Income Tax | Shares Received On Amalgamation Can Be Taxed as Business Income If Held As Stock-in-Trade: Supreme Court

The Supreme Court has held that when shares held as stock-in-trade are replaced with shares of another company under an amalgamation scheme, the allotment can result in taxable business income, provided the new shares can be realised in money and have a definite value. The bench, consisting of Justices J B Pardiwala and R Mahadevan, opined that "where the shares of an amalgamating company, held as stock-in-trade, are substituted by shares of the amalgamated company pursuant to a scheme of...

Delhi High Court Pulls Up Income Tax CPC For Tax Recovery Despite Stay, Issues Directions For Coordination

The Delhi High Court has pulled up the Income Tax Department's Centralised Processing Centre for recovering tax dues from a taxpayer even though a stay on recovery was already in place, saying such lapses are unacceptable in a fully digitized system. A division bench of Justices Dinesh Mehta and Vinod Kumar said the department cannot plead ignorance once a stay order is passed. “In the era of computerization, where even assessments are made online, Income Tax returns are filed online, appeals...

ITAT Upholds Deletion Of ₹25.55-Crore Income Tax Addition On Everest Food Over Alleged Bogus Purchases

The Mumbai Bench of the Income Tax Appellate Tribunal has recently upheld the deletion of a Rs 25.55 crore income tax addition against Everest Food Products Pvt. Ltd., a Mumbai-based company that manufactures and sells masala and spices under the popular “Everest” brand. A bench of Judicial Member Kavitha Rajagopal and Accountant Member Vikram Singh Yadav dismissed the revenue's appeal, agreeing with the Commissioner (Appeals) that purchases cannot be treated as non-genuine solely because...

Income Tax | Delhi High Court Bars Tax Recovery After Taxpayer Pays 20% Of Disputed Demand

The Delhi High Court on Tuesday restrained the Income Tax Department from taking any recovery action, including adjusting refunds, after it orally observed that the taxpayer had already paid 20% of the disputed tax demand and had the balance stayed during the pendency of the appeal. A Division Bench of Justice Dinesh Mehta and Justice Vinod Kumar was hearing a petition filed by a trader who had filed his return for Assessment Year 2021–22. The tax demand arose after additions were made to the...

"Shocking": Delhi HC Pulls Up IT Dept For 8-Year Delay In Processing ₹5.37 Crore Microsoft Refund

The Delhi High Court has pulled up the Income Tax Department over “shocking” eight years delay in processing Rs 5.37 crore tax refund to Microsoft Corporation India.A Division Bench of Justices Dinesh Mehta and Vinod Kumar allowed the writ petition filed by Microsoft India seeking refund of amounts arising from Fringe Benefit Tax (FBT), which had been acknowledged as payable as far back as in June 2017.The court noted that while the Assessing Officer had determined refundable amounts of Rs 6.94...

Income Tax | Manual Returns Invalid After E-Filing Became Mandatory For Companies on May 14, 2007: Madras High Court

The Madras High Court has held that from May 14, 2007, companies had to file their income tax returns electronically, and that paper returns filed after that date carry no legal validity A bench of Justices Anita Sumanth and Mummineni Sudheer Kumar rejected a claim for deduction under Section 80-IC of the Income Tax Act, holding that electronic filing of returns was a mandatory requirement for availing the benefit. The case reached the High Court after the Income Tax Department filed an appeal...

Belated Deposit Of TDS Doesn't Extinguish Criminal Liability Under Income Tax Act: Delhi High Court

The Delhi High Court has held that the subsequent or belated deposit of tax deducted at source (TDS) does not absolve an assessee or company officials of criminal liability under Section 276B of the Income Tax Act, 1961.Justice Amit Mahajan thus dismissed the petition filed by a company's Managing Director, seeking quashing of a criminal complaint and summoning order in a case relating to delayed deposit of TDS amounting to over ₹2.09 crore for the financial year 2017–18.The plea challenged the...

Delhi High Court Refuses To Quash Reassessment Against Homebuyer Over Alleged Cash Payment To Builder

The Delhi High Court has refused to interfere with reassessment proceedings initiated against a taxpayer after documents seized from real estate group Bhutani Infra allegedly reflected a cash transaction linked to a flat purchase.A Division Bench of Justices Dinesh Mehta and Vinod Kumar observed that the notice issued under Section 148 of the Income Tax Act cannot be termed as without jurisdiction at the threshold.The petitioner/taxpayer had argued that the sole basis for reopening the...

Use of Tissue Culture Technology Does Not Bar Tax Exemption On Agricultural Income: Telangana High Court

The Telangana High Court has held that income earned from the sale of tissue-cultured plants qualifies as agricultural income and is therefore exempt from income tax, though advanced scientific techniques are used in their cultivation. The Bench of Justices P Sam Koshy and Narsing Rao Nandikonda heard a case where the assessee (appellant), who was engaged in the business of micropropagation of plants through tissue culture technology, claimed that the income from the same was exempt from tax as...

Income Declared Under VDIS Can Still Be Scrutinised If Higher Income Is Found: Madhya Pradesh High Court

The High Court of Madhya Pradesh at Jabalpur recently held that declaring income under the Voluntary Disclosure of Income Scheme, 1997 does not stop the income tax department from checking whether the correct income was disclosed, even though the scheme protects the assessee from being questioned about the source of that income. A Division Bench of Justice Vivek Rusia and Justice Pradeep Mittal said that VDIS gives only limited immunity. “The assessee is only protected from disclosing the...

Amendments To Income Tax Appellate Tribunal Rules Mandate Digital Signatures For Filing Appeals

The Ministry of Law and Justice has recently notified changes to the Income-tax (Appellate Tribunal) Rules, 1963, making the use of digital signatures compulsory for filing appeals before the Income Tax Appellate Tribunal (ITAT). The changes have been brought in through the Income-tax (Appellate Tribunal) Amendment Rules, 2025. Under the amended rules, appeals must now be filed electronically. Rule 6 has been substituted to state that a memorandum of appeal shall be filed by the appellant or...

ITAT Mumbai Sets Aside ₹2.28-Crore Capital Gains Tax on Housing Society For Developer Payments To Members

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has quashed a Rs 2.28 crore capital gains tax addition against Colombia Co-operative Housing Society, holding that redevelopment compensation paid directly to individual members cannot be taxed as the society's income.The ITAT held that amount paid by a developer directly to individual members of a co-operative housing society pursuant to redevelopment cannot be taxed as capital gains in the hands of the society, particularly when the...