Tax Cases Weekly Round-Up: 30 October To 5 November 2022

Supreme CourtIndustrial Townships Are "Local Areas" For Entry Tax Levy By States Though They Are Excluded From Municipalities : Supreme Court Case Title: OCL India Limited vs State of Orissa Citation: 2022 LiveLaw (SC) 911 The Supreme Court upheld States' power to impose entry tax from Industrial Township/Areas. The bench of CJI UU Lalit, Justices S. Ravindra Bhat and J B Pardiwala held that industrial townships are 'local area' for the purposes of entry tax. Delhi High Court Delhi High Court Allows Depreciation Claim To Daikin For Goodwill On Exclusive Business Rights Case Title: Commissioner Of Income Tax Versus Daikin Shri Ram Aircon Pvt Ltd. Citation: 2022 LiveLaw (Del) 1026 The Delhi High Court while ruling in favour of the Daikin Shri Ram Aircon Pvt. Ltd. has held that the business rights acquired for valuable consideration constitute an intangible asset within the meaning of Section 32(1)(ii) of the Income Tax Act and depreciation is allowable. Admission of Appeals As A Condition Precedent To Be Eligible For Settlement Under Vivad Se Vishwas Scheme Is Contrary To Law: Delhi High Court Case Title: Medeor Hospital Ltd. Versus PCIT The Delhi High Court has ruled that the Central Board of Direct Taxes (CBDT) FAQ No. 59 of Circular No.21/2020 dated December 4, 2020, which contemplates admission of appeal before the filing of declaration as a condition precedent for the appeal to be treated as pending and eligible for settlement under the Vivad Se Vishwas Scheme (VSV Act) is contrary to law. Delhi High Court Condones Delay In Payments Under VSV Due To Covid and Death Of Managing Director Case Title: Srishtii Infra Housing Pvt. Ltd. Versus PCIT The Delhi High Court, while exercising its extraordinary writ jurisdiction under Article 226 of the Constitution of India, has condoned the delay in payments under Direct Tax Vivad Se Vishwas (VSV) due to COVID and the death of the managing director of the company. Madras High Court Capitation Fee collected indirectly by educational institutions, no tax exemption: Madras High Court Case Title: Commissioner of Income Tax vs MAC Public Charitable Trust & Others The Madras High Court has lifted the corporate veil of the educational institution for collecting involuntary capitation fees. Allahabad High Court Demand Of Tax and penalty can't be imposed on the basis of conjecture : Allahabad High Court Case Title: State Of U.P. Versus M/S Maa Vindhyavasini Tobacco Pvt Ltd Citation: 2022 LiveLaw (AB) 480 The Allahabad High Court has held that the demand for tax and penalty cannot be imposed on the basis of conjecture and surmise, especially in cases where the goods were accompanied by a tax invoice and E-way bill. Punjab and Haryana High Court Parking Services Of Cycle, Scooters Doesn't Attract Service Tax: Punjab & Haryana High Court Case Title: Sham Lal Versus State of Haryana and others The Punjab and Haryana High Court has held that the service tax is not payable on the parking services for cycles and scooters. ITAT Sale Of Scrap By Trader, Not Engaged In Any Manufacturing Activity, Will Also Attract TCS: ITAT Case Title: Umeshkumar Harilal Shah versus ITO (TDS)-3, Ahmedabad The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that sale of scrap by a trader, who is not engaged in any manufacturing activity from which the scrap arose, will also attract TCS. ITAT Suggests Government To Work-Out Mechanism To Ensure Tax Recovery From ARCs/Banks On sale Of Security Assets Case Title: Abbasbhai A. Upletawala Versus Income Tax Officer The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has suggested the government work out a mechanism to ensure tax recovery from Asset Reconstruction Companies (ARCs)/banks on the sale of security assets. Existence Of Dependent Agent Permanent Establishment (DAPE) Is Of No Tax Consequence, If Agent Is Paid Arm's Length Remuneration: ITAT Case Title: RGA International Reinsurance Company Ltd. versus Assistant Commissioner of Income Tax International Taxation The Mumbai bench of the Income Tax Appellate Tribunal (ITAT)has ruled that the business profits embedded in the reinsurance premium received by a non-resident reinsurance company, is not taxable in India if the company has no permanent establishment (PE) in India which is at its disposal. No Tax Implications On Business Profits Earned On Reinsurance Business In Absence Of Fixed Place PE in India: ITAT Case Title: RGA International Reinsurance Company Ltd Versus Assistant Commissioner of Income Tax International Taxation The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that there are no tax implications on business profits earned on account of the reinsurance business in the absence of a fixed place permanent establishment (PE) in India. CESTAT ...

Tax Cases Weekly Round-Up: 30 October To 5 November 2022

Mariya Paliwala

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