Income Tax Act | ITAT Mumbai Grants Major Tax Relief To Vodafone; Deletes Depreciation, TDS & S.14A Disallowances

The Mumbai Bench of the Income Tax Appellate Tribunal has held that multiple additions made by the Assessing Officer could not be sustained in law. The Bench held that the transfer of passive telecom tower assets pursuant to a court-approved demerger amounted to a genuine “gift” under Section 47(iii), and the Assessing Officer could not artificially impute consideration or deny depreciation. It further ruled that roaming services do not involve human intervention so as to qualify as...

Non-Filing Of ITR By Creditor Not Proof For Lack Of Creditworthiness: Patna High Court Deletes Income Tax Additions

The Patna High Court has held that the Income Tax Appellate Tribunal was not justified in restoring an addition of ₹1.91 crore under Section 68 of the Income Tax Act after reversing a reasoned order of the Commissioner of Income Tax (Appeals), where the assessee had produced documentary evidence and the Assessing Officer's remand report did not disclose any adverse material. A Division Bench of Justice Bibek Chaudhuri and Justice Dr. Anshuman held that the Tribunal interfered with the...

Non-Compete Fee Can Be Deducted As Revenue Expenditure Under Section 37(1) Income Tax Act: Supreme Court

The Supreme Court has held that payment of non-compete fee does not result in acquisition of a capital asset or alteration of the profit-making structure of the business, and is allowable as revenue expenditure under Section 37(1) of the Income Tax Act, 1961.“Thus non-compete fee only seeks to protect or enhance the profitability of the business, thereby facilitating the carrying on of the business more efficiently and profitably. Such payment neither results in creation of any new asset nor...

Income Tax Act | S.153C Trigger Starts On Handing-Over Date, Not Search Date: Delhi High Court

The Delhi High Court has dismissed an appeal filed by the Principal Commissioner of Income Tax (Central), Gurugram, upholding the Income Tax Appellate Tribunal's order which had rejected a reassessment notice issued under Section 153C of the Income Tax Act for AY 2013-14. A Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar held that the six-year block period under Section 153C must be computed from the date when seized documents were handed over to the Assessing Officer...

Income Tax Act | S.153C Notices Unsustainable When Search For 'Other Person' Initiated After 01.04.2021: Madras High Court

The Madras High Court held that the notices under Section 153C are unsustainable where a search for 'other person' was initiated after 01.04.2021. Section 153C of the Income Tax Act applies when documents or assets belonging to a third party are found during a search, and an assessment is made against that person. Section 153C(3) of the Income Tax Act states that Section 153C shall not apply to any search initiated under Section 132 or books/assets requisitioned under Section 132A...

Income Tax Act | Bombay High Court Allows Treaty-Based Cap Of 10% On DDT For Foreign Shareholder; Sets Aside BFAR Ruling

The Bombay High Court (Goa Bench) has held that Dividend Distribution Tax (DDT) paid by an Indian subsidiary to its foreign shareholder must be restricted to the treaty rate of 10% under Article 11 of the India-UK India Double Taxation Avoidance Agreement (DTAA) A Division Bench of Justice Bharati Dangre and Justice Nivedita P. Mehta allowed the appeal filed by the assessee, M/s Colorcon Asia Pvt. Ltd., and set aside the advance ruling passed by the Board for Advance Rulings, (BFAR)...

Income Tax Act | Bombay High Court Allows Treaty-Based Cap Of 10% On DDT For Foreign Shareholder; Sets Aside BFAR Ruling

The Bombay High Court (Goa Bench) has held that Dividend Distribution Tax (DDT) paid by an Indian subsidiary to its foreign shareholder must be restricted to the treaty rate of 10% under Article 11 of the India-UK India Double Taxation Avoidance Agreement (DTAA) A Division Bench of Justice Bharati Dangre and Justice Nivedita P. Mehta allowed the appeal filed by the assessee, M/s Colorcon Asia Pvt. Ltd., and set aside the advance ruling passed by the Board for Advance Rulings, (BFAR)...

Prosecution Can Be Initiated Without Waiting For ITAT Penalty Confirmation In High-Value Cases: Delhi High Court

The Delhi High Court has made it clear that approval of collegium of two CCIT/DGIT rank officers is only required in cases where tax evaded is less than the threshold limit of ₹25 Lakh.A division bench of Justices V. Kameswar Rao and Vinod Kumar held, “the appropriate authority for initiating the prosecution proceedings would be the sanctioning authority i.e., the PCIT and not the collegium of two CCIT/DGIT rank officers since the tax to be evaded exceeds Rs. 25 lacs.”The observation was made...

Income Tax Act | S.54 Relief Cannot Be Denied Merely Due To Delay In Registration If Sale Proceeds Invested Within Time: ITAT Chennai

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) held that deduction under Section 54 of the Income Tax Act cannot be denied merely due to delay in registration if investment in new residential property is made within the prescribed time. Section 54 of the Indian Income Tax Act, 1961 offers individuals and Hindu Undivided Families (HUFs) an exemption from long-term capital gains tax. This exemption applies when they sell a residential house property and use the proceeds...

Income Tax Act | Reassessment U/S 147 Valid If Original Order Did Not Consider S. 80HHC Claim Earlier: Madras High Court

The Madras High Court held that reassessment under Section 147 of the Income Tax Act is valid if the original order is completely silent on the assessee's claim for deduction under Section 80HHC of the Income Tax Act. Section 147 of the Income Tax Act, 1961, empowers the Assessing Officer (AO) to assess or reassess income that has escaped assessment. Justices Anita Sumanth and Mummineni Sudheer Kumar stated that the original order of assessment is wholly silent in regard to the ...

Income Tax Act | Sikkim High Court Allows S.80P(2)(d) Deduction On Interest Earned From Co-operative Banks By Non-Bank Co-operative Society

The Sikkim High Court has held that a non-bank co-operative society is entitled to claim deduction under Section 80P(2)(d) of the Income Tax Act, 1961, on interest income earned from investments made with co-operative banks, and that Section 80P(4) does not bar such deduction. A Division Bench of Chief Justice Biswanath Somadder and Justice Meenakshi Madan Rai allowed the tax appeal filed by the Sikkim State Cooperative Supply and Marketing Federation Limited (SIMFED) and set aside the...

Income Tax Act | Upkeep & Maintenance Expenses For Rubber Replantation Are Revenue Expenditure, Deductible U/S 37: Kerala High Court

The Kerala High Court held that expenditure incurred on the upkeep and maintenance of rubber trees, including expenses relating to replantation and replacement, is revenue in nature and therefore allowable as a deduction under Section 37 of the Income Tax Act, 1961. Section 37 of the Income Tax Act, 1961, provides that expenses incurred by businesses for raising loans are eligible for deduction. Justices A. Muhamed Mustaque and Harisankar V. Menon were examining the issue regarding...