Court Intimation of Large Cash Transactions to Income Tax Authorities 1. Issue The central legal question was whether a Civil Court, while hearing a recovery suit, can compel a plaintiff to disclose their PAN and order the reporting of a heavy cash transaction (₹80 lakh) to the Income Tax Department, especially when the transaction occurred… Read More »
Entitlement to Foreign Tax Credit and Validity of Demands in Absence of Notice 1. Foreign Tax Credit Eligibility via Form 16 Disclosure Issue: Whether a taxpayer is entitled to the Foreign Tax Credit (FTC) for taxes paid in the UK if the amount was reflected in Form 16 and the total TDS claim, but not… Read More »
Jurisdictional Invalidity of Reassessment Notices due to Improper Sanction and Non-Disclosure I. Issue: Sanction by Principal Commissioner instead of Joint Commissioner The primary dispute focused on whether the Principal Commissioner was the “Specified Authority” to grant sanction for a reassessment notice issued during the COVID-19 extension period. 1. Impact of TOLA on Limitation For AY… Read More »
Determining Year of Acquisition for CII and Allowability of Construction Costs without Bills 1. Issue I: Possession vs. Registration for Cost Inflation Index (CII) Issue: Whether the date of acquisition for computing the Cost Inflation Index (CII) should be the date of physical possession and full payment or the subsequent date of registration of the… Read More »
Judicial Limits on the Scope of Enquiry for Section 12AB Registration 1. The Core Dispute: Technical Observations vs. Charitable Genuineness The assessee, a charitable trust operating a gaushala for stray cattle, sought regular registration under Section 12AB. The Commissioner (Exemptions) rejected the application based on four primary technical and evidentiary objections: Animal Count Mismatch: Discrepancies… Read More »
Exemption for Reinvestment in Agricultural Land (Section 54B) 1. The Core Dispute: Registration vs. Possession and Payment The assessee, a 50% co-owner of urban agricultural land, sold his share for ₹1.14 crore. He reinvested ₹1.27 crore in a new agricultural land, making payments primarily through verifiable banking channels. Revenue’s Stand: The Assessing Officer (AO) denied… Read More »
Taxation of Net Income for Unregistered Charitable Trusts 1. The Core Dispute: Gross vs. Net Income Taxation The assessee, a charitable trust, claimed exemption under Section 11 for its charitable activities. However, it did not have a valid registration under Section 12A/12AB for the relevant Assessment Year (2023-24). Revenue’s Stand: The Assessing Officer (AO) denied… Read More »
Majorly in favor of the Assessee across Transfer Pricing (TP) and Corporate Tax grounds. I. TP: Selection of Tested Party and Profit Level Indicator (PLI) Issue: Whether the Associated Enterprises (AEs) can be treated as “tested parties” and if gross profit margin is the appropriate PLI for software consultancy services. Key Takeaways: Tested Party: Following… Read More »
Revenue Classification of Mesne Profits as Taxable Income from Unauthorized Occupation 1. Issue The primary legal question was whether mesne profits—compensation awarded by a court to a property owner for the unauthorized occupation of their premises by a holdover tenant—constitute a capital receipt (non-taxable) or a revenue receipt (taxable). 2. Facts The assessee owned multiple… Read More »