Tax
Mark-To-Market Loss, Loss On Forward Contracts, Loss On Forward Premium Account Not Speculative In Nature, ITAT Deletes Addition
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition and held that mark-to-market losses, losses on forward contracts, and losses on forward premium accounts are not speculative in nature.The bench of Yogesh Kumar U.S. (Judicial Member) and Pradip Kumar Kedia (Accountant Member) has observed that CIT(A) has committed no error in deleting the addition, observing that the forward mark contracts on foreign currency are incurred during the normal course of...
Marketing/Recruitment/Referral Consultant To Foreign Universities On Principal To Principal Basis Is Not 'Intermediary Service': AAR
The Telangana Bench of the Authority of Advance Ruling (AAR) has held that marketing, recruiting, or referring consultants to foreign universities on a principal-to-principal basis is not 'intermediary service'.The bench of S.V. Kasi Visweswara Rao and Sahil Inamdar observed that the supplier is located in India while the recipient of services, i.e., foreign colleges and universities, is located outside India. Since the activity of the applicant supplier is an independent service of 'marketing,...
Unexplained Expenditure Addition Merely Based On CBIC Instruction Not Sustainable: Delhi High Court
The Delhi High Court has deleted the addition for unexplained expenditure, which was based on the instruction issued by the Central Board of Indirect Taxes and Customs (CBIC).“Merely proceeding on the basis that CBIC is an apex body and therefore, information provided by it cannot be doubted, without even identifying or meaningfully analyzing such information, is wholly insufficient to proceed to make an addition,” the bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju observed.The...
Rajasthan High Court Dismisses Petition Challenging GST Demand On Exhibition Services
The Jaipur Bench of the Rajasthan High Court has dismissed the petition challenging the GST demand on exhibition services.The bench of Justice Pankaj Bhandari and Justice Shubha Mehta did not find any reason to entertain the writ petition as the services received outside India are already taxable at the hands of the receiver of services, who is a registered person in taxable territory, i.e., India.The petitioner has assailed the order dated November 30, 2023, passed by the respondents-department...
Investment Made From Share Premium Without Any Noticeable Business Activity, Legitimacy Of Income Not Established: Calcutta High Court
The Calcutta High Court has held that the source of investments by those two companies is also the share capital and share premium raised by them while issuing their own shares to other closely held companies, and those companies had no noticeable business activities.The bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya, while upholding the ITAT's order, noted that the effects of the documents were considered by the tribunal, and it was not satisfied with the genuineness...
Labelling and Re-Labelling of Containers Qualifies as 'Manufacture' for CENVAT Credit Under Excise Act: Supreme Court
The Supreme Court has held that labelling or re-labelling of containers amounts to 'manufacture' under the Central Excise Act for availing cenvat creditThe bench of Justices A. S. Oka and Ujjal Bhuyan was pronouncing its judgment on an appeal by the revenue under Section 35L(1)(b) of the Central Excise Act, 1944 against a 2015 order passed by the CESTAT, Mumbai.By the impugned order, CESTAT has allowed the appeal filed by the respondent holding that as per Note 3 to Chapter 18 of the Central...
Monetary Limit Of Rs. 1 Crore For Appeals To High Court; Delhi High Court Dismisses Dept's Appeal
The Delhi High Court has dismissed the challenging redemption fine of Rs. 40 lakhs, citing instructions issued by the Central Board of Indirect Taxes and Customs (CBIC), which set the monetary limit of Rs. 1 crore for appeals to the high court.The Bench of Justice Sanjeev Sachdeva and Justice Ravinder Dudeja has observed that the issue involved is with regard to the redemption fine of Rs. 40 lakhs and penalty of Rs. 20 lakhs, which cumulatively are below the threshold limit. The bench was of the...
Unexplained Expenditure Addition Merely Based On CBIC Instruction Not Sustainable: Delhi High Court
The Delhi High Court has deleted the addition for unexplained expenditure, which was based on the instruction issued by the Central Board of Indirect Taxes and Customs (CBIC).“Merely proceeding on the basis that CBIC is an apex body and therefore, information provided by it cannot be doubted, without even identifying or meaningfully analyzing such information, is wholly insufficient to proceed to make an addition,” the bench of Justice Vibhu Bakhru and Justice Tara Vitasta Ganju observed.The...
AO Can't Proceed With Assessment In Absence Of Section 127 Transfer Order: Delhi High Court
The Delhi High Court has held that the Assessing Officer cannot proceed with assessment in the absence of a transfer order under Section 127 of the Income Tax Act.The bench of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav has observed that once the case of the assessee is centralized, then the transfer of the case of the assessee to another AO would not be permissible without a decentralization order or transfer order under Section 127 of the Income Tax Act, as contrary to such a...
Show Cause Notice Not Adjudicated For Nearly 14 Years; Delhi High Court Issues Notice To Dept.
A division bench of the Delhi High Court, comprising Justice Sanjeev Sachdeva and Justice Ravinder Dudeja, has issued the notice to the department in a petition assailing the jurisdiction to adjudicate the Show Cause Notice, which has not been adjudicated for nearly 14 years.The petitioner/assessee is a manufacturer of Pan Masala containing tobacco commonly known as Gutkha, commercially engaging under the brand name "Pukar."The searches were conducted at three premises of the petitioner by...
S.144B(6) Income Tax Act | If Assessee “Requests” Then Opportunity Of Personal Hearing Is Mandatory, Not Optional: Allahabad High Court
The Allahabad High Court has held that opportunity of personal hearing is mandatory under Section 144B(6)(vii) and (viii) of the Income Tax Act, 1961 when show cause notice is issued regarding why assessment may not be completed as proposed. The Court held that once the assesee “requests” for an opportunity of personal hearing, it becomes incumbent on the Assessing Authority to grant that opportunity under Section 144B(6)(viii).Section 144B provides for Faceless Assessment. Section 144B(6)(vii)...
UPVAT | Computation Of Correct ITC Be Examined By Assessing Authority Not Later Than Stage Of Making Regular Assessment Order: Allahabad High Court
The Allahabad High Court has held that computation of correct input tax credit can only be done till the passing of the regular assessment order by the Assessing Authority and not at a later stage. The Court held that reverse input tax credit is neither a 'rate of tax' nor a 'turnover' which can be subjected to reassessment under Section 29 of the Uttar Pradesh Value Added Tax Act, 2008.Section 29 of the UPVAT Act empowers the Assessing Authority to initiate reassessment proceedings against an...