Tax Cases Weekly Round-Up: 16 October To 22 October, 2022

Supreme Court Valuation Of Shares For The Purpose Of Gift Tax Should Take Into Consideration Limitation And Restrictions: Supreme Court Case Title: Deputy Commissioner of Gift Tax Versus M/s BPL Limited Citation: 2022 LiveLaw (SC) 848 The Supreme Court has held that the valuation of shares for the purpose of gift tax must take into consideration the limitations and restrictions. The division bench of Justice Sanjiv Khanna and Justice J.K. Maheshwari has observed that the equity shares under the lock-in period were not "quoted shares", for the simple reason that the shares in the lock-in period were not quoted on any recognised stock exchange regularity from time to time. There are no current transactions relating to these shares made in the ordinary course of business. The equity shares, being under the lock-in period, could not be traded and, therefore, remained unquoted on any recognised stock exchange. Advancement Of General Public Utility Won't Be "Charitable Purpose" For Income Tax Exemption If It Is Done As Business : Supreme Court Case Title : Assistant Commissioner of Income Tax vs Ahmedabad Urban Development Authority and connected cases Citation : 2022 LiveLaw (SC) 865 In a significant judgment, the Supreme Court has held that entities created with the object of advancing general public utility cannot seek exemption under the Income Tax Act 1961 under the head "charitable purposes" if they are engaging in any trade, business, commerce or providing any service for any consideration. Statutory Authorities, Professional Bodies Like ICAI Entitled To Income Tax Exemption If Amounts Charged By Them Are Nominal To Cover Costs : Supreme Court Case Title : Assistant Commissioner of Income Tax vs Ahmedabad Urban Development Authority and connected cases Citation : 2022 LiveLaw (SC) 865 The Supreme Court has pronounced a significant judgment on the scope of exemption for "charitable purposes" under Section 2(15) of the Income Tax Act 1961 in relation to statutory authorities and professional bodies. With effect from 01.04.2009, after the Finance Act 2009, a proviso was added to the section to state : "Provided that the advancement of any other object of general public utility shall not be a charitable purpose, if it involves the carrying on of any activity in the nature of trade, commerce or business, or any activity of rendering any service in relation to any trade, commerce or business, for a cess or fee or any other consideration, irrespective of the nature of use or application, or retention, of the income from such activity". Delhi High Court TDS On NRI Payment: Delhi High Court Rejects Appeal By Revenue-Payment Found As Salary, Not Fees Case Title: PCIT Versus M/s Boeing India Pvt. Ltd. Citation: 2022 LiveLaw (Del) 985 The Delhi High Court, while upholding the order passed by the Income Tax Appellate Tribunal (ITAT), has held that the provision of TDS on NRI payments under Section 195 of the Income Tax Act has no application once the nature of payment is determined as salary and a deduction has been made under Section 192. The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that the real employer of the seconded employees continues to be the Indian entity and not the overseas entity. SCN Without Any Reasons: Delhi High Court Quashes Order Cancelling GST Registration Case Title: Balaji Enterprises Versus Principal Additional Director General Citation: 2022 LiveLaw (Del) 986 The Delhi High Court has quashed the order cancelling the GST registration as the Range Inspector has physically verified the premises, neither by serving any notice of the physical verification nor in the report generated after the verification was uploaded on the portal. The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju has observed that there was an infraction of the provisions of Rule 25 of the CGST and the order has gone beyond the frame of the Show Cause Notice. Bombay High Court Financial Benefits To Assessee Can't Be A Ground To Levy Interest Without A Statutory Provision: Bombay High Court Case Title: Mahindra & Mahindra Ltd. versus Union of India & Ors. The Bombay High Court has ruled that penalty or interest on additional customs duty (CVD) and special additional duty of customs (SAD), or surcharge, which is not connected to the basic customs duty, cannot be imposed in the absence of an explicit substantive provision. The Division Bench of Justices K.R. Shriram and A.S. Doctor observed that there was no substantive provision which obligated the assessee to pay interest or penalty on CVD or SAD, leviable under the Customs Tariff Act, 1975, or on the surcharge leviable under the Finance Act, 2000. Madras High Court GST Dept. To Consider Reply to SCN Sent By Assessee Through post and Not Portal: Madras High Court ...

Tax Cases Weekly Round-Up: 16 October To 22 October, 2022

Mariya Paliwala

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