Bombay High Court Quashes Reassessment Against Royal Chains, Says 'Reason To Suspect' Not Enough

The Bombay High Court on 24 August quashed an Income Tax reassessment notice issued to jewellery manufacturer Royal Chains Pvt Ltd for Assessment Year 2016-17. A Division Bench of Justices B.P. Colabawalla and Farhan P. Dubash noted that a completed Income Tax assessment cannot be reopened merely on the basis of suspicion about an investor's background, without material having a direct nexus with the particular transaction and the alleged escapement of income. It observed: “The connection that...

Chhattisgarh HC Upholds ₹37.74L Compensation To Accident Victim's Mother, Says No Tax Deduction Below ₹5L

The Chhattisgarh High Court on 20 August held that income tax need not be deducted while calculating motor accident compensation if the deceased's income falls within the Rs. 5 lakh limit eligible for rebate under Section 87A of the Income Tax Act. Justice Sanjay Kumar Jaiswal upheld the Motor Accident Claims Tribunal's decision not to deduct tax from the deceased's annual income of Rs. 4,34,970, including 50% towards future prospects, and dismissed his mother's appeal seeking enhancement of...

Calcutta High Court Upholds Reassessment Against Chirania Projects, Orders Personal Hearing

The Calcutta High Court on 18 August upheld reassessment proceedings initiated against Chirania Projects Private Limited for Assessment Year (AY) 2019-20, while directing the Assessing Officer to provide the company an opportunity of personal hearing during the reassessment. Justice Smita Das De passed the order while hearing the company's writ petition challenging the 30 June 2025 order under Section 148A(3) of the Income Tax Act and the consequential notice under Section 148. She observed: ...

Interest On Trust's FDs Taxable Without Specific Donor Direction For Corpus: Madras High Court

The Madras High Court on 17 August held that interest earned on fixed deposits maintained by a Trust is taxable revenue receipt where donors have not specifically directed that such interest form part of the Trust's corpus. A Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan dismissed an appeal filed by St. Joseph's Development Trust, upholding the addition of Rs. 94.66 lakh as taxable interest income for Assessment Year (AY) 2017-18. The judges held: ...

Calcutta HC Upholds ₹752 Cr. Relief For Syama Prasad Port, Says Actuarial Contributions Not Limited

The Calcutta High Court on 21 August upheld the deletion of tax disallowances totalling over Rs.752 crore from the assessment of Syama Prasad Mookherjee Port, Kolkata, (formerly Kolkata Port Trust) and dismissed the Revenue's appeal against the Income Tax Appellate Tribunal (ITAT), Kolkata's order. A Division Bench comprising Justices Rajarshi Bharadwaj and Uday Kumar observed that extraordinary contributions to approved superannuation and gratuity funds made to meet actuarial shortfalls cannot...

Taxpayer Cannot Be Denied TDS Credit For Deductor's Failure To Deposit Tax: Bombay High Court

The Bombay High Court on 5 August held that TDS credit cannot be denied to a taxpayer merely because the person who deducted the tax failed to deposit it with the Central Government, once actual deduction of tax from the income or payment is established. A Division Bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla observed that the default of the deductor cannot prejudice the deducted and directed the Income Tax Department to verify claims and grant TDS credit where actual deduction...

AO Can't Reopen Scrutinised Issue On Mere Change Of Opinion Without Tangible Material: Gujarat High Court

The Gujarat High Court on 19 August held that an Assessing Officer (AO) cannot reopen an assessment on an issue already specifically examined during the original scrutiny merely on a change of opinion, unless fresh tangible material shows that income had escaped assessment because of suppression of material facts. A Division Bench of Justices A.S. Supehia and Vaibhavi D. Nanavati allowed a writ petition filed by Loonchand Dhanraj HUF and quashed the reassessment proceedings initiated through a...

Reassessment Objections Must Be Raised Before Assessing Officer First: Telangana High Court

The Telangana High Court on 11 August declined to interfere with reassessment proceedings against Nitin Enterprises at the preliminary stage, holding that objections concerning the jurisdiction and validity of the reassessment must first be raised before the Assessing Officer and, if necessary, pursued through the statutory appellate remedies. A Division Bench comprising Justices P. Sam Koshy and Narsing Rao Nandikonda held that proceedings initiated through a notice under Section 148A and the...

Telangana High Court Holds Share Premium From Non-Resident Is Capital Receipt, Quashes ₹44.07 Cr Demand

The Telangana High Court on 11 August held that the share premium received by Escientia Advanced Sciences Pvt. Ltd. from a non-resident shareholder on a fresh issue of equity shares is a capital receipt and cannot be treated as taxable income. A Division Bench comprising Justices P. Sam Koshy and Narsing Rao Nandikonda allowed the company's writ petition and quashed a Rs. 44.07 crore tax demand raised for assessment year 2019-20. The judges held: "..the premium received by the petitioner on...

Income Tax Department Can't Retain Tax Collected Twice On Same Income: Telangana High Court

The Telangana High Court has held that the Income Tax Department cannot retain tax collected twice on the same income and that the Commissioner must exercise powers under Section 264 of the Income Tax Act, 1961. The provision enables revision of an assessment to provide relief against over-assessment, even where the mistake is attributable to the taxpayer. A Division Bench comprising Justices P. Sam Koshy and Narsing Rao Nandikonda made the observation while allowing a writ petition filed by...

Delhi High Court Sets Aside Income Tax Penalty For Furnishing Inaccurate Income Particulars Over Defective Notice

The Delhi High Court has held that a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, cannot be sustained if the notice issued to the assessee fails to specify the particular limb under which the penalty proceedings are proposed.The division bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta rejected the Revenue's appeal against an ITAT order which had set aside the penalty imposed on Vitasta Estates.It noted that Section 271(1)(c) contemplates two distinct grounds for...

Husband Cannot Claim Capital Gains Exemption For Property In Wife's Name: Punjab & Haryana High Court

The Punjab and Haryana High Court on 12 August held that capital gains exemption under Section 54 of the Income Tax Act cannot be claimed where a residential property is sold and the proceeds are reinvested in another residential property purchased solely in the name of the taxpayer's wife. A Division Bench of Justices Deepak Sibal and Rupinderjit Chahal dismissed an appeal filed by Subh Karan Yadav, a retired government employee, against the order of the Income Tax Appellate Tribunal (ITAT)...