at which the CNG were supplied by the appellants...