Direct Tax Cases Weekly Round-Up: 18 To 24 February 2024

Supreme Court 'Enemy Property' Not Exempt From Municipal Taxes As It Is Not Vested With Union Govt : Supreme Court Case Details: Lucknow Nagar Nigam & Others Versus Kohli Brothers Colour Lab. Pvt. Ltd. & Others Citation : 2024 LiveLaw (SC) 156 The Supreme Court held that the 'enemy property' vested in the possession of the Union Government-appointed 'custodian', as per the Enemy Property Act, 1968, cannot be considered a property of the Union Government to claim the exemption from the municipal taxes under Article 285 (1) of the Constitution of India. Delhi High Court Mitsubishi Corporation Not Liable To Deduct TDS On Sum Which Was Not Chargeable To Tax In India: Delhi High Court Case Title: The Commissioner Of Income Tax Versus Mitsubishi Corporation India P. Ltd. The Delhi High Court has held that the assessee, Mitsubishi Corporation, is not liable to deduct TDS under Section 195(1) of the Income Tax Act where the sum paid was not chargeable to tax in India. Mere Deduction Of TDS By Donor On Grants Would Not Disentitle The NGO From Sections 11 Exemption: Delhi High Court Case Title: Aroh Foundation Versus Commissioner Of Income Tax Exemption & Anr. The Delhi High Court has held that a mere deduction of TDS by a donor on grants would not disentitle the assessee-NGO from exemption under Section 11 of the Income Tax Act. TDS Prosecution Can't Be Initiated Against Any Office Holder In Corporate Without Establishing Administrative Connection: Delhi High Court Case Title: Varun Sood Versus ACIT The Delhi High Court has held that TDS prosecution can't be initiated against any office holder in a corporation without establishing an administrative connection. Bombay High Court Change Of Opinion Does Not Constitute Justification For Assuming Income Chargeable To Tax ; Bombay High Court Case Title: Mira Bhavin Mehta Versus Income Tax Officer The Bombay High Court has held that the reopening of the assessment was purely on the basis of a change of opinion of the AO from that held earlier during the course of assessment proceedings. The change of opinion does not constitute justification for assuming that income chargeable to tax has escaped assessment. Interest Paid On Loan Taken To Invest In Shares Of Subsidiary In Normal Course Of Business Activities Is Allowable Expenditure: Bombay High Court Case Title: The Principal Commissioner of Income Tax Versus Videocon Industries Ltd. & Anr. The Bombay High Court has held that if an assessee for commercial expediency and in the normal course of its business activities takes loan to invest in shares of its subsidiary, the interest paid on these advances utilised is allowable expenditure under Section 36(1)(iii) of the Income Tax Act. Madras High Court Chennai Metro Rail Responsible For TDS Deduction And Not Work-Contractors: Madras High Court Case Title: Tvl.Transtonelstory Afcons Versus The Assistant Commissioner (CT) Citation: 2024 LiveLaw (Mad) 81 The Madras High Court has held that Chennai Metro Rail Ltd. (CMRL) is responsible for TDS deduction and not work contractors. Jharkhand High Court Reopening Notice Issued U/s 148 Merits To Be Quashed If Barred By Limitation Period Prescribed U/s 149: Jharkhand High Court Case Title: M/s. Sevensea Vincom Private Limited Verses Principal Commissioner of Income Tax Finding that the notice issued u/s 148 is barred by the limitation period prescribed u/s 149 of the Income tax Act, 1961, the Jharkhand High Court (Ranchi Bench) ruled that the very initiation of reassessment proceeding is wholly without jurisdiction. ITAT Stamp Value As On Date Of Agreement Of Sale Of Property Has To Be Considered For Applicability Of Section 56(2)(vii)(b): ITAT Case Title: Shyamkumar Madhavdas Chugh Versus The ACIT The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that stamp value as on the date of agreement of sale of the property, in the year 2010 (i.e., Rs. 1.4 Cr), has to be considered for the applicability of Section 56(2)(vii)(b) of the Income Tax Act.

Direct Tax Cases Weekly Round-Up: 18 To 24 February 2024

Mariya Paliwala

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