Old Income Tax Demands Cannot Surface On Portal Without Serving Underlying Orders: Bombay High Court

The Bombay High Court recently observed that old income tax demands could not be sustained where the underlying orders were not made available to the taxpayer, observing that such demands cannot be permitted to surface without proper disclosure. “Old matters and demands cannot be allowed to suddenly surface on the portal without the underlying orders being available and served. Consequently, the impugned demands cannot be sustained,” the court said. A Division Bench of Justices B. P....

Lottery Ticket Discount Not “Commission” Absent Payment Or Credit, No TDS Applicable: Madras High Court

The Madras High Court on 9 April held that the difference between the face value of lottery tickets and the discounted price at which a taxpayer sells them to dealers does not constitute “commission.” Therefore, it is not subject to tax deduction at source (TDS) under Section 194G of the Income Tax Act. The Division Bench of Justices G. Jayachandran and Shamim Ahmed dismissed the Revenue's appeal and upheld the Tribunal's order in favour of Martin Lottery Agencies Ltd. The judges observed: ...

Pre-2002 Transfer Of Self-Generated Trademarks With No Cost Of Acquisition Not Taxable: Gujarat High Court

The Gujarat High Court on 12 March, held that consideration of Rs.29.10 crore received by Zydus Lifesciences Limited on assignment of self-generated trademarks prior to 1 April 2002 is not chargeable to tax either as capital gains or as business income under the Income Tax Act, 1961. A Division Bench of Justices A.S. Supehia and Justice Pranav Trivedi dismissed the Revenue's appeal and affirmed the Tribunal's view that, in the absence of an ascertainable cost of acquisition, the charging...

Demonetisation Deposits From Cash In Hand Cannot Be Rejected Without Evidence: Allahabad High Court

The Allahabad High Court on 8 April held that where a taxpayer explains cash deposits during 2016 Indian demonetization as arising from cash in hand, the Assessing Officer cannot reject the explanation in the absence of any material to the contrary. A Bench comprising Justices Shekhar B. Saraf and Abdhesh Kumar Chaudhary dismissed the appeal filed by the Principal Commissioner of Income Tax, Lucknow against Medharaj Techno Concept Pvt. Ltd. and upheld the order of the Income Tax Appellate...

Share Buyback Not Acquisition Of Property: Delhi High Court Deletes ₹16.33 Crore Tax Addition Against Globe Capital

The Delhi High Court has upheld the deletion of a Rs 16.33 crore addition against Globe Capital Market Ltd., holding that a company's buyback of its own shares does not amount to acquisition of “property” and Section 56(2)(x) of the Income Tax Act has no application to such transactions. A Division Bench of Justices Dinesh Mehta and Vinod Kumar dismissed the appeal filed by the Principal Commissioner of Income Tax, affirming the Income Tax Appellate Tribunal's decision, which had upheld relief...

CBDT Delay Condonation Circular For 'Genuine Hardship' Applies Irrespective Of Assessment Year: Delhi High Court

The Delhi High Court has held that a beneficial circular issued by the Central Board of Direct Taxes (CBDT) allowing delay condonation in cases of “genuine hardship” cannot be restricted to specific assessment years and must be applied uniformly to all bona fide cases.A Division Bench of Justices Dinesh Mehta and Vinod Kumar passed the ruling while allowing a writ petition filed by VRG Electronics Pvt. Ltd., challenging the rejection of its application for condonation of delay in filing...

Delhi High Court Upholds Reassessment, Says Defect In 7-Day Notice Under Income Tax Act Stood Cured By Corrigendum

The Delhi High Court has upheld reassessment proceedings against an taxpayer for Assessment Year 2018–19, holding that the defect of granting less than seven days to respond to a notice under Section 148A(b) of the Income Tax Act stood cured by a corrigendum issued within the limitation period. A Division Bench of Justices V. Kameswar Rao and Vinod Kumar rejected the petitioner's challenge that the notice was invalid for providing only six days to respond, contrary to the statutory requirement...

Interest On Funds Linked To Business Setup Not Taxable As 'Other Income': Delhi HC In VNG Automotive Case

The Delhi High Court has recently held that interest earned by VNG Automotive Pvt. Ltd. on funds earmarked for setting up its manufacturing unit cannot be taxed as “income from other sources”, finding that the funds were not surplus but were directly linked to project obligations. The Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar said: “We find that the funds in the present case were not lying as surplus but the same were earmarked to facilitate the balance payment for...

Actor Vijay Appeals Single-Bench Ruling Of Madras High Court Upholding ₹1.5 Crore Income Tax Penalty

Actor-turned-politician Joseph Vijay has moved a Division Bench of the Madras High Court against a single-judge ruling that upheld a ₹1.5 crore income tax penalty imposed on him.The appeal, filed last month, is yet to be listed for hearing.The challenge is to a judgment by Justice Senthilkumar Ramamoorthy, who had dismissed Vijay's writ petition and upheld the penalty linked to alleged undisclosed income of Rs 15 crore for the financial year 2015–16.The single judge held that the penalty order...

Gujarat High Court Seeks Affidavit From Centre Over Failure To Make ITR Utilities Available By April 1

The Gujarat High Court recently directed the Union government to file an affidavit in a writ petition filed by the Chartered Accountants Association, Surat, and others, alleging continued non-compliance with its 2015 directions on the timely availability of income tax return e-filing utilities. A Division Bench of Justice A.S. Supehia and Justice Pranav Trivedi noted that despite its earlier ruling in All Gujarat Federation of Tax Consultants v. CBDT, the respondent Department had not followed...

Madras High Court Quashes IT Case Against Gautham Vasudev Menon Over Non-Filing Of His Company's Returns

The Madras High Court on Monday quashed an income tax prosecution against filmmaker Gautham Vasudev Menon for failure to file the income tax returns of his company, Photon Kathaas Productions Pvt Ltd, for the assessment year 2013-14.Justice GK Ilanthiraiyan quashed the case pending against Menon before the Additional Chief Metropolitan Magistrate. The case against Menon was initiated under Section 276 CC read with Section 278B of the Income Tax Act for non-filing of the returns of the company...

TEP-Based Income Tax Summons Can't Be Quashed Without Proof Of Mala Fide: Andhra Pradesh High Court

The Andhra Pradesh High Court has held that summons issued under Section 131(1A) of the Income Tax Act on the basis of a Tax Evasion Petition (TEP) cannot be quashed in writ jurisdiction in the absence of clear and convincing proof of mala fide, particularly where such allegations are raised belatedly and lack foundational pleadings or supporting material. A Division Bench of Justice Ravi Nath Tilhari and Justice Balaji Medamalli dismissed a writ petition filed by Koduru Picheswara Rao...