This Tax Alert summarizes recent ruling of the Gujarat High Court (HC) [1] on refund eligibility of unutilized input tax credit (ITC) on account of exports, in case of amalgamation, where statutory provisions under Goods and Services Tax law (GST law) had not been complied with.
The key observations of the HC are:
In a significant and taxpayer-friendly ruling, the Hon’ble ITAT, Mumbai Bench in Sanjay Gopaldas Bajaj vs. ITO has held that a taxpayer is entitled to claim deduction under section 54 in a return filed pursuant to reassessment proceedings, even where no original return was filed. The ruling assumes importance for individual taxpayers facing reassessment proceedings involving capital gains, particularly in cases where exemption claims are made for the first time during reassessment proceedings.
In the present case, the assessee had not filed his original
return of income within the timeline prescribed under the Act. Based on
information available in TDS statements reflecting salary, rental income and
property transactions, the Assessing Officer (AO) initiated reassessment
proceedings. In response to the notice, the assessee filed his return of income
declaring long-term capital gains arising from sale of a residential property
and claimed deduction under section 54 on the ground that the entire capital
gains had been reinvested in a new residential house within the prescribed
time.
While the AO accepted the computation of capital gains, he
denied deduction under section 54 solely on the ground that the assessee had
not filed the original return. The Ld. CIT(A) upheld the disallowance by
placing reliance on the Supreme Court’s decision in CIT v. Sun Engineering
Works (P.) Ltd. Aggrieved, the assessee preferred an appeal before the
Hon’ble ITAT.
The Hon’ble ITAT ruled decisively in favour of the taxpayer and allowed the
claim, making the following important observations:
The Reserve Bank of India (RBI) has overhauled the Foreign Exchange Management (Export and Import of Goods and Services) Regulations with the objective of simplifying cross-border trade compliance and establishing a more facilitative export-import regulatory framework.
In a recent ruling, the Mumbai Bench of the Income Tax Appellate Tribunal (“ITAT”) held that income or disallowances relating to a predecessor company for a period prior to amalgamation cannot be assessed by clubbing them with the income of the successor entity through a single reassessment order. The ITAT categorically ruled that the Income-tax Act does not envisage a composite or consolidated reassessment of predecessor and successor incomes, even where the successor is liable for the predecessor’s tax dues.
At first glance, DGFT Public Notice No. 42/2025-26 appears to be a mundane update—just three new fields to populate on the electronic Bank Realisation Certificate (eBRC): GSTIN, GST Invoice Number, and Date. Many exporters are dismissing it as a simple format tweak. This dismissal is a monumental, and potentially costly, error.
Effective 13 January 2026, this notice fundamentally rewires India’s export compliance machinery. The eBRC is being transformed from a confirmatory document into a live financial control instrument. The core shift is seismic: from Shipping-Bill-Centric to Invoice-Centric tracking of export realisations.
In a significant and taxpayer-friendly ruling, the Hon’ble ITAT, Delhi Bench has recently delivered an important decision in LinkedIn Technology Information (P.) Ltd. v. PCIT, which provides much-needed clarity on the application of tax treaty protections, particularly the non-discrimination principle, in cases involving payments to foreign entities. The ruling assumes importance for Indian companies making cross-border payments to overseas group entities, vendors, or service providers, especially in situations where TDS disputes arise and consequential disallowances are proposed by the tax authorities.
Under Article 13(4A) of the India–Singapore DTAA, capital gains from the transfer of shares of an Indian company acquired by a Singapore resident before 1 April 2017 are taxable only in Singapore. Article 13(5) similarly provides that capital gains from transfer of any other property not covered specifically under any other Para of the said article, including Compulsorily Convertible Debentures (CCDs), are taxable in the country of residence of the transferor, i.e., Singapore. However, Article 24A denies these treaty benefits to a shell or conduit company that has negligible business operations or lacks real and continuous business activities in Singapore, even if the prescribed expenditure threshold specified therein is satisfied.
The Government has been revisiting taxation of share buy-backs very frequently - making, unmaking, and remaking the framework - each time introducing a new approach; the latest one being the Budget announcements yesterday which seeks to tax buy-backs through a promoter-based classification.
01. The present employer contribution is restricted to 12%.
02. In
the proposal the 12% limit removed
03. It
means employer contribution can go upto Rs. 7.5 Lakhs
04. The
extra payment to PF from employer is not CTC in the hands of employee &
reduce the employee tax burden
|
01. No change in Income Tax rates, surcharge & cess.
02. Income tax Act 2025 effective from April 1, 2026.
03. Old regime tax continues with same tax rates & deductions.
