Category Archives: Judgements

Government authorisations (or approvals) are not eligible for depreciation

By | June 7, 2017

Government authorisations (or approvals) are not eligible for depreciation The Delhi Bench of the Income-tax Appellate Tribunal held that government authorisations or approvals are not licenses or rights having a business or commercial nature that, in turn, could be transferred to the taxpayer. Therefore, depreciation is not allowed on the value assigned such government authorisations. The tribunal also… Read More »

Search and Seizure of undisclosed income deposited into account of Third party

By | May 30, 2017

Held A person could be in possession of undisclosed income not only in his or her own account but in someone else’s account. In the context of the present petitions, therefore, when pursuant to the search warrant, the Department proceeded to search and seize not only valuable things etc. found in the premises of Mr.… Read More »

Expense reimbursements not taxable as transfer pricing study showed no profit element

By | May 26, 2017

The Mumbai Bench of the Income-tax Appellate Tribunal held that amounts received by the taxpayer as reimbursements of training-related travel expenses, group health insurance, and other incidental expenses under a technical service agreement were not taxable as fees for technical services. Relying in part on the transfer pricing study and transfer pricing order, the tribunal… Read More »

Gift received from HUF would be exempt from tax u/s 56(2)(vi) of Income Tax

By | May 21, 2017

ITAT Mumbai DCIT Vs Ateev V. Gala  Appeal Number : ITA NO.1906/Mum/2014 Date of Judgement/Order : 19/04/2017 Related Assessment Year : 2010-11 Issue Whether gift received from HUF by a member of HUF falls under the definition of “relative” as provided in the Explanation to clause (vi) of sub section (2) of section 56 of… Read More »

Unrealised foreign exchange loss on a loan obtained for Asset purchases in India

By | May 20, 2017

Unrealised foreign exchange loss, loan to purchase of assets in India The Chennai Bench of the Income Tax Appellate Tribunal held that an unrealised foreign exchange loss on a loan obtained for the purpose of asset purchases was a “revenue loss” and therefore was allowable as deduction. The case is: Hyundai Motor India Ltd. Read a May… Read More »

Income from sub-licensing of property is not business income

By | May 20, 2017

Income from sub-licensing of property, held not business income The Supreme Court of India addressed the character of income from the sub-lisensing of retail property, and held that such income was taxable as “house property” income and not business income. The case is: Raj Dadarkar and Associates. Read a May 2017 report [PDF 368 KB] of KPMG

Interest on Fixed Deposits from unutilized funds of Power Plant Taxable – income from other source

By | May 18, 2017

Held The Hon’ble jurisdictional High Court in the case of CIT v. Rasi Cement Ltd. [1998] 232 ITR 554 (AP) has answered similar questions involved in favour of the Revenue. The question before the Hon’ble High Court was whether the interest earned on surplus funds deposited in the banks during the installation of the company,… Read More »

No Section 68 addition on cash credited in Swiss Bank if information not supplied by Swiss Bank Authority

By | May 17, 2017

Held Documents relied by the AO are the copies of the copies which did not have any signature of bank official or name of the bank or the place or the country were the branch was situated. The AO himself admitted in para 6 of the assessment order that the requisite information from the Swiss… Read More »

Benefit of 2016 Income declaration scheme not available even if search proceedings under section 132 initiated after launching of scheme

By | May 16, 2017

Held In the taxing statutes, the Court has to be very slow in interpreting the statutes where intention of the legislature is to curb the evasion of tax. This is a peculiar case where the Government has granted the benefit under the scheme only to the persons who are not covered under Section 132 of… Read More »

Notice not served due to change of Address , Reassessment Valid u/s 148 of Income Tax

By | May 15, 2017

HIGH COURT OF KERALA Smt. Rajee Rajkumar v. Assistant Commissioner of Income-tax, Non-corporate Circle(1), Ernakulam A.M. SHAFFIQUE, J. W.P. (C.) NOS. 17509 & 17571 OF 2016 APRIL  5, 2017 Anil D. Nair, R. Sreejith, Kum. Soumya Prakash and Kum. Mekhala M. Benny, Advs. for the Petitioner. Christopher Abraham and K.M.V. Pandalai, Advs, for the Respondent.… Read More »

No Leave travel concession u/s 10(5) for journey outside India : ITAT

By | May 12, 2017

Held On perusal of this section (Section 10(5) of Income tax act) , we are of the view that this provision was introduced in order to motivate the employees and also to encourage tourism in India and, therefore, the reimbursement of LTC/LFC was exempted, but there was no intention of the Legislature to allow the… Read More »

Appy Fizz to be classified as Health Drink under Kerala VAT

By | May 12, 2017

SUPREME COURT OF INDIA Parle Agro (P.) Ltd. v. Commissioner of Commercial Taxes, Trivandrum A.K. SIKRI AND ASHOK BHUSHAN, JJ. CIVIL APPEAL NOS. 6468 TO 6472 OF 2017 MAY  9, 2017 Aditya Bhattacharya, Victor Das, M.P. Devanath, L. Charanya and Ramesh Babu M.R., Advs. for the Appellant. G. Prakash, Jishnu M.L., Ms. Priyanka Prakash, Ms.… Read More »

Refund claim of service tax paid by mistake couldn’t be rejected due to expiry of time period

By | May 9, 2017

Held In the instant case, the amount deposited by the assessee-Appellants without any authority of law cannot be considered as Service Tax. As per Article 265 of the Constitution, no tax can be collected without any authority of law. At the relevant time, there was no authority of law to collect Service Tax on the… Read More »

Appeal against composite order can be filed even if tax effect is less than limit in any of years

By | May 8, 2017

HIGH COURT OF GUJARAT Principal Commissioner of Income-tax, Ahmedabad v. Devendranath G. Chaturvedi* M.R. SHAH AND B.N. KARIA, JJ. CIVIL APPLICATION (OJ) NO. 166 OF 2017† STAMP NO. 9 OF 2017 (Arising out of order of ITAT in IT Appeal No. 385 (Ahd.) of 2011, dated 29-1-2016.) APRIL  3, 2017 Nitin K. Mehta, Adv. for… Read More »

Nirbhaya case Judgment of Supreme Court -Mukesh & Anr Vs. State for NCT of Delhi & Ors. -Criminal Appeal Nos. 607-608 Of 2017

By | May 6, 2017

Supreme Court of India Mukesh & Anr Vs. State for NCT of Delhi & Ors.  Appeal Number : Criminal Appeal Nos. 607-608 Of 2017 Date of Judgement/Order : 05.05.2017 Relevant Extract of the Judgment 140. We are here concerned with the award of an appropriate sentence in case of brutal gang-rape and murder of a… Read More »

Notice deemed to be served if Assessee refused to accept it: HC

By | May 5, 2017

Held The addressee in this case is correctly described. There is no dispute about his identity. Even his address is correct. It is at that address the packet is carried and by the concerned postal authority. The duly authorised person carrying the packet reached the address. On noticing the addressee, he serves it, but the… Read More »

40(a)(ia) disallowance for TDS default even if no sum payable at year end; SC

By | May 4, 2017

Held Section 40(a)(ia) covers not only those cases where the amount is payable but also when it is paid. SUPREME COURT OF INDIA Palam Gas Service v. Commissioner of Income-tax A.K. SIKRI AND ASHOK BHUSHAN, JJ. CIVIL APPEAL NO. 5512 OF 2017 MAY  3, 2017 Raj Kumar Mehta and Ms. Himanshi Andley Advs. for the… Read More »

No sec. 68 additions on cash deposited in bank account if assessee wasn’t maintaining books of account

By | May 4, 2017

IN THE ITAT MUMBAI BENCH ‘B’ Mehul V. Vyas v. Income-tax Officer, 23(2)(3), Mumbai* D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND RAVISH SOOD, JUDICIAL MEMBER IT APPEAL NO. 727 (MUM.) OF 2013 [ASSESSMENT YEAR 2006-07] APRIL  7, 2017 Narayan Atal for the Appellant. Ms. Pooja Swaroop for the Respondent. ORDER   Ravish Sood, Judicial Member –… Read More »

Section 54 relief allowed for property purchased jointly with brother : ITAT

By | May 2, 2017

Facts of the Case Assessee was the owner of a flat in Jai Mahavir Apartment, J.P. Road at Andheri (West) jointly with his wife Mrs. Manisha J. Faria. The said flat was sold for Rs. 1,02,55,000/-. The assessee computed long term capital gains at Rs. 43,01,665/- being 50% share in the property. The assessee invested… Read More »

Cenvat refund cann’t be denied for non registration of premises

By | May 2, 2017

Held In absence of a statutory provision, prescribing that,  registration of the premises was mandatory for availing input service tax credit, the Assessee could not be denied refund of unutilized cenvat credit on input services. Madras High Court Commissioner of Service Tax-III Vs Customs, Excise & Service Tax Appellate Tribunal  Appeal Number : C.M.A. No.… Read More »

Assessee failed to utilize capital gains within 3 years, Sec 54F can’t be denied during assessment

By | April 30, 2017

Held As per proviso to sub-section (4) of Section 54F if the amount deposited in capital gain account is not utilized wholly or partly for purchase or construction of new asset within the period specified in sub-section (1) then the amount of capital gain shall be charged under Section 45 as income of the previous… Read More »

Black money received from sale of Agriculture Land is also not Taxable ; ITAT

By | April 30, 2017

Facts of the Case The assessee was asked to explain the source of cash deposits in Federal Bank amounting to Rs.80 lakhs. The assessee vide letter dated 30/11/2015 stated that he and his wife had sold agricultural for Rs.70,79,500/- which was deposited in Federal Bank and balance cash deposits are out of agricultural income. The… Read More »

Income of foreign shipping company not taxable in India under ‘ place of effective management ‘ test

By | April 29, 2017

Income of a foreign shipping company not taxable in India under “place of effective management” test: The Rajkot Bench of the Income-tax Appellate Tribunal held that under Article 9 of the India-Denmark income tax treaty, earned by a foreign company from operations of ships in international traffic is not taxable in India because the place of effective… Read More »

Tax on Waiver of interest in the hands of amalgamating company

By | April 29, 2017

Waiver of interest in the hands of amalgamating company: The Supreme Court of India held that waiver of interest due by amalgamating company to financial institutions is taxable in the hands of the amalgamated company under section 41(1) of the Income-tax Act, 1961.The case is: Mcdowell & Company Ltd. Read an April 2017 report [PDF 309 KB]… Read More »

Liaison office of a multinational company is permanent establishment

By | April 29, 2017

40% profit attributed to Indian operations of taxpayer: The Bengaluru Bench of Income-tax Appellate Tribunal held that a liaison office of a multinational company conducting activities that are not “preparatory and auxiliary” constitutes a permanent establishment. The case is: Arrow Electronic India Ltd. Read an April 2017 report [PDF 420 KB] of KPMG

Sale of business on “ going concern ” basis is “ slump sale ” and not sale of depreciable asset

By | April 29, 2017

Sale of business on “going concern” basis is “slump sale” and not a sale of depreciable asset: The Supreme Court of India, in a case that arose prior to the introduction of slump sale provisions, held that sale of an entire running business on a “going concern” basis is a slump sale under section 50(2)… Read More »

Race car circuit constitutes “fixed place PE” under India-United Kingdom income tax treaty:

By | April 29, 2017

Race car circuit constitutes “fixed place PE” under the India-United Kingdom income tax treaty: The Supreme Court of India held that an international circuit constitutes fixed place of business under the India-UK income tax treaty, since the circuit was under the control and at the disposal of the taxpayer. The case is: Formula One World… Read More »

No Interest u/s 234B & 234C on income declared during survey – ITAT

By | April 29, 2017

Held Survey operation under section 133A of the Act was conducted at the business premises of the assessee on 5.3.2008 i.e. after close of the financial year relevant to the assessment year 2006- 07. Now the question arises whether the assessee as per the provisions of section 210 read with section 208 of the Act… Read More »

CBDT cannot insist on pre-deposit compounding fee without considering application for compounding: HC

By | April 29, 2017

Held The CBDT cannot arrogate to itself, on the strength of Section 279 of the Act or the Explanation thereunder, the power to insist on a ‘pre-deposit’ of sorts of the compounding fee even without considering the application for compounding. Indeed Mr Kaushik was unable to deny the possibility, even if theoretical, of the application… Read More »

Resorts liable to pay luxury tax on free accommodation services provided to its members

By | April 26, 2017

HIGH COURT OF KERALA Mahindra Holidays & Resorts India Ltd. v. Intelligence officer K. VINOD CHANDAN, J. W.P. (C.) NO. 20728 OF 2015 (M) MARCH  29, 2017 Mohan Parasaran, Sr. Adv., K. Ramakumar, Sr. Adv., and P.J. Philip, Adv. for the Petitioner. R. Venkataraman, Sr. Adv., P. Ravindranath, Smt. Ubaya Bharathi and Akhil Suresh, Advs.… Read More »

Non Deposit of Court fees due to Demonetization – Delay Condoned

By | April 25, 2017

Madhya Pradesh High Court Prashant Sahu Vs Vijay Kumar Chourasiya  Appeal Number : MCRC-3140-2017 Date of Judgement/Order : 10/04/2017 Shri K.P.Pathak, learned counsel for the applicant. Applicant filed a Criminal Complaint Case before the JMFC, Jabalpur. After affording the opportunity, the applicant could not deposit the requisite court fees and, therefore, vide order dated 17.1.2017,… Read More »

Sec. 68 AO cannot Examine Source of Source in Non-Share Capital Cases

By | April 25, 2017

ITAT Delhi ACIT, Vs Smt. Prem Anand  Appeal Number : I.T.A. No. 3514/DEL/2014 Date of Judgement/Order : 13/04/2017 Assessment Year : 2008-09 Ld. CIT(A) has rightly observed that the assessee is not required to explain source of source of the fund gets buttressed by the amendment made in section 68 with effect from 01.04.2013, which… Read More »

Measurement land Distance from Municipality -Tahsildar Certificate required

By | April 25, 2017

  Certificate of competent authority only can be relied for measurement of distance of land from Municipality ITAT Mumbai Asst. Commissioner of Income Tax Vs Mr. Alkesh Kanti Lal Patel  Appeal Number : I .T.A. No.4270/Mum/2015 Date of Judgement/Order : 03/04/2017 Assessment Year : 2011-12 We have observed that the assessee has claimed to have… Read More »

UP VAT Registration can’t be cancelled because of wrong Input Tax Credit claim

By | April 25, 2017

Allahabad High Court Sevak Enterprises Vs Commissioner, Commercial Tax  Appeal Number : Sales/ Trade Tax Revision No. – 146 of 2017 Date of Judgement/Order : 13/04/2017 UP VAT Act Act does not contemplate that if claim of Input Tax Credit (I.T.C.) is reversed the registration of a dealer could be cancelled in addition to reversal… Read More »

TDS on Land Acquisition amount is part of Compensation : SC

By | April 25, 2017

Supreme Court of India Baranagore Jute Factory Plc. Mazdoor Sangh (Bms) Etc Vs  Baranagore Jute Factory Plc  Appeal Number : Civil Appeal No. 4298- 4299 of 2017 Date of Judgement/Order : 21/03/2017 Leave granted. 2. The appellants are the petitioners/ applicants before the learned Single Judge in an application filed by them for taking appropriate… Read More »

Subsidy for Setting Up / Expansion of Industry is tax-free Capital Receipt

By | April 25, 2017

ITAT Delhi LG Electronics India Pvt. Ltd. Vs. ACIT  Appeal Number : ITA No. 2163/Del/2015 Date of Judgement/Order : 19/04/2017 Assessment Year : 2008- 09 It is an admitted position that the assessee treated the amount of subsidy as a capital receipt, but, did not reduce it from the value of fixed assets and eventually… Read More »

Share Trading Income cannot be treated as ‘Capital Gain, it is business income

By | April 25, 2017

ITAT Ahemdabad Income-Tax Officer Vs Manusi Securities Pvt. Ltd.  Appeal Number : ITA Nos. 2338 & 2339/Ahd/2011 Date of Judgement/Order : 10/04/2017  Assessment Year : 2007-08 & 2008-09 We notice that assessee company is engaged in the business of trading in securities. During the year assessee has shown the sale of securities as business receipts… Read More »

Assessee not allowed to appear with Counsel to Record Statement U/s. 108 of Customs Act

By | April 25, 2017

Allahabad High Court Pawan Kumar Pawan Arora Vs Union of India  Appeal Number : Criminal MISC. Writ Petition No. – 4424 of 2017 Date of Judgement/Order : 30/03/2017 Contention of the learned counsel for the petitioner is that the petitioner be allowed to appear before the authority concerned for recording the statement under Section 108… Read More »

Delay of DVAT Refund Claim by use of Revisionary Power is an Abuse of Power

By | April 25, 2017

Delhi High Court Garg Roadlines Vs Commissioner Trade & Taxes Appeal Number : WP (C) 2282/2017 Date of Judgement/Order : 12/04/2017 The power under Section 74A of the DVAT Act is not to be exercised slightly. It is a power coupled with the duty to act responsibly and by the competent authority applying mind to… Read More »

Notice sent by registered post is deemed to be served if it was returned back with postal endorsement

By | April 17, 2017

This Court in catena of cases has held that when a notice is sent by registered post and is returned with postal endorsement “refused” or “not available in the house” or “house locked” or “shop closed” or “addressee not in station”, due service has to be presumed Jagdish Singh v. Natthu Singh [1992] 1 SCC… Read More »

No Vat on Consumable used in Provision of Service

By | March 24, 2017

Facts of the Case Soaps, detergent, chemicals and solvents are deposited in the store of the Contractee (Railways) by Petitioner  to ensure that adequate quantity is used by the petitioner for the execution of the awarded work. Then said soaps/detergent/chemical/solvent are issued from Railways store to Petitioner Issue whether the consumable chemicals/solvents used in the… Read More »

Disclosure of unaccounted income due to search – No Penalty – Delhi High Court

By | March 16, 2017

Issue For the relevant assessment year 2005-06, Assessee reported its income through a return under Section 139(1) of the Act, declaring an income of Rs.1,72,799/- on 30.12.2005 A search and seizure operation under Section 132(4) of the Act was carried out on 11.01.2007 in the premises of the assessee’s group companies and directors of the… Read More »

No TDS if Company made payment to Labours on bhelaf of farmers

By | March 16, 2017

Facts of the case As per the agreement entered with the farmers by Assessee (Company) , the farmers shall supply sugarcane at factory gate for a agreed price fixed by the State Govt. However, as per the request of farmers and also to facilitate smooth supply of sugar cane, it has employed harvesting gang labours… Read More »

Illegal business Loss is allowed as Business expenses

By | March 14, 2017

HIGH COURT OF GUJARAT Rama Natha Gadhavi v. Income-tax Officer K.S. JHAVERI AND K.J. THAKER, JJ. TAX APPEAL NO. 505 OF 2009 DECEMBER  4, 2014 R.K. Patel, Adv. for the Appellant. Pranav G. Desai, Adv. for the Respondent. JUDGMENT K.S. Jhaveri, J. – This is an appeal by the appellant-assessee, seeking to challenge the order… Read More »

Spread interest over to relevant financial years before deducting TDS – High Court to Insurance Company

By | March 14, 2017

Issue :- Insurance Company deposited with Workmen’s Compensation Commissioner Rs. 2,46,600/- after deducting, by way of TDS Rs.15,793/- original claimant filed application before the Workmen’s Compensation Commissioner with the grievance that the said amount of Rs.15,793/- could not have been deducted and he is entitled for full amount and interest as awarded by the judgment dated… Read More »

licence fee or privilege fee paid for Liquor lease is allowable Expenses

By | March 11, 2017

Held The assessing officer has no authority or competence to hold that the privilege fee is not having the character of statutory fee or that the State Legislature or the State Government in exercise of its power by way of a delegated legislation, cannot decide the quantum of fee or the percentage of the revenue… Read More »

Credit can not be denied to purchaser for non payment of tax by Seller

By | March 8, 2017

Held The default of the selling dealer in not filing returns or not paying tax at his end cannot result in the denial of credit to the purchasing dealer. In such circumstances, if the selling dealer fails to remit the tax, the statute provides adequate machinery for recovery of the tax from the seller, who… Read More »