Tax Cases Weekly Round-Up: 9 July To 15 July, 2023

Supreme Court Revenue Dept Can't Recover Refunded Cess Amount Because Refund Was Based On A Judgment Which Was Later Overruled : Supreme Court Case Title: Commissioner of CGST and Central Excise (J and K) vs M/s Saraswati Agro Chemicals Pvt. Ltd. Citation : 2023 LiveLaw (SC) 522 The Supreme Court has upheld the decision of the Jammu and Kashmir and...

Capital Gain Exemption Allowable On Construction Of Residential House Completed Within 3 Years: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), has held that the claim of capital gain exemption under Section 54 of the Income Tax Act, 1961 on construction of residential house completed within 3 years is allowed and removed the penalty levied under Section 271(1)(c) of the Income Tax Act. The assessee, Hemant Shridhar Phatak, in its return of income claimed exemption...

ITAT Disallows Interest Paid On Loan Taken For Paying Compensation To Family Members Pursuant To Arbitral Award On Family Settlement

The Panaji Bench of the Income Tax Appellate Tribunal (ITAT) has disallowed the interest paid on a loan that was taken for paying compensation to the assessee’s family members pursuant to an arbitral award on family settlement.The bench of R.S. Syal (Vice President) and Partha Sarathi Chaudhury (Judicial Member) has observed that the expenses incurred by the assessee for paying interest on...

Bank Guarantee Rates Cannot Be Considered For Benchmarking Corporate Guarantee Fee: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that bank guarantee rates cannot be considered for benchmarking corporate guarantee fees.The bench of Kavitha Rajagopal (Judicial Magistrate) and Prashant Maharishi (Accountant Member) has remanded the file back to the assessing officer with a direction to the assessee to show the benchmarking of corporate guarantee fees...

Business Model Explains Mismatch Between Form 26AS And Actual Income: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition on the grounds that the business model explains the mismatch between Form 26AS and actual income.The bench of Sandeep Singh Karhail (Judicial Member) and Prashant Maharishi (Accountant Member) has observed that the income of the assessee is not the rental income but the income earned in the business of...

Foreign Assignment Allowance Received For The Services Rendered Outside India Can’t Be Taxed In India: ITAT

The Hyderabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that foreign assignment allowance received by the assessee for services rendered outside India could not be taxed in India.The bench of Rama Kanta Panda (Vice President) and K. Narasimha Chary (Judicial Member) has observed that the income derived by a non-resident for performing services outside India and the...

Payment Made For Acquiring Membership In A Social Club Can’t Be Allowed As Business Expenditure: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has observed that payments made for acquiring membership in a social club could not be allowed as business expenditure when there was no evidence to prove that membership in the social club was acquired for entertaining customers by the assessee.The bench of Vikas Awasthy (Judicial Member) and Om Prakash Kant (Accountant Member)...

Tax Cases Weekly Round-Up: 2 July To 8 July, 2023

Supreme Court CTO For Enhanced Production Capacity Issued After SC’s Order Fixing Total Import Limit; Importer Not Entitled To Proportionate Increase In Import Quota: Supreme Court Case Title: M/s Sanvira Industries vs Rain CII Carbon (Vizag) Ltd. & Ors Citation : 2023 LiveLaw (SC) 497 The Supreme Court has upheld the decision of the Delhi High Court which set...

Compensation Paid By Builder For Delay In Handing Over Possession Of Flat Is Part Of Work-In-Progress: ITAT Allows Deduction

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that compensation paid by a builder for the delay in handing over possession of a flat should be considered part of work-in-progress. As a result, the ITAT allowed the deduction of the compensation. The case pertains to Mr. Jayant Hari Mulay, a promoter and builder who had purchased a plot of land for the construction...

No Tax Can Be Levied On The Principle Of Estoppels: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that no tax can be levied on the principle of estoppel. Just because the Assessee has shown the receipt or income in the wrong head does not make him liable for tax.The bench of N. K. Choudhry (Judicial Member) has observed that management licence fees are taxable under the heading "Income from Business" and not "Income...

ITAT Deletes Disallowance On Ocean Freight Charges Paid To Korean AE

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the disallowance of ocean freight charges paid to Korean-associated enterprises (AE).The bench of Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) has observed that as per Article 8 of the DTAA of India-Korea, the rentals of ships are in the nature of profit from the operation of ships or...

Income From The Sale Of RECs Is Capital In Nature, Is Not Subject To Taxation: ITAT

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT) has held that the income from the sale of Renewable Energy Certificates (RECs) is classified as capital in nature and is not subject to taxation.The bench of Anikesh Banerjee (Judicial Member) and M. L. Meena (Accountant Member) observed that all the modes of incentives were in the nature of entitlements received to improve...