Foreign Entity Having Valid Tax Residency Certificate Is Eligible To DTAA Benefit On Long-Term Capital Gain From Sale Of Share Of Indian Entity: Delhi ITAT

While observing that the Assessee submitted a valid Tax Residency Certificate (TRC) which is certainly statutory evidence, the Delhi ITAT granted India-Singapore DTAA benefit under Article 13(4) on long term capital gains on sale of share of an Indian company. The Tribunal emphasized that the burden is on the Revenue Department to establish that the entity has been formed and operated in a manner that the only intention was to take DTAA benefit without there being actual intention of...

Madras High Court Sets Aside Order Passed Against A Dead Person

The Madras High Court sets aside an order passed by the Deputy State Tax Officer against a dead person. The Bench of Justice Krishnan Ramasamy observed that “the impugned order was passed by the Deputy State Tax Officer/respondent against a dead person, who was passed away on 21.11.2019. In such case, the impugned order is liable to be set aside.” Facts of the case: The assessee/petitioner's wife, who was the proprietor of M/s. S.R. Steels, passed away on 21.11.2019....

Past Tax Claims Against Corporate Debtor Stands Extinguished Consequent To Approval Of Resolution Plan Under IBC: Bombay HC

Since upon the completion of Corporate Insolvency Resolution Process (CIRP), the Assessee has changed hands and commenced under a new ownership and management, the Bombay High Court held that tax proceedings pertain to period prior to the CIRP, and consequent to the approval of the resolution plan, the tax proceedings stand extinguished. The Division Bench of Justice G. S. Kulkarni and Justice Somasekhar Sundaresan observed that “provisions outlined in Section 31(1) of the Insolvency...

Payments Made During Investigation Without SCN Do Not Constitute Payments Against Demand: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the payment made by the assessee during an investigation, without any Show Cause Notice, cannot be considered as payment against a demand raised by the Department without even going into the merits of the nature of demand. The Bench of Dr. Rachna Gupta (Judicial Member) has observed that “any amount received during investigation is Revenue Deposit hence cannot be retained for want of...

Reworking Value Of Investments Held In Subsidiary By Applying DCF Method Is Permitted, Once Correctness Of Valuation Stands Proved: Delhi ITAT

Referring to Explanation to Section 56(2)(viib), the Delhi ITAT held that the assessee is entitled to suitably modify the Net Asset Value (NAV) as long as the NAV is capable of being substituted by some proof or competent evidence. Further, finding that the assessee has produced the valuation report as well as the market valuation of Hotel Residence AG Switzerland in German currency, the Tribunal observed that the valuation of shares of subsidiary company to determine the FMV of the...

Unaccounted Money Brought In The Garb Of Unsecured Loan: Mumbai ITAT Confirms Addition U/s 68

Finding that loans were nothing but accommodation entries and the repayment is also nothing but return of accommodation entries, the Mumbai ITAT held that the money which has been brought in the garb of unsecured loan is nothing but the unaccounted money of the assessee, and deserves to be added u/s 68. Section 68 of Income Tax Act aims to ensure individuals and corporations transparently disclose their income by addressing unexplained cash credits in their books of accounts, placing...

Estimation Report By DVO Alone Can't Form Basis For Reopening Completed Assessment: Delhi High Court

The Delhi High Court held that the sole ground for re-opening of assessment u/s 148 by AO being the report/estimate of the Valuation Officer is unsustainable. Proximity of the reasons with the belief of escapement of income is the determinative factor for re-opening of the assessment, as absence of reasons would obviate the possibility of a belief and would bring the case in the realm of mere suspicion which cannot be a ground for reopening of assessment. added the Court. The ...

ITO's Personal Opinion In Prior Assessment Not A Valid “Reason To Believe” For Reopening Assessment: Punjab & Haryana High Court

The Punjab and Haryana High Court while quashing the reopening proceedings initiated under Section 148 of the Income Tax Act stated that merely on account of there being an error found based on a personal opinion of the Income Tax Officer in relation to the earlier assessment, cannot be a reason to believe for initiating reassessment. The Bench consists of Justices Sanjeev Prakash Sharma and Sanjay Vashisth observed that “merely because a new assessing officer may not be happy with...

Ruling Of Apex Court In Ashish Agarwal Case Is Not Applicable To Taxpayers Who Didn't Assail Original Reopening Notice U/s 148, Clarifies Delhi HC

While examining the ratio laid down by the Apex Court in landmark judgment of Union of India and Ors. vs Ashish Agarwal [(2023) 1 SCC 617], the Delhi High Court clarified that the said decision was principally concerned with the correctness of judgments rendered by various High Courts on challenges raised by Assessees to the initiation of reassessment in accordance with the unamended procedure and which had existed prior to April 01, 2021. Opining that Ashish Agarwal case neither...

Panchnama Not To Be Treated As Certificate Required For Admitting Printouts From Personal Computer As Evidence: CESTAT

The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that a panchnama cannot be treated as a certificate required under Section 36B(4) of the Central Excise Act, 1944 for admitting printouts from a personal computer as evidence. The Bench of Justice Dilip Gupta (President) and Hemambika R. Priya (Technical Member) has observed that “the CPU did not contain the hard disk. The hard disk was in fact picked up from the corner of the room. No ...

Local Sales Assessment Does Not Exempt Assessee From Inter-State Sales Tax Claims, Rules Punjab & Haryana High Court

The Punjab and Haryana High Court ruled that local sales assessment does not exempt assessee from inter-State Sales tax claims. The Bench consists of Justices Sanjeev Prakash Sharma and Sanjay Vashisth observed that “merely because the concerned respective States has assessed the assessee/petitioner for the local sales, it cannot absolve itself from the claim raised by the State of Bihar and the assessee/petitioner was required to pay the same.” Section 6(1) of...

AO Was Not Intimated About Removal Of Company's Name From ROC, Draft Assessment Can't Be Said To Have Passed In Name Of Non-existent Entity: Delhi ITAT

While finding that the AO/DRP was not informed about striking off the name of non-resident assessee from the ROC, the Delhi ITAT held that assessee cannot take a plea that draft assessment order was against the non-existing entity or the company whose name is struck off. Further, pointing that the objections of non-existence of company were filed only on the day on which the Registrar of Companies, Mauritius had removed the name of the company u/s 308 of the Mauritius Companies Act,...