Tax Cases Weekly Round-Up: 5 February to 11 February 2023

Supreme Court Exemption Of Newspaper’s Income Utilised For Charity: Supreme Court Remands The Matter To AO Case Title: PCIT Versus Servant of People Society The Supreme Court has remanded the appeal in respect of the exemption of newspaper income used for charity. Delhi High Court Department Can’t Go Behind TRC Issued By The Other Tax Jurisdictions: Delhi High Court Case Title: Blackstone Capital Partners (Singapore) VI FDI Three Pte. Ltd. Versus ACIT Citation: 2023...

Expenses Incurred During Regular Course Of Business Cannot Be Treated As Capital Expenses: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that expenses incurred during the regular course of business cannot be treated as capital expenses.The two-member bench of Yogesh Kumar US (Judicial Member) and Anil Chaturvedi (Accountant Member) has observed that the payment was made towards the professional fee, which includes monthly retainer fees for the professional services.The assessee/respondent is a company stated to be engaged in the business of software development....

Section 14A Disallowance Not Warranted If No Exempt Income Is Earned: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the disallowance under Section 14A of the Income Tax Act is not warranted if no exempt income is earned.The two-member bench of Anubhav Sharma (Judicial Member) and Anil Chaturvedi (Accountant Member) has observed that Section 14A envisages that there should be actual receipt of income, and hence Section 14A of the Act will not apply where no exempt income is received or receivable during the relevant previous year.The...

Unmarried Daughter’s Jewllery And Mother’s Jewellery Can Be Kept In Family Home: ITAT Deletes Addition

The Allahabad Income Tax Appellate Tribunal (ITAT) has deleted the addition as the jewellery belonging to unmarried daughters will be kept along with the assessee’s jewellery in a family home where they are living together.The two-member bench of Vijay Pal Rao (Judicial Member) and Ramit Kochar (Accountant Member) has observed that the assessee has discharged her primary burden by explaining the jewellery found during search and explaining in a statement that 504 grams belonged to her mother,...

Credit For TCS Available To Assessee In Whose Hand Income Is Assessed To Tax: ITAT

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has reiterated that credit for Tax Collected at Source (TCS) should be given to the assessee who is finally and lawfully assessed to tax in respect of the income on which TCS has been collected, irrespective of the person in whose name the TCS certificate has been issued. Referring to the decision of the Jaipur Bench of ITAT in Jai Ambey Wines vs. ACIT (2017), the bench of N.V. Vasudevan (Vice President) noted that what is...

Delay By State To Issue Necessary Certificates: ITAT Quashes Revision Order

The Calcutta Bench of Income Tax Appellate Tribunal (ITAT) has quashed the revision proceedings initiated in the name of the deceased person.The revenue department acted quickly after receiving the legal heir certificate, according to the two-member bench of George Mathan (Judicial Member) and Arun Khodpia (Accountant Member). However, there has been a delay at the level of the state government in issuing the necessary certificates. Fault cannot be placed on the revenue or the assessee.The...

Merely Making Unsustainable Claim Will Not Amount To Furnishing Of Inaccurate Particulars Of Income: ITAT

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the mere making of a claim, which is not sustainable by the law itself, will not amount to furnishing inaccurate particulars of income.The bench of S.S. Vishwanethra (Judicial Member) has observed that the appellant cannot be held guilty of furnishing inaccurate particulars of income, and, therefore, the Assessing Officer was not justified in levying a penalty under Section 271(1)(c) of the Income Tax Act.The...

Assessing Officer Not Justified In Rejecting Audited Books Of Accounts For Producing Photocopy Of Bills: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessing officer was not justified in taking drastic action and rejecting books of account that are audited solely on the basis of general remarks that photocopies of the bills have been produced instead of original bills.The two-member bench of Anubhav Sharma (Judicial Member) and Pradip Kumar Khedia (Accountant Member) has observed that an insignificant variation in the net profit ratio per se cannot lead to drastic...

2% TDS Deductible On Common Area Maintenance Charges: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that 2% TDS is deductible on common area maintenance charges.The two-member bench of C.M. Garg (Judicial Member) and Pradip Kumar Khedia (Accountant Member) has observed that the common area maintenance charges were not part of the actual rent paid to the owner by the assessee company. Payments of rent and common area maintenance charges have been made to distinct entities or companies; therefore, the authorities below were not...

Tax Cases Weekly Round-Up: 15 January to 21 January 2023

Delhi High Court VAT Department Not To Initiate Coercive Measures Against PSU Pawan Hans: Delhi High Court Case Title: Pawan Hans Ltd. Versus Commissioner of Trade and Taxes Citation: 2023 LiveLaw (Del) 65 The Delhi High Court has granted a stay to helicopter charterer PSU Pawan Hans Ltd. against a VAT demand of Rs. 176 crores. The division bench of Justice Vibhu Bakhru and Justice Amit Mahajan has observed that the issue needs consideration and directed the VAT department...

Hire Charges Received Under ‘Time Charter Agreement’ Not Taxable As Royalty, If Control Over Ship Remained With Owner: ITAT

The Mumbai bench of the ITAT has ruled that hire charges received by the owner of a ship for chartering its vessel under a ‘Time Charter Agreement’, is not taxable as ‘royalty’ under Section 9(1) (vi) of the Income Tax Act, 1961, if control and dominance over the ship remained with the assessee/ owner and not with the charterer. The bench of Amit Shukla (Judicial Member) and Gagan Goyal (Accountant Member) held that to fall within the ambit of “use or right to use” an equipment under...

Interest Income Earned By A Co-Operative Society Eligible For Deduction: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that interest income earned by a co-operative society on its investments held with co-operative banks would be eligible for claim of deduction under section 80P(2)(d) of the Income Tax Act.The two-member bench of Kuldip Singh (Judicial Member) and S Rifaur Rahman (Accountant Member) found that the CIT(A) erred in upholding the assessee's denial of deduction under Section 80P(2)(d).The appellant/assessee, a cooperative society, has...