INCOME TAX
Inspection And Examination Of Goods Before Shipment Not Taxable As Technical And Managerial Services: ITAT Delhi
The Delhi Bench of ITAT, consisting of members Amit Shukla (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member), ruled that inspection and examination of goods before shipment cannot be treated as technical and managerial services under Section 9 (1) of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) (CIT (A)) had confirmed the additions made to Assessee's taxable income under Section 40 (a) (i) of the Act on the ground that the Assessee had not deducted tax at...
Invalid Re-Assessment By AO Cannot Be Subject Matter Of Revision Under Section 263 Of Income Tax Act: ITAT Mumbai
The Bench of ITAT Mumbai, consisting of members Kuldip Singh (Judicial Member) and M. Balaganesh (Accountant Member), held that when an assessment framed by the Assessing Officer is invalid in law, the said invalid order cannot be the subject matter of revision under Section 263 of the Income Tax Act ,1961. The Assessing Officer (AO) had reopened assessment for the relevant years on the ground that the Assessee had failed to disclose true and full facts necessary for the purpose of...
Reassessment Proceedings Not Time Barred When Time Limit Increased Retrospectively Under Income Tax Act: ITAT
The Mumbai Bench of ITAT, comprising of members Pramod Kumar (Vice President) and Suchitra Kamble (Judicial Member), has held that reassessment proceeding cannot be held time barred when an amendment increasing limitation of time is expressly stated to be retrospective. The court added that it was not open to the ITAT and Commissioner of Income Tax (Appeals), to contest the validity of a retrospective amendment in law.During search and seizure operations by revenue authorities, the...
Loss On Investment In Subsidiary, Made To Boost Sales, Deductible As Revenue Expenditure, Rules ITAT
The ITAT Bench of Chennai, consisting of members V. Durga Rao (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member), allowed the loss on investment made in subsidiary company for increasing business expediency to be written off as business loss. Allowing deduction of legal fee and due diligence expenditure incurred in acquiring a foreign entity, the ITAT ruled that the loss on acquisition made to boost trading results could not be ruled as capital in nature. The Assessee, an...
AOP Running Educational Institution Eligible For Exemption Under Section 10 (23C) (VI) Of The Income Tax Act, Rules ITAT
The ITAT Bench of Mumbai, consisting of members Kuldip Singh (Judicial Member) and Prashant Maharishi (Accountant Member), ruled that an unregistered Association of Persons (AOP), formed by an agreement merging two charitable Trusts, is eligible for exemption under section 10 (23C) (vi) of the Income Tax Act, 1961. The Assessee, an educational institution, formed as an AOP, filed an application seeking approval for exemption under section 10 (23C) (vi) of the Income Tax Act for the...
Supreme Court Allows Adjustment Of Installments Made Under Income Declaration Scheme For Computing Tax Liability
A Bench of Supreme Court, consisting of Justices U.U. Lalit and P.S. Narasimha, allowed the adjustment of installments made under the "Income Declaration Scheme, 2016" in computing the tax liability of the Assessee for the relevant assessment years. The Assessee, having made a declaration under the "Income Declaration Scheme, 2016", had made two installments of tax with respect to the income disclosed under the Scheme, but defaulted in the payment of the final installment. The...
CBDT Circular Denying Tax Benefit Under MFN Clause Transgresses Income Tax Act, Rules ITAT
The ITAT Bench of Pune, consisting of members R.S. Sayal (Vice President) and Partha Sarathi Chaudhury (Judicial Member), has held that the CBDT Circular, issued in February 2022, requiring a separate notification by the Government of India for importing the benefit of the Most Favoured Nation (MFN) clause into a Double Taxation Avoidance Agreement (DTAA), transgressed the boundaries of section 90 (1) of the Income Tax Act,1961. Also, the Bench ruled, since the Circular is in the nature...
TDS On MACT Awards: Supreme Court Asks Centre To Look Into Unclaimed Refunds Of Claimants Who Are Not IT Assessees
The Supreme Court on Thursday directed the Central Government to look into the issue of money deduced from motor accident compensation awards as Tax Deducted at Source (TDS) lying as unclaimed refunds with respect to claimants who may not come within the bracket of Income Tax assesses. A bench comprising Justice Sanjay Kishan Kaul and Justice MM Sundresh was hearing the case Bajaj Allianz General Insurance Company Private Ltd. vs. Union of India in which it is considering guidelines to...
Income Deduction For State Govt Undertakings - 'Exclusivity' Under S. 40(a)(iib) of Income Tax Act Not Based On Number Of Undertakings : Supreme Court
The Supreme Court has rejected the argument raised by the Kerala State Beverages Corporation that it is entitled to deduct the levies made by the state government on it from income. The Beverages Corporation's claim was on the premise that the license given to by the State Government to trade in liquor was not 'exclusive'. Section 40(a)(iib) of the Income Tax Act, which refers to charges paid to the government that are not deductible from income, uses the word "exclusively". The Supreme Court...
ITAT Cannot Recall Its Order By Invoking Power U/Sec 254(2) Income Tax Act : Supreme Court
The Supreme Court observed that the Income Tax Appellate Tribunal cannot recall orders passed by it invoking power under Section 254(2) of the Income Tax Act.Section 254(2) power is only to correct and/or rectify the mistake apparent from the record and not beyond that, the bench comprising Justices MR Shah and BV Nagarathna said.In this case, the ITAT allowed the Revenue's appeal and held that payments made for purchase of software are in the nature of royalty. The Assessee filed miscellaneous...