Foreign Assignment Allowance Received For The Services Rendered Outside India Can’t Be Taxed In India: ITAT

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that foreign assignment allowance received by the assessee for services rendered outside India could not be taxed in India.The bench of Rama Kanta Panda (Vice President) and K. Narasimha Chary (Judicial Member) has observed that the income derived by a non-resident for performing services outside India and the accrual thereof happen outside India; such income cannot be taxed in India under Section 5(2) of the Income Tax...

Payment Made For Acquiring Membership In A Social Club Can’t Be Allowed As Business Expenditure: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has observed that payments made for acquiring membership in a social club could not be allowed as business expenditure when there was no evidence to prove that membership in the social club was acquired for entertaining customers by the assessee.The bench of Vikas Awasthy (Judicial Member) and Om Prakash Kant (Accountant Member) has upheld the adjustment under Section 143(1) of an individual's Club Membership Fees as capital...

Tax Cases Weekly Round-Up: 2 July To 8 July, 2023

Supreme Court CTO For Enhanced Production Capacity Issued After SC’s Order Fixing Total Import Limit; Importer Not Entitled To Proportionate Increase In Import Quota: Supreme Court Case Title: M/s Sanvira Industries vs Rain CII Carbon (Vizag) Ltd. & Ors Citation : 2023 LiveLaw (SC) 497 The Supreme Court has upheld the decision of the Delhi High Court which set aside the increased quota allocated for import of raw pet-coke (RPC) based on the “Consent to Operate” ...

Compensation Paid By Builder For Delay In Handing Over Possession Of Flat Is Part Of Work-In-Progress: ITAT Allows Deduction

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that compensation paid by a builder for the delay in handing over possession of a flat should be considered part of work-in-progress. As a result, the ITAT allowed the deduction of the compensation. The case pertains to Mr. Jayant Hari Mulay, a promoter and builder who had purchased a plot of land for the construction of flats. According to the agreement, Mulay was obligated to hand over certain completed flats to the...

No Tax Can Be Levied On The Principle Of Estoppels: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that no tax can be levied on the principle of estoppel. Just because the Assessee has shown the receipt or income in the wrong head does not make him liable for tax.The bench of N. K. Choudhry (Judicial Member) has observed that management licence fees are taxable under the heading "Income from Business" and not "Income from House Property" when granting licences to manage and operate hotel premises.The appellant/assessee...

ITAT Deletes Disallowance On Ocean Freight Charges Paid To Korean AE

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the disallowance of ocean freight charges paid to Korean-associated enterprises (AE).The bench of Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) has observed that as per Article 8 of the DTAA of India-Korea, the rentals of ships are in the nature of profit from the operation of ships or aircraft in international traffic carried on by an enterprise of a contracting state. The amount can be...

Income From The Sale Of RECs Is Capital In Nature, Is Not Subject To Taxation: ITAT

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) has held that the income from the sale of Renewable Energy Certificates (RECs) is classified as capital in nature and is not subject to taxation.The bench of Anikesh Banerjee (Judicial Member) and M. L. Meena (Accountant Member) observed that all the modes of incentives were in the nature of entitlements received to improve the world's atmosphere by reducing carbon and heat, the emissions and entitlements earned can, at best, be...

Bogus Long-Term Capital Gains From Transaction In Penny Stocks: ITAT Upholds Addition

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has upheld the addition of bogus long-term capital gains from transactions in penny stocks.The bench of T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member) has observed that the assessees' failure to show how they were prejudiced by not providing the report cannot be held to be an infraction of the principle of natural justice to invalidate the order of the AO.The appellant/assessee has challenged the order...

Expenses For Community Development, Environment Health & Safety : ITAT Allows CSR Expenditure

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that once the expenditure has been accepted to be for community development and environmental health and safety expenses, the same cannot be held to have not been incurred wholly and exclusively for the purpose of business in the year under consideration.The bench of Sandeep Singh Karhail (Judicial Member) and Amarjit Singh (Accountant Member), while allowing the expenditure, observed that expenditure incurred on community...

Income Tax Not Chargeable On Interest Subsidy Received Under Technology Upgradation Fund Scheme: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that income tax is not payable on the interest subsidy received under the technology upgradation fund scheme.The bench of Kuldip Singh (Judicial Member) and Prashant Maharishi (Accountant Member) has observed that interest subsidy received under the technology upgradation fund scheme, though credited in the net off against the interest expenditure in the books of account, is still capital in nature.The assessee is a company...

Joint Ownership Of The Property Is No Bar In Claiming Exemption Under Section 54F Of The Income Tax Act: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the deduction under Section 54F of the Income Tax Act on the grounds that the assessee is not the exclusive owner of multiple residential properties occupied by other family members.The bench of Kavitha Rajagopal (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that the joint ownership of the property would not stand in the way of claiming exemption under Section 54F of the Income Tax Act.The...

Interest Income Received On Temporary FDs Is Eligible For Exemption: ITAT

The Banglore Bench of the Income Tax Appellate Tribunal (ITAT) has held that interest income received on temporarily fixed deposits is eligible for exemption.The bench of George George K. (Judicial Member) and Laxmi Prasad Sahu (Accountant Member) has relied on the decision of the Karnataka High Court in the case of CIT Vs. Hewllett Packard Soft Ltd. in which it was held that the assessee was entitled to 100% exemption or deduction under Section 10-A in respect of the interest income earned by...