INCOME TAX
2% TDS Deductible On Common Area Maintenance Charges: ITAT
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that 2% TDS is deductible on common area maintenance charges.The two-member bench of C.M. Garg (Judicial Member) and Pradip Kumar Khedia (Accountant Member) has observed that the common area maintenance charges were not part of the actual rent paid to the owner by the assessee company. Payments of rent and common area maintenance charges have been made to distinct entities or companies; therefore, the authorities below were not...
Tax Cases Weekly Round-Up: 15 January to 21 January 2023
Delhi High Court VAT Department Not To Initiate Coercive Measures Against PSU Pawan Hans: Delhi High Court Case Title: Pawan Hans Ltd. Versus Commissioner of Trade and Taxes Citation: 2023 LiveLaw (Del) 65 The Delhi High Court has granted a stay to helicopter charterer PSU Pawan Hans Ltd. against a VAT demand of Rs. 176 crores. The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the issue needs consideration and directed the VAT department...
Hire Charges Received Under ‘Time Charter Agreement’ Not Taxable As Royalty, If Control Over Ship Remained With Owner: ITAT
The Mumbai bench of the ITAT has ruled that hire charges received by the owner of a ship for chartering its vessel under a ‘Time Charter Agreement’, is not taxable as ‘royalty’ under Section 9(1) (vi) of the Income Tax Act, 1961, if control and dominance over the ship remained with the assessee/ owner and not with the charterer. The bench of Amit Shukla (Judicial Member) and Gagan Goyal (Accountant Member) held that to fall within the ambit of “use or right to use” an equipment under...
Income Tax Act - For Block Assessment, Normals Procedure Not Applicable; Interest Can Be Levied Without Sec 158BC Notice : Supreme Court
The Supreme Court recently held that revenue was justified in levying interest under Section 158BFA(1) of the Income Tax Act for late filing of the return for the block period even in absence of any notice under Section 158BC of the Act and for the period prior to 01.06.1999.A Bench comprising Justice M.R. Shah and Justice C.T. Ravikumar was considering a batch of petitions dealing with the same issue. Factual Background Since the Court was dealing with a batch of similar petitions, it only...
Interest Income Earned By A Co-Operative Society Eligible For Deduction: ITAT
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that interest income earned by a co-operative society on its investments held with co-operative banks would be eligible for claim of deduction under section 80P(2)(d) of the Income Tax Act.The two-member bench of Kuldip Singh (Judicial Member) and S Rifaur Rahman (Accountant Member) found that the CIT(A) erred in upholding the assessee's denial of deduction under Section 80P(2)(d).The appellant/assessee, a cooperative society, has...
Company’s Income Cannot Be Assessed Under ‘Salary’: ITAT
The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that since the assessee is a company, its income cannot be assessed under the heading "salary."The bench of K. Narasimha Chary (a judicial member) has restored the issue to the file of the Assessing Officer to verify the availability of brought-forward losses for the purpose of setting off the current year's income against losses.The assessee is a private company that filed a return of income for the assessment year...
Impossible For A Company To Get Its Accounts Audited On 31st March And Get The Approval In AGM On The Same Date: ITAT Upholds Addition
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that it is impossible for a company to get its accounts audited on 31st March and present the same for approval in the Annual General Meeting on March 31st.The two-member bench of Kul Bharat (Judicial Member) and N.K. Billaiya (Accountant Member), while upholding the addition under Section 56(2)(viib), observed that the certificate of the auditors nowhere says that the valuer has considered the audited balance sheet. The...
Tax Cases Weekly Round-Up: 08 January To 14 January 2023
Supreme Court Income Tax Act | Writ Petition Can Be Entertained To Examine If Conditions To Issue Section 148 Notice Are Satisfied : Supreme Court Case Title: Red Chilli International Sales Versus ITO Citation: 2023 LiveLaw (SC) 16 The Supreme Court recently set aside an order of the Punjab and Haryana High Court which dismissed a writ petition filed by an assessee against a notice issued under Section 148A of the Income Tax Act 1961 for reopening assessment. The High Court...
TDS Not Applicable To Salary/Commission Paid To Partners: ITAT
The Gauhati Bench of the Income Tax Appellate Tribunal (ITAT) has held that the TDS is not applicable to salary or commission paid to partners.The two-member bench of Sanjay Garg (Judicial Member) and Manish Board (Accountant Member) observed that salary, bonus, remuneration, or commission are collectively referred to as "remuneration," and the remuneration paid during the year is within the permissible limit set forth in section 40(b)(v) of the Income Tax Act.The respondent/assessee is a...
Income Tax Act | Writ Petition Can Be Entertained To Examine If Conditions To Issue Section 148 Notice Are Satisfied : Supreme Court
The Supreme Court recently set aside an order of the Punjab and Haryana High Court which dismissed a writ petition filed by an assessee against a notice issued under Section 148A of the Income Tax Act 1961 for reopening assessment.The High Court had dismissed the writ petition on the ground of availability of alternative remedy. Taking exception to the High Court's approach, the Supreme Court observed that writ petitions have been entertained to examine whether the conditions for the...
Tax Cases Weekly Round-Up: 1 January to 7 January 2023
Supreme Court Non-Banking Finance & Leasing Companies Not Liable To Pay Interest Tax On Instalments Paid Under Hire Purchase Agreement : Supreme Court Case Title: M/s. Muthoot Leasing And Finance Ltd. versus CIT Citation : 2023 LiveLaw (SC) 7 The Supreme Court has held that non-banking finance and leasing companies are not liable to pay tax on the interest component included in the hire-purchase instalment paid under the hire purchase agreement. Sabka Vishwas Scheme : ...
When AO Has Taken One Of The Possible Views The PCIT Is Prohibited From Adopting Different View: ITAT
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), while quashing the revision order, held that when the Assessing Officer (AO) has taken one of several possible views, the Principal Commissioner of Income Tax (PCIT) is prohibited from adopting a different view.The two-member bench of Aby V. Varkey (Judicial Member) and B.R. Baskaran (Accountant Member) relied on the decision of the Supreme Court in the case of Malabar Industrial Co., Ltd. v. CIT, in which it was ruled that if the AO...