Delhi HC holds secondment reimbursements taxable as Fees for Included Services (FIS) under India–USA tax treaty

 The Delhi High Court (HC) ^[1] has recently ruled in favor of the Revenue on the issue of taxability of cost reimbursements received by a foreign Taxpayer from Indian entities in respect of secondment of employees. The HC held that such receipts are taxable as Fees for Included Services (FIS) under Article 12 of the India–USA Double Taxation Avoidance Agreement (‘the treaty’) as the secondment arrangement satisfied the “make available” test.

Calcutta HC upholds validity of GST adjudication order digitally signed within limitation, despite subsequent portal upload

 This Tax Alert summarizes a recent ruling of the Calcutta High Court (HC) ^[1] on whether an adjudication order under Section 73 of the Central Goods and Services Tax Act, 2017 (CGST Act), which was digitally signed within the prescribed limitation period but uploaded on the common portal thereafter, can be treated as validly issued order, enforceable in law.

GST Invoice Rejected in IMS After Tax Paid? Here’s Your Complete Action Plan

 1. The Core Solution: Coordinate with Your Customer and Re-Report

The GST law provides a very clear and straightforward remedy for this situation. The system is designed to capture the "delta" (the net change) rather than penalizing you for a one-off rejection. The golden rule here is reconciliation, not refund.

The most efficient and widely recommended solution involves a simple two-way coordination between you (the supplier) and your customer (the recipient).

Delhi Tribunal rules that court-approved capital reduction cannot be re-characterized as buy-back

 This Tax Alert summarizes a recent ruling of the Delhi Income-tax Appellate Tribunal (Tribunal) in case of Seaview Developers Pvt. Ltd. (Taxpayer) v DCIT^[1] on the issue of characterization of a court-approved reduction of share capital undertaken by an unlisted company. The key issue before the Tribunal was whether a reduction of share capital implemented pursuant to a scheme sanctioned by the Bombay High Court could be recharacterized as a buy-back of shares and subjected to the buy-back tax regime which trigger levy in the hands of the company while the income in the hands of shareholders is exempt.

Commission Paid to Overseas Sourcing Agents Not Taxable as FTS; No Witholding Obligation

 Delhi ITAT held that commission paid by an exporter to an overseas sourcing agent for procurement of export orders and follow-up on realisation of proceeds is not Fee for Technical/Consultancy Services, and accordingly no tax was required to be withheld and therefore, the resultant disallowance for non-deduction was deleted.

Background

Key changes notified in ITR-1 to ITR-5 and ITR-7 for AY 2026-27

 The Central Board of Direct Taxes, in exercise of the powers conferred by section 139 read with section 295 of the Income-tax Act, 1961 (‘the Act’) recently vide multiple notifications (Notification No. 57/2026 to Notification No. 60/2026 and Notification No. 62/2026) introduced various income-tax return forms (ITR-1 to ITR-5 and ITR-7) applicable for AY 2026-27.

Section 56(2)(ix): Forfeiture of Advance Money Received – A Critical Analysis

The Dual Conditions for Taxability

Section 56(2)(ix) of the Income Tax Act imposes tax liability on sums received as advance or otherwise during negotiations for transfer of a capital asset, provided two essential conditions are concurrently satisfied: (i) the amount must be received in the course of negotiation for transfer of a capital asset, and (ii) such negotiation must not result in transfer, with the amount being forfeited. The legislature has consciously employed the conjunction 'and', making both conditions mandatory for the provision to apply.

Gujarat High Court reaffirms mandatory right to personal hearing in Faceless Assessments

 Recently, the Hon’ble Gujarat High Court in B.M. Developers v. Assessment Unit of Income-tax Department ruled in favor of the taxpayer and reaffirmed that an assessment completed under the faceless assessment regime cannot disregard the taxpayer's statutory right to a personal hearing. The Hon’ble Court held that where a taxpayer specifically requests a hearing through video conferencing, the same must be granted in accordance with the prescribed procedure, failing which the assessment would be vitiated for breach of the principles of natural justice.

CBIC clarifies drawback and refund mechanism under customs where import duty is paid through duty credit scrips

 This Tax Alert summarizes a recent Circular issued by the Central Board of Indirect Taxes and Customs (CBIC) clarifying the manner of grant of drawback or refund in cases where import duty was paid through duty credit scrips.

The key clarifications are:

Section 54F Survives Family Connection: ITAT Backs Genuine Intra-Family Property Transaction

 In a recent ruling, the Hon'ble Mumbai Tribunal examined the availability of deduction under Section 54F of the Income-tax Act, 1961 where a residential property is purchased from close relatives, and whether such a transaction can be disregarded as a colourable device merely because the parties are family members.

Strategic Grounds for Tax Appeals in GST

 

There is a visible surge in Indirect Tax litigations in recent times. An effective litigation strategy is built not just on merits of the case but also on various other grounds. In this Insight, we have discussed such grounds that Taxpayers can consider evaluating.