Tax Weekly Round-Up: 6th January - 12th January 2025

SUPREME COURT Reduction In Share Capital Amounts To Transfer Of Capital Asset Under Income Tax Act : Supreme Court Case Name: PRINCIPAL COMMISSIONER OF INCOME TAX-4 & ANR v. M/S. JUPITER CAPITAL PVT. LTD. Case no.: SPECIAL LEAVE PETITION NO. 63 OF 2025 The Supreme Court (recently on January 02) reiterated that reduction in share capital is covered under Section 2(47) of the Income Tax Act, 1961, which talks about transfer of a capital asset. It explained that such reduction would come under the expression “sale, exchange or relinquishment of the asset” used in the provision. The Bench of Justices J.B. Pardiwala and R. Mahadevan said that this provision provides an inclusive definition of transfer, covering relinquishment of an asset or extinguishment of any right. HIGH COURTS Allahabad HC [GST] Decision-Making Procedure Adopted By Authority De Hors Provisions Of Act/Rules, Is Liable To Be Rendered As Flawed: Allahabad High Court Case Title: M/S Akriti Food Industry Llp v. State Of UP And 3 Others Case no.: [WRIT TAX No. - 2070 of 2024] While directing that the order under Section 73 of the Goods and Service Tax Act, 2017 uploaded in the “Additional Notices and Tabs” on the GST portal be treated as the show cause notice, the Allahabad High Court observed, “If in a decision making procedure adopted by the authority is de hors the provisions of the act or rules framed thereunder, it is liable to be rendered as flawed one.” Delhi HC Customs Dept Should Serve Notices By Email In Addition To Post, Will Prevent Delay And Non-Appearances: Delhi High Court Case title: Bonanza Enterprises v. The Assistant Commissioner Of Customs & Anr. Case no.: W.P.(C) 7510/2024 The Delhi High Court recently called upon the Customs Department to make use of Section 153(c) of the Customs Act, 1962 which empowers it to serve notices through email. A division bench of Justices Prathiba M. Singh and Amit Sharma said such an approach will prevent delay and non-appearances, leading to expeditious disposal of matters. “In the opinion of this Court, the provision itself makes it clear that notices can be sent by email…The Customs Department ought to in future follow a system by which in addition to notices by speed post, registered post or courier, notices are also sent on the email address which is provided on the letterhead of the Petitioner or any authorised person. This would avoid substantial delay and matters proceeding ex-parte as has happened in the present case,” it said. Uploading Information On Insight Portal Not A Substitute For Handing Over Material To AO For Non-Searched Entity U/S 153C Of IT Act: Delhi HC Case title: ATS Township Pvt Ltd v. Assistant Commissioner Of Income Tax Circle 1(1) Delhi & Ors Case no.: W.P.(C) 13790/2024 The Delhi High Court has held that the provision under Section 153C of the Income Tax Act, 1961 for the Assessing officer of a searched person to record 'satisfaction' and handover documents regarding undisclosed income of another person cannot be substituted by merely uploading such information on the Department's insight portal. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “Uploading of information by the investigation wing of the Income Tax department would not be a substitute for recording of a satisfaction note by the AO of a searched person and handing over the assets, books of accounts or other material to the AO of the person other than the searched person for the purpose of initiation of proceedings under Section 153C of the Act.” Assessee Must Clearly Establish 'Movement Of Goods' To Defend Allegations Of Accommodation Entries: Delhi HC Case title: Abhishek Bansal v. Income Tax Officer, Ward 58(3), Delhi Case no.: W.P.(C) 17300/2024 The Delhi High Court has made it clear that merely producing transaction documents to establish that payments were made to an entity is not sufficient to defend the allegations of accommodation entries. A division bench of Acting Chief Justice Vibhu Bakhru and Justice Tushar Rao Gedela observed, “The documents provided by the petitioner would establish that the payments had been made to Shri Ajay Gupta through banking channels. However, the same does not address the allegation of purchases reflected were accommodation entries…In the present case, the petitioner was required to clearly show the movement of goods to establish that the goods had in fact moved from Shri Ajay Gupta to the petitioner. However, it does not appear that any such information was provided by the petitioner to the AO.” Income Tax Dept Can Invoke S.159 When Reassessment Notice Was Issued During Lifetime Of Deceased Assessee: Delhi HC Case title: Late Sh. Lal Chand Verma Through His Legal Heir v. Union Of India & Anr. Case no.: W.P.(C) 8184/2023 The Delhi High Court has held that Section...

Tax Weekly Round-Up: 6th January - 12th January 2025

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