Banks Exempted From Deducting Tax At Source While Paying Interest To Statutory Corporations : Supreme Court Reiterates

The Supreme Court has reiterated that Banks are exempted from the mandate of Section 194A of the Income Tax Act, 1961, to deduct tax at the source (TDS), on payment of interest to corporations established by a statute. In the facts of the present case, the Apex Court held that in terms of the notification dated 22.10.2022 issued by the Central Government, the Union Bank of India (appellant) was exempted from the requirement under Section 194A, Income Tax Act, 1961, to deduct tax at ...

Interest On Income Tax Refund Not Connected To Permanent Establishment Under DTAA, Cannot Be Taxed As Business Income: Dehradun ITAT

The Dehradun Bench of ITAT, consisting of members Amit Shukla (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member), has ruled that interest on income tax refund received by a foreign enterprise is not effectively connected to its Permanent Establishment in India and therefore it cannot be taxed as its business income under Income Tax Act, 1961. The ITAT also held that receipts from Service Tax and VAT could not be included in the gross taxable receipts of an assessee under the...

Interest Income Derived By Gujarat Sports Authority On Its Surplus Taxable As "Income From Other Sources": Ahmedabad ITAT

The Ahmedabad Bench of ITAT, consisting of members P.M. Jagtap (Vice President) and Siddhartha Nautiyal (Judicial Member), has ruled that the interest income earned by the Gujarat Sports Authority on its deposits would be taxable as "Income from Other Sources" and not as business income under the Income Tax Act, 1961. The ITAT held that since the Sports Authority was not engaged in any business activity, therefore the interest income earned by it on its deposits would not qualify as...

Accessing The Premises Of A JV Company For Technical Assistance Can't Be Treated As Permanent Establishment Under DTAA : Delhi ITAT

The Delhi Bench of ITAT, consisting of members N.K. Billaiya (Accountant Member) and Astha Chandra (Judicial Member), has held that access to a foreign enterprise for providing technical assistance to its Joint Venture Company in its premises in India does not amount to a Permanent Establishment under the Double Taxation Avoidance Agreement. The Assessee FCC Co. Ltd, a Japanese company engaged in the business of manufacturing clutch systems for cars and utility vehicles, entered into a ...

Payment To Foreign Company For Utilisation Of Transponder Of A Satellite Is Not "Royalty" As Per DTAA: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) consisting of Sandeep Sigh Karhail (Judicial Member) and Prashant Maharishi (Accountant Member) ruled that the payment made to a foreign company for the utilisation of a transponder centred on a satellite was not in the nature of "royalty" in terms of the Double Taxation Avoidance Agreement (DTAA).The assessee/respondent in the business of marketing advertisement time for different television channels, and distribution of these ...

Claim Of Deduction Under Section 54 Of Income Tax Act To Be Reckoned From The Date Of Possession Of New Property: Mumbai ITAT

The Mumbai Bench of ITAT, consisting of members Pramod Kumar (Vice President) and Kuldip Singh (Judicial Member), has ruled that an assessee's claim of deduction under Section 54 of the Income Tax Act, 1961 was to be reckoned from the date of possession of the new residential house property. Also, the ITAT ruled that the source of funds for the purchase of the new house property under Section 54 is irrelevant. The Assessing Officer (AO) had denied the benefit of deduction under Section...

ITAT Chennai: Internal Family Arrangement Has No Bearing On Computation Of Capital Gains From Joint Property

The Chennai Bench of ITAT, consisting of members V. Durga Rao (Judicial Member) and G. Manjunatha (Accountant Member), has held that capital gains under the Income Tax Act, 1961 is to be computed according to the respective share of the parties in a residential property and not according to any internal family arrangement. The Assessee had filed his income tax return, which was taken up for scrutiny. The Assessing Officer (AO) had noticed that the Assesse, along with his wife and his...

Non Production Of Persons Despite Summons Leads To Inference Of Routing Own Money : ITAT Delhi

The Delhi Bench of ITAT, consisting of members G.S. Pannu (President) and K. Narsimha Chary (Judicial Member), has ruled that an Assessing Officer has the power to verify transactions beyond the paperwork submitted by the Assessee under Section 68 of the Income Tax Act, 1961. The Assessing Officer (AO) had disallowed expenses and made additions to Assessee's income under Section 68 of Income Tax Act, 1961 on the ground that the transaction of loans and advances by an advisory company...

ITAT: Unascertained Business Loss Cannot Be Allowed As Deduction

The Bangalore Bench of ITAT, consisting of members Beena Pillai (Judicial Member) and Chandra Poojari (Accountant Member), has ruled that unless the recovery of embezzled amount in the course of business was impossible, it could not be claimed as a business loss. The ITAT ruled that an unascertained loss cannot be allowed as deduction from taxable income. The Assessing Officer (AO) had disallowed loss from embezzlement of cash by Assessee's staff as business loss on the ground that the...

Rejection of Additional Evidence without Examination is Violation of Principles of Natural Justice: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has ruled that rejection of additional evidence without examination is a violation of principles of natural justice.The two-member bench of B.R.R.Kumar (Accountant Member) and Saktijit Dey (Judicial Member) has restored the issue to the file of Commissioner (Appeals) for de-novo adjudication after considering the additional evidences filed by the assessee and the remand report of the Assessing Officer. The tribunal has directed the...

ITAT Remands Matter To CIT(A) To Determine Taxable Income After Examining Nature Of Credit Entries, Bank Accounts

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) consisting of Astha Chandra (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member) has remanded the matter back to CIT(A) to determine the issue afresh after examining the bank accounts and determining the taxable income. The assessee/appellant had credited a total amount of Rs.4,00,74,711/- in the bank accounts of his various proprietary concerns. All the deposits were made in PNB, New Delhi in the names of Tirupati...

Consideration For Accessing Database Cannot Be Treated As 'Royalty' Under India-US DTAA: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT)has ruled that the consideration for accessing Database cannot be treated as 'Royalty' under India-US Double Taxation Avoidance Agreement (DTAA). The two-member bench of Challa Nagendra Prasad (Judicial Member) and N.K.Billaiya (Accountant Member) has observed that the purchaser of the book does not acquire the right to exploit the underlying copyright, when the purchaser reads the book, he only enjoys the contents. Similarly,...