ITAT Mumbai Sets Aside CIT(A) Enhancement Of Taxable Income On Issue Not Examined By AO

The Income Tax Appellate Tribunal (ITAT) at Mumbai has held that the Commissioner of Income Tax (Appeals) cannot enhance an assessment by introducing a fresh issue that was never examined by the Assessing Officer, setting aside an addition made through adjustment of work in progress in the case of Skyline Greathills, a real estate company. A Bench of Vice President Saktijit Dey and Accountant Member Arun Khodpia observed, “Section 251(1) of the Act restricts the CIT(A) to assume...

Jio Infocomm USA's Receipts For Voice Termination Services Not Taxable As Royalty Or FTS In India: ITAT Mumbai

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that Rs. 23.20 crore received by Reliance Jio Infocomm USA Inc. for providing voice termination services to Reliance Jio Infocomm Ltd. cannot be treated as royalty or fees for technical services (FTS) under Indian tax law or the India–US tax treaty. It said the income is in the nature of business profits and therefore not taxable in India. The decision was delivered by Judicial Member Beena Pillai and Accountant Member...

No Bad Debt Deduction From Taxable Income Without Actual Write-Off: Madras High Court

The Madras High Court has held that a taxpayer cannot claim a bad debt deduction merely by declaring a debt as irrecoverable and must comply with statutory conditions requiring an actual write-off in its books. A Division Bench of Justice G. Jayachandran and Justice Shamim Ahmed observed, “Merely stating that a bad and doubtful debt is an irrecoverable is not sufficient to claim deduction. Appropriate treatment in the accounts, together with compliance of the conditions in sections 36(1)(vii),...

Supreme Court Dismisses Income Tax Appeal Against Nokia Over Gross Delay Of 286 Days

The Supreme Court on Thursday dismissed the Income Tax Department's appeal against Nokia Corporation over a 286-day delay, leaving undisturbed the Delhi High Court's ruling that offshore supply of telecom equipment is not taxable, software payments are not royalty, and no permanent establishment existed in India.A Bench of Justices B.V. Nagarathna and Ujjal Bhuyan found no sufficient and satisfactory reason by the department to condone 286 days 'gross' delay and observed the following:“There is...

Can Delay Beyond Prescribed Time Limit In Service Tax Appeals Be Condoned Under Limitation Act? Supreme Court To Examine

The Supreme Court has agreed to examine whether delay in filing a service tax appeal beyond the 2-month deadline and the additional 1-month extension allowed under the law can be excused under Section 5 of the Limitation Act. Section 5 of the Limitation Act allows courts to accept delayed filings if sufficient cause for the delay is shown. A Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan issued notice on April 13, 2026 while hearing a petition filed by assessee Morthala Sidda...

Summary Processing Cannot Decide Debatable ESI, EPF Claims: Chhattisgarh High Court

The Chhattisgarh High Court on 16 April held that the Income Tax Department cannot invoke summary processing powers under Section 143(1)(a) of the Income Tax Act, 1961 to disallow claims involving debatable legal issues, including employee contributions towards ESI and EPF, as such adjustments fall outside the limited scope of prima facie scrutiny.A Division Bench of Justices Sanjay K. Agrawal and Sachin Singh Rajput allowed the appeal filed by Maa Harsiddhi Infra Developers Pvt Ltd...

No Penalty Where Claim Is Based On Binding High Court Law Later Reversed By Top Court: Bombay High Court

The Bombay High Court on 30 March held that if a taxpayer made a deduction claim based on a binding High Court judgment, penalty under Section 270A of the Income Tax Act cannot be imposed subsequently, merely because the claim was later disallowed following a Supreme Court ruling.A Division Bench of Justices B. P. Colabawalla and Firdosh P. Pooniwalla held that penalty is not automatic and does not arise where a taxpayer makes a bona fide claim based on the prevailing legal position. It noted: ...

No Separate Tax Addition On Cash Already Owned By Group Company: ITAT New Delhi

On 16 April, the New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that once cash seized during search proceedings has already been owned and taxed in the hands of a group company before the Settlement Commission, authorities cannot again add the same amount in the hands of an individual, even if it was found in a locker held in his name. The Bench comprising Accountant Member S. Rifaur Rahman and Judicial Member Vimal Kumar dismissed the Revenue's appeal against Lalit Kumar...

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...