Tax
Allahabad High Court Grants Interim Relief On Plea Challenging Order U/S 129 UPGST Act Claiming Asst Commissioner Was Not 'Proper Officer'
Recently, the Allahabad High Court has granted interim relief in a writ petition challenging the order under Section 129 of the Uttar Pradesh Goods and Service Tax Act, 2017.Petitioner was transporting Arecanuts, when the shipment was intercepted by the Mobile Squad. Due to alleged reuse of bill and e-way bills, physical verification of the goods was ordered. Though no discrepancies were found upon physical verification, an order of detention of goods was passed. Subsequently, the Assistant...
S.245 IT Act | TDS Deducted By Employer Can't Be Adjusted Against Assessee's Future Refund: Delhi High Court
The Delhi High Court recently granted relief to Satwant Singh Sanghera, a pilot formerly employed with the now collapsed Kingfisher Airlines, against tax demand of over Rs 11 lakh.Singh contended that he had duly filed his income tax returns for the Assessment Years in question and the company had deducted TDS from his salary. The same was reflected in Form 16A issued by the company.He contended that the amount was not deposited with the government due to the default of the company and he is not...
S.10(23G) IT Act | Capital Invested To Purchase Shares Of 'Infrastructure Facility' Before June 1998 Can't Be Included In Total Income: Telangana HC
The Telangana High Court has held that the capital expenditure made prior to June 1998, for purchasing shares in any 'infrastructure facility', cannot be included in an assessee's total income. A division bench of Justices Sujoy Paul and Namavarapu Rajeshwar Rao reasoned, “The capital expenditure for purchasing shares falls under the category of infrastructure facilities and...
Assessee Entitled To Charge Depreciation On Purchase Of Goodwill: Delhi High Court
The Delhi High Court has made it clear that goodwill is not 'income' but rather 'expenditure' for acquisition of assets and therefore, an assessee is entitled to charge depreciation on the amount spent towards it.A division bench of Justices Vibhu Bakhru and Swarana Kanta Sharma cited Commissioner of Income Tax, Kolkata v. Smifs Securities Ltd. (2012) whereby the Supreme Court had held that goodwill could be considered as an intangible asset eligible for depreciation.In the case at hand, the...
Sales Commission Paid To Overseas Subsidiary For Non-Technical Services Is Not 'FTS', Does Not Attract TDS Liability U/S 195: Bangalore ITAT
The Bangalore ITAT deleted the disallowance made by the AO u/s 40(a)(ia) on ground of non-deduction of tax at source on sales commission paid by the assessee company/ respondent to its US based subsidiary as well as other AE on account of selling & marketing services. The Division Bench comprising George George K (Vice-President) and Padmavathy S (Accountant Member) observed that the sales and marketing services rendered to assessee by its US based subsidiary does not fall within...
Delay In Allotting Shares No Basis To Treat Share Application Money In Hands Of Overseas AE As 'Loan': Mumbai ITAT Deletes Notional Interest
The Mumbai ITAT held that when no income had accrued from the transaction of remittance of share application money by assessee to its overseas AE, then such transaction cannot be subjected to the transfer pricing provisions The ITAT deleted a transfer pricing addition made by the TPO on account of notional interest on share application money paid by assessee to its AEs. Transaction between assessee/ Appellant and its AE was in the nature of remittance towards share application...
Similarity Of Functional Filters & Business Model Is Necessary For Including/ Excluding Comparable To Determine Arm's Length Price: Delhi HC
The Delhi High Court noted that the present appeal is confined only to inclusion/ exclusion of certain uncontrolled entities as comparable for purpose of determining arm's length price (ALP) of assessee company/ Appellant.Further, for purposes of benchmarking, there must be similarity of functional filters, product homogeneity and business model, in order to arrive at suitable comparable...
Employee Working Beyond Banking Hours May Be Classified As Violation Of Banking Rules, But No Basis To Assume Additional Income: Delhi ITAT
The Delhi ITAT deleted the addition made by AO in the absence of any supporting evidence, which was merely based on assumption and not on any material recovered during search and seizure. The ITAT further clarified that assessee/ employee doing overtime beyond working hours may be classified as violation of banking rules, but could not form basis for addition, assuming that assessee...
Current Transactions Pertaining To Conveyance Expenses Incurred By Holding Company On Behalf Of Subsidiary Is Not Deemed Dividend: Delhi ITAT
The Delhi ITAT held that transaction between assessee and its subsidiary cannot be treated as deemed loan u/s 2(22)(e), as they are current transactions that pertain to travelling & other expenses incurred by assessee on behalf of its subsidiary. Any loan/ advance given by a closely held company to a shareholder holding 10% or more voting power is considered a dividend under...
Ahmedabad ITAT Deletes Addition Of Decentralized Govt Grants Merely Routed Through Assessee, Directly Utilized By Other Govt Agencies
Finding that assessee had followed a consistent and reasonable policy in recognizing income, and the amount in question was rightfully excluded from taxable income, the Ahmedabad ITAT deleted the addition made by AO on account of understatement of income. The ITAT held so after emphasizing that said income was never accrued to assessee nor did it represent real income as the funds...
Banks Can Claim Tax Deductions For Broken Period Interest On HTM Securities If Held As Trading Assets: Supreme Court
The Supreme Court on Wednesday (October 16) held that banks can claim tax deductions for broken period interest on held to maturity (HTM) government securities if they are held as trading asset. “Therefore, on facts, if it is found that HTM Security is held as an investment, the benefit of broken period interest will not be available. The position will be otherwise if it is held...
Interest On Delayed Customs Duty Is Compensatory In Nature And Hence Allowable Expenditure U/S 37(1): Bangalore ITAT
Finding that the interest payment is incurred wholly & exclusively for business purposes, and is neither personal nor capital in nature, the Bangalore ITAT held that interest on delayed customs duty cannot be treated at par with penalty.The ITAT therefore clarified that such interest payment is an accretion to the main payment and not penalty, and hence, allowable as revenue expenditure...