Telangana High Court
S.168A GST Act | 'Recommendation' Of GST Council To Extend Limitation Period Can Be Substituted By Subsequent 'Ratification': Telangana HC
The Telangana High Court has upheld the validity of two 2023 notifications, issued by the GST Department post COVID-19 pandemic, for extending the limitation period prescribed for issuing notices under Section 73 of the Central Goods and Services Tax Act, 2017. A division bench of Justice Sujoy Paul and Dr. Justice G. Radha Rani also upheld a notification issued in 2022 for similar purpose. In doing so, it observed, “In the manner statute i.e., Section 168A is worded, there is no...
Sole Financial Creditor Can't Entertain Request For One-Time Settlement Once CIRP Proceedings Have Commenced: Telangana High Court
Telangana High Court has dismissed a Writ petition filed by Mandava Holdings Private Limited challenging the rejection of the one-time settlement (OTS) proposal offer made to PTC India Financial Services Limited so as to stop CIRPC proceedings without considering the RBI framework for compromise settlement and technical write-offs.The petitioner contended that PTC India Financial Services Limited was wrong in approving the resolution plan without considering the settlement offer and prayed that...
2% Additional Tax For Acquiring 'Second Vehicle' Can't Be Levied When First Vehicle Has Already Been Sold: Telangana High Court
The Telangana High Court recently set aside Moosarambagh RTO's direction imposing 2% additional tax on a resident's purchase of a Mahindra XUV 700 car by labelling it to be his 'second vehicle'. As per the Telangana Motor Vehicles Taxation Act, 1963, vehicles that cost over Rs 20 lakh will be charged 18%. A second vehicle purchased in the name of the owner will be charged an additional 2% tax. Justice Nagesh Bheemapaka clarified that the additional tax on a second vehicle is...
Loss Of FD Investments Doesn't Qualify As 'Trading Loss' For Deduction From Income U/S 28 Of Income Tax Act: Telangana HC
The Telangana High Court has held that the loss of fixed deposit investments by an assessee does not qualify as a 'trading loss' for the purposes of claiming deduction from income under Section 28 of the Income Tax Act, 1961. Under Section 28, one may deduct expenses that are fully and solely incurred in the course of operating a business or practicing a profession. In the case at hand, the appellant, engaged in the business of sale of electrical goods, money lending and dealing in...
Only Income From Investment Made By Charitable Institution In Violation Of S.13(1)(d) Income Tax Act Is Liable To Tax: Telangana HC
The Telangana High Court has held that the benefit of exemption under Section 11 of the Income Tax Act, 1961, can be denied only on income from such investments made by charitable or religious institutions, which are in violation of Section 13(1)(d) of the Act. Section 11(1) of the Act mandates that any income derived from the property held under the trust wholly for charitable purpose or religious purpose is exempted from the total income to the extent to which such income is applied...
MSEFC Must Decide Question On Limitation Before Adjudicating Dispute On Merits: Telangana High Court
The Telangana High Court bench of Justice P. Sam. Koshy, while hearing a petition filed under Article 227, has held that the issues of maintainability, particularly the question of limitation, are to be decided by the Micro and Small Enterprises Facilitation Council (MSEFC) before proceeding to adjudicate the dispute on merits. Facts: In a common order dated 15/06/2024, the MSEFC, in a section 16 petition filed by the petitioner, has held that the claims of the claimant were barred...
When Multiple Agreements Are Not Interconnected, Arbitration Clause In Any One Agreement Can't Justify Referring All Disputes To Arbitration: Telangana HC
The Telangana High Court bench of Chief Justice Alok Aradhe and Justice Sreenivas Rao, affirmed that where multiple agreements are interconnected and form part of a single commercial transaction then only the presence of an arbitration clause in one or more agreements can justify referring all disputes, involving all agreements and parties, to arbitration. This is true even if some agreements lack an arbitration clause. In this case, the court found that agreements were not interconnected.Brief...
Amount Received By Assessee Under Agreement To Not Carry On Competitive Business Is In Nature Of 'Capital Receipt', Not Exigible To Tax: Telangana HC
The Telangana High Court has held that the amount received by the developer of Hepatitis-B vaccine, under a co-marketing agreement with PFIZER Company, is a capital receipt not liable to tax. A division bench of Chief Justice Alok Aradhe and Justice J. Sreenivas Rao reasoned that the developer-assessee's right to promote, market, distribute or sell the vaccine or a new competitive product to a third party was taken away under the agreement. “The payment of the amount under the...
[Deemed Dividend] Accumulated Profits Of Company U/S 2(22)(e) Of Income Tax Act Are Computed After Adjusting Depreciation: Telangana HC
The Telangana High Court has held that for purposes of taxation, “accumulated profits” of a company are to be calculated after adjusting depreciation as per the Income Tax Act, 1961. In ruling so, a division bench of Chief Justice Alok Aradhe and Justice J. Sreenivas Rao cited two rulings of the Bombay High Court which held that “depreciation as granted in accordance with the rates prescribed by the Income-tax Act would have to be deducted for ascertaining the accumulated profits.” ...
Hotel Replacing Damaged Furniture, Carpets Is Current Expenditure Allowable U/S 37 Income Tax Act: Telangana HC
The Telangana High Court has held that the expenditure incurred by a hotel on replacement of damaged items is a current expenditure, allowable under Section 37 of the Income Tax Act, 1961. Section 37 of Income Tax Act states that any business expenditure, excluding capital expenditure and the individual's personal expenses, that is spent for the business's operations shall be applicable for deduction from business income. A division bench of Justices Sujoy Paul and Namavarapu ...
Telangana High Court Reiterates Limited Scope For Interference With Arbitral Awards U/S 34 Of Arbitration & Conciliation Act, 1996
The Telangana High Court bench comprising Chief Justice Alok Aradhe and Justice J. Sreenivas Rao has held that an interim order passed by an arbitral tribunal under section 17 of the Arbitration and Conciliation Act, 1996, restraining the encashment of a bank guarantee does not warrant interference under section 34 of the Act. The court also held that section 34 does not permit the court to act as an appellate body or correct errors of law or fact. Brief Facts: The Andhra Pradesh...
Court U/S 11 Of Arbitration Act Only Checks For Existence Of Agreement, Jurisdictional Questions To Be Decided By Arbitrator: Telangana HC
The Telangana High Court Bench of Chief Justice Alok Aradhe affirmed that Sub-section (1) of Section 16 provides that the Arbitral Tribunal may rule on its own jurisdiction, “including any objections” with respect to the existence or validity of the arbitration agreement. Section 16 is an inclusive provision, which would comprehend all preliminary issues touching upon the jurisdiction of the Arbitral Tribunal. The issue of limitation is a jurisdictional issue, which would be required to...