No TDS Payable On Pfizer Products' Cost-Sharing Payments To Pfizer Ltd. Without Profit Element: Bombay HC

Holding that reimbursements without any profit element do not attract TDS, the Bombay High Court has dismissed an income tax appeal filed by the Revenue against Pfizer Products India Pvt. Ltd. over cross-charges of Rs.14,51,77,000 paid to its sister concern-Pfizer Ltd.A Division Bench of Justice M. S. Karnik and Justice S. M. Modak held, "The cross-charge paid by the Assessee-Respondent in terms of the cost-sharing agreement between the Assessee and M/s. Pfizer Ltd, did not have any...

Suspicion, Human Probabilities Insufficient For Tax Additions Without Evidence: Telangana High Court

The Telangana High Court on 6 March held that additions under Section 68 of the Income Tax Act, 1961 cannot be sustained merely on suspicion or the test of human probabilities and must rest on concrete evidence. A Division Bench of Justices Sam Koshy and Suddala Chalapathi Rao dismissed the Revenue's appeals and upheld the Income Tax Appellate Tribunal (ITAT)'s decision to remand the issue of Rs. 182 crore share premium received by Bharathi Cement Corporation Pvt. Ltd. for fresh examination. It...

Bombay High Court Admits Limited 115JB Questions In ACC Case, Holds Settled Issues Not Appealable

The Bombay High Court on 16 March partly admitted an appeal filed by the Department against ACC Limited, holding that several issues raised by the Revenue were already covered by binding precedents and therefore did not give rise to any substantial question of law. A Bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla, however, admitted the appeal on four questions concerning computation of book profits under Section 115JB of the Income Tax Act, 1961. They held: “The appeal is...

Developer Undertaking Risk And Execution Qualifies For Section 80-IA Deduction: Bombay High Court

The Bombay High Court on 11 March held that a taxpayer-company undertaking substantial development work, investment risk and technical execution cannot be treated as a mere works contractor and is entitled to deduction under Section 80-IA(4) of the Income Tax Act for profits from infrastructure projects. A Bench comprising Justices M. S. Karnik and S. M. Modak dismissed the Revenue's appeals against Patel Engineering Ltd., holding that the latter acted as a “developer” of infrastructure...

Old Income Tax Demands Cannot Surface On Portal Without Serving Underlying Orders: Bombay High Court

The Bombay High Court recently observed that old income tax demands could not be sustained where the underlying orders were not made available to the taxpayer, observing that such demands cannot be permitted to surface without proper disclosure. “Old matters and demands cannot be allowed to suddenly surface on the portal without the underlying orders being available and served. Consequently, the impugned demands cannot be sustained,” the court said. A Division Bench of Justices B. P....

Lottery Ticket Discount Not “Commission” Absent Payment Or Credit, No TDS Applicable: Madras High Court

The Madras High Court on 9 April held that the difference between the face value of lottery tickets and the discounted price at which a taxpayer sells them to dealers does not constitute “commission.” Therefore, it is not subject to tax deduction at source (TDS) under Section 194G of the Income Tax Act. The Division Bench of Justices G. Jayachandran and Shamim Ahmed dismissed the Revenue's appeal and upheld the Tribunal's order in favour of Martin Lottery Agencies Ltd. The judges observed: ...

Final Assessment Without Draft Order Under Section 144C Invalid: ITAT New Delhi

The New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) on 10 April, held that the Assessing Officer's failure to issue a draft assessment order under Section 144C(1) of the Income Tax Act renders the final order void. The Bench comprising Judicial Member C N Prasad and Accountant Member M Balaganesh allowed the appeals filed by Sumitomo Corporation India Pvt. Ltd. against the assessment orders passed by the Deputy Commissioner of Income Tax. The Tribunal held: “the Final...

Pre-2002 Transfer Of Self-Generated Trademarks With No Cost Of Acquisition Not Taxable: Gujarat High Court

The Gujarat High Court on 12 March, held that consideration of Rs.29.10 crore received by Zydus Lifesciences Limited on assignment of self-generated trademarks prior to 1 April 2002 is not chargeable to tax either as capital gains or as business income under the Income Tax Act, 1961. A Division Bench of Justices A.S. Supehia and Justice Pranav Trivedi dismissed the Revenue's appeal and affirmed the Tribunal's view that, in the absence of an ascertainable cost of acquisition, the charging...

No Penalty If High Court Admits Quantum Issue As Substantial Question Of Law: Mumbai ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) on 15 April held that “penalty” under Section 271(1)(c) of the Income Tax Act cannot be sustained where the quantum issue has already been admitted by the High Court as a substantial question of law. A Bench comprising Judicial Member Sandeep Singh Karhail and Accountant Member Bijayananda Pruseth quashed the penalty imposed on the Small Industries Development Bank of India, holding that admission of a substantial question...

Demonetisation Deposits From Cash In Hand Cannot Be Rejected Without Evidence: Allahabad High Court

The Allahabad High Court on 8 April held that where a taxpayer explains cash deposits during 2016 Indian demonetization as arising from cash in hand, the Assessing Officer cannot reject the explanation in the absence of any material to the contrary. A Bench comprising Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary dismissed the appeal filed by the Principal Commissioner of Income Tax, Lucknow against Medharaj Techno Concept Pvt. Ltd. and upheld the order of the Income Tax Appellate...

Share Buyback Not Acquisition Of Property: Delhi High Court Deletes ₹16.33 Crore Tax Addition Against Globe Capital

The Delhi High Court has upheld the deletion of a Rs 16.33 crore addition against Globe Capital Market Ltd., holding that a company's buyback of its own shares does not amount to acquisition of “property” and Section 56(2)(x) of the Income Tax Act has no application to such transactions. A Division Bench of Justices Dinesh Mehta and Vinod Kumar dismissed the appeal filed by the Principal Commissioner of Income Tax, affirming the Income Tax Appellate Tribunal's decision, which had upheld relief...

ITAT Mumbai Allows Co-operative Society Tax Deduction On Interest Income From Co-op Banks

The Mumbai Bench of the Income Tax Appellate Tribunal has granted relief to a co-operative society by holding that deduction under Section 80P(2)(d) is allowable on interest income earned from deposits with co-operative banks, noting that the issue is already covered by judicial precedents including Pathare Prabhu Cooperative Housing Society Ltd. v. ITO. “As the issue is squarely covered in favour of the Assessee by the aforesaid judgment referred to above, thus, the addition under...