ITAT Delhi Deletes ₹1.05 Crore Addition On Dissolved Firm, Says Income Taxed In Surviving Partner's Hands

The Income Tax Appellate Tribunal (ITAT), Delhi Bench, directed deletion of a Rs. 1.05 crore addition on a partnership firm, holding that no addition could be made in the hands of a dissolved firm when the same receipts had already been offered to tax in the hands of the successor proprietorship. Judicial Member Sudhir Kumar and Accountant Member Manish Agarwal observed, "no addition could be made in the hands of the assessee firm which has already been dissolved in preceding year for the...

Bombay High Court Sets Aside Cap On Export Unit Tax Deduction Based On Sister Concern Profits

The Bombay High Court has held that deduction under Section 10B of the Income Tax Act, which grants tax relief to export-oriented units on profits derived from exports, cannot be restricted merely by comparing the assessee's profit margins with those of a sister concern, in the absence of any material establishing an arrangement to inflate profits. “The capping of the profit share of the Assessee on which deduction under Section 10B could be claimed at 19% solely on the basis of the sister...

Income Tax | Reference To District Valuation Officer Cannot Be Used To Initiate Assessment Proceedings: Telangana HC

The Telangana High Court has dismissed the revenue's appeal against Legend Estates Pvt. Ltd. and held that a reference to the District Valuation Officer under Section 142A of the Income Tax Act is untenable where the taxpayer's books of accounts are neither rejected nor found defective. It also held that a reference under Section 142A can be made only during the course of assessment or reassessment proceedings and not for the purpose of initiating such proceedings. A Division Bench of Justice...

Interest Earned By Co-operative Credit Society On Bank Deposits Eligible For Tax Deduction: Telangana HC

The Telangana High Court has held that interest earned by the Hyderabad-based co-operative credit society on bank deposits made from its business funds is eligible for deduction under the provision applicable to co-operative societies providing credit facilities to their members."It is clear that eligibility for deduction under Section 80P(2)(a) requires that the claim must relate to the profits and gains of business attributable to one or more of the activities specified therein. In the present...

Revenue Cannot Demand Interest On Delayed Duties Yet Deny It On Refund: Telangana High Court

The Telangana High Court recently held that the Revenue is bound to compensate a taxpayer for amounts wrongfully collected and retained as interest on alleged central excise duty liability arising from a customs notification, even where such amounts were recovered under an amnesty scheme. The court said, “the Revenue cannot act in contradicting ways, i.e., on one hand demanding interest from the assessee for the delay in payment of duties and on other hand refusing to pay interest on the amount...

Telangana HC Upholds ITAT Order Rectifying Contradiction That Allowed Both Taxpayer and Revenue Appeals

The Telangana High Court has upheld an Income Tax Appellate Tribunal (ITAT) order that corrected its own contradictory ruling after it had simultaneously allowed both the assessee's and the Revenue's appeals on the very same issue. Holding that such an outcome was inherently inconsistent, a bench of Justice P. Sam Koshy and Justice Suddala Chalapathi Rao observed the tribunal was justified in stepping in to resolve the contradiction, especially when it had already decided the issue on...

Search Under IT Act Is Person-Centric; Premises Don't Decide 'Searched Person': Karnataka High Court

Holding that a “searched person” under the Income Tax Act is determined by the person against whom statutory satisfaction is recorded and not by whose premises are searched, the Karnataka High Court on Friday ruled that a taxpayer cannot be treated as a searched person merely because a search was conducted at his premises.The ruling came in a case where the tax department initiated proceedings against the taxpayer under Section 153C based on documents seized during a search conducted at his...

Uttarakhand High Court Sets Aside GST Order Passed Same Day As Reply, Calls Hearing An “Eyewash”

Observing that passing an adjudication order on the very same day as filing of reply without granting a meaningful opportunity of hearing violates principles of natural justice, the High Court of Uttarakhand set aside GST demand and penalty proceedings against Poddar Ispat Pvt. Ltd.The bench, consisting of Chief Justice Manoj Kumar Gupta and Justice Subhash Upadhyay, stated that the mere recording of a hearing on the date of filing a reply does not satisfy the requirement of a fair...

Failure To Claim Tax Relief Doesn't Change Nature Of Salary Arrears: Delhi High Court

The Delhi High Court has clarified that the non-claim of relief under Section 89 of the Income Tax Act, 1961 does not determine the nature of income and cannot be taken to mean that such income is not arrears.For context, Section 89 provides relief to taxpayers receiving salary arrears, advance salary, or profits in lieu of salary in a lump sum.A division bench of Justices Anil Kshetarpal and Amit Mahajan was dealing with a petition challenging an order of the Central Administrative Tribunal...

Madras High Court Quashes GST Demand On GAIL, Says No Recovery If Tax Already Paid

The Madurai Bench of the Madras High Court has quashed a show cause notice issued to GAIL (India) Ltd. under Section 76 CGST Act, holding that recovery proceedings cannot be sustained where the tax collected has already been remitted to the Government, even if paid through another GST registration of the same entity. Section 76 of the CGST Act, 2017 provides that any person who collects an amount as representing tax must forthwith pay the same to the Government, irrespective of whether the...

Andhra Pradesh High Court Sets Aside GST Order Against Mytrah Energy Over Failure To Examine Nature of Supply

The Andhra Pradesh High Court has set aside a GST assessment order against Mytrah Energy India Pvt. Ltd., holding that the assessing authority failed to properly examine the nature of the transaction and wrongly applied a notification retrospectively.The Division Bench of Justice R. Raghunandan Rao and Justice T.C.D. Sekhar held that the assessment order was unsustainable for failure to examine the nature of supply and accordingly remanded the matter for fresh adjudication.The petitioner,...

Delhi High Court Refuses To Quash Third-Party Reassessment Despite Interim Relief To Searched Entity

The Delhi High Court has dismissed a writ petition filed by Hari Bhoomi Communications Private Limited, holding that reassessment proceedings initiated against it on the basis of material recovered during a search at another entity's premises are not rendered void by a subsequent interim order passed in favour of the searched entity. A division bench of Justice Dinesh Mehta and Justice Vinod Kumar refused to interfere with an assessment order dated March 25, 2026, passed against the company...