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...

ITAT Imposes Cost Of Rs.10K On Foreign Portfolio Investor For Not Responding To Section 142(1) Notices

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has imposed a cost of Rs.10,000 on a foreign portfolio investor (FPI) for not responding to notices under Section 142(1) of the Income Tax Act.The bench of Vikas Awasthy (Judicial Member) and Padmavathy (Accountant Member) has observed that there is negligence on the part of the assessee in not responding to the notices issued by the AO. The assessee should have made reliable arrangements for the communication of notices....

Income Would Accrue Only When The Assessee Gets A Right To Receive The Income: ITAT

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has held that the income would be receivable only when the income accrues to the assessee, and the income would accrue to the assessee only when the assessee gets such a right to receive the income.The bench of George George K. (Vice President) and Laxmi Prasad Sahu (Accountant Member) has observed that the assessee would get a right to receive only when it is sanctioned to the assessee by the customs authorities and not when...

ITAT Quashes Income Tax Addition In Respect Of Immovable Property Warranting Revision By The PCIT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the income tax addition in respect of immovable property, warranting revision by the PCIT.The bench of Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) has observed that AO, after making adequate inquiries, proceeded to make an addition for alleged money receipts on a protective basis in the hands of the assessee. When adequate inquiries were made, they could not be subjected to revision by the PCIT...

Section 68 Of The Income Tax Act Is Not Applicable On Share Premium: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that Section 68 of the Income Tax Act, which relates to the taxability of unexplained cash credits, is not applicable to share premiums.The bench of Narender Kumar Choudhry (Judicial Member) and B.R. Baskaran (Accountant Member) has observed that the provisions of Section 68 would be attracted when the assessee fails to prove the identity of the creditor, credit worthiness of the creditor, and genuineness of transactions. The...

Treatment Of Shares In Books Of Accounts Determines Taxation, JM Financial’s Set-off Not Colourable Device: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the treatment of shares in books of accounts determines taxation under capital gain or business income, and the method adopted for arriving at the sale consideration does not determine the nature of the transaction.The bench of Aby T. Varkey (Judicial Member) and Padmavathy S. (Accountant Member) has observed that shares reflected as investments in financials, held for a long time and earning dividend income, are...

Income Tax Department Introduces Young Professional Scheme to Assist Officers in Income Tax Appellate Tribunal (ITAT)

In a bid to bolster its resources and streamline tax litigation management, the Income Tax Department, under the Ministry of Finance, Government of India, has launched the Young Professional Scheme. This scheme aims to engage young graduates in Law and Accountancy on a full-time basis, providing valuable support to Departmental Officers across various benches of the Income Tax Appellate Tribunal (ITAT) nationwide.The Young Professional Scheme is designed to leverage the expertise and domain...

“Cloud Service Fee” Received By Amazon From Customers In India Is Not Taxable As Royalty, FTS, FIS: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that cloud computing services provided by Amazon Web Services cannot be held liable to tax in India as royalty and fee for technical or included services (FTS/FIS).The bench of G.S. Pannu (President) and Astha Chandra (Judicial Member) has observed that the AWS services provided by Amazon are standardised services that do not provide any technical services to its customers nor satisfy the 'make available' test as the customer...

ITAT Allows Income Tax Deduction On Interest Received From Enhanced Compensation Against Compulsory Acquisition Of Agricultural Land

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the income tax deduction on interest received from enhanced compensation for the compulsory acquisition of agricultural land.The bench of C.M. Garg (Judicial Member) has observed that the interest received by the assessee on enhanced compensation under Section 28 of the Land Acquisition Act, being part of the enhanced compensation, shall be treated as tax-free in the case of an individual under Section 10(37) if the transfer...

PCIT Can’t Initiate Revision Proceedings When CIT (A) Has Already Disposed Of The Appeal: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the revision order passed by the PCIT as the CIT (A) had already disposed of the appeal.The bench of Chandra Mohan Garg (Judicial Member) and M. Balaganesh (Accountant Member) has observed that the issue of granting additional TDS credit was already considered and decided by the CIT (A). For adjudication of the same issue, the PCIT cannot invoke revision proceedings under Section 263 in view of the provisions of Explanation...

District Mining Officer Liable To Collect TCS On Compounding Fee Received From Illegal Miners: ITAT

The Raipur Bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessee, the District Mining Officer, is liable to collect tax at source on the compounding fee received from illegal miners even in the absence of a valid lease or licence of mines.The bench of Ravish Sood (Judicial Member) and Arun Khodpia (Accountant Member) has observed that even in the absence of any lease, licence, or contract, if there is any transfer by the assessee of any right or interest in the mine, then...

ITAT Deletes Addition On Security Deposits From Distributors/Retailers Against Coca Cola Bottles

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition against Hindustan Coca-Cola Beverages on the Security Deposits made by distributors and retailers against Coca-Cola bottles.The bench of Anubhav Sharma (Judicial Member) and N.K. Billaiya, (Accountant Member) has relied on the decision of the Supreme Court in the case of Sugauli Sugar Works [P] Ltd., in which it was held that the onus is on the revenue to bring on record tangible evidence to show that liability...