Web Hosting Services Availed By The Assessee Do Not Constitute Royalty Or FTS Under India-Mauritius DTAA: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that web hosting services availed by the assessee do not constitute royalty or Fee for Technical Services (FTS) under the India-Mauritius Double Tax Avoidance Agreement (DTAA).The bench of G.S. Pannu (President) and Astha Chandra (Judicial Member) has observed that the web hosting services availed by the assessee do not constitute royalty or FTS, and hence payments made by the assessee to OIT Managed Services Mauritius in...

Shree Sai Baba Sansthan Trust Eligible For Income Tax Exemption On Anonymous Donations: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that Shree Sai Baba Sansthan Trust is eligible for income tax exemption on anonymous donations.The bench of Aby T. Varkey (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that there may be instances where a trust, which exists both for charitable and religious purposes, has incurred religious expenditure that is less than 5% of the total expenses of the trust. In such a case, the trust may be eligible for...

Delhi High Court Upholds ITAT’s Decision On Selection Of Comparables For Determination Of Arm’s Length Price Of An International Transaction

The Delhi High Court had upheld the decision of the Income Tax Appellate Tribunal (ITAT) on the selection of comparables for the determination of the arm’s length price of an international transaction.The Bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the Tribunal not only followed the previous orders mentioned above to maintain consistency but also examined the entire material on record to ascertain the comparability of each of the comparables with the case of the...

Deemed Dividend Is Taxable Only In The Hands Of The Shareholder: ITAT

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that a deemed dividend is taxable only in the hands of the shareholder.The bench of Siddhartha Nautiyal (Judicial Member) and Annapurna Gupta (Accountant Member) has observed that the assessee firm was neither a registered shareholder nor a beneficial shareholder; there is no reason to tax the amount received by it by way of advance from Shree Electromelts Ltd. (SEL) amounting to Rs. 2,28,53,926 as a deemed dividend in terms of...

ITAT Allows Income Tax Deduction On Interest Income From Investment In Co-Operative Bank

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has allowed the deduction under Section 80P(2)(d) of the Income Tax Act on the interest income from investments in cooperative banks.The bench of Mahavir Singh (Vice President) and Manjunatha.G. (Accountant Member) has observed that the Erode District Central Co-operative Bank is also governed by the Tamil Nadu Co-operative Societies Act, and once it is governed by the Co-operative Societies Act, the assessee is eligible for a claim of...

Tax Cases Weekly Round-Up: 22 To 28 October, 2023

Supreme Court State Amendments Made To VAT Acts After GST Came Into Effect Are Invalid : Supreme Court Case Title: The State of Telangana & Ors. V. M/S Tirumala Constructions., Civil Appeal No(S). 1628 Of 2023 Citation : 2023 LiveLaw (SC) 927 A Division Bench of the Supreme Court, while deciding the appeals arising from judgments of Telangana, Gujarat and Bombay High Court with respect to the validity of VAT Amendment Act in their respective states, made several...

Long-Term Capital Gain Can’t Be Claimed Without Owning Flats for At Least 3 years: ITAT

The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) has held that long-term capital gain cannot be claimed without owning flats for at least 3 years.The bench of R.K. Panda (Vice President) and Laliet Kumar (Judicial Member) has observed that PCIT is fully justified in invoking the provisions of Section 263 of the Income Tax Act as the assessee without holding the seven flats for a period of 3 years from the date of acquisition claimed deduction under Section 54F after selling these...

Tax Cases Weekly Round-Up: 15 To 21 October, 2023

Supreme Court U.P. Trade Tax Act | ‘Tinted Glass’ To Be Taxed As “Goods Or Wares Made Of Glass”, As it is Different from ‘Plain Glass’: Supreme Court Case Title: M/S Triveni Glass Limited v COMMISSIONER OF TRADE TAX, U.P. Case No.: 2023 LiveLaw (SC) 896 The Supreme Court has held that ‘Tinted Glass Sheet’ is different from ‘Plain Glass sheet’ and is thus liable to be taxed as “goods or wares made of glass” under Entry 4 of Notification No.5784 dated 07.09.1981, issued by...

PCIT Precluded From Initiating Proceedings Based On Document Not Forming Part Of Any Proceedings: ITAT

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the basis to initiate the proceedings under Section 263 of the Income Tax Act by the PCIT is misplaced as it was based on the document, which was not forming part of any proceedings.The bench of Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) has observed that the report from the Departmental Valuer (DVO) was received by the AO after the assessment order passed, which evidences that the report was...

ITAT Deletes Addition On Cash Deposit During Demonetisation On Account Of Sale Of Petrol, Diesel And Other Petroleum Products

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition of cash deposits during demonetisation on account of the sale of petrol, diesel, and other petroleum products.The bench of T.R. Senthil Kumar (Judicial Member) and Waseem Ahmed (Accountant Member) have observed that cash deposits are on account of the sale of petrol, diesel, and other petroleum products. These sales have been duly recorded in the books of accounts, and appropriate VAT taxes were also collected...

Double Taxation Avoidance Agreement Cannot Be Enforced Unless Notified By Centre Under Section 90 Income Tax Act : Supreme Court

The Supreme Court has held that a Double Taxation Avoidance Agreement (DTAA) cannot be given effect to by a court, authority or a tribunal unless it has been notified by the Central Government under Section 90 of the Income Tax Act.The Court held that until the Government of India issues a notification as per Section 90, the DTAA treaty is not enforceable per se in Indian courts.A bench comprising Justices S Ravindra Bhat and Dipankar Datta held so while allowing a batch of appeals filed by the...

Bona Fide Non-Offering Of Interest On Income Tax Refund While Filing ITR Does Not Amount To Under-Reporting Of Income: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the explanation of the assessee for not offering the interest on income tax refund while filing its return of income is bona fide.The bench of Sandeep Singh Karhail (Judicial Member) and Amarjit Singh (Accountant Member) has observed that bona fide non-declaration of interest on income tax refunds cannot be said to be under-reporting of income by the assessee within the meaning of Section 270A of the Income Tax Act.The...