Sunday, 15 September 2024

Direct Tax Case Laws - Sep 24.

 SC

·       Supreme Court Upholds Vodafone Idea’s Non-Liability for TDS on Payments to Non-Resident Telecom Operators 

·       Supreme Court has dismissed the review petitions filed by Nestle in MFN row sticking to its earlier ruling. 

·       In the case of Kakinada & Ors, the Supreme Court's decision highlights that even under Article 142, delays beyond statutory periods cannot be condoned, implying that High Courts should not bypass statutory limits under Article 226.    

·       Supreme Court in the case of Ravi Agarwal held that in case of section 80DD, retrospective amendment is not possible.

·       Supreme Court dismissed the Department's special leave petition on merits in case of Soorajmull Nagurmull, holding that if the assessee has provided evidence of the liability's existence, regardless of its prolonged outstanding status, no addition under section 41(1) can be made.

 

 

HC

·       In the cases of CIT v. Plasmac Machine Mfg. Co. Ltd. [1993] 201 ITR 650 (Bom.), it was held that disallowance under this section could be made only from an expense that is claimed in Profit and Loss Account. Since, in the case of capital expenditure, no deduction is claimed under the P and L account, there should not be any disallowance under section 40(a)(ia) in respect of such payment.    

 

·       Case where TDS was paid before prosecution, procedure for treating a director as principal officer was not followed: Bombay HC allows petition. Hemant Mahipatray Shah.

 

·       Delhi HC in the case of Akash Poddar held that the settlement proceeds received from former employer for unconditionally and irrevocably relinquishing all the rights, title, interest and entitlement in the shares or the share certificates as capital gains and not profit in lieu of salary /to be taxed as salary. 

 

·       In case goods are manufactured on behalf of AEs, royalty payment could still be at arms length: Delhi HC : Samsung India Electronics.   

 

·       Transaction stood grandfathered by virtue of Article 13(3A) of India-Mauritius DTAA’; Delhi HC quashes AAR order holding Tiger Global transaction as ‘aimed at tax avoidance.  TIGER GLOBAL INTERNATIONAL.

 

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·       The compensation paid for dip in value of stock options is a perquisite. Madras HC, Nishithkumar Mukeshkumar Mehta.

 

ITAT 

·       ITAT Mumbai in the case of ishares MSCI EM held that STCL on which STT was paid and taxable at 15% tax can be set off against STCG which was not subject to STT and was taxable at the rate of 30%.   

 

·       Mumbai ITAT has held that exemption under section 54F should be available on a depreciable asset which is subject to tax under section 50 if such asset qualifies as long-term capital asset. Sonia Pathak Khanna.

 

·       In the judgment of Wipro Limited, Bangalore ITAT has held that to the extent of foreign tax paid are ineligible for credit, then such sums are eligible for deduction from the business income of the assessee.   

 

·       In the case of Haris K Mohammed, the ITAT held that section 2(22)(e) covers only direct benefit received by the shareholder from any payment made by the company, and not indirect benefit derived from any other transaction.   Further, the section can apply only in the year in which the payment is made by the company, otherwise it would be not possible to ascertain the accumulated profit, and the computation mechanism will fail

 

·       Kolkata ITAT in the case of Santanu Sanyal held that Foreign assignment allowance received in India by a non-resident individual towards services rendered outside India will not fall within the scope of total income under section 5(2) of the Act. 

 

·       Ahmedabad ITAT in the case of Axis Bank permits discount on ESOP as a deduction under sec 37(1) of the Income Tax Act.

 

·       ITAT Delhi in the case of Pranav Vikas India held that penalty for misreporting of income cannot be imposed in case there is no malafide intention. 

 

·       Technical services provided to US residents are taxable in India only if make available condition is fulfilled: ITAT Delhi : Invesco Holding Company.   

 

·       Exemption U/S 11 cannot be denied merely due to delay in filing Form 10B: ITAT Delhi: Shambhu Dayal Modern School.

 

·       Delhi bench of the ITAT in the context of section 249(4)(b) of the Income Tax Act held that liability to pay advance tax does not arise on disputed incomes which depend on appraisal of documents and explanations. Therefore in such cases 249(4)(b) does not come into play. Refer, Narayani Trading.

 

·       Delhi ITAT  in the case of Tata Teleservices Ltd. held as that the India-China DTAA was amended in 2019 to explicitly include CDB as a financial institution wholly owned by the Government of China. However, even before the amendment, CDB was eligible for the benefits under Article 11(3) of the DTAA & hence the appeal of the Revenue is dismissed, ie Tata Teleservices Ltd. Is not liable to deduct tax on the interest payments made to CDB under Section 195 of the Income Tax Act, 1961.

 

·       In the case of Nord Anglia Education, Delhi ITAT held that routine Support Services Can’t Be Classified as FTS Under India-UK DTAA. 

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