Tax Cases Weekly Round-Up: 5 February to 11 February 2023

Supreme Court Exemption Of Newspaper’s Income Utilised For Charity: Supreme Court Remands The Matter To AO Case Title: PCIT Versus Servant of People Society The Supreme Court has remanded the appeal in respect of the exemption of newspaper income used for charity. Delhi High Court Department Can’t Go Behind TRC Issued By The Other Tax Jurisdictions: Delhi High Court Case Title: Blackstone Capital Partners (Singapore) VI FDI Three Pte. Ltd. Versus ACIT Citation: 2023 LiveLaw (Del) 125 The Delhi High Court has quashed the reassessment and held that the department cannot go behind the Tax Residency Certificate (TRC) issued by the other tax jurisdiction. The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that the reason given for reopening the assessment, namely, to verify the nature and genuineness of the transactions of the assessee in the assessment year, was untenable in law as the return of income had been filed by the assessee within time with full particulars. The notice has been issued on borrowed satisfaction, which is impermissible in law. Karnataka High Court No GST Applicable On Supply Of Vouchers: Karnataka High Court Case Title: M/s Premier Sales Promotion Pvt Ltd versus Union of India & Ors. The Karnataka High Court has ruled that vouchers do not fall under the category of goods and services and therefore, the issue and supply of vouchers would not attract GST. Gujarat High Court Practice Of Not Responding To Request Of Adjournment, To Take Matter Up At Anytime, When AO Deems Fit Is Not Endorsable: Gujarat High Court Case Title: Shree Siddhi Foods Versus ACIT The Gujarat High Court has held that the practice of not responding to the request for adjournment and thereafter taking the matter up at any time when the Assessing Officer deems it appropriate was not endorsable. Orissa High Court Orissa High Court Allows Deduction To The Co-operative Society Involved In The Business Of Banking Case Title: Cuttack Central Co-operative Bank Ltd. Versus Asst. Commissioner of Income Tax The Orissa High Court has granted the deduction to the Co-operative Society engaged in the banking business. The division bench of Chief Justice Dr. S. Muralidhar and Justice M. S. Raman has observed that the tribunal was justified in making further classification while interpreting Section 80P(4) of the Income Tax Act by treating it to be different from the primary agriculture rural development bank/co-operative societies. ITAT Credit For TCS Available To Assessee In Whose Hand Income Is Assessed To Tax: ITAT Case Title: M/s Hotel Ashok Garden versus ITO The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has reiterated that credit for Tax Collected at Source (TCS) should be given to the assessee who is finally and lawfully assessed to tax in respect of the income on which TCS has been collected, irrespective of the person in whose name the TCS certificate has been issued. Unmarried Daughter’s Jewllery And Mother’s Jewellery Can Be Kept In Family Home: ITAT Deletes Addition Case Title: Shakun Devi Versus Joint Commissioner of Income Tax The Allahabad Income Tax Appellate Tribunal (ITAT) has deleted the addition as the jewellery belonging to unmarried daughters will be kept along with the assessee’s jewellery in a family home where they are living together. Section 14A Disallowance Not Warranted If No Exempt Income Is Earned: ITAT Case Title: Indian Farmers Fertiliser Versus DCIT The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the disallowance under Section 14A of the Income Tax Act is not warranted if no exempt income is earned. The two-member bench of Anubhav Sharma (Judicial Member) and Anil Chaturvedi (Accountant Member) has observed that Section 14A envisages that there should be actual receipt of income, and hence Section 14A of the Act will not apply where no exempt income is received or receivable during the relevant previous year. Expenses Incurred During Regular Course Of Business Cannot Be Treated As Capital Expenses: ITAT Case Title: ACIT Versus Drishti Soft Solutions Pvt. Ltd. The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that expenses incurred during the regular course of business cannot be treated as capital expenses. The two-member bench of Yogesh Kumar US (Judicial Member) and Anil Chaturvedi (Accountant Member) has observed that the payment was made towards the professional fee, which includes monthly retainer fees for the professional services. CESTAT Road Construction Services Are Excluded From The Taxable Service: CESTAT Quashes Service Tax Demand Case Title: Apollo Construction Projects Pvt Ltd. Versus C.S.T.-Service Tax – Ahmedabad The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT)...

Tax Cases Weekly Round-Up: 5 February to 11 February 2023

Mariya Paliwala

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