Tax Cases Weekly Round-Up: 12 November To 18 November, 2023

Supreme Court UP VAT Act | Assessee Entitled To Claim Full Input Tax Credit On Exempted Goods Produced As By-Products Or Waste Products During Manufacturing Of Taxable Goods: Supreme Court Case details: M/S Modi Naturals Ltd v The Commissioner of Commercial Tax UP Case No.: 2023 LiveLaw (SC) 976 The Supreme Court while relying on Explanation (iii) to Section 13 of Uttar Pradesh Value Added Tax Act, 2008 (“UP VAT Act”), has held that if during the manufacture of any...

Rates On Which Power Is Available Through Indian Energy Exchange Can’t Be Applied As It Is Not Rates To Consumers But Rates To DISCOM: ITAT Deletes TP Adjustment

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has deleted the Transfer Pricing (TP) Adjustment as rates on which power is available through the Indian Energy Exchange cannot be applied because these are not the rates to the consumers but rates to the DISCOMs.In the Tata Steel Ltd case, the bench of Amit Shukla (Judicial Member) and Padmavathy S (Accountant Member) eliminated the TP-adjustment for the specified domestic transaction (SDT) of power transfer from eligible undertakings...

ITAT Dirests ALP Computation Towards Guarantee Commission @ 0.3523% In Case Of Macrotech Developers

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has directed the ALP Computation Towards Guarantee Commission at a rate of 0.3523% in the case of Macrotech Developers.The bench of Kuldip Singh (Judicial Member) and Padmavathy S. (Accountant Member) has observed that the rate of guarantee commission is required to be determined on the basis of the credit rating of the issuer company and the comparison of interest rates without guarantee and with guarantee.The respondent/assessee had an...

Tax Cases Weekly Round-Up: 05 November To 11 November, 2023

Delhi High Court CENVAT Credit Refund Can’t Be Denied In Absence Of Self-Assessed Return Having Been Questioned, Reviewed Or Re-Assessed: Delhi High Court Case Title: BT (India) Private Limited Versus UOI Citation: 2023 LiveLaw (Del) 1082 The Delhi High Court has held that a CENVAT credit refund cannot be denied in the absence of the self-assessed return having been questioned, reviewed or re-assessed. Delhi High Court Quashes Suspension Of License, Issued To Customs...

Unsold Flats Which Are In Stock In Trade Should Be Assessed As "Business Income": ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has observed that unsold flats that are in stock in trade should be assessed under the heading "business income".The bench of Kuldip Singh (Judicial Member) and S. Rifaur Rahman (Accountant Member) has observed that there is no justification for estimating the rental value of unsold flats and notionally computing the annual letting value under Section 263 of the Income Tax Act.The appellant/assessee is in the business of purchasing and...

ITAT Deletes Income Tax Addition Of Rs.2.30 Crores As AO Failed To Mention Investment Outside The Books Of Accounts

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition of Rs. 2.30 crores as the Assessing Officer (AO) did not mention any investment outside the books of accounts.The bench of Astha Chandra (Judicial Member) and N. K. Billaiya (Accountant Member) has observed that the assessee has explained the investment duly reflected in its bank statement, and such reflection in the bank statements has not been doubted by the AO; therefore, it cannot be said that the...

Income Tax Authorities Can’t Step Into Shoes Of Businessmen To Determine Expenditure For Business Purpose: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that income tax authorities cannot step into the shoes of businessmen to determine how much expenditure should have been incurred for the purpose of business.The bench of Astha Chandra (Judicial Member) and B. R. R. Kumar (Accountant Member) has observed that activities clearly demonstrate that the assessee had incurred expenses for preparing technical and financial bids for obtaining contracts for the maintenance and operation of...

Interest Earned Deposited In The Consolidated Fund Of India By Way Of Challans: ITAT Deletes Income Tax Addition Against NHIDCL

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the assessee, National Highways & Infrastructure Development Corp. India (NHIDCL), received funds in fiduciary capacity from the government and deposited with the Consolidated Fund of India the interest received on deposits kept in bank accounts out of funds received for infrastructure development projects.The bench of Yogesh Kumar US (Judicial Member) and B.R.R. Kumar (Accountant Member) has observed that the assessee,...

Tax Cases Weekly Round-Up: 29 October To 4 November, 2023

Supreme Court Supreme Court Affirms Penalty On 'Zarda' Manufacturers For Misclassifying Product As 'Chewing Tobacco' For Central Excise Duty Case Title: Commr. Of Cen. Exc. Ahmedabad v M/S Urmin Products P. Ltd. And Others Citation: 2023 LiveLaw (SC) 949 The Supreme Court while adjudicating a matter wherein the Assesssee deliberately misclassified the ‘Zarda’ produced by it as ‘Chewing Tobacco’ for evading payment of a high duty as applicable to ‘Zarda’, has affirmed the...

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...