DIRECT TAX CASE LAWS- DEC 23.

 ·       The Supreme Court  set aside a 2021 Delhi High Court ruling that allowed Nestle SA, Concentrix Services, Steria and others a concessional withholding tax rate of 5% on dividend income from their Indian arms, extending the MFN clause in the OECD. 

 

·       In the case of Bharti Hexacom the Supreme Court  held that License Fee paid by Telecom Operators is Capital in nature. 

 

·       The Supreme court in the case of Vegetable products Ltd held that If two or more possible interpretations are possible for a particular taxing provision, which interpretation should be adopted, the one in the favour of the taxpayer, or one against?. If we find that language to be ambiguous or capable of more meanings than one, then we have to adopt that interpretation which favours the assessee,

 

·       In the case of Jigar Jashwantlal Shah, the Gujarat High court held that Section 56(2)(viic) does not apply to fresh issuances or allotments of shares by a company.  

 

·       Karnataka High court in the case of I.G Petrochemicals held that waiver of loan is not income u/s 28

 

·       Delhi High Court in the case of Biorad laboratories held that If make available clause as per DTAA between India and Singapore is not satisfied, managerial charges cannot be FTS.

 

·       In the case of Shreyash retail, the Delhi HC held that rate of LDC cannot be provided at higher rates without application of mind

 

·       In the case of Chintan Bindra the Delhi HC held that Employee Can’t Be Penalized For Non-Deposit Of TDS By Employer  

 

·       Mumbai ITAT in the case of TCS held that there is no need to charge brand royalty from AEs.

 

·       Mumbai ITAT in the case of Total energies marketing held that ESOP is taxable in the hands of employees not at the time of grant of ESOP but at the time of vesting ESOP right 

 

·       ITAT Delhi in the case of LIFESTYLE PROBUILD PVT. LTD held that prescribed method for unquoted shares is not any specific method but it provides that assessee may obtain valuation report from merchant banker or accountant. In this case the assessee has obtained valuation report of the accountant. To this extent, valuation adopted by the assessee cannot be said to be not in accordance with law. 

 

·       Delhi ITAT in another case held that In absence of 'FTS/ Royalty' clause, Technical Fee is Taxable under 'Business Profit' clause, not under 'Other Income' clause. 

 

·       Jaipur ITAT in the case of Mangalam Art held that Interest paid on TDS is compensatory in nature and is a business expenditure allowable u/s 37(1) of the Income Tax.  

 

·       Delhi ITAT in the case of Serco India held that Income Tax Authorities Can’t Step Into Shoes Of Businessmen To determine Expenditure For Business Purpose. 

 

·       Mumbai ITAT in the case of Rustomjee Realty held that CSR Expenses could also be eligible for deduction U/S 80G, provided conditions are fulfilled.

 

In the case of ICICI Bank, Mumbai ITAT held that Club Membership Fees Paid By ICICI Bank For Employees Are To Be Treated As Business Expenditure.