Firm Liable To Pay Tax On Distribution Of Capital Assets On Dissolution And Not Partner: Bombay High Court

The Bombay High Court has held that, as per Section 45(4) of the Income Tax Act, assuming that there was a distribution of capital assets upon dissolution of the firm, it is the firm and not the partner who has to pay the tax.The bench of Justice K. R. Shriram and Justice Dr. Neela Gokhale has observed that the amount of Rs. 28 crores can be considered the amount received by a partner upon retirement from the firm and is not chargeable to tax.In FY 2009–10, Justice S. P. Bharucha, Chief...

Unsold Flats Which Are In Stock In Trade Should Be Assessed As "Business Income": ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has observed that unsold flats that are in stock in trade should be assessed under the heading "business income".The bench of Kuldip Singh (Judicial Member) and S. Rifaur Rahman (Accountant Member) has observed that there is no justification for estimating the rental value of unsold flats and notionally computing the annual letting value under Section 263 of the Income Tax Act.The appellant/assessee is in the business of purchasing and...

ITAT Deletes Income Tax Addition Of Rs.2.30 Crores As AO Failed To Mention Investment Outside The Books Of Accounts

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition of Rs. 2.30 crores as the Assessing Officer (AO) did not mention any investment outside the books of accounts.The bench of Astha Chandra (Judicial Member) and N. K. Billaiya (Accountant Member) has observed that the assessee has explained the investment duly reflected in its bank statement, and such reflection in the bank statements has not been doubted by the AO; therefore, it cannot be said that the...

CBDT Notifies Income Tax Exemption To Punjab Infrastructure Regulatory Authority

The Central Board of Direct Taxes (CBDT) has notified the Income Tax exemption to the Punjab Infrastructure Regulatory Authority under clause (46) of section 10 of the Income-tax Act, 1961.The ‘Punjab Infrastructure Regulatory Authority’ is an authority constituted by the Government of Punjab.The Board has exempted the Punjab Infrastructure Regulatory Authority from Income Tax in respect of Grants received by or arising to the Authority from the State Government; sum received by the Authority...

Rajasthan High Court Stays Cess Demand Against Hotelier, Who Is A Subsequent Purchaser

The Rajasthan High Court has stayed the cess demand against the hotelier, who was the subsequent purchaser.The bench of Justice Arun Monga acknowledged the fact that the cess can be levied only on the original owner, and the petitioner/assessee, being the subsequent purchaser, cannot be fastened with past liability.The petitioner/assessee, along with his two partners, purchased a property in Rajsamand from one Jagdish Agarwal in 2019. The property was also constructed by the predecessor in...

Income Tax Authorities Can’t Step Into Shoes Of Businessmen To Determine Expenditure For Business Purpose: ITAT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that income tax authorities cannot step into the shoes of businessmen to determine how much expenditure should have been incurred for the purpose of business.The bench of Astha Chandra (Judicial Member) and B. R. R. Kumar (Accountant Member) has observed that activities clearly demonstrate that the assessee had incurred expenses for preparing technical and financial bids for obtaining contracts for the maintenance and operation of...

Cash Can’t Be Considered As Goods For The Purpose Of Seizure Proceedings Under GST: Gujarat High Court

The Gujarat High Court has recently delivered a verdict on the issue of the seizure of cash under the Goods and Services Tax (GST) Act, clarifying that cash does not qualify as "goods" for the purpose of seizure proceedings.The judgment delivered by the division bench of Justices Biren Vaishnav and Mauna M. Bhatt, emphasized that retaining seized cash for more than six months without issuing a Show Cause Notice (SCN) is not justified.Facts: According to the factual background of this case, the...

Interest Income From Co-Operative Bank Entitled To Income Tax Deduction: Madras High Court

The Madras High Court recently clarified that interest income received from a Cooperative bank is also entitled to deduction under Section 80P(2)(d) of the Income Tax Act 1961.Justice Krishnan Ramasamy observed that as per the Act, a Co-operative society is defined as a co-operative society registered under the Co-operative Societies Act 1912. Thus, even a cooperative bank would come within the meaning of a Co-Operative society and be entitled to deduction."A reading of the above definition...

Re-Opening Is Not Permissible As It Falls Within The Purview Of A ‘Change Of Opinion’: Bombay High Court

The Bombay High Court has held that re-opening is not permissible as it clearly falls within the purview of a ‘change of opinion’ which is impermissible in law.The bench of Justice K. R. Shriram and Justice Neela Gokhale have observed that the basis on which the AO issued notice alleging that there was "information" that suggests escapement of income was an internal audit objection. Information is explained in Section 148 of the Act to mean "any objection raised by the Comptroller and Auditor...

Service Tax Payable On Renting/Leasing Shops, Premises, Buildings, Etc. For Any Commercial Purpose Except Agriculture: CESTAT

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax is payable on renting or leasing shops, premises, buildings, etc. for any commercial purpose except agriculture.The bench of Dr. Rachna Gupta (Judicial Member) and P.V. Subba Rao (Technical Member) observed with respect to shops, premises, buildings, etc. rented or leased out for any other commercial purpose other than with reference to agricultural produce (like a bank general shop, etc.),...

Delhi High Court Quashes Non-Speaking Order Rejecting The Grant Of An LDC Permitting Deduction Of 0.01% TDS

The Delhi High Court has quashed the non-speaking order rejecting the grant of a lower deduction of tax certificate (LDC) permitting the deduction of 0.01% TDS.The bench of Chief Justice Satish Chandra Sharma and Justice Tushar Rao Gedela has observed that the reasons furnished by the Respondent/department qua the Application i.e., as to why the Petitioners’ request that TDS should not be deducted at a rate of 0.01%, hinges on broad generalisations in relation to the propriety of projected...

Bombay High Court Quashes FAO Order Passed After Two Years Of DRP Direction Against Vodafone Idea

The Bombay High Court has held that the assessment order dated August 31, 2023, passed by the Faceless Assessing Officer (FAO) two years after the Dispute Resolution Panel (DRP) directions, is time-barred and cannot be sustained.The bench of Justice K. R. Shriram and Justice Neela Gokhale has strongly recommended that a detailed inquiry be initiated on the failure on the part of the Faceless Assessing Officer concerned to act in accordance with the provisions of the Income Tax Act and the lack...