Direct Tax/ Income Tax Archive

Notice under Section 263 no longer holding the charge, absent express Section 120(2) authorization is void ab initio cannot be invoked where the Assessing Officer has conducted the enquiry and formed a plausible view.

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ITAT, Delhi: Mukul Rohatgi v. ACIT, Circle-61(1), New Delhi Background: The assessee, a Senior Advocate and former Attorney General of India, was assessed under Section 143(3) r/w Section 144B for AY 2022-23 vide order dated 28.03.2024. The PCIT, Delhi-12 invoked revisional jurisdiction under Section 263, issuing a show cause notice dated 27.02.2026 and passing …
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Whether the retrospective amendment to Section 9 of the Income Tax Act, 1961 brought by the Finance Act, 2010 (with effect from 01.06.1976) is valid and applicable retrospectively, and whether the twin conditions laid down by the Supreme Court in Ishikawajima-Harima Heavy Industries Ltd. v. DIT, namely that services must be both rendered in India and utilised in India, continue to govern the taxability of fees for technical services under Section 9(1)(vii).

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Karnataka High Court: Jindal Thermal Power Company Limited v. DCIT (TDS) The Appellant made payments to REOL, BEI, and EOI under 1995 contracts for offshore equipment supply and related services. The ACIT (TDS) raised demands under Section 201(1) for AYs 1996-97 and 1997-98 for failure to fully deduct tax, which were upheld by the …
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Bombay High Court holds co-operative banks exempt from TDS on interest paid to non-member co-operative society depositors

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Bombay High Court: Citizen Credit Co-Operative Bank Ltd. and Ors. v. ITO Hon’ble Court interpreted Section 194A(3)(v) of the Act, which exempts certain categories of interest payments from TDS. The dispute was whether the exemption available when one co-operative society pays interest to another continues to apply even where the payer is a cooperative …
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Gujarat High Court holds that absence of income booked against project expenditure does not disentitle deduction of that expenditure

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Gujarat High Court: PCIT 3, Ahmedabad v. Gujarat State Road Development Corporation Ltd. The assessee, engaged in building road infrastructure projects, filed its return for A.Y. 2011-12, and the Assessing Officer disallowed amount of project expenses on the ground that no corresponding income had been booked against them. The addition deleted was by the …
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Telangana High Court holds share premium received from a non-resident shareholder is a capital receipt, not taxable income

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Telangana High Court: Escientia Advanced Sciences Pvt. Ltd. v. ACIT  During the relevant A.Y., petitioner issued equity shares to its Mauritius based shareholder and received share premium. It reported the transaction through Form PAS-3 filed with the ROC and reflected it in its audited financial statements. The IT Dept., however, proceeded on the premise …
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Where the Assessing Officer of the searched person and the other person is the same, the limitation for completing assessment under Section 153C is to be computed from the date of transfer of jurisdiction under Section 127, and any assessment made beyond the prescribed period is liable to be quashed as barred by limitation.

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ITAT, Delhi: Sudhir Aggarwal v. DCIT, Central Circle-28 New Delhi Background: A search under Section 132 was conducted on the Alankit Group on 18.10.2019, pursuant to which proceedings under Section 153C were initiated against the assessee on the basis of seized material alleged to pertain to him. The assessee’s case was transferred to the …
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Whether a foreign shipping enterprise operating round-trip cruise services with hospitality and entertainment facilities is engaged in the business of carriage of passengers so as to be entitled to presumptive taxation under Section 44B of the Income-tax Act, 1961.

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Supreme Court: Director of Income Tax (IT)-I v. Superstar Libra Ltd. BACKGROUND The assessee, acting as an agent of Superstar Libra Ltd. (SLL), a non-resident shipping company, sought a certificate under Section 195 by claiming that the income of SLL was taxable under Section 44B at the presumptive rate of 7.5% of the gross …
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Section 115BB: ITAT Bangalore holds only net winnings from online gaming are taxable

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ITAT Bangalore: Arakere Channappa Vishwanath v. ITO The Tribunal allowed the assessee’s appeal, holding that the Assessing Officer erred in taxing the entire gross gaming receipts of Rs 2.33 crore under Section 115BB. The assessment was initiated on the basis of information received from the Compliance Risk Information Unit and details furnished by Gameskraft …
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Section 56(2)(ix): Karnataka High Court holds that business advances for procurement of stock-in-trade cannot be taxed as forfeited advances

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Karnataka High Court: Pr. Commissioner of Income Tax, Koramangala, Bangalore & Anr. v. Shri Ravi Shankar Shetty The Court dismissed the Revenue’s appeal, holding that Section 56(2)(ix) was inapplicable where the advances were received for procuring land as stock-in-trade and there was no forfeiture of such advances. The assessee, engaged in the business of …
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Section 37(1): Delhi High Court allows deduction of FCCB issue expenses as revenue expenditure

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Delhi High Court: Pr. Commissioner of Income Tax v. SpiceJet Ltd. The Court dismissed the Revenue appeals, holding that expenditure incurred in connection with the issue of Foreign Currency Convertible Bonds (FCCB’s) is allowable as revenue expenditure under Section 37(1) of the Income Tax Act, 1961. The Assessee had claimed deduction of expenditure incurred …
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