No Addition Is Permitted U/S 41(1) In Absence Of Evidence Showing Cessation Of Liability: Delhi ITAT

The New Delhi ITAT held that unless and until there is evidence to show that the liability has ceased to exist, there cannot be any addition u/s 41(1) of the Income Tax Act, and hence, deleted the addition made by AO. As per Section 41(1) of the Income tax Act, where an allowance or deduction has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee, and subsequently during any previous year the assessee has obtained,...

Mere Difference Of Opinion With AO Is No Basis To Exercise Revisionary Power U/s 263: Chandigarh ITAT Confirms Sec 80P Deduction Granted By AO

The Chandigarh ITAT quashed the revision order u/s 263 holding that application of mind is discernible from examination of the record and that “the power under Section 263 of the Act was exercised on the basis of a mere difference in opinion with the AO, rendering such exercise of revisionary power to be invalid”. Section 263 of the Income Tax Act is a provision that empowers the Commissioner of Income Tax to revise any order passed by an assessing officer if the Commissioner believes...

Payment Made Overseas For Providing Information On Tariff Change Is Not 'FTS' And Hence Does Not Warrant TDS Deduction U/s 195: Delhi ITAT

The New Delhi ITAT held that no tax is deductible at source u/s 195 on payments made to overseas logistics company for rendition of logistics services, as such services cannot be treated as fees for technical services (FTS) as defined in Explanation 2 to Section 9(1)(vii). Finding that the sole basis of the Revenue for holding that the payment made to overseas logistics company is towards consultancy services is that as per one of the terms of contract executed between Assessee and the...

Over Dimensional Cargo Can't Be Penalized For Reaching Earlier Than Estimated Time: Allahabad High Court

The Allahabad High Court has held that Over Dimensional Cargo cannot be penalized by the authorities for reaching its destination in less time than estimated by travelling at a higher speed when there is no intention to evade tax.Clause 2.4 of the Circular issued by Commissioner, State Tax dated 17.01.2024 provides that Over Dimensional Cargo cannot be detained and penalty cannot be imposed only because the goods have reached the intended place earlier than the estimated time. “The mere fact...

Excise-Duty Not Payable On Trade Discount Offered To Bulk Buyer Of CNG: CESTAT

The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that excise duty is not payable on trade discounts offered to bulk buyers of compressed natural gas (CNG).The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that no evidence is forthcoming that the discount offered by Mahanagar Gas Ltd. (appellant-assessee) to Brihanmumbai Electric Supply and Transport (BEST) was in lieu of the infrastructural facilities extended...

Impact Of Working Capital Adjustment On Outstanding Trade Receivable Must Be Verified Before Making ALP Adjustment Qua Notional Interest: Ahmedabad ITAT

The Ahmedabad ITAT remitted the issue of transfer pricing adjustment regarding interest on overdue trade receivables in case of entity engaged in manufacturing of pharmaceutical products, while emphasizing that no further adjustment is warranted on outstanding receivables from AEs once working capital adjustment is already factored in. The credit period means the time period provided to the AEs/Non-AEs to clear their outstanding dues towards the export proceeds. The dispute over trade...

[Income Tax Act] Proceedings U/S 148A Summary In Nature, Assessing Authority To Only See If It Is “Fit Case” For Reassessment: Allahabad HC

The Allahabad High Court has held that proceedings under Section 148A of the Income tax Act, 1961 are summary in nature. The Court held that at the stage of passing order under Section 148A(d), the Assessing Authority has to only see if it is a “fit case” for initiation of reassessment proceedings or not.The Court held that the Assessing Authority need not go into the correctness of the material but only record its satisfaction as to the relevancy of the material for assuming jurisdiction for...

Rectification Order Passed In Name Of Non-Existent Entity Despite Having Knowledge Of Its Merger, Is Invalid: Mumbai ITAT

The Mumbai ITAT held that rectification order passed in the name of a non-existent entity, despite informing Revenue regarding its merger, is non-est in the eyes of law. The Division Bench comprising Prashant Maharishi (Accountant Member) and Raj Kumar Chauhan (Judicial Member) observed that “the internal correspondence of the Revenue also shows that the Assessing Officer was aware about the merger. Still the Assessing Officer chooses to pass the rectification order in the name of a...

Failure To Cite Judgment Does Not Render Original Judgement Flawed: Allahabad High Court

The Allahabad High Court has held that mere failure to cite a judgement does not, in and of itself, render the original judgement flawed.The bench of Justice Shekhar B. Saraf has observed that the review jurisdiction is not a panacea for addressing every perceived deficiency or oversight in the original judgement; rather, it is a narrow avenue reserved for rectifying errors glaringly evident on the face of the record. Failure to cite a particular judgement does not automatically invalidate the...

Interest Received By Overseas Head Office From Its Indian Permanent Establishment Is Not Taxable In View Of Treaty Benefits: Mumbai ITAT

Referring to the provision of Article 12 and 7 of the India-France DTAA which demonstrate that interest payment made by the permanent establishment to the head office are not taxable in the hands of the head office, the Mumbai ITAT held that interest received by the overseas head office (HO) from its Permanent Establishment (PE) is not taxable under beneficial provision of DTAA. The permanent establishment concept creates a minimum threshold of business presence below which the source ...

Franchise Agreement Granted Non-Exclusive Licence Rather Than Transfer Of Right To Use Goods, VAT Not Payable: Allahabad High Court

The Allahabad High Court has held that the franchise agreement granted a non-exclusive licence rather than a transfer of the right to use goods and the transaction does not attract Value Added Tax under the Uttar Pradesh Value Added Tax Act (UPVAT Act).The bench of Justice Shekhar B. Saraf has observed that the respondent-department had received royalty amount from various dealers under the franchise agreement and service tax has been duly paid by it on the same. If the payments have been...

Option Once Exercised For A Financial Year May Not Be Withdrawn Midway: Allahabad High Court

The Allahabad High Court has held that an option, once exercised for a financial year, may not be withdrawn midway.The bench of Justice Saumitra Dayal Singh and Justice Donadi Ramesh has observed that the only recourse that applicant may have taken may be to apply to the jurisdictional authority to discontinue the benefit of the compounding scheme from the beginning of the next financial year, i.e., 1.4.1998. For the option to be exercised, the applicant ought to have made that application...