ITAT Directs Dept. To Allow Interest Paid On Borrowings Against FD Income If Reasonable Link Exists

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), while remanding the matter back to the department, held that the interest paid on borrowings is allowable against FD income if any reasonable link exists.The bench of Amit Shukla (Judicial Member) and Padmavathy S. (Accountant Member) has directed the assessing officer to consider the movement in the FD account and the loan account to understand the nexus and also to consider the alternate claim of interest as business expenditure...

Tax Cases Weekly Round-Up: 27 August To 2 September, 2023

Delhi High Court DGGI Can’t Be Stopped From Taking Intelligence-Based Enforcement Action When Investigation By Other Authority Is Going On: Delhi High Court Case Title: M/S. Hanuman Enterprises Pvt. Ltd. Versus The Additional Director General Directorate General Of GST Citation: 2023 LiveLaw (Del) 756 The Delhi High Court has held that the Directorate General of Goods and Service Tax Intelligence (DGGI) cannot be stopped from taking intelligence-based enforcement action...

Licence Fee Received By Cricket Australia For Live And Non-Live Transmissions Rights Can’t Be Taxed As Royalty: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that Cricket Australia is not liable to pay ‘royalty’ on licence fees received for live and non-live transmission rights.The bench of Kul Bharat (Judicial Member) and M. Balaganesh (Accountant Member) has relied on the decision of the Co-ordinate Bench of the Tribunal in the case of Fox Network Group Singapore Pte. Ltd. vs. ACIT, in which it was held that there is no copyright on live events, and therefore, it is not taxable as...

AO Bound To Grant Advance Tax Credit That Was Left By The Taxpayer: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the AO is bound to grant the credit of advance tax that was left by the taxpayer.The bench of Sandeep Singh Karhail (Judicial Member) and B.R. Baskaran (Accountant Member) has observed that the inadvertence on the part of the assessee to claim the credit for the advance tax while filing its return of income or filing the revised return of income in this regard does not absolve the AO from its statutory duty as per Section...

HSBC Not Liable To Deduct TDS On Nostro Account Maintenance Charges: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessee, HSBC, was not under obligation to withhold tax from Nostro Account Maintenance Charges in terms of Section 195 of the Income Tax Act and therefore could not be treated as an ‘assessee in default’.The bench of Rahul Chaudhary (Judicial Member) has observed that Nostro Account Maintenance Charges are in the nature of bank charges levied on transactions and are not subject to tax deduction at source under...

ITAT Deletes TP-Adjustment On Payment Of Export Commission And Model Fee Against Honda Subsidy

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the adjustment on account of Arm's Length Pricing (ALP) of the export commission payment against the Honda subsidy.The bench of Challa Nagendra Prasad (Judicial Member) and Shamim Yahya (Accountant Member) has observed that the issues of transfer pricing adjustment with respect to the determination of an ALP of Rs. nil on export commission and payment of royalty are decided in favour of the assessee.As per the Income Tax...

Interest Certificate Not Necessary For Claiming Section 24(B) Deduction: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the interest certificate is not necessary for claiming section 24(b) deduction.The bench of Aby T. Varkey (Judicial Member) and S. Rifaur Rahman (Accountant Member) has observed that PCIT erred in holding that the Assessee was ineligible for interest deduction as it did not furnish the certificates from the lender banks as per Section 24(b)-third proviso.The appellant/assessee is in the business of Commercial leasing which...

ITAT Allows Rs.1,094.14 Cr Loss To Standard Chartered Bank Arising From Securities Scam As Business Loss

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the loss of Rs. 1,094.14 crore to Standard Chartered Bank arising from a securities scam as a business loss.The bench of Rahul Chaudhary (Judicial Member) and Prashant Maharishi (Accountant Member) has observed that the loss suffered by the assessee was a result of both the nature of the arrangements the assessee had with the brokers and the misconduct on the part of the employees or ex-employees of the assessee. The loss...

ITAT Allows Capital Gains Exemption To NSE Investor Under India-Mauritius Tax Treaty

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has allowed the capital gains exemption to NSE investors under the India-Mauritius tax treaty.The bench of G.S. Pannu (President) and Saktijit Dey (Vice President), while condemning the department, observed that when the assessee holds a valid Tax Residency Certificate (TRC) and Category 1 GBL and, moreover, the entire process relating to the acquisition of shares of NSE and its sale went through a process of scrutiny and approval by...

For Computing Holding Period For Capital Gain The Period To Be Taken From Date Of Allotment Of The Flat: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that for computing the holding period for capital gain, the period is to be taken from the date of allotment of the flat.The bench of Aby T. Varkey (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that for computing the holding period for capital gain, the period should not be taken from the date of the application of the flat. The rights of the assessee arise in the said flat only on the allotment and...

Defects In Statement Of Reportable Account Rectified Within The Time Limit: ITAT Deletes Penalty

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the penalty as the defects in the statement of the reportable account were rectified within the time limit.The Bench of V. Durga Rao (Judicial Member) and Manjunatha, G. (Accountant Member) has observed that the provisions of sub-section (4) of Section 285BA of the Income Tax Act mandate that the defect be rectified within a period of one month from the date of intimation. The Reporting Entity has rectified the defects...

Tax Cases Weekly Round-Up: 6 August To 12 August, 2023

Delhi High Court Depreciation Allowable On Goodwill Though No Actual Cash Payment Made For Acquisition: Delhi High Court Case Title: PCIT Versus M/S Eltek Sgs Pvt. Ltd. Citation: 2023 LiveLaw (Del) 668 The Delhi High Court has held that depreciation is allowable on goodwill arising in a scheme of amalgamation even though no actual cash payment was made for the acquisition of goodwill. Bombay High Court Shifting Of Commissionerates, Re-Organisation Of Office, Not...