Direct Tax Weekly Round-Up: 21 To 27 July 2024

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.

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.

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.

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.

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.

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.