INCOME TAX
Output VAT Refund Received By Hyundai Motor Towards Investment Promotion Subsidy Is Non-Taxable Capital Receipt: ITAT
The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that the output VAT refund received by Hyundai Motor towards investment promotion subsidy is a non-taxable capital receipt.The bench of V. Durga Rao (Judicial Member) and Manjunatha G (Accountant Member) has observed that the output VAT incentive (investment promotion subsidy) granted for the purpose of setting up or expanding its manufacturing facility is a capital receipt and hence cannot be treated as income under the...
Tax Cases Weekly Round-Up: 8 To 14 October, 2023
Supreme Court Customs Duty - Undervaluation Must Be Proved By Evidence Of Prices Of Contemporaneous Imports; Else Benefit Of Doubt Goes To Importer : Supreme Court Case Title: Commissioner of Customs (Imports), Mumbai v. M/s Ganpati Overseas Citation : 2023 LiveLaw (SC) 864 The Supreme Court has recently highlighted that the transaction value (the price actually paid or payable for the goods) should be the primary basis for customs valuation and that other valuation...
S.153C Income Tax Act | Preceding 6 Years Period As Regards 3rd Party To Be Calculated From Date When Documents Are Assigned To Concerned AO : Supreme Court
The Supreme Court has rejected the argument of the Income Tax department that Section 153C of the Income Tax Act 1961 empowers the assessing officer to seek information from a third party regarding income tax returns of the period of six years preceding the date of the search of the assessee whose premises was originally searched.A Bench comprising Justice S. Ravindra Bhat and Justice Aravind Kumar held that under Section 153C, a third party would only have to furnish income tax returns of...
Income Received By UK Telecom Company From Indian Telecom Company For Rendering Roaming Services To Customers Abroad Is Not ‘Royalty’: ITAT
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that income received by a UK telecom company from an Indian telecom company for rendering roaming services to customers abroad is not ‘royalty’.The bench of Amit Shukla (Judicial Member) and Gagan Goyal (Accountant Member) has observed that payments made to a non-resident company for providing standard bandwidth services cannot be characterized as ‘royalty’ under DTAA. The amount received by the assessee from Vodafone Idea Limited...
Tax Not Payable On Interest Accrued On FD Which Is Subject To CBI’s Prohibitory Order: ITAT
The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has held that tax is not payable on interest accrued on FD, which is subject to the CBI’s prohibitory order.The bench of Madhumita Roy (Judicial Member) and Chandra Poojari (Accountant Member) has observed that the lower authorities have committed an error in bringing the interest accrued on FD, which is subject to a prohibitory order by CBI Hyderabad, into tax in these assessment years under consideration, and the same has to be...
No Basis Of Allocation Or Actual Cost Incurred For Affiliates: ITAT Confirms Additions For Cost Reimbursement As FTS
The Mumbai Bench of Income Tax Appellate Tribunal, while confirming the additions for cost reimbursement as fees for technical services (FTS), noted that the assessee had no basis of allocation or actual cost incurred for affiliates.The bench of Aby T. Varkey (Judicial Member) and S. Rifaur Rahman (Accountant Member) has observed that the assessee has entered into a support services agreement to provide support services through the various cost centers but failed to submit any details or proper...
Tax Cases Weekly Round-Up: 1 To 7 October, 2023
Delhi High Court EPF Contribution Paid Next Day After National Holiday, Delhi High Court Allows Deduction As Due Fell On National Holiday Case Title: PCIT Versus Pepsico India Holding Pvt. Ltd. The Delhi High Court has allowed the deduction for the employee’s contribution towards the provident fund as the due date fell on a national holiday. Bombay High Court Bombay High Court Quashes Reassessment Against Knight Riders Sports Case Title: Knight Riders Sports...
Tax Cases Monthly Round Up: September 2023
Direct Tax Supreme Court Material Disclosed To Income Tax Settlement Commission Needn't Be Something Which Wasn't Discovered By Assessing Officer : Supreme Court Case Title: KOTAK MAHINDRA BANK LIMITED vs COMMISSIONER OF INCOME TAX BANGALORE AND ANR Citation : 2023 LiveLaw (SC) 822 The Supreme Court has ruled that Section 245H of the Income Tax Act, 1961, which empowers the Settlement Commission to grant immunity from prosecution and penalty to the assessee if he...
ITAT Confirms Addition Of Expenses Incurred On Brand Reminders, Customer Gifts For Doctor
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has confirmed the addition towards expenses incurred on brand reminders, customer gifts, and the purchase of medical books and journals for doctors.The bench of Rahul Chaudhary (Judicial Member) and Prashant Maharishi (Accountant Member) has relied on the decision of the Supreme Court in the case of Apex Laboratories, in which it was held that any free gift in any manner is prohibited by the provisions of the Indian Medical Council’s...
ALP Of The ESOP Expenses Cannot Be Taken As ‘Nil’: ITAT
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the arm's-length price (ALP) of the employee stock option plan (ESOP) expenses cannot be taken as ‘Nil’.The bench of Rahul Chaudhary (Judicial Member) and S. Rifaur Rahman (Accountant Member) has observed that the transfer pricing addition of INR 26,53,078 is, therefore, set aside, and the TPO/Assessing Officer is directed to re-compute the ALP and the transfer pricing adjustment, if any, by following the method adopted by...
Tax Cases Weekly Round-Up: 24 To 30 September, 2023
Supreme Court Material Disclosed To Income Tax Settlement Commission Needn't Be Something Which Wasn't Discovered By Assessing Officer : Supreme Court Case Title: KOTAK MAHINDRA BANK LIMITED vs COMMISSIONER OF INCOME TAX BANGALORE AND ANR Citation : 2023 LiveLaw (SC) 822 The Supreme Court has ruled that Section 245H of the Income Tax Act, 1961, which empowers the Settlement Commission to grant immunity from prosecution and penalty to the assessee if he has co-operated...
Assessee Resorts To Colourable Devices, Sham Transactions To Defraud Dept: ITAT
The Panaji Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessee had resorted to colourable devices and sham transactions in order to defraud the Department by camouflaging its unaccounted income so that ultimately, the tax could be evaded.The bench of Partha Sarathi Chaudhury (Judicial Member) and Inturi Rama Rao (Accountant Member) has observed that tax planning is legitimate provided it is within the framework of law, and colourable devices cannot be part of tax planning....