Direct Tax Half Yearly Digest: January To June 2024 - PART I

Taxpayer Entitled To Hearing On Merits If Appeals Were Dismissed By HC For Delay In Filing Paper-Book: Supreme Court

Case Title: Herbicides India Limited vs ACIT

2024 LiveLaw (SC) 44

While setting aside the Rajasthan High Court orders, the Supreme Court restored the assessee's appeals by condoning the delay in filing the paper-book before High Court and observed that the assessee is entitled to have his appeals heard on merits.

Tax Return Filed Without Regular Books Of Account Not Invalid, Burden To Call For Curing Of Defects On Assessing Officer: Supreme Court

Case Title: M/S Mangalam Publications, Kottayam V. Commissioner Of Income Tax, Kottayam

Citation : 2024 LiveLaw (SC) 55

While deciding the question as to whether reopening of a concluded assessment under Section 147 of the Income Tax Act (“Act”) was legally sustainable or not, the Supreme Court recently held that for the purposes of tax assessment, an assessee's obligation is limited to making a "full and true" disclosure of all "material" or primary facts, and thereafter, the burden shifts on the assessing officer. If a return is defective, it is upto the officer that he intimate the assessee in order that defects may be cured. But if the officer fails to do so, the return cannot be called defective.

Reopening Of Income Tax Assessments : Supreme Court Refuses To Interfere With Delhi High Court's Guidelines To Tax Dept.

Case Title: Asst. Commissioner Of Income Tax Versus Sabh Infrastructure Ltd.

The Supreme Court has refused to interfere with a 2017 Delhi High Court judgment which issued a set of guidelines to the Income Tax Department regarding the reopening of assessments.

TDS Under S.194-H Income Tax Act Won't Apply To Business Transactions Where Assessee Is Not Responsible For Paying Income : Supreme Court

Case Title: Bharti Cellular Limited v. Assistant Commissioner of Income Tax and Another

Citation : 2024 LiveLaw (SC) 176

In a significant development, the Supreme Court recently held that under Section 194-H of the Income Tax Act, 1961, cellular mobile service providers are not liable to deduct tax at source on income/profit component in payments received by their franchisees/distributors from third parties/customers.

Interest-Free/Concessional Loans To Bank Employees Taxable As Perquisite : Supreme Court Upholds Rule 3(7)(I) Of Income Tax Rules

Case Name- All India Bank Officers' Confederation Vs The Regional Manager, Central Bank Of India & Others

Citation : 2024 LiveLaw (SC) 352

A Division bench of the Supreme Court comprising of Justice Sanjiv Khanna and Justice Dipankar Datta while deciding a Civil Appeal in the case of All India Bank Officers' Confederation Vs The Regional Manager, Central Bank Of India & Others has held that Rule 3(7)(i) of the Income Tax Rules, 1962 is not violative of Article 14 of the Constitution of India and provision of interest free/concessional loan benefits provided by banks to bank employees shall be taxable as a perquisite under Section 17 of the Income Tax Act, 1961.

Delhi High Court

Transactions Concerning Mutual Funds Not In The Nature Of Investment And Not Motivated By Trade: Delhi High Court

Case Title: PCIT Versus M/S Wig Investment

Citation: 2024 LiveLaw (Del) 60

The Delhi High Court has held that transactions concerning mutual funds were in the nature of investment and not motivated by trade.

Fees Received For Sub-Licensing Sports Broadcasting Rights Attributable To 'Live Feed', Not Taxable As Royalty: Delhi High Court

Case Title: The Commissioner Of Income Tax - International Taxation -1 Versus Fox Network Group Singapore Pte Ltd.

Citation: 2024 LiveLaw (Del) 73

The Delhi High Court has held that fees received by assessees for sub-licensing sports broadcasting rights attributable to 'live feed' is not taxable as royalty.

Investment In Shares In Indian Subsidiary 'Capital Account Transaction', Not Income: Delhi High Court

Case Title: M/S Angelantoni Test Technologies Srl V. Assistant Commissioner Of Income Tax

Citation: 2024 LiveLaw (Del) 25

The Delhi High Court has held that investment in shares by a company in its Indian subsidiary is a “capital account transaction” which does not give rise to any income. Therefore, the same cannot be treated as income for taxation.

Delhi High Court Directs Income Tax Commissioner To Accept BCI's Form No.10 After Condoning Delay

Case Title: Bar Council Of India Versus Commissioner Of Income Tax (Exemption)

Citation: 2024 LiveLaw (Del) 27

The Delhi High Court has directed the income tax commissioner to accept Form No. 10 submitted by the Bar Council of India (BCI) after condoning the delay.

Income Tax: Denial of 80lA Benefit In 4th Year Of Assessment, U-Turn By Department Is Not Justified: Delhi High Court

Case Title: Pr. Commissioner Of Income Tax Versus M/S Bt Global Communications India Pvt. Ltd.

Citation: 2024 LiveLaw (Del) 34

The Delhi High Court has held that the Principal Commissioner Income Tax (PCIT) wrongly invoked jurisdiction under Section 263 of the Income Tax Act and fell in error by taking a U-turn in the fourth assessment year, thereby denying the benefit of Section 80IA of the Income Tax Act.

Actual Interest Expenditure Had To Be Adjusted Against Income Earned By Way Of Interest: Delhi High Court

Case Title: CIT Versus RRPR Holding Pvt. Ltd.

Citation: 2024 LiveLaw (Del) 3

The Delhi High Court has held that actual interest expenditure had to be adjusted against the income earned by way of interest.

Use Of Trademark Incidental To Advertisement Or Publicity Is A Business Income, Not Royalty And FTS: Delhi High Court

Case Title: Hyatt International-Southwest Asia Ltd. Versus Additional Director Of Income Tax

Citation: 2024 LiveLaw (Del) 13

The Delhi High Court has held that the use of trademarks incidental to advertisement or publicity was held as neither royalty nor fees for technical services (FTS) but as business income.

Employee Accepted Salary After TDS Deduction, Employer Responsible For Non-Deposit: Delhi High Court

Case Title: Harshdip Singh Dhillon Versus Union Of India

Citation: 2024 LiveLaw (Del) 20

The Delhi High Court has held that the employee accepted salary after TDS deduction and the employer is responsible for non-deposit of TDS.

Sales Tax Subsidy/Incentive Is Capital Receipt: Delhi High Court

Case Title: Commissioner Of Income Tax Versus M/S Indo Rama Textiles Ltd.

Citation: 2024 LiveLaw (Del) 118

The Delhi High Court has held that the sales tax subsidy or incentive received by the assessee under the Dispersal of Industries Package of Incentives, 1993, was a capital receipt.

AO Lacks Jurisdiction To Pass Draft Assessment Order In Absence Of " Any Variation In Income Or Loss ": Delhi High Court

Case Title: The Commissioner Of Income Tax - International Taxation Versus S.A.Chitra Ventures Ltd.

Citation: 2024 LiveLaw (Del) 211

The Delhi High Court has held that the AO, under Section 144C of the Income Tax Act, would have no jurisdiction to pass a draft assessment order in the absence of "any variation in the income or loss returned," which is prejudicial to the interest of the assessee.

Subscription To Legal Database Can't Be Construed Transfer Of Copyright, Subscription Fee Is Not Royalty: Delhi High Court

Case Title: The Commissioner Of Income Tax - International Taxation -3 Versus Relx Inc

Citation: 2024 LiveLaw (Del) 217

The Delhi High Court has held that subscription to legal databases cannot be construed as a transfer of copyright.

Revisional Jurisdiction Can't Be Invoked For Inadequacy Of Enquiry By AO: Delhi High Court

Case Title: PCIT Versus M/S Clix Finance India Pvt. Ltd.

Citation: 2024 LiveLaw (Del) 279

The Delhi High Court has held that the inadequacy of the inquiry by the AO with respect to certain claims would not in itself be a reason to invoke the powers enshrined in Section 263 of the Income Tax Act.

Pick And Choose Method Of Rejecting Certain Entries From Books Of Account Is Arbitrary: Delhi High Court

Case Title: PCIT Versus M/S Forum Sales Pvt. Ltd.

Citation: 2024 LiveLaw (Del) 280

The Delhi High Court has held that any pick-and-choose method of rejecting certain entries from the books of account while accepting others without an appropriate justification is arbitrary and may lead to an incomplete, unreasonable, and erroneous computation of the income of an assessee.

Expression “Yes” By PCIT Couldn't Be Considered A Valid Approval U/s 151 Of Income Tax Act: Delhi High Court

Case Title: The Pr. Commissioner Of Income Tax -7 Versus Pioneer Town Planners Pvt. Ltd.

Citation: 2024 LiveLaw (Del) 290

The Delhi High Court has held that the expression “yes” could not be considered to be a valid approval under Section 151 of the Income Tax Act.

Assessment Order Passed Beyond Time Limit Prescribed U/s 153 Merits To Be Quashed: Delhi High Court

Case Title: Readers Digest Book and Home Entertainment (India) Pvt Ltd vs DCIT

Finding that no valid demand stood raised against the Petitioner / assessee prior to Sep 30, 2021, the Delhi High Court directed the Respondents / Revenue to re-compute the refund payable to the petitioner along with statutory interest which shall run up to the date of remittance in accordance with law.

ITAT Must Recall Its Order U/s 254 To Correct Manifest Error Apparent On Record: Delhi High Court

Case Title: PCIT vs Fiserv India Private Ltd.

While condoning the delay of 86 days by Revenue in filing the appeal, the Delhi High Court dismisses Revenue's appeal filed against the Tribunal's order in miscellaneous application filed by assessee to review its earlier order u/s. 254(2) of the Income tax Act.

Upward Adjustments Of Income As Proposed By TPO Stands Withdrawn: Delhi High Court Applies Rule Of Consistency To Adopt TNMM

Case Title: Pr. CIT vs Oriflame India Pvt Ltd

Finding that the matter has been resolved and Modicare Limited has been excluded from the list of comparable to determine the ALP, the Delhi High Court dismisses Revenue's appeal against ITAT's decision in case of assessee engaged in sale of a wide variety of skin care and cosmetic products.

Services Provided By Irish Company To Its Indian Counterpart Not Technical Services: Delhi High Court Quashes Order Denying Nil/Lower TDS certificate

Case Title: SFDC Ireland Limited Versus Commissioner Of Income Tax

Citation: 2024 LiveLaw (Del) 307

The Delhi High Court has quashed the order denying Nil or lower TDS certificates and held that the services provided by the assessee, Irish Company, to its Indian counterpart were not technical services.

ITO Can't Retain Amount Deposited By Taxpayer Without Framing Final Assessment Order During Period Of Stay: Delhi High Court

Case Title: Navisite India Pvt Ltd vs CIT

Citation: 2024 LiveLaw (Del) 308

The Delhi High Court allowed assessee's petition seeking refund of amounts which was deposited towards part payment of demand raised in pursuance of assessment order for AYs 2008-09 and 2009-10.

Pre-Deposit Of 20% Demand Is Not Precondition For Consideration Of Stay Application During Pendency Of First Appeal: Delhi High Court

Case Title: National Association Of Software And Services Companies (NASSCOM) Versus Deputy Commissioner Of Income Tax (Exemption) Circle 2 (1)

Citation: 2024 LiveLaw (Del) 327

The Delhi High Court has held that a 20% pre-deposit demand is not a precondition for consideration of a stay application during the pendency of the first appeal.

Failure Of AO To Take Concrete Steps To Ascertain The Genuineness And Creditworthiness Of Transactions: Delhi High Court

Case Title: PCIT Versus M/S Paramount Propbuild Pvt. Ltd.

Citation: 2024 LiveLaw (Del) 333

The Delhi High Court has held that the AO has not taken any concrete steps to ascertain the genuineness and creditworthiness of the transactions.

Variance In Allowable Deductions Doesn't Amount To Furnishing Inaccurate Particulars Of Income: Delhi High Court

Case Title: Pr. Commissioner of Income Tax V/s. ICICI Bank Ltd

The Delhi High Court has held that the assessee cannot be said to furnish inaccurate particulars of income merely for variance in allowable deductions.

Abhisar Buildwell Judgment Can't Be Construed To Be An Authority To Override Mandate Of Section 245-I: Delhi High Court

Case Title: Orchid Infrastructure Developers Pvt. Ltd. Versus PCIT

The Delhi High Court has held that the judgement of Abhisar Buildwell passed by the Supreme Court cannot be construed to be an authority to override the mandate of Section 245-I of the Income Tax Act.

Addition Solely Based On Photocopy Of Sale Agreement Is Completely Unjustifiable: Delhi High Court

Case Title: PCIT Versus Rashmi Rajiv Mehta

The Delhi High Court has held that an addition solely based on a photocopy of the sale agreement is completely unwarranted and unjustifiable.

Income Tax Addition Made Towards Unsubstantiated Share Capital Is Eligible For Section 80-IC Deduction: Delhi High Court

Case Title: Valley Iron & Steel Co.Ltd Versus PCIT

Citation: 2024 LiveLaw (Del) 397

The Delhi High Court has held that income tax additions made towards unsubstantiated share capital are eligible for deduction under Section 80-IC of the Income Tax Act.

Delhi High Court Quashes Initiation Of Section 153C Assessment Proceedings Falling Beyond Maximum 10 Years Block Period

Case Title: PCIT Versus Ojjus Medicare Pvt. Ltd.

Citation: 2024 LiveLaw (Del) 407

The Delhi High Court has quashed the initiation of assessment proceedings under Section 153C of the Income Tax Act, which was falling beyond the maximum 10-year block period.

Delhi High Court Interpretes Rule 11UA For Determination FMV Of Shares U/S 56(2)(viib)

Case Title: Agra Portfolio Pvt. Ltd. Versus Pr. Commissioner Of Income Tax

Citation: 2024 LiveLaw (Del) 415

The Delhi High Court has held that it has interpreted Rule 11UA of the Income Tax Rules, 1962, for determining the fair market value (FMV) of shares under Section 56(2)(viib) of the Income Tax Act, 1961.

Delhi High Court Interprets Rule 11UA For Determination FMV Of Shares U/S 56(2)(viib)

Case Title: Agra Portfolio Pvt. Ltd. Versus Pr. Commissioner Of Income Tax

Citation: 2024 LiveLaw (Del) 420

The Delhi High Court has held that it has interpreted Rule 11UA of the Income Tax Rules, 1962, for determining the fair market value (FMV) of shares under Section 56(2)(viib) of the Income Tax Act, 1961.

AO Is Not Clothed With Powers To Ascertain ALP Of Any International Transaction: Delhi High Court

Case Title: M/S. Giesecke And Devrient India Pvt. Ltd.Versus DCIT

Citation: 2024 LiveLaw (Del) 425

The Delhi High Court has held that AO is not clothed with the powers to ascertain the Arm's Length Price (ALP) of any international transaction.

Reopening Or Abatement Of Assessment To Be Triggered Only Upon Discovery Of Material: Delhi High Court

Case Title: Saksham Commodities Limited Versus Income Tax Officer

Citation: 2024 LiveLaw (Del) 436

The Delhi High Court has held that a reopening or abatement would be triggered only upon the discovery of material that is likely to “have a bearing on the determination of the total income” and would have to be examined bearing in mind the AYs' that are likely to be impacted.

ITSC Entrusted With Power Of Granting Immunity From Penalty And Prosecution Only In Case Of Full And True Disclosure: Delhi High Court

Case Title: PCIT Versus Pankaj Buildwell Ltd. & Group

Citation: 2024 LiveLaw (Del) 444

The Delhi High Court has held that the Income Tax Settlement Commission (ITSC) is entrusted with the power to grant immunity from penalty and prosecution only in cases of full and true disclosure.

Delhi High Court Grants Relief Of As Low As 5% IGST On Import Of Dialysis Machines By FMC India

Case Title: Fresenius Medical Care India Private Limited Versus UOI

Citation: 2024 LiveLaw (Del) 446

The Delhi High Court has granted relief of as low as 5% Integrated Goods and Service Tax (IGST) on the import of dialysis machines by Fresenius Medical Care India Private Limited (FMC India).

NFAC Can't Sustain Invocation Of Penalty Proceedings Based On Their Own Failure To Lodge Claim Under IBC Within Time: Delhi High Court

Case Title: M Tech Developers Pvt. Ltd. Versus National Faceless Assessment Centre

Citation: 2024 LiveLaw (Del) 466

The Delhi High Court has held that the National Faceless Assessment Centre (NFAC) cannot sustain invocation of penalty proceedings based on their own failure to lodge a claim under the Insolvency and Bankruptcy Code (IBC) within time.

Failure Of Dept. To Comply With ITAT's Order: Delhi High Court Directs Dept. To Remove Demands, Penalty From ITBA portal

Case Title: Sunshine Capital Limited Versus DCIT

Citation: 2024 LiveLaw (Del) 467

The Delhi High Court has held that the Department has failed to comply with Income Tax Appellate Tribunal's (ITAT's) Order in passing a fresh assessment order within the stipulated time.

Eligible Industrial Undertakings Carrying Out Manufacturing Activity Is Only Essential Requisite For Claiming Benefit Of Sec 80IC: Delhi High Court

Case Title: CIT verses Dabur India Ltd

Citation: 2024 LiveLaw (Del) 532

The Delhi High Court dismisses Revenue's appeal against ITAT's order in case of Dabur India Ltd., while reiterating that for purpose of deduction u/s 80IB & 80IC of the Income tax Act, the only essential requisite is that the eligible industrial undertakings should be carrying out manufacture or production of articles or things.

Income Tax Dept. To Allow Personal Hearing Through National Faceless Assessment Centre On Assessee's Request: Delhi High Court

Case Title: Global Vectra Helicorp Limited Versus Assessment Unit, National Faceless Assessment Centre, Delhi

Citation: 2024 LiveLaw (Del) 554

The Delhi High Court has held that the income tax department should allow personal hearings through the national faceless assessment centre on the assessee's request.

AO Can't Proceed With Assessment In Absence Of Section 127 Transfer Order: Delhi High Court

Case Title: Rajsheela Growth Fund (P) Ltd. Versus ITO

Citation: 2024 LiveLaw (Del) 584

The Delhi High Court has held that the Assessing Officer cannot proceed with assessment in the absence of a transfer order under Section 127 of the Income Tax Act.

Assessee Can't Be Obstructed From Availing DTVSV Act Benefits Even When Limitation Period For Appeal Hasn't Expired: Delhi High Court

Case Title: PT Bukaka Teknik Utama Versus Commissioner Of Income Tax (IT), Delhi - 2

Citation: 2024 LiveLaw (Del) 613

The Delhi High Court has held that the assessee can't be obstructed from availing of the benefits of the Direct Tax Vivad se Vishwas Act, 2020 (DTVSV Act) even where the time limit for an appeal has not expired.

'Co-Ordinated Investigation' For Prevention Of Tax Evasion Is Good Ground For Transfer: Delhi HC Refuses To Interfere With Transfer Order U/s 127

Case Title: Dollar Gulati Vs PCIT and Ors

Citation: 2024 LiveLaw (Del) 616

The Delhi High Court refuses to interfere with the order of the AO passed u/s 127 where the case of the Taxpayer was centralized and transferred from Income-tax Officer (ITO), Delhi to Deputy Commissioner of Income-tax (DCIT), Central Circle, Haryana.

Grant Of Section 153D Approval Can't Be Merely Ritualistic Formality, Rather It Must Reflect Appropriate Application Of Mind: Delhi High Court

Case Title: Pr. Commissioner Of Income Tax -15 Versus Shiv Kumar Nayyar

Citation: 2024 LiveLaw (Del) 630

The Delhi High Court has held that a grant of approval under Section 153D of the Income Tax Act, 1961, cannot be merely a ritualistic formality or rubber stamping by the authority; rather, it must reflect an appropriate application of mind.

Once TPO Passed Order, AO Obliged To Pass An Assessment Order In Accordance With Section 92CA(4): Delhi High Court

Case Title: New Delhi Television Limited Versus Dispute Resolution Panel 2 & Anr

Citation: 2024 LiveLaw (Del) 633

The Delhi High Court has held that once the Transfer Pricing Officer (TPO) had proceeded to pass the order of October 17, 2017, all that the AO was obliged to do was pass an assessment order in accordance with the procedure prescribed in Section 92CA(4) of the Income Tax Act.

Interest Received By Indian PE On Deposit Maintained With Head Office/Overseas Branch Is Not Taxable In India: Delhi High Court

Case Title: The Commissioner Of Income Tax-International Taxation-3 Versus The Bank Of Tokyo-Mitsubishi UFJ Ltd.

Citation: 2024 LiveLaw (Del) 667

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.

Once Issue Of Arm's Length Remuneration Settled By TPO, Question Of Ascertaining Existence Of PE Is Academic; Delhi High Court Quashes Reassessment Proceedings

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.

Under-Reporting And Misreporting Are Viewed As Separate And Distinct Misdemeanours; Delhi High Court Quashes Penalty

Case Title: GE Capital Us Holdings Inc Versus Dy Commissioner Of Income Tax (International Taxation)

Citation: 2024 LiveLaw (Del) 696

The Delhi High Court, while quashing the penalty, has held that both under-reporting and misreporting are viewed as separate and distinct misdemeanours.

Exemption Allowable On Donations Made By One Charitable Trust To Other Charitable Institutions For Temporary Period: Delhi High Court

Case Title: Commissioner Of Income Tax (Exemptions) Versus M/S Jamnalal Bajaj Foundation

Citation: 2024 LiveLaw (Del) 697

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.

Initiation Of Section 153C Assessment Proceedings Falling Beyond Maximum 10 Years Block Period Unsustainable: Delhi High Court

Case Title: Flowmore Limited Versus Deputy Commissioner Of Income Tax, Central Circle 28, New Delhi & Anr.

Citation: 2024 LiveLaw (Del) 700

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.

Unsettled Claims As Well As IBNR Would Amount To Contingent Liabilities; Section 37 Deduction Allowable: Delhi High Court

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.

Reassessment On Non-Searched Entity Is Governed By Limitation In First Proviso To Sec 149(1) R/w Sec 153C & 153A: Delhi High Court

Case Title: Dinesh Jindal Vs ACIT and Ors

Citation: 2024 LiveLaw (Del) 721

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.

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

Case Title: GE Capital Us Holdings Inc Vs DCIT

Citation: 2024 LiveLaw (Del) 722

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.

Provisions For Unsettled Outstanding & IBNR Claims Allowable U/s 37 Being Ascertained Liabilities: Delhi High Court

Case Title: PCIT Vs Care Health Insurance Limited

Citation: 2024 LiveLaw (Del) 723

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

Change Of Opinion Does Not Constitute Justification To Believe Income Chargeable To Tax Has Escaped Assessment: Bombay High Court

Case Title: Geopreneur Realty Private Limited Versus UOI

The Bombay High Court has held that a change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment.

Bombay High Court Upholds ITAT's Order Directing Vodafone India To Deposit Rs.230 Crores For Staying Income Tax Demand

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.

Discrepancies Between Dates Of Creation And Signing Assessment Order; Bombay High Court Quashes MVAT Order Passed Beyond 4 Years

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.

AO Has No Jurisdiction To Assess Or Reassess Income Which Was Subject Matter Of Appeal: Bombay High Court

Case Title: Shri Shanmukhananda Fine Arts Versus The Deputy Director of Income Tax (Exemptions)

The Bombay High Court has held that the AO has no jurisdiction to assess or reassess any income, which was the subject matter of an appeal.

Bombay High Court Directs Dept. To Accept Declaration Under VsV Act

Case Title: Neelam Ajit Versus ACIT

The Bombay High Court at Goa has directed the department to accept the declaration under the Vivad Se Vishwas Act, 2020 (VsV Act).

The bench of Justice M. S. Sonak and Justice Valmiki Sa Menezes has observed that the delay alleged on the part of the Petitioner is hardly 11 days. The alleged deficit payment, if any, is of hardly 2,21,862. However, even if it is assumed that there was some marginal delay, this delay is attributable to the technical glitches and also the mistakes of the Respondents in processing the Petitioner's declaration.

Defect Notice Caused No Prejudice Since Last 30 Years, Assessee Clearly Understood Purport Of Notice: Bombay High Court

Case Title: Veena Estate Pvt. Ltd. Versus Commissioner of Income-Tax

The Bombay High Court has held that even assuming that there was a defect in the notice, it had caused no prejudice to the assessee, and the assessee “clearly understood” what the purport and import of the notice were under Section 274 read with Section 271 of the Income-tax Act, 1961. The principles of natural justice cannot be read in abstract form.

HSBC Bank Carrying On Bona Fide Banking Business In Mauritius Exempt From Tax In India: Bombay High Court

Case Title: Commissioner of Income Tax Versus M/s. HSBC Bank (Mauritius) Ltd.

The Bombay High Court has held that HSBC Bank carrying on bona fide banking business in Mauritius is exempt from tax in India.

Income Tax Deduction Available On Excise Duty Claim As It Does Not Amount To Double Deduction: Bombay High Court

Case Title: M/s. Johnson and Johnson Ltd. Versus The Deputy Commissioner of Income Tax

The Bombay High Court has held that excise duty paid and included in the closing stock has to be claimed separately as a deduction; otherwise, the appellant would not be claiming the entire excise duty paid in the year of its payment.

AO Can't Take Recourse To Re-open Assessment To Remedy Error Resulting From His Oversight In Assessment Proceeding: Bombay High Court

Case Title: Emkay Global Financial Services Limited Versus Assistant Commissioner of Income Tax

The Bombay High Court has held that the assessing officer cannot take recourse to reopen the assessment to remedy the error resulting from his oversight in the assessment proceeding.

Legal Services Provided By Individual Advocate, Partnership Firm Of Advocates Exempted From Service Tax: Bombay High Court

Case Title: Adv. Pooja Patil Versus The Deputy Commissioner

The Bombay High Court has held that the service provided by an individual advocate, a partnership firm of advocates, by way of legal services is exempt from levy of service tax.

Share Premium Received By Issuance Of Shares Is On Capital Account And Gives Rise To No Income: Bombay High Court

Case Title: Shendra Advisory Services P. Ltd. Versus The Deputy Commissioner of Income Tax

The Bombay High Court has held that the share premium received by the issuance of shares is on the capital account and gives rise to no income.

Storage Tanks Does Not Qualify Either As Land Or As Building, TDS Deductible On Storage Charges: Bombay High Court

Case Title: The Commissioner of Income Tax (TDS) Versus M/s. B. Arunkumar Trading Ltd.

The Bombay High Court has held that the respondent (assessee) ought to have deducted tax under Section 194I of the Income Tax Act, 1961, from the storage charges paid by the assessee.

Bombay High Court Quashes Reassessment Notices Issued Against Godrej For Beyond Limitation Period

Case Title: Godrej Industries Ltd. Versus The Assistant Commissioner of Income Tax

The Bombay High Court has quashed the reassessment notices issued against Godrej because the notice was issued beyond the limitation period.

TDS Not Liable To Be Deducted On Business Support Services As Not Taxable As FTS: Bombay High Court

Case Title: Shell India Markets Private Limited Versus Union of India

The Bombay High Court has held that business support services are not taxable as a fee for technical services (FTS), and no TDS is liable to be deducted.

Actual Agricultural Operation, Not a Necessary Condition To Qualify As Agricultural Land; Bombay High Court

Case Title: Ashok Chaganlal Thakkar Versus National Faceless Assessment Centre

The Bombay High Court has held that actual carrying on of agricultural operations is not a necessary condition for deciding that the parcels of land were agricultural lands.

Exgratia Bonus Paid By Indian Express To Employees Over And Above Eligible Bonus Is Allowable As Business Expenditure: Bombay High Court

Case Title: Indian Express Newspapers (Bombay) Ltd. Versus CIT

The Bombay High Court has held that exgratia bonuses paid to employees over and above the eligible bonus under the Payment of Bonus Act are allowable as business expenditures.

Harshad Mehta Scam: AO Can't Assess Additions Again If Deleted By CIT(A) In First Round Of Proceedings; Bombay High Court

Case Title: CCIT(OSD)/Pr. Commissioner of Income Tax, Central Versus Bhupendra Champaklal Dalal

The Bombay High Court in the Harshad Mehta Scam case, while upholding the ITAT's ruling, held that the Assessing Officer could not have assessed additions again since the CIT (A) had deleted the same in the first round of proceedings and the concerned matters have attained finality.

Interest Paid On Borrowed Funds For Investment In Shares Is Hit By Sec 14A If Dividend Received On Shares Was Not Part Of Total Income: Bombay HC

Case Title: Mahesh K. Mehta Vs Deputy Commissioner of Income Tax

The Bombay High Court recently held that the interest paid on borrowed funds in respect of investment in shares of two companies was hit by Section 14A of the Act inasmuch as the dividend received on such shares did not form part of the total income.

Revenue Officers Bound By Decisions Of Appellate Authorities While Disposing Quasi-Judicial Issues: Bombay High Court

Case Title: M/s. OM Siddhakala Associates Versus Deputy Commissioner of Income Tax

The Bombay High Court has held that the revenue officers are bound by the decisions of appellate authorities while disposing of quasi-judicial issues.

Retrospective Legislation Can't Affect Vested Rights Of Assessee: Bombay High Court

Case Title: Senapati Santaji Ghorpade Sugar Factory Versus Assistant Commissioner of Income Tax

The Bombay High Court has held that retrospective legislation cannot affect the vested rights of the assessee.

Bombay High Court Quashes Reassessment Order Against Housewife When Property Was Purchased By Her Husband

Case Title: Kalpita Arun Lanjekar Versus Income Tax Officer

The Bombay High Court has quashed a reassessment order against a housewife when the alleged investment was made by her husband.

AO To Record Dissatisfaction With Correctness Of Claim Of Assessee In Respect Of Expenditure: Bombay High Court

Case Title: PCIT Versus M/s. Tata Capital Ltd.

The Bombay High Court has held that the Assessing Officer should record his dissatisfaction with the correctness of the claim of the assessee in respect of the expenditure, and to arrive at such dissatisfaction, he should give cogent reasons.

Approval To Reopen Assessment Against Vodafone Granted By The Dept. In A Most Casual Manner: Bombay High Court

Case Title: Vodafone India Ltd. Versus Deputy Commissioner of Income Tax

The Bombay High Court has held that the approval has been granted in a most casual manner. The power vested in the authorities under Section 151 to grant or not grant approval to the AO to reopen the assessment is coupled with a duty. The authorities were duty-bound to apply their minds to the proposal put up for approval in light of material relied upon by the AO.

No Order Passed On Rectification Application Filed By Assessee For Six Years: Bombay High Court Directs Disciplinary Action Against AO

The Bombay High Court has directed the disciplinary action against AO as no order has been passed on the rectification application filed by the assessee for six years.

Filing Delayed Returns, Power To Condone Delay Is Conferred On CBDT To Ensure Substantial Justice; Bombay High Court

Case Title: Pankaj Kailash Agarwal verses ACIT

Explaining the scope of powers u/s 119(2)(b) of the Income tax Act, the Bombay High Court recently clarified that the legislature has conferred power on the Principal Commissioner of Income Tax (respondent no.3) to condone the delay to enable the authorities to do substantive justice to the parties by disposing the matter on merits.

“Certainly The High Court Should Not Scrutinise An Order Of The ITSC As An Appellate Court,” Says Bombay High Court

Case Title: The Commissioner of Income Tax, Central Versus Income Tax Settlement Commission

The Bombay High Court has held that interference with the orders of the Income Tax Settlement Commission (ITSC) should be avoided, keeping in mind the legislative intent. The scope of interference is very narrow, and certainly the High Court should not scrutinize an order of the ITSC as an appellate court. Unsettling reasoned orders from the ITSC may erode the confidence of assessees. The larger picture has to be kept in mind.

Refund More Than 10% Of Tax As Determined On Regular Assessment, CEAT Entitled To Interest On Refund Of Rs. 5.24 Cr.: Bombay High Court

Case Title: Ceat Limited Versus Commissioner of Income Tax

The Bombay High Court has held that Ceat Limited is entitled to interest on a refund of Rs. 5.24 crore as the refund is more than 10% of tax as determined on regular assessment.

Tata Steel Entitled To Treat Contribution Of Rs. 212.52 Crores To CAF As Revenue Expenditure: Bombay High Court

Case Title: PCIT Versus Tata Steel

The Bombay High Court has held that Tata Steel is entitled to treat the contribution of Rs. 212.52 crores to the Compensatory Afforestation Fund (CAF) as revenue expenditure.

Error On Part Of Auditor Should Be Accepted As Reasonable Cause Shown By Trust Management For Delay Condonation: Bombay High Court

Case Title: Al Jamia Mohammediyah Education Society Versus Commissioner Of Income Tax (Exemptions)

The Bombay High Court has held that the error on the part of the auditor cannot be rejected but should be accepted as a reasonable cause shown by the trust management.

Reassessment Can't Be Based On Reasons Borrowed From Other Dept. Or Justice M.B. Shah Commission Report: Bombay High Court

Case Title: Balaji Mines And Minerals Pvt. Ltd. Versus The Assistant Commissioner Of Income Tax

The Bombay High Court has held that the reasons for reopening clearly show that the assessing officer, except borrowing the information from the third report of the Justice M.B. Shah Commission, failed to record independently to his own satisfaction any reason so as to direct the reopening of the assessment.

Sanctioning Authority Has To Be PCCIT For Issuing Reopening Notice After Expiry Of Three Years: Bombay High Court

Case Title: Balkrishna Barsha Sutar Versus The Income Tax Officer

The Bombay High Court has held that the sanctioning authority has to be the Principal Chief Commissioner of Income Tax (PCCIT) for issuing a reopening notice after the expiry of three years.

Income Tax Authority Should Refrain From Over Analysis Which Leads To Paralysis Of Justice: Bombay High Court

Case Title: Bhatewara Associates Versus Income Tax Appellate Tribunal, Pune & Ors.

The Bombay High Court, while setting aside the order of the Income Tax Appellate Tribunal (ITAT), held that the authority should refrain from overanalyzing, which leads to paralysis of justice.

Capital Gain Tax Not Payable On Transfer Of Shares By Way Of Gift: Bombay High Court

Case Title: M/s. Jai Trust Versus The Union of India

The Bombay High Court has held that capital gain tax is not payable on the transfer of shares by way of gift.

Merely Brandishing Newspaper Cuttings Doesn't Prove Sharing Commercial Expertise: Bombay High Court

Case Title: Hindustan Export & Import Corporation Private Limited Versus The Deputy Commissioner of Income-tax

The Bombay High Court has held that merely brandishing newspaper cuttings does not amount to proof of sharing commercial expertise with its French counterpart as mandated by Section 80-O of the Income Tax Act.

No Change In Opening And Closing Stock Of NCDs; Bombay High Court Quashes Reassessment Notice

Case Title: Upesi Ventures Ltd. Versus The Assistant Commissioner of Income Tax

The Bombay High Court has quashed the reassessment notices as there was no change in the opening and closing stock of the non-convertible debts (NCDs).

Search U/s 132 Is Invalid If Material Considered For Authorizing Search Is Irrelevant And Unrelated: Bombay High Court

Case Title: Echjay Industries Pvt Ltd Vs Union of India

The Bombay High Court recently quashed the search proceedings authorized by CBDT u/s 132(1) along with consequential notices and further actions on the ground that the material considered for authorizing the search is irrelevant and unrelated, and that “the reasons recorded, only indicates a mere pretence”.

Refusal To Condone Delay In filing Revised ITR by CBDT , Filed Post-NCLT Order Is Unreasonable: Bombay High Court

Case Title: CG Power And Industrial Solutions Ltd Vs Assistant Commissioner of Income Tax

The Bombay High Court quashes the CBDT's order rejecting the application filed by CG Power and Industrial Solutions Ltd seeking condonation of delay in filing returns of income based on recast of accounts pursuant to NCLT's order.

'Transit Rent' Can't Be Considered As 'Revenue Receipt', Not Liable To Be Taxed: Bombay High Court

Case Title: Sarfaraz S. Furniturewalla Versus Afshan Sharfali Ashok Kumar & Ors.

The Bombay High Court has held that 'Transit Rent' is not to be considered a revenue receipt and is not liable to be taxed. As a result, there will be no question of the deduction of TDS from the amount payable by the developer to the tenant.

Madras High Court

Income Tax Act | Penalty U/S 271E Cannot Be Levied On Repayment Of Loan In Absence Of Cash Transaction: Madras HC

Case Title: Anamallais Bus Transports P. Ltd verses The Principal Commissioner of Income Tax

Citation: 2024 LiveLaw (Mad) 24

While observing that transaction pertaining to loan between two concerns wherein the liability of borrower stood reduced in the books of accounts to an extent of payment made to clear the liability of assessee appears to be in accordance with law, the Madras High Court ruled that penalty under Section 271E of Income tax Act, 1961 cannot be levied on repayment of loan in absence of cash transaction.

Reopening Of Assessment Inspired From 'Review' & 'Change Of Opinion' By Subsequent AO Is Deprecated: Madras HC

Case Title: BNY Mellon Technology Private Limited Vs Additional / Joint / Deputy / Assistant Commissioner of Income Tax

Citation: 2024 LiveLaw (Mad) 12

While setting aside the order disposing of the assessee's objection to re-opening of the assessment pursuant to the issue of notice u/s 148 of the Income Tax Act, 1961 and the consequent reassessment order, the Madras High Court held that there is no scope for re-opening the assessment, since the reasons cited for same was inspired from change of opinion of the Assessing officer.

Madras High Court permits Compounding Of Prosecution In Tax Evasion Case By MRF Chairman & Managing Director

Case Title: The Principal Commissioner of Income Tax Versus K.M.Mammen

Citation: 2024 LiveLaw (Mad) 2

The bench of Justice R. Mahdevan and Justice Mohammed Shaffiq, while upholding the order passed by the single judge, held that since the penalty was reduced from 300% to 100% of the tax sought to be evaded, the assessee is entitled to the benefit of Section 279(1A) of Income Tax. The section deals with non-prosecution for tax offences where the penalty is reduced.

Madras High Court Quashes Assessment Proceedings Initiated In Violation Of Procedure Prescribed As Per Sec 144B

Case Title: CPF (INDIA) Private Limited Verses Addl. CIT

Citation: 2024 LiveLaw (Mad) 62

While holding that the draft assessment order suffers from non-application of mind, the Madras High Court sets aside the proceedings initiated in violation of procedure prescribed as per Section 144B(1)(vii) read with (xiv) and (xvi)(b) of the Income tax Act, 1961.

CBDT's Digital Evidence Investigation Manual Is Mandatory For Income Tax Dept. While Conducting Searches, Seizing Electronic Evidence: Madras High Court

Case Title: M/s.Saravana Selvarathnam Retails Private Limited Versus Commissioner of Income Tax Appeals

Citation: 2024 LiveLaw (Mad) 101

The Madras High Court has held that it is mandatory for the income tax department to follow the Digital Evidence Investigation Manual issued by the Central Board of Direct Taxes (CBDT) while conducting searches and seizing electronic evidence.

Internal Arrangement W/r/t Transfer Of Assessment Proceedings Not Material For Ascertaining Limitation: Madras High Court

Case Title: Taeyang Metal India Private Limited vs DCIT

Citation: 2024 LiveLaw (Mad) 107

Finding that the period of one month expired on July 31, 2022, whereas the assessment order came to be issued on Mar 25, 2023, the Madras High Court Held the assessment order issued beyond time-limit specified in Sec.144C(13) as unsustainable.

Any Order Passed By Referring To Sec 144(C)(1) Should Be Construed Only As Draft Assessment Order: Madras High Court

Case Title: The Ramco Cements Limited vs ITO

Citation: 2024 LiveLaw (Mad) 108

While dismissing assessee's petition, the Madras High Court held that the impugned assessment order passed by the respondent/ AO is only a draft assessment order in which case, the petitioner/ assessee should approach the appropriate forum and address their grievance in terms of Section 144 (C) of the Income Tax Act.

AO Competent To Invoke Section 154 Jurisdiction If Glaring Mistake Of Fact/Law Is Committed While Passing Assessment Order: Madras High Court

Case Title: M/s.Sabari Alloys & Metals India Private Limited Versus The Deputy Commissioner of Income Tax

Citation: 2024 LiveLaw (Mad) 110

The Madras High Court has held that the Assessing Officer is not incompetent to invoke the jurisdiction under Section 154 of the Income Tax Act, 1961, if such officer had committed a glaring mistake of fact or law while passing the assessment order.

Tax Recovery Officer Cannot Declare Sale Made By Assessee In Favour Of 3rd Party As Void: Madras High Court

Case Title: K.N.Subramaniam Versus PCIT

Citation: 2024 LiveLaw (Mad) 116

The Madras High Court has held that a tax recovery officer cannot declare a sale made by the assessee in favour of a third party void if he finds that the property of the assessee was transferred by the assessee to a third party with an intention to defraud the revenue.

Wilful Failure To Furnish Return As Per Sec 139(1) Is Only Criterion For Initiation Of Prosecution U/s 276CC: Madras High Court

Case Title: Vinayagam Sabarisanthanakrishnan verses ACIT

Citation: 2024 LiveLaw (Mad) 118

The Madras High Court recently highlighted that provision of Section 278E of the Income tax Act brings in a statutory presumption regarding the existence of a culpable mental state.

Assessing Officers Are Not Governed By Strict Rules Of Indian Evidence Act, 1872 In Case Of Assessment Proceedings: Madras High Court

Case Title: M/s.LKS Gold House Private Limited Versus The Deputy Commissioner of Income Tax

Citation: 2024 LiveLaw (Mad) 120

The Madras High Court has held that assessing officers are not governed by the strict rules of the Indian Evidence Act, 1872.

10% of Demand Already Paid By Assessee, Madras High Court Allows Cooperative Bank's Writ Appeal By Waiving 10% Pre-Deposit

Case Title: The Salem Urban Co-operative Bank limited Versus The Income Tax Officer (TDS Ward)

Citation: 2024 LiveLaw (Mad) 122

The Madras High Court has waived the condition of payment of a 10% pre-deposit as the 10% demand was already paid by the assessee.

CBDT Circular Not Extending Time To File Application For Regular Registration Of New Provisionally Registered Trusts U/S 80G Violative Of Constitution: Madras High Court

Case Title: Sri Nrisimha Priya Charitable Trust versus Central Board of Direct Taxes

Citation: 2024 LiveLaw (Mad) 156

The Madras High Court has held that the Circular dated May 24, 2023, issued by the Central Board of Direct Taxes (CBDT) not extending time to file applications for regular registration of new provisionally registered trusts under Section 80G of the Income Tax Act is violative of the Constitution of India.

Opportunity For Hearing Was Refused Due To Assessee's Failure To Click On Appropriate Button, Madras High Court Quashes Faceless Assessment Order

Case Title: M/s.Bay-Forge Private Limited Versus Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income Tax Officer, National Faceless Assessment Centre, New Delhi

Citation: 2024 LiveLaw (Mad) 162

The Madras High Court has quashed the order as the opportunity for hearing was refused due to the assessee's failure to click on the appropriate button.