ITAT Delhi: Carry Forward of Business Losses Post-Amalgamation – Emphasis on Beneficial Ownership

 As per the Income Tax Law, where a company’s shareholding changes during a year, losses from earlier years cannot be carried forward to set off against that year’s income, unless at the end of the year, at least 51% of the voting shares continue to be beneficially held by the persons who beneficially held them when the losses were originally incurred.

SEBI Introduces new "Informal Guidance Scheme" – Overview and Key Highlights

 The Capital Market Regulator, the Securities and Exchange Board of India (‘SEBI’), has recently notified the SEBI (Informal Guidance) Scheme, 2025 (‘New Scheme’), replaces the erstwhile SEBI (Informal Guidance) Scheme, 2003 (‘Old Scheme’) with effect from December 1, 2025. The New Scheme seeks to broaden the scope of eligible applicants and streamline the process for obtaining informal guidance, while retaining the core objective of providing regulatory clarity.

Key changes under the New Scheme include the following:

ITAT clarifies on use of DCF vs NAV valuation methods for share issuance

 The Delhi Bench of the Income Tax Appellate Tribunal (ITAT), in a recent ruling, has deleted the addition made under Section 56(2)(viib) of the Income-tax Act, 1961 (“the Act”), holding that the Assessing Officer was not justified in rejecting the valuation report furnished by the assessee under the Discounted Cash Flow (DCF) Method merely on account of disclaimer language contained in the valuation report. The ITAT emphasized that such disclaimers are standard professional caveats in valuation reports and their presence, by itself, cannot form a valid ground to disregard a valuation of an expert.

Delhi ITAT denies indexation on sale of depreciable assets and treats gains taxable as short term capital gains

 Section 50 of the Income-tax Act, 1961 provides that any capital gains arising from the transfer of depreciable capital assets forming part of a block of assets are treated as short-term capital gains, even if the asset is held for more than 24 months which is the normal threshold for assets being qualified as long term. The effective tax cost on transfer of long term capital assets is lower due to availability of indexation and lower tax rates than in cases of short-term capital assets.

Mumbai Tribunal: Amounts in foreign bank account of Trust cannot be taxed as income of trustee

 Mumbai Tribunal deleted the addition in respect of the amounts of the trust’s foreign bank account in the hands of the trustee, on the ground that the trustee was not the beneficial owner of the trust assets

Key GST Judgments: Place of Supply, Export of Services, Refund Forums, and Limitation Clarified

The recent months have seen several significant rulings by various High Courts on critical issues under the Goods and Services Tax (GST) regime. These decisions offer much-needed clarity on determining the nature of supply, availing export benefits, procedural compliances, and calculating limitation periods for appeals.

India Tax Due Date - January 2026.

 

Sr No	Due Date	Related to	Compliance to be made
1	11.01.2026	GST	Filing of GSTR 1 for the month of December 2025
2	13.01.2026	ISD	Filing for the month of Dec 2025
3	20.01.2026	GST	Payment of GST for the month of December 2025 Filing of GSTR 3B for the month of December 2025
4	07.01.2026	TDS/TCS (Income Tax)	Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of December 2025. Deposit TDS from Salaries deducted during the month of December 2025 • Deposit TCS for collections made under section 206C including sale of scrap during the month of December 2025, if any
5	31.01.2026	TDS/TCS	Filing of TDS/TCS quarterly return for Q3 (Oct to Dec-2025).

Penalty for under-reporting deleted for bona fide claim of 'Health & Education Cess' basis prevailing judicial precedents (claim withdrawn after retrospective amendment)

 Recently, the Hon’ble Income-tax Appellate Tribunal, Pune (‘ITAT’) in the case of Capgemini Technology Services India Ltd. (‘the Company’), has held that penalty for under-reporting and misreporting of income cannot be levied for claiming Health and Education Cess as a deductible expense when such claim was made bona fide based on prevailing judicial precedents and was later withdrawn following a retrospective amendment to the law. The Hon’ble ITAT observed that the issue was highly debatable at the relevant time and, since there was no concealment or misreporting of income and the assessee had duly complied with the prescribed legal procedure, the penalty was unsustainable.

Date of transfer to be adopted for calculation of FMV of shares in capital reduction tax calculation

 The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has ruled in favour of RBS AA Holdings Netherlands B.V., holding that the relevant date for conducting valuation of unlisted shares in case of capital reduction ought to be the actual transfer date of transfer and not last adopted Balance Sheet date of the investee company. As a result, the Tribunal allowed the company’s full claim of long-term capital loss amounting to Rs.43.06 crores.

Rules Service PE cannot be constituted by mere presence of employees (with no actual service) or virtual rendering of services from abroad

 In a recent ruling, the Delhi High Court affirmed the decision of the Tribunal in Clifford Chance Pte Ltd. v. ACIT, holding that a foreign entity did not constitute a Service Permanent Establishment (“PE”) in India under Article 5(6) of the India–Singapore DTAA merely because its employees rendered services (virtually as well as physically) to India customers for more than 90 days in aggregate. The Court held that, for a service PE to arise, the relevant test is the actual number of days on which services are rendered in India by employees physically present.