Tax Weekly Round-Up: July 07 - July 13, 2025

HIGH COURTSAllahabad HCMere Absence Of Activity At Principal Place Of Business Doesn't Mean Invoices Issued To Assessee Are Fake: Allahabad High CourtCase Title: S.S. Enterprises v. State of U.P. and AnotherCase no.: WRIT TAX No. - 3026 of 2025The Allahabad High Court has held that merely because there was no activity at the principal place of business of the assessee, it cannot be presumed that the invoices issued in favour of such assessee are fake.Petitioner approached the High Court seeking quashing of the penalty order under Section 129(3) of the CGST Act and seeking release of the goods confiscated under Section 129(1)(a) by the Assistant Commissioner Commercial Tax Mobile Unit Khataul, Muzaffarnagar.Bombay HC[Income Tax Act] Reassessment Beyond 4 Years Requires Specific Non-Disclosure By Assessee, Not Mere Allegations: Bombay High CourtCase Title: Bharat Petroleum Corporation Ltd. v. Assistant Commissioner of Income TaxCase Number: WRIT PETITION NO. 1752 OF 2022The Bombay High Court stated that reassessment under Section 147 Income Tax Act beyond 4 years requires specific non-disclosure by assessee, not mere bald allegations.Section 147 of the Income Tax Act, 1961 provides for the reopening of assessment proceedings. This section gives discretion to the Assessing Officer (AO) to reopen the assessment proceedings when he/she has reason to believe that some of the income has escaped assessment.No Leniency In Import/Export Lapses; Bombay High Court Upholds Licence Cancellation Of Courier Agency For Clearing Imports Without AuthorisationCase Title: M/s. Skypak Services Specialists Limited v. Union of IndiaCase Number: WRIT PETITION NO. 1326 OF 2014The Bombay High Court has upheld the licence cancellation of a courier agency for clearing imports without authorisation by stating that any such exercise of discretion of leniency will only encourage persons to commit the offence by taking recourse to the services of the courier agencies.Justices M.S. Sonak and Jitendra Jain stated that “the petitioner has been negligent in carrying out its obligation under the 1998 Regulations. These obligations are cast on the Authorised Courier since the petitioner was engaged in the business of clearance of imports and exports. There is a high degree of responsibility cast upon the petitioner in the discharge of its functions because the repercussions of illegal imports and exports are economically and otherwise also far reaching.”Reward Schemes Must Be Fairly Implemented: Bombay High Court Directs Dept To Pay Informer For Assisting In Tax RecoveryCase Title: Darshan Singh Parmar v. The Union of IndiaCase Number: WRIT PETITION NO. 2283 OF 2013The Bombay High Court has directed the department to pay informer for assisting in tax evasion recovery.Justices M.S. Sonak and Jitendra Jain stated that “If the Government has formulated a reward scheme, it must be implemented fairly and transparently. Informers who take risks and invest time must not be made to run from pillar to post to secure what may be due and payable. There must be no unreasonable delay in paying the determined reward amounts, and the practice of raising frivolous and belated objections only to avoid legitimate payments must also be eschewed.”[Income Tax Act] Amount Indicated In P&L Account As Provision For Doubtful Debts/Advances Cannot Be Treated As "Reserve" U/S 115JA: Bombay HCCase Title: M.J. Exports Pvt. Ltd. v. Joint Commissioner of Income Tax & Anr.Case no.: Income Tax Appeal No. 407 of 2003The Bombay High Court has ruled that a provision for doubtful debts cannot be treated as either a "reserve" or a "provision for liability" under clauses (b) or (c) of the Explanation to Section 115JA of the Income Tax Act, 1961, and thus cannot be added back to the book profits for the purpose of minimum alternate tax (MAT). The Court accordingly overturned the addition of ₹2.49 crore made by the Assessing Officer and upheld by the Tribunal.A Division Bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne was hearing an appeal filed by M.J. Exports Pvt. Ltd., which had made a provision for doubtful debts in its profit and loss account for the Assessment Year 1997–98.Insurance Claim Received On Dead Horses Is Capital Receipt, Not Taxable As Income U/S 41(1): Bombay High CourtCase Title: M/s. Poonawalla Estate Stud & Agricultural Farm v. Commissioner of Income TaxCase Number: INCOME TAX APPEAL NO. 541 OF 2003The Bombay High Court held that insurance claim received on dead horses is capital receipt, not taxable as income under Section 41(1) Of Income Tax Act.The bench opined that horses in respect of which the insurance claim was received were Assessee's capital assets and that therefore insurance receipt arising therefrom could only have been considered as capital receipt, not chargeable to tax.GST Notice U/S 79(1)(c) Can't Be Issued Directly To Bank; Must Be Served To Actual Taxpayer: Bombay High CourtCase Title: M/s. Galaxy International v. Union of India &...

Tax Weekly Round-Up: July 07 - July 13, 2025

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Tax Weekly Round-Up: July 07 - July 13, 2025

Kapil Dhyani

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