Direct Tax Cases Monthly Round Up: July 2024

Supreme CourtState Not Liable To Collect Tax At Source While Giving Contractors Permit To Vend Liquor At Fixed Retail Price : Supreme CourtCase Details : THE EXCISE COMMISSIONER KARNATAKA & ANR. v. MYSORE SALES INTERNATIONAL LTD. & ORS CIVIL APPEAL NO. 2168 OF 2007Citation : 2024 LiveLaw (SC) 496The Supreme Court recently held that any vendor who buys liquor from state manufacturers without obtaining it through auction and sells in retail at a fixed price would be excluded from the definition of 'buyer' under Section 206C of the Income Tax Act. Such a trade would be exempted from TCS (Tax Collected at Source).Regular Entries In 7th Schedule Of Constitution Can't Be Given Wider Interpretation To Include Taxation Powers : Supreme CourtCase Details : Mineral Area Development v. M/S Steel Authority Of India & Ors (CA N0. 4056/1999)Citation : 2024 LiveLaw (SC) 512The Supreme Court has recently held that regular entries under List I and II of the 7th Schedule of the Constitution cannot be given a wider interpretation to include taxation powers which are covered under the domain of specific tax entries under the 7th Schedule. Vodafone Idea Not Liable To Deduct TDS On Charges Paid To Non-Resident Telecom Operators : Supreme CourtCase Title: Deputy Director of Income Tax & Anr. v. M/S. Vodafone Idea Ltd.Citation :2024 LiveLaw (SC) 522Dismissing a petition filed by the Income Tax Department, the Supreme Court recently upheld the view that Vodafone Idea is not liable to deduct TDS (tax deducted at source) on interconnectivity usage and bandwidth charges paid to non-resident telecom operators.Delhi High CourtNot Permissible For TPO To Engage In Restructuring Of Transaction: Delhi High CourtCase Title: CIT Versus A.T. Kearney Ltd.The Delhi High Court has held that it is not permissible for the Transfer Pricing Officer (TPO) to engage in the restructuring of a transaction.Services Provided Outside To Indian Customers In Connection With Right To Use Of Process Can't Be Taxed : Delhi High CourtCase Title: The Commissioner Of Income Tax - International Taxation Versus Telstra Singapore Pte Ltd.The Delhi High Court has held that the receipts from Indian customers for services provided outside' Indian Territory in connection with use or right to use of process or equipment by the assessee company cannot be taxed as royalty.Educational Activities Neither Business Nor Profession, Covered Under Section 2 (15) Of Income Tax Act: Delhi High CourtCase Title: CIT(E) Versus NIIT FoundationThe Delhi High Court has held that the assessee is carrying on educational activities that are covered by the provisions of Section 2 (15) of the Income Tax Act, and it is neither business nor profession of the assessee.Loans Extended By NOIDA Is Not Commercial Activity, Eligible For Section 10(46) Exemption: Delhi High CourtCase Title: New Okhla Industrial Development Authority Versus Union Of India & Ors.The Delhi High Court has held that the loans and advances extended by the New Okhla Industrial Development Authority (NOIDA) are not commercial activities and are eligible for exemption under Section 10(46) of the Income Tax Act.TPO Lacks Jurisdiction To Question Commercial Expediency Or Genuineness Of Need: Delhi High CourtCase Title: PCIT Versus Samsung India Electronics Pvt. Ltd.The Delhi High Court has held that the statutory authority conferred upon the Transfer Pricing Officer (TPO) can only extend to an examination of the appropriateness of the method adopted for the purposes of determining arm's length pricing (ALP) or evaluating the enlistment of comparables. However, the TPO would neither be justified nor could it be countenanced to have the jurisdiction to question commercial expediency or genuineness of need.Services Provided By IMG Utilized By BCCI Outside India, Income Not Liable To Be Taxed: Delhi High CourtCase Title: International Management Group (Uk) Limited Versus Commissioner Of Income Tax-2, International Taxation, New DelhiThe Delhi High Court has held that services provided by International Management Group (IMG) are utilized by the Board of Control for Cricket in India (BCCI) outside India, so the income determined as Fee for Technical Services (FTS) cannot be deemed to accrue in India and therefore cannot be taxed in India.Order Of ITSC Final And Conclusive For AY For Which Application Has Been Filed: Delhi High CourtCase Title: Pr. Commissioner Of Income Tax -Central -1 Versus Maharaji Education TrustThe Delhi High Court has held that the order of the Income Tax Settlement Commission (ITSC) is final and conclusive for a particular assessment year (AY) for which the application has been filed.ITSC Empowered To Make Income Tax Addition: Delhi High CourtCase Title: Harsh Dhanuka HUF Versus PCITThe Delhi High Court has held that the Income Tax Settlement Commission (ITSC) does not lack jurisdiction to make an addition, which has also been duly recorded in the terms of settlement.AO Can't Review Its Own Order: Delhi High...

Direct Tax Cases Monthly Round Up: July 2024

Mariya Paliwala

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