Income Tax Addition On Unaccounted Sales And Purchases Can't Be Solely Based On Loose Slips: ITAT Bangalore

The Banglore Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition of Rs. 1.36 crore on alleged unaccounted sales and purchases that were solely based on loose slips.The bench of Keshav Dubey (Judicial Member) and Chandra Poojari (Accountant Member) has observed that the onus lies upon the Department to collect cogent evidence to corroborate the notings on the loose sheets. The additions cannot be made merely on the basis of notings on the loose sheet papers, which...

Delay In Approaching Revision Authority Under Income Tax Act Can't Be Condoned: Kerala High Court

The Kerala High Court has held that the delay in approaching the revision authority under the Income Tax Act cannot be condoned.The bench of Justice A.K. Jayasankaran Nambiar and Justice Syam Kumar V.M. has observed that it was the same aspect of delay or limitation that prevented the Department from re-assessing the income of the appellant for the assessment years 2004–2005 and 2005–2006, respectively. The bench found that during the years the appellant had declared the profit on the sale of...

Failure Of Assessee To Update E-Mail Address With Dept.; Kerala High Court Dismisses Writ Petition Challenging Demand Notice

The Kerala High Court has dismissed the writ petition challenging the assessment order and notice of demand on the grounds that they were issued in violation of the principles of natural justice.The bench of Justice Murali Purushothaman has observed that when the petitioner-assessee is at fault, as they did not update or change the email address with the Department, they cannot legitimately complain that there is a violation of the principles of natural justice.The petitioner/assessee company is...

Prerogative Of Govt. To Fix Income Limit For Encashment Of Earned Leave Salary For Income Tax Exemption: Kerala High Court

The Kerala High Court has held that it is the prerogative of the government to fix the limit of income from the encashment of earned leave salary for the purposes of exemption from payment of income tax. Unless the government issues a notification fixing the limit of income for earned leave salary, an employee cannot claim exemption from payment of income tax on the encashment of earned leave for up to 300 days.The bench of Justice Murali Purushothaman has observed that the last notification was...

CESTAT Cases Weekly Round-Up: 09 To 15 June 2024

Redemption Fine And Penalty Can Be Imposed On Re-export Of Prohibited Goods: CESTATCase Title: M/s. Scania Commercial Vehicles India Pvt. Ltd. Versus Commissioner of CustomsThe Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that a redemption fine and penalty can be imposed on the re-export of prohibited goods. Section 125 enables the Customs Officer to grant an option to the owner or the person from whose possession the goods have been seized to pay a fine...

ITAT Cases Weekly Round-Up: 09 To 15 June 2024

Income From Reselling Of Subscription Based Product Is Royalty: ITATCase Title: Gartner Ireland Ltd. Versus DCITThe Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the income from the reselling of subscription-based products is royalty.Income Tax Deduction Allowable On Expenditure Incurred On Warranty Claim: ITATCase Title: Grey Orange India Pvt. Ltd. Versus ACITThe Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the income tax deduction is allowable on...

Direct Tax Cases Weekly Round-Up: 09 To 15 June 2024

Delhi High CourtUnsettled Claims As Well As IBNR Would Amount To Contingent Liabilities; Section 37 Deduction Allowable: Delhi High CourtCase Title: Principal Commissioner Of Income Tax 1 Versus M/S Care Health Insurance LimitedCitation: 2024 LiveLaw (Del) 707The Delhi High Court has held that the deduction under Section 37 of the Income Tax Act is allowable on unsettled claims as well as Incurred But Not Reported (IBNR), which would amount to contingent liabilities.Reassessment On Non-Searched...

Provisions For Unsettled Outstanding & IBNR Claims Allowable U/s 37 Being Ascertained Liabilities: Delhi High Court

While upholding ITAT's decision deleting disallowance of provisions for unsettled outstanding claims and 'Incurred But Not Reported' (IBNR) claims of health insurance company, the Delhi High Court held that provisions for unsettled outstanding and IBNR claims are not contingent liabilities, and hence allowable u/s 37 of Income tax Act. Section 37 of Income Tax Act states that any business expenditure, excluding capital expenditure and the individual's personal expenses, that is spent or...

Assessments Concluded U/s 153A Without Mandatory Approval U/s 153D Would Be Void: Delhi ITAT

The Delhi ITAT allowed the Assessee's appeal challenging assessments completed u/s 153A r/w Section 143(3) as void, in absence of mandatory approval u/s 153D. Section 153D of the Income Tax Act, mandates that no order of assessment or reassessment shall be passed by an AO below the rank of Joint Commissioner without the prior approval of the Joint Commissioner or a higher-ranking officer. The Division Bench comprising G.S. Pannu (Vice President) and Anubhav Sharma (Judicial...

Non-Payment Of Tax Due To Uncertain Legal Position Existing At Time Of Filing Return Is Outside Scope Of 'Mis-Reporting': Delhi HC Deletes Penalty U/s 270A

While quashing a show cause notice issued by the Department for initiation of penalty proceedings u/s 270A in a vague manner, the Delhi High Court held that categorical finding of 'mis-reporting/ under-reporting' is essential for levy of penalty u/s 270A. The High Court also set aside an order dismissing immunity claimed by the assessee u/s 270AA and dropped the penalty proceedings u/s 270A due to AO's failure to allude to specific charge of misreporting or under-reporting in show cause...

Absence Of 'FTS' In Treaty Is No Basis To Tax Technical Services Rendered To AE, In Absence Of Its PE In India: Delhi ITAT

The Delhi ITAT ruled that though income received by a non-resident entity towards services provided to Indian associate enterprises (AE) are in nature of 'fees for technical service' (FTS), but same cannot be taxed in India simply in absence of FTS clause under respect treaty provisions. The Division Bench comprising G.S. Pannu (Vice-President) and Anubhav Sharma (Judicial Member) also clarified that the services provided to AE are in nature of business activity covered under Article...

Reassessment On Non-Searched Entity Is Governed By Limitation In First Proviso To Sec 149(1) R/w Sec 153C & 153A: Delhi High Court

While quashing the reassessment notice issued to the Assessee, pursuant to a search operation conducted against a third party, the Delhi High Court held the same to be barred by limitation under first proviso to Section 149(1) read with Section 153C & Section 153A of Income tax Act. The High Court rejected the AO's contention that Section 148 notice would not be beyond the limitation period as provided under the first proviso to Section 149 when computed from the date of actual...