Tax Cases Weekly Round-Up: 25 December to 31 December 2022

Delhi High CourtCompensation On Cancellation Of Leasehold Rights Over A Plot, Capital Receipt: Delhi High CourtCase Title: PCIT Versus Pawa Infrastructure (P) Ltd.Citation: 2022 LiveLaw (Del) 1215The Delhi High Court has held that the leasehold rights held by the assessee in the plot were a capital asset and that the compensation received by the assessee from the Government of Goa on the cancellation of the plot was a capital receipt and not a revenue receipt.The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that if an agreement for the transfer of rights in an immovable property is not performed by the transferor, the transferee is entitled to compensation as he/she is deprived of the price of escalation. Therefore, the character of the payment received as compensation by the transferee bears the character of a capital receipt. The payment of interest in the facts of the present case is compensatory in nature and, therefore, does not bear the character of a revenue receipt.Bombay High CourtMarine Paint As Part Of Vessel? Bombay High Court Confirms AAAR DecisionCase Title: Jotun India Private Limited Versus The Union of IndiaThe Bombay High Court has dismissed the writ petition challenging the advance ruling given by the Maharashtra Appellate Authority for Advance Ruling (AAR).The division bench of Justice Nitin Jamdar and Justice Gauri Godse has observed that the authority and the appellate authority followed the entire procedure and that full opportunity was given to the petitioner. There was no evidence of a violation of natural justice principles due to a lack of opportunity to be heard.All points put forth by the petitioner as to why anti-fouling paint should be considered part of the ship were taken into consideration, and the authority and the Appellate Authority took a particular view of the matter.Madras High CourtMadras High Court Upholds State's Decision To Increase Property Tax In Chennai, Coimbatore Municipal AreasCase Title: K.Balasubramaniam v. The Commissioner, Greater Chennai Corporation and others (batch cases)Citation: 2022 LiveLaw (Mad) 524The Madras High Court recently upheld the validity of the Government Order issued by Tamil Nadu's Municipal Administration and Water Supply Department and the consequential resolutions of Greater Chennai Corporation and Coimbatore Corporation by which the property taxes in Chennai and Coimbatore were revised and increased.Gujarat High CourtGujarat High Court Quashes Assessment Order Of Income Tax Worth Rs. 101 Crores For Not Following Natural JusticeCase Title: Map Refoils India Ltd. Versus National Faceless E-Assessment CenterThe Gujarat High Court has quashed the assessment order of income tax worth Rs. 101 crores on the grounds of a violation of the principle of natural justice by the National Faceless Assessment Center.The division bench of Justice N.V. Anjaria and Justice Bhargav D. Karia has observed that the respondent/department will be at liberty to proceed with assessment under the provisions of Section 144B of the Income Tax Act, 1961, as permissible under the law, after issuance of a show cause notice and draft assessment order so as to provide an opportunity of hearing to the petitioner.Directors Not Negligent; Wrong Invocation Of Section 179 IT Act: Gujarat High CourtCase Title: Devendra Babulal Jain versus Income Tax OfficerThe Gujarat High Court has ruled that the Directors of the assessee company cannot be held negligent merely because they failed to deposit before the Assessing Officer 20% of the demand raised, so as to seek stay of demand during the pendency of an appeal before the CIT(A). Thus, the Court held that jurisdiction under Section 179 of the Income Tax Act, 1961, holding the Directors of the assessee company liable to pay the company's outstanding tax dues, could not have been invoked by the Income Tax Authorities.Himachal Pradesh High CourtRejection Of Appeal For Restoration Of GST Registration - Delay Of 1 Day Is Hyper Technical: Himachal Pradesh High CourtCase Title: Sunil Kumar Vij Versus Union Of IndiaThe Himachal Pradesh High Court has held that the rejection of an appeal for the restoration of GST registration for a delay of 1 day is hyper-technical.The division bench of Justice Tarlok Singh Chauhan and Justice Virender Singh has allowed the claim of the petitioner, stating that the view taken by the appellate authority is quite hyper-technical and academic and that rejecting the appeal for a delay of one day is in gross violation of the principle of natural justice and that cancellation would prevent the fundamental right of doing business.ITATProperty Transferred to Mother Through Sale Deed Is A Sale And Not Gift, Taxable As Capital Gain: ITATCase Title: Shri Jay Atulbhai Mody Versus ITOThe Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) has held that the property transferred by the assessee to his mother for consideration of Rs. 5 lakh is liable to be brought...

Tax Cases Weekly Round-Up: 25 December to 31 December 2022

Mariya Paliwala

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