Recent Income tax Judgement

 

·         Mumbai Tribunal allows tax holiday benefit to an amalgamated company with respect to eligible undertakings vested with it pursuant to an amalgamation post 1 April 2007

 

·         Delhi ITAT allows education cess as allowable deduction in case of LG soft India.

 

·         Mumbai ITAT allowed depreciation on spectrum fee in case of  Vodafone. 

 

The Chandigarh Bench of ITAT  has deleted the Disallowance as prior period expenses as assessee paid and accounted for the expenses in the books of accounts

 

·         The Jaipur Bench of ITAT  has held that the depreciation being statutory allowance cannot be restricted on the basis of personal use.

 

·         The ITAT, Chennai bench has held that the reimbursement of expenses cannot be treated as income and therefore, the provisions of TDS cannot be applicable to those payments for the purpose of the Income Tax Act, 1961

 

·         The ITAT, Delhi bench, allowed deduction to the assessee, the club subscription /expenses incurred to solicit the foreign buyers except the amount spent on cigarettes and wine. 

 

·         Ahmedabad ITAT has added another judgement in the plethora of judicial precedents in relation to taxability of capital receipt in the case of Ganeshsagar Infrastructure Pvt. Ltd. [TS-1183-ITAT-2021(Ahd)]. In furtherance of the same, ITAT held that any capital receipt on the extinguishment of the right to sue arising from arbitral award is neither taxable under section 115JB nor section 45 of the Income Tax Act, 1961 (“The Act”).

During the proceedings of the case, the assessee company had agreed on the purchase of land during the year 1992, later found out to be disputed land being sold to another purchaser in 1986 but mutated only in 1993. The assessee filed the objection before competent authorities which later passed on for arbitral award in 2007, directing the original purchaser to sell the land to third party and distribute the proceeds between the assessee and the original purchaser in the ratio of 68:32 respectively, also directing both the parties for withdrawal of civil suits.   ITAT contended that the right to receive compensation for release of right to sue is not a capital asset under section 2(14) of the Act, thus not chargeable to tax as capital gains. ITAT further stated that such capital receipts do not fall under the ambit of section 115JB of the Act, hence, not taxable under MAT provisions as well.