Direct Tax Cases Monthly Round Up: June 2024

Delhi High CourtInterest Received By Indian PE On Deposit Maintained With Head Office/Overseas Branch Is Not Taxable In India: Delhi High CourtCase Title: The Commissioner Of Income Tax-International Taxation-3 Versus The Bank Of Tokyo-Mitsubishi UFJ Ltd.The Delhi High Court has held that interest received by the Indian PE on deposits maintained with the Head Office/Overseas Branch is not taxable in India.Once Issue Of Arm's Length Remuneration Settled By TPO, Question Of Ascertaining Existence Of PE Is Academic; Delhi High Court Quashes Reassessment ProceedingsCase Title: Progress Rail Locomotive Inc. (Formerly Electro Motive Diesel Inc.) Versus Deputy Commissioner Of Income-TaxCitation: 2024 LiveLaw (Del) 671The Delhi High Court, while quashing the reassessment proceedings initiated by the income tax department against the Caterpillar Group, held that once the issue of arm's length remuneration was settled by the Transfer Pricing Officer (TPO), the question of ascertaining the existence of a permanent establishment (PE) was academic.Under-Reporting And Misreporting Are Viewed As Separate And Distinct Misdemeanours; Delhi High Court Quashes PenaltyCase Title: GE Capital Us Holdings Inc Versus Dy Commissioner Of Income Tax (International Taxation) The Delhi High Court, while quashing the penalty, has held that both under-reporting and misreporting are viewed as separate and distinct misdemeanours.Exemption Allowable On Donations Made By One Charitable Trust To Other Charitable Institutions For Temporary Period: Delhi High CourtCase Title: Commissioner Of Income Tax (Exemptions) Versus M/S Jamnalal Bajaj FoundationThe Delhi High Court has held that exemption is allowable on donations made by one charitable trust to other charitable institutions for a temporary period.Initiation Of Section 153C Assessment Proceedings Falling Beyond Maximum 10 Years Block Period Unsustainable: Delhi High CourtCase Title: Flowmore Limited Versus Deputy Commissioner Of Income Tax, Central Circle 28, New Delhi & Anr.The Delhi High Court has held that the initiation of Section 153C of the Income Tax Act assessment proceedings falling beyond the maximum 10-year block period is unsustainable.Unsettled Claims As Well As IBNR Would Amount To Contingent Liabilities; Section 37 Deduction Allowable: Delhi High CourtCase Title: Principal Commissioner Of Income Tax 1 Versus M/S Care Health Insurance LimitedCitation: 2024 LiveLaw (Del) 707The Delhi High Court has held that the deduction under Section 37 of the Income Tax Act is allowable on unsettled claims as well as Incurred But Not Reported (IBNR), which would amount to contingent liabilities.Reassessment On Non-Searched Entity Is Governed By Limitation In First Proviso To Sec 149(1) R/w Sec 153C & 153A: Delhi High CourtCase Title: Dinesh Jindal Vs ACIT and OrsWhile quashing the reassessment notice issued to the Assessee, pursuant to a search operation conducted against a third party, the Delhi High Court held the same to be barred by limitation under first proviso to Section 149(1) read with Section 153C & Section 153A of Income tax Act.Non-Payment Of Tax Due To Uncertain Legal Position Existing At Time Of Filing Return Is Outside Scope Of 'Mis-Reporting': Delhi HC Deletes Penalty U/s 270ACase Title: GE Capital Us Holdings Inc Vs DCITWhile quashing a show cause notice issued by the Department for initiation of penalty proceedings u/s 270A in a vague manner, the Delhi High Court held that categorical finding of 'mis-reporting/ under-reporting' is essential for levy of penalty u/s 270A.Provisions For Unsettled Outstanding & IBNR Claims Allowable U/s 37 Being Ascertained Liabilities: Delhi High CourtCase Title: PCIT Vs Care Health Insurance LimitedWhile upholding ITAT's decision deleting disallowance of provisions for unsettled outstanding claims and 'Incurred But Not Reported' (IBNR) claims of health insurance company, the Delhi High Court held that provisions for unsettled outstanding and IBNR claims are not contingent liabilities, and hence allowable u/s 37 of Income tax Act.Bombay High CourtBombay High Court Upholds ITAT's Order Directing Vodafone India To Deposit Rs.230 Crores For Staying Income Tax DemandCitation: 2024 LiveLaw (Bom) 303Case Title: Vodafone India Services Pvt. Ltd. Versus Assistant Commissioner of Income Tax Circle 8(3)(2)The Bombay High Court has upheld the order passed by the Income Tax Appellate Tribunal (ITAT) directing Vodafone India to deposit Rs. 230 crores for staying income tax demand.Discrepancies Between Dates Of Creation And Signing Assessment Order; Bombay High Court Quashes MVAT Order Passed Beyond 4 YearsCase Title: Karvy Innotech Limited Versus State of MaharashtraThe Bombay High Court, while noting the discrepancies between the dates of creation and signing of the assessment order, quashed the Maharashtra Value Added Tax Act (MVAT) Order, which was passed beyond the limitation period of 4 years.Calcutta High CourtAO's Failure To Make Proper Enquiry On ...

Direct Tax Cases Monthly Round Up: June 2024

Mariya Paliwala

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