Deemed Dividend Is Taxable Only In The Hands Of The Shareholder: ITAT

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that a deemed dividend is taxable only in the hands of the shareholder.The bench of Siddhartha Nautiyal (Judicial Member) and Annapurna Gupta (Accountant Member) has observed that the assessee firm was neither a registered shareholder nor a beneficial shareholder; there is no reason to tax the amount received by it by way of advance from Shree Electromelts Ltd. (SEL) amounting to Rs. 2,28,53,926 as a deemed dividend in terms of...

ITAT Allows Income Tax Deduction On Interest Income From Investment In Co-Operative Bank

The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has allowed the deduction under Section 80P(2)(d) of the Income Tax Act on the interest income from investments in cooperative banks.The bench of Mahavir Singh (Vice President) and Manjunatha.G. (Accountant Member) has observed that the Erode District Central Co-operative Bank is also governed by the Tamil Nadu Co-operative Societies Act, and once it is governed by the Co-operative Societies Act, the assessee is eligible for a claim of...

Tax Cases Weekly Round-Up: 22 To 28 October, 2023

Supreme Court State Amendments Made To VAT Acts After GST Came Into Effect Are Invalid : Supreme Court Case Title: The State of Telangana & Ors. V. M/S Tirumala Constructions., Civil Appeal No(S). 1628 Of 2023 Citation : 2023 LiveLaw (SC) 927 A Division Bench of the Supreme Court, while deciding the appeals arising from judgments of Telangana, Gujarat and Bombay High Court with respect to the validity of VAT Amendment Act in their respective states, made several...

Long-Term Capital Gain Can’t Be Claimed Without Owning Flats for At Least 3 years: ITAT

The Hyderabad Bench of Income Tax Appellate Tribunal (ITAT) has held that long-term capital gain cannot be claimed without owning flats for at least 3 years.The bench of R.K. Panda (Vice President) and Laliet Kumar (Judicial Member) has observed that PCIT is fully justified in invoking the provisions of Section 263 of the Income Tax Act as the assessee without holding the seven flats for a period of 3 years from the date of acquisition claimed deduction under Section 54F after selling these...

Tax Cases Weekly Round-Up: 15 To 21 October, 2023

Supreme Court U.P. Trade Tax Act | ‘Tinted Glass’ To Be Taxed As “Goods Or Wares Made Of Glass”, As it is Different from ‘Plain Glass’: Supreme Court Case Title: M/S Triveni Glass Limited v COMMISSIONER OF TRADE TAX, U.P. Case No.: 2023 LiveLaw (SC) 896 The Supreme Court has held that ‘Tinted Glass Sheet’ is different from ‘Plain Glass sheet’ and is thus liable to be taxed as “goods or wares made of glass” under Entry 4 of Notification No.5784 dated 07.09.1981, issued by...

PCIT Precluded From Initiating Proceedings Based On Document Not Forming Part Of Any Proceedings: ITAT

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has held that the basis to initiate the proceedings under Section 263 of the Income Tax Act by the PCIT is misplaced as it was based on the document, which was not forming part of any proceedings.The bench of Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) has observed that the report from the Departmental Valuer (DVO) was received by the AO after the assessment order passed, which evidences that the report was...

ITAT Deletes Addition On Cash Deposit During Demonetisation On Account Of Sale Of Petrol, Diesel And Other Petroleum Products

The Ahmedabad Bench of Income Tax Appellate Tribunal (ITAT) has deleted the addition of cash deposits during demonetisation on account of the sale of petrol, diesel, and other petroleum products.The bench of T.R. Senthil Kumar (Judicial Member) and Waseem Ahmed (Accountant Member) have observed that cash deposits are on account of the sale of petrol, diesel, and other petroleum products. These sales have been duly recorded in the books of accounts, and appropriate VAT taxes were also collected...

Bona Fide Non-Offering Of Interest On Income Tax Refund While Filing ITR Does Not Amount To Under-Reporting Of Income: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the explanation of the assessee for not offering the interest on income tax refund while filing its return of income is bona fide.The bench of Sandeep Singh Karhail (Judicial Member) and Amarjit Singh (Accountant Member) has observed that bona fide non-declaration of interest on income tax refunds cannot be said to be under-reporting of income by the assessee within the meaning of Section 270A of the Income Tax Act.The...

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...

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...