Company’s Income Cannot Be Assessed Under ‘Salary’: ITAT

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that since the assessee is a company, its income cannot be assessed under the heading "salary."The bench of K. Narasimha Chary (a judicial member) has restored the issue to the file of the Assessing Officer to verify the availability of brought-forward losses for the purpose of setting off the current year's income against losses.The assessee is a private company that filed a return of income for the assessment year...

Impossible For A Company To Get Its Accounts Audited On 31st March And Get The Approval In AGM On The Same Date: ITAT Upholds Addition

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that it is impossible for a company to get its accounts audited on 31st March and present the same for approval in the Annual General Meeting on March 31st.The two-member bench of Kul Bharat (Judicial Member) and N.K. Billaiya (Accountant Member), while upholding the addition under Section 56(2)(viib), observed that the certificate of the auditors nowhere says that the valuer has considered the audited balance sheet. The...

Tax Cases Weekly Round-Up: 08 January To 14 January 2023

Supreme Court Income Tax Act | Writ Petition Can Be Entertained To Examine If Conditions To Issue Section 148 Notice Are Satisfied : Supreme Court Case Title: Red Chilli International Sales Versus ITO Citation: 2023 LiveLaw (SC) 16 The Supreme Court recently set aside an order of the Punjab and Haryana High Court which dismissed a writ petition filed by an assessee against a notice issued under Section 148A of the Income Tax Act 1961 for reopening assessment. The High Court...

TDS Not Applicable To Salary/Commission Paid To Partners: ITAT

The Gauhati Bench of the Income Tax Appellate Tribunal (ITAT) has held that the TDS is not applicable to salary or commission paid to partners.The two-member bench of Sanjay Garg (Judicial Member) and Manish Board (Accountant Member) observed that salary, bonus, remuneration, or commission are collectively referred to as "remuneration," and the remuneration paid during the year is within the permissible limit set forth in section 40(b)(v) of the Income Tax Act.The respondent/assessee is a...

Tax Cases Weekly Round-Up: 1 January to 7 January 2023

Supreme Court Non-Banking Finance & Leasing Companies Not Liable To Pay Interest Tax On Instalments Paid Under Hire Purchase Agreement : Supreme Court Case Title: M/s. Muthoot Leasing And Finance Ltd. versus CIT Citation : 2023 LiveLaw (SC) 7 The Supreme Court has held that non-banking finance and leasing companies are not liable to pay tax on the interest component included in the hire-purchase instalment paid under the hire purchase agreement. Sabka Vishwas Scheme : ...

When AO Has Taken One Of The Possible Views The PCIT Is Prohibited From Adopting Different View: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), while quashing the revision order, held that when the Assessing Officer (AO) has taken one of several possible views, the Principal Commissioner of Income Tax (PCIT) is prohibited from adopting a different view.The two-member bench of Aby V. Varkey (Judicial Member) and B.R. Baskaran (Accountant Member) relied on the decision of the Supreme Court in the case of Malabar Industrial Co., Ltd. v. CIT, in which it was ruled that if the AO...

Income From Domain Name Registration Not Taxable As “Royalty”; Registrar Merely An Intermediary: Mumbai ITAT

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has ruled that a domain name registrar does not have any right in the domain name, which is registered by it merely as a facilitator. Thus, the income received by it from domain name registration is not taxable as “Royalty”, the ITAT ruled. The bench of G.S. Pannu (President) and Sandeep Singh Karhail (Judicial Member) held that the assessee, who offered domain name registration services to customers, merely acted as an...

ITAT Sustains Disallowance As Cash Payment Exceeds Rs. 20,000 To Single Party In Single Day

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has sustained the disallowance under section 40A(3) of the Income Tax Act as a cash payment exceeds INR 20,000 to a single party in a single day.The two-member bench headed by Mahavir Singh (Vice President) and G. Manjunatha (Accountant Member) has observed that Section 40A(3), which has been amended w.e.f. 01.04.2009 by the Finance Act, 2008, provides that the provisions of sub-section (3) of Section 40A of the Act shall be attracted...

Tax Cases Weekly Round-Up: 25 December to 31 December 2022

Delhi High CourtCompensation On Cancellation Of Leasehold Rights Over A Plot, Capital Receipt: Delhi High CourtCase Title: PCIT Versus Pawa Infrastructure (P) Ltd.Citation: 2022 LiveLaw (Del) 1215The Delhi High Court has held that the leasehold rights held by the assessee in the plot were a capital asset and that the compensation received by the assessee from the Government of Goa on the cancellation of the plot was a capital receipt and not a revenue receipt.The division bench of Justice...

ITAT Allows Expenses Incurred Towards Transfer Of Shares

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the expenses incurred towards the transfer of shares.The two-member bench of Yogesh Kumar U.S. (Judicial Member) and B.R.R. Kumar (Accountant Member) has observed that the expenses incurred by the assessee are allowable transfer expenses as per Section 48 of the Income Tax Act, and both the lower authorities have committed an error in disallowing the expenses incurred by the assessee.The assessee filed the return for the...

Property Transferred to Mother Through Sale Deed Is A Sale And Not Gift, Taxable As Capital Gain: ITAT

The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) has held that the property transferred by the assessee to his mother for consideration of Rs. 5 lakh is liable to be brought under the ambit of capital gain.The two-member bench of Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) has directed the AO to refer the matter to the Department Valuation Officer (DVO) to determine the value of the property in accordance with the provisions of Section 50C of the Income Tax...

Tax Cases Weekly Round-Up: 18 December to 24 December 2022

Supreme CourtSmall Tax Effect: Monetary Limit To Prefer An Appeal Before The Supreme Court Is Rs. 2 crores: Supreme Court Case Title: CIT Versus Swapnil Finance Pvt. Ltd. The Supreme Court disposed of the appeal on the ground of low tax effects. The division bench of Justice M.R. Shah and Justice Sudhanshu Dhulia observed that the monetary limit to file an appeal before the Supreme Court is Rs. 2 crores. Bombay High Court Bombay High Court Allows Deduction On Issuance Of...