Tax Weekly Round-Up: May 19 - May 25, 2025

SUPREME COURTIncome Tax Act | Supreme Court Clarifies Restriction Under S.80-IA(9) On Claiming Cumulative Deductions Under S.80IA & 80-HHCCase title: Case Title: Shital Fibers Limited versus Commissioner of Income Tax (and connected cases)Case no.: CIVIL APPEAL NO.14318 OF 2015Answering a reference, the Supreme Court held that deductions under Sections 80-IA/80-IB of the Income Tax Act need not reduce the gross total income before computing deductions under other provisions like Section 80-HH for export profits.The bench comprising Justices Abhay S Oka, Ahsanuddin Amanullah and AG Masih delivered the verdict while answering a reference after a matter was referred to the larger bench due to split verdict in Assistant Commissioner of Income Tax v. Micro Labs Limited (2015) on the issue of whether deductions claimed under Section 80-IA/80-IB (for industrial profits in certain categories) and Section 80-HHC (for export profits) could be cumulatively allowed.Supreme Court Upholds Kerala's Luxury Tax On Cable TV As Constitutionally ValidCase Title: THE STATE OF KERALA AND ANR. Versus ASIANET SATELLITE COMMUNICATIONS LTD. AND ORS.Case no.: CIVIL APPEAL NO.9301 OF 2013The Supreme Court today (May 22) upheld the constitutional validity of the Kerala luxury tax and allowed Kerala's appeal, affirming the state's power to tax cable TV services under Entry 62 of List II (State List) as “luxury.”The Court clarified that the service tax imposed by the Finance Act on broadcasting services under Entry 97 of List I (Union List) does not conflict with state taxes on entertainment, and therefore, no constitutional overlap exists between central and state levies.Supreme Court Upholds Dual Taxation On Broadcasting, Says States Can Levy Entertainment Tax Alongside Centre's Service TaxCase Title: THE STATE OF KERALA AND ANR. Versus ASIANET SATELLITE COMMUNICATIONS LTD. AND ORS. (and connect cases)Case no.: CIVIL APPEAL NO.9301 OF 2013While upholding the State's authority to impose entertainment tax on broadcasting services like cable TV, digital streaming, and OTT platforms, the Supreme Court held that both the Centre and the State are empowered to levy service tax and entertainment tax, respectively, on assessees such as cable operators and entertainment service providers.The bench of Justices BV Nagarathna and N Kotiswar Singh held that broadcasting constitutes a form of communication, while entertainment falls under the category of luxuries as outlined in Entry 62 of List II. Applying the doctrine of pith and substance, it reasoned that entertainment can be delivered through means of communication, making broadcasting merely incidental to it. As such, it does not directly encroach upon matters within the Union List. Consequently, both taxes function within their respective constitutional spheres, allowing the Centre and the State to concurrently impose service tax and entertainment tax on the activities undertaken by an assessee.HIGH COURTSBombay HCBombay High Court Quashes NBW Issued Against Actor Arjun Rampal Over 2019 Tax Evasion CaseCase Title: Arjun Amarjeet Rampal vs Income Tax DepartmentCase no.: Writ Petition 2579 of 2025The Bombay High Court recently quashed and set aside a 'non-bailable warrant' issued by the Ballard Pier Magistrate Court in the city against Bollywood actor Arjun Rampal in a 2019 Income Tax evasion case.Vacation Court judge Justice Advait Sethna noted that the order passed by the Additional Chief Metropolitan Magistrate Court in Ballard Pier was 'cryptic' and passed 'without application of mind' as the non-bailable warrant was issued in a case pertaining to a 'bailable offence.'Delhi HCIncome Tax Act Doesn't Contemplate Hiatus Between Handing Over & Receipt Of Documents By AO Of Non-Searched Entity: Delhi High CourtCase title: Carol Infrastructure Private Limited v. Assistant Commissioner Of Income Tax, Central Circle 27, Delhi & Anr.Case no.: W.P.(C) 3927/2025The Delhi High Court made it clear that Section 153C of the Income Tax Act, 1961 “does not contemplate a hiatus” between handing over and receipt of information or documents pertaining to a non-searched entity.A division bench of Justices Vibhu Bakhru and Tejas Karia observed, “The main body of Section 153C(1) of the Act and the proviso do not contemplate a hiatus between the handing over of the documents by the AO having jurisdiction over such person and receipt of the same by the AO having jurisdiction over person other than the searched person.”Indo-Swiss DTAA | Period Of Reference Can't Be Excluded From Limitation U/S 153B Income Tax Act If Reference Is Invalid: Delhi High CourtCase title: The Pr. Commissioner Of Income Tax -Central -1 v. Sneh Lata Sawhney (and batch)Case no.: ITA 758/2023The Delhi High Court has made it clear that Clause (ix) of the Explanation to Section 153B of the Income Tax Act 1961 cannot be invoked to exclude the period of reference under the Indo-Swiss DTAA, if the reference itself is invalid.A division bench of...

Tax Weekly Round-Up: May 19 - May 25, 2025

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