Tax
Telangana High Court Quashes Tax Authority's Show Cause Notices To Assessee As Demand Was Settled Under State's One Time Settlement Scheme
The Telangana High Court recently quashed two show cause notices issued by the tax authority to a company, demanding tax which was already settled under the state government's One Time Settlement (OTS) scheme, while noting that there was "no allegation of fraud" committed by the company in the notices. A division bench of Justice Sujoy Paul and Justice Namavarapu Rajeshwar Rao in its August...
Assessee Failed To Explain Huge Variation In Stock And Admitted To Shortage: CESTAT Upholds Penalty Under Section 11 AC(1)(A) Of The Central Excise Act, 1944
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that the assessee has failed to explain the huge variation in stock and has admitted to the shortage, making them liable under Section 11AC(1)(A) of the Central Excise Act, 1944. Section 11 AC(1)(A) Of the Central Excise Act, 1944 provides that if any excise duty has not been levied,...
Forex Fluctuation Loss Directly Resulting From Trading Items Can't Be Considered As Non-Operating Loss: Delhi High Court
Finding that Assessee/ Petitioner had raised invoices on its AE (Ameriprise USA) based on cost-plus pricing methodology for the specified products & services provided by the Assessee, the Delhi High Court held that foreign exchange loss directly resulting from trading items could not be considered as a non-operating loss. The Division Bench comprising Justice Yashwant Varma...
No Service Tax Can Be Determined Without Clarifying The Category Of Service Under Which The Said Amount Can Be Attributed: CESTAT
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that no service tax can be determined without clarifying the category of service under which the said amount can be attributed. Under Section 78 of the Finance Act, 1994, if service tax has not been levied, paid, short-levied, short-paid, or erroneously refunded due to fraud,...
No Evidence Of Over-Valuation Of Goods; Transaction Value Wrongly Rejected Under Rule 8 of Customs Valuation Rules: CESTAT
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that there is no evidence of over-valuation of Goods and the transaction value has been wrongly rejected under Rule 8 of Customs Valuation Rules. Section 113 of the Customs Act, 1952 provides the list of goods that are liable to be confiscation if they are attempted to...
Indian-Subsidiary Which Is Compensated At Arm's Length Can't Be Construed As Dependent Agent PE: Delhi High Court
Finding that subsidiary company (KIPL) is only undertaking marketing enterprise, whereas contracts are finalized and signed by the assessee (Principal company) outside India, the Delhi High Court held that KIPL cannot be said to be habitually securing and concluding order on behalf of assessee, and hence it is not Dependent Agent PE (DAPE) of Assessee. The Division Bench...
No Notional Interest Can Be Levied On Delayed Receivables From AEs/ Non-AEs If Taxpayer Is Debt Free Company, Reiterates Delhi H[gh Court
Since the TPO has failed to answer the issue of international transactions bearing in mind Explanation (i)(c) of Section 92B, the Delhi High Court reiterated that no transfer pricing addition of arms' length interest is warranted on account of delayed receivables. Section 92B of the Income Tax Act lays down the method for computing the income arising from international transactions...
Impact Of Delayed Receivables From AE Already Factored In Working-Capital: Allahabad HC Directs TPO To Adjudicate Interest On Receivables
The Allahabad High Court recently reiterated that once working capital adjustment is granted to assessee, there is no need for further imputation of interest on outstanding receivables at the end of the year, as the same gets subsumed in working capital adjustment. The Division Bench comprising Justice Shekhar B. Saraf and Justice Manjive Shukla reiterated that “In respect...
Income Tax Act | Supreme Court Refuses To Give Retrospective Application To 2022 Amendment To S.80DD Regarding 'Jeevan Adhar' Policies
In a recent case, the Supreme Court refused to give the retrospective operation to the amended Section 80DD of the Income Tax Act, 1961 (“IT Act”) which provided an option to the subscriber the Jeevan Adhar Policy (“Policy”) upon attaining the age of 60 years to discontinue the deposit made under the policy and make use of the money accumulated for the benefit of the disabled person...
Substantial Question Is Absent To Entertain Appeal U/s 260A: Madhya Pradesh HC Confirms Deletion Of Addition U/s 68
Finding that the legal principles have been properly applied by the Tribunal in appreciating the evidence and no substantial question has arisen for consideration, the Madhya Pradesh High Court confirmed the action of the Tribunal in deleting the additions made u/s 68. As per Section 68 of Income tax Act, where any sum is found credited in the book of an assessee maintained...
Tax Liability Already Attaining Finality Under VSV Can't Be Altered By Invoking Rectification Action U/s 154: Delhi High Court
The Delhi High Court held that when the determination as carried out by the Designated Authority has finality, it cannot possibly be reopened or revised by any authority under the Income Tax Act by taking recourse to a power u/s 154 which may otherwise be available to be exercised. The High Court held so after finding that the Revenue initiated the rectification action after...
Final Assessment Order Passed Without Issuing Draft Assessment U/s 144C, Deprives Taxpayer's Statutory Right, And Hence Invalid: Delhi High Court
The Delhi High Court held that a failure to frame an assessment order in draft would clearly be violative of the mandatory prescriptions of Section 144C and the final order of assessment framed in violation thereof liable to be viewed as a nullity. The High Court therefore clarified that final assessment order passed without passing draft assessment u/s 144C would be...