Reassessment Notice Can't Be Based On 'General Information' From Investigation Wing Of Income Tax Dept: Delhi High Court

The Delhi High Court has made it clear that the Income Tax Department cannot issue reassessment notice to an assessee based on general information shared by its Investigation Wing, until the Assessing Officer forms definite 'reason to believe' escapement of income.A division bench of Justices Vibhu Bakhru and Tejas Karia observed,“It is clear from the information received from the...

Valuation Of Company's Unquoted Equity Shares By 'Discounted Cash Flow' Method Permissible Under Income Tax Rules: Delhi High Court

The Delhi High Court recently rejected the appeal preferred by the Income Tax Department against an ITAT order allowing the valuation of a software company's unquoted equity shares by discounted cash flow [DCF] method.In doing so, a division bench of Justices Vibhu Bakhru and Tejas Karia held that DCF method “is one of the methods that can be adopted by the Assessee under Rule 11UA(2)(b) of...

AO Cannot Alter Net Profit In Profit & Loss Account Except Under Explanation To S.115J Of Income Tax Act: Bombay High Court

The Bombay High Court stated that assessing officer do not have the jurisdiction to go behind net profit in profit and loss account except as per explanation to Section 115J Of Income Tax Act. The Division Bench consists of Chief Justice Alok Aradhe and Justice M.S. Karnik observed that “Section 115J of the 1961 Act mandates that in case of a company whose total income as...

[Income Tax] Breach Of Article 265 Cannot Be Alleged Based On Inconclusive Opinion By Assessing Officer: Bombay High Court

The Bombay High Court stated that a breach of Article 265 of the constitution cannot be alleged or sustained based upon a tentative or inconclusive opinion formed by assessing officer. The Division Bench consists of Justices M.S. Sonak and Jitendra Jain stated that “If the communication dated 29 November 2018 is an order, it being like a preliminary, prima facie, or interlocutory...

Does Payment For Transponder Services Constitute 'Royalty' U/S 9(1)(vi) Of Income Tax Act? Bombay High Court Asks CIT To Decide

The Bombay High Court has asked the Commissioner of Income Tax to decide whether payment for transponder services constitutes 'royalty' under Section 9(1)(Vi) of Income Tax Act. The Division Bench of Justices M.S. Sonak and Jitendra Jain observed that “the authorities have held the payment to constitute 'royalty' under the domestic law as well as under the Treaty, but by holding...

Assessing Officer Can't Act As Prosecutor, Judge And Executor At The Same Time: Himachal Pradesh High Court

Himachal Pradesh High Court held that the Assessing officer must provide the university a fair opportunity to present its case and can't take law in his own hand by acting as a Prosecutor, Judge and Executor at the same time.Justice Tarlok Singh Chauhan & Justice Sushil Kukreja: “The Assessing officer took the law into his own hand and played as a Prosecutor, Judge and Executor at the...

Amount Of Subsidy Received By Assessee From RBI Cannot Be Treated As 'Interest' Chargeable U/S 4 Of Income Tax Act: Bombay High Court

The Bombay High Court held that the amount of subsidy received by the Assessee from RBI cannot be treated as 'interest' chargeable under Section 4 of Income Tax Act. The Division Bench of Chief Justice Alok Aradhe and Justice Sandeep V. Marne stated that “the amount of subsidy received by the Assessee is not relatable in loan or advance given by the assessee to the RBI and...

No Provision To Reject Appeal On Non-Appearance Of Assessee, Must Be Decided By Mandate U/S 250(6) Of Income Tax Act: Kerala High Court

The Kerala High Court stated that there is no provision of rejecting the appeal merely on non-appearance of assessee and the appellate authority must decide an appeal by strictly following the mandate contemplated under Section 250(6) of the Income Tax Act, 1961. The Bench of Justice Ziyad Rahman A.A. observed that “evidently, going by Subsection 6 of Section 250, no other meaning...

Notice U/S 148 Of Income Tax Act Can't Be Issued Without Giving Proper Reasons: Himachal Pradesh High Court

Himachal Pradesh High Court held that a notice under Section 148 of Income Tax 1961 for initiation of reassessment proceedings, can't be issued by the assessing officer without giving proper reasons.“Section 148 enables the Assessing Officer to initiate reassessment proceedings where income chargeable to tax is believed to have escaped assessment”. Justice Tarlok Singh Chauhan &...

[Income Tax] Delhi HC Larger Bench To Decide On Retrospective Applicability Of Extended Limitation For Reassessment In Cases Involving Foreign Assets

A larger bench of the Delhi High Court will decide whether Section 149(1)(c) of the Income Tax Act 1961, inserted vide a 2012 amendment to provide an extended period of reassessment for cases involving foreign assets, applies retrospectively.Section 149(1)(c) prescribes that reassessment notice in respect of any income in relation to any asset located outside India, which had escaped...

Open Terrace/Portico Excluded While Computing Built-Up Area To Determine Eligibility For Deduction U/S 80-IB Of IT Act: Telangana High Court

The Telangana High Court stated that open terrace/portico excluded while computing build-up area for determining eligibility for deduction under section 80-IB of Income Tax Act. The Bench consists of Justices P. Sam Koshy and Narsing Rao Nandikonda was addressing the issue of whether the terrace / balcony that is in the form of open to sky or portico / porch area without walls...

Disallowance U/S 143(1)(a) Of Income Tax Act Inapplicable When Issue Involved Is Pending Before Supreme Court: Chhattisgarh High Court

The Chhattisgarh High Court has held that an Assessing Officer (AO) cannot apply Section 143(1)(a) of the Income Tax Act, 1961 (the 1961 Act), to disallow a claim where the issue involved, such as the deductibility of employees' contributions to EPF/ESI under Section 36(1)(va), was pending consideration before the Supreme Court in Checkmate Services Pvt. Ltd. v. CIT [(2023) 6 SCC 451].In...