Calcutta High Court Annual Tax Digest 2025

Direct TaxAO Duty Bound To Dispose Of Assessee's Written Objections To Proposed Re-Assessment By Passing Speaking Order: Calcutta High CourtCase title: Principal Commissioner Of Income Tax 13 Kolkata Vs Champalal OmprakashCase no.: ITAT/5/2025The Calcutta High Court recently upheld an ITAT order deleting the addition of over ₹4 crore made to the income of an assessee under the Income Tax Act, 1961 in reassessment action.A division bench of Chief Justice TS Sivagnanam and Justice Bivas Pattanayak held that the Assessing Officer had erred in not disposing of the written objection submitted by the assessee against the reopening of the assessment.Calcutta High Court Upholds Quashing Of ₹7.29 Crore Penalty Imposed On Dissolved HUFCase title: Principal Commissioner Of Income Tax-9, Kolkata Vs. Chandravadan Desai (HUF)Case no.: ITAT/274/2024The Calcutta High Court has upheld the quashing of penalty proceedings initiated against a dissolved Hindu Joint Family. A division bench of Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) upheld the ITAT order which had relied on a Supreme Court ruling to declare the penalty action void-ab-initio.The Top Court had in CIT vs. Maruti Suzuki India Limited held that notice and/or consequent order issued in the name of a non-existent person renders the entire proceedings and all consequent actions to be a nullity in the eye of law.When Assessee-Company Can Prove Genuineness Of Transaction, Delhi HC's 'NR Portfolio' Judgment Not Applicable: Calcutta HCCase title: The Principal Commissioner Of Income Tax Central 1, Kolkata v. Wise Investment Private LimitedCase no.: ITAT/238/2024The Calcutta High Court has made it clear that the Delhi High Court decisions in NR Portfolio and Navodaya Castles will hold no value where an assessee-company establishes the identity of its shares subscribers, creditworthiness of the share subscribers and genuineness of the transactions.In CIT v. NR Portfolio Private Limited (2014) and in CITA v. Navodaya Castles Private Limited (2014), the Delhi High Court had held that mere production of incorporation details, PAN Nos. or the fact that third persons or company had filed income tax details in case of a private limited company may not be sufficient when surrounding and attending facts predicate a cover up. These facts indicate and reflect proper paperwork or documentation but genuineness, creditworthiness, identity are deeper and obtrusive.Section 80IA Income Tax Act | Internal CUP Method Is Most Appropriate For ALP Determination In Captive Power Transactions: Calcutta High CourtCase Title: Principal Commissioner of Income Tax Central-1, Kolkata v. Rungta Mines LimitedCase Number: ITAT/215/2024The Calcutta High Court held that Internal CUP (Comparable Uncontrolled Price) method is most appropriate for ALP (Arm's Length Price) determination in captive power transactions.Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) was addressing issue of whether the Internal Comparable Uncontrolled Price (CUP) method adopted by the assessee was right in determining the Arm's Length Price (ALP) for power supplied by the assessee's Captive Power Plants (CPPs) to non-eligible units for transfer pricing adjustments.Mere Incorporation Of Investing Companies Under Companies Act Not Enough To Prove Genuineness Of Share Transactions: Calcutta High CourtCase Title: Principal Commissioner of Income Tax - 2, Kolkata v. Minto Park Estates Private LimitedCase Number: ITAT/4/2025 (IA NO: GA/2/2025)The Calcutta High Court held that mere incorporation of investing companies under the Companies Act is not enough to prove the genuineness of share transactions.The bench opined that, admittedly, the shares were by way of a private placement. Though the investing companies might have been incorporated under the provisions of the Company's Act, that by itself will not validate the transaction.Stock Exchange & Banking Channels Cannot Mask Sham Transactions Carried Out Through Bogus Capital Loss Claim Companies: Calcutta High CourtCase Title: Principal Commissioner of Income Tax Central - 2, Kolkata v. M/s. Zulu Merchandise Private LimitedCase Number: ITAT/88/2025 (IA NO: GA/2/2025)The Calcutta High Court held that stock exchange and banking channels cannot mask sham transactions carried out through bogus capital loss claim companies.Justices T.S. Sivagnanam and Chaitali Chatterjee (Das) observed that “the entire information contained in the investigation report was apprised to the assessee by the assessing officer and thereafter the show cause notices was issued for which the assessee' submitted their reply and in the reply they did not raise any issue that they were unaware about the investigation report but made a vague and unsubstantiated statement stating that the transaction was in the normal course of business.”Income Tax | Interest Earned On Surplus Lending Funds Is Attributable To Banking Business, Qualifies For 80P Deduction: Calcutta High...

Calcutta High Court Annual Tax Digest 2025

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