No Penalty Where Claim Is Based On Binding High Court Law Later Reversed By Top Court: Bombay High Court

The Bombay High Court on 30 March held that if a taxpayer made a deduction claim based on a binding High Court judgment, penalty under Section 270A of the Income Tax Act cannot be imposed subsequently, merely because the claim was later disallowed following a Supreme Court ruling.A Division Bench of Justices B. P. Colabawalla and Firdosh P. Pooniwalla held that penalty is not automatic and does not arise where a taxpayer makes a bona fide claim based on the prevailing legal position. It noted: ...

No Separate Tax Addition On Cash Already Owned By Group Company: ITAT New Delhi

On 16 April, the New Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that once cash seized during search proceedings has already been owned and taxed in the hands of a group company before the Settlement Commission, authorities cannot again add the same amount in the hands of an individual, even if it was found in a locker held in his name. The Bench comprising Accountant Member S. Rifaur Rahman and Judicial Member Vimal Kumar dismissed the Revenue's appeal against Lalit Kumar...

Works Contract Road Construction Taxable, Refund Barred Under Unjust Enrichment: CESTAT New Delhi

The New Delhi Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) on 16 April held that a service tax refund cannot be granted where the taxpayer has passed on the tax burden to the recipient, as such claims are barred by the doctrine of unjust enrichment. The Bench comprising Judicial Member Dr. Rachna Gupta and Technical Member Hemambika R. Priya upheld the denial of refund to Sandeep Builders, noting that the activities undertaken by the company were correctly taxed as...

No TDS Payable On Pfizer Products' Cost-Sharing Payments To Pfizer Ltd. Without Profit Element: Bombay HC

Holding that reimbursements without any profit element do not attract TDS, the Bombay High Court has dismissed an income tax appeal filed by the Revenue against Pfizer Products India Pvt. Ltd. over cross-charges of Rs.14,51,77,000 paid to its sister concern-Pfizer Ltd.A Division Bench of Justice M. S. Karnik and Justice S. M. Modak held, "The cross-charge paid by the Assessee-Respondent in terms of the cost-sharing agreement between the Assessee and M/s. Pfizer Ltd, did not have any...

Suspicion, Human Probabilities Insufficient For Tax Additions Without Evidence: Telangana High Court

The Telangana High Court on 6 March held that additions under Section 68 of the Income Tax Act, 1961 cannot be sustained merely on suspicion or the test of human probabilities and must rest on concrete evidence. A Division Bench of Justices Sam Koshy and Suddala Chalapathi Rao dismissed the Revenue's appeals and upheld the Income Tax Appellate Tribunal (ITAT)'s decision to remand the issue of Rs. 182 crore share premium received by Bharathi Cement Corporation Pvt. Ltd. for fresh examination. It...

Bombay High Court Admits Limited 115JB Questions In ACC Case, Holds Settled Issues Not Appealable

The Bombay High Court on 16 March partly admitted an appeal filed by the Department against ACC Limited, holding that several issues raised by the Revenue were already covered by binding precedents and therefore did not give rise to any substantial question of law. A Bench of Justices B.P. Colabawalla and Firdosh P. Pooniwalla, however, admitted the appeal on four questions concerning computation of book profits under Section 115JB of the Income Tax Act, 1961. They held: “The appeal is...

Developer Undertaking Risk And Execution Qualifies For Section 80-IA Deduction: Bombay High Court

The Bombay High Court on 11 March held that a taxpayer-company undertaking substantial development work, investment risk and technical execution cannot be treated as a mere works contractor and is entitled to deduction under Section 80-IA(4) of the Income Tax Act for profits from infrastructure projects. A Bench comprising Justices M. S. Karnik and S. M. Modak dismissed the Revenue's appeals against Patel Engineering Ltd., holding that the latter acted as a “developer” of infrastructure...

Old Income Tax Demands Cannot Surface On Portal Without Serving Underlying Orders: Bombay High Court

The Bombay High Court recently observed that old income tax demands could not be sustained where the underlying orders were not made available to the taxpayer, observing that such demands cannot be permitted to surface without proper disclosure. “Old matters and demands cannot be allowed to suddenly surface on the portal without the underlying orders being available and served. Consequently, the impugned demands cannot be sustained,” the court said. A Division Bench of Justices B. P....

GST Refund Limitation Mandatory; Delay Can Be Condoned Under Article 226 In Cases Of Genuine Hardship: Karnataka HC

The Karnataka High Court held that the two-year limitation under Section 54 of the CGST Act is mandatory, and cannot be relaxed by tax authorities. However, in cases of genuine hardship, delay in filing refund claims may be condoned by invoking writ jurisdiction under Article 226, subject to safeguards protecting the Revenue.The Division Bench comprising Justice S.G. Pandit and Justice K.V. Aravind made the ruling. Section 54 of the CGST Act provides provisions for claiming refunds of...

Lottery Ticket Discount Not “Commission” Absent Payment Or Credit, No TDS Applicable: Madras High Court

The Madras High Court on 9 April held that the difference between the face value of lottery tickets and the discounted price at which a taxpayer sells them to dealers does not constitute “commission.” Therefore, it is not subject to tax deduction at source (TDS) under Section 194G of the Income Tax Act. The Division Bench of Justices G. Jayachandran and Shamim Ahmed dismissed the Revenue's appeal and upheld the Tribunal's order in favour of Martin Lottery Agencies Ltd. The judges observed: ...

Biodegradable Carry Bags Eligible For 5% GST Subject To Notification Conditions: Rajasthan AAR

The Rajasthan Authority for Advance Ruling (AAR) in February, held that concessional GST at 5% applies to biodegradable carry bags only if the goods satisfy the condition of being biodegradable under the relevant notification. It also held that it cannot determine whether a product meets scientific standards of biodegradability or compostability. The Authority Bench comprising Utkarsha and Dr. Akhedan Charan disposed of an application filed by Pradeep Verma concerning classification and GST...

Semen Sorting Services Exempt From GST As Support To Animal Husbandry: Gujarat AAR

The Gujarat Bench of the Authority for Advance Ruling (AAR) on 3 March, held that semen sorting services using specialised technology qualify as support services to animal husbandry and are exempt from Goods and Services Tax (GST). The Authority Bench comprising Sushma Dora and Vishal Malani decided on an application filed by Jiva Sciences Private Limited, which undertakes separation of X and Y chromosomes from bovine semen using proprietary technology. It ruled: “'Semen Sorting Services' are...