Tax demands cannot legally subsist or be adjusted without serving a statutory Section 143(1) intimation. Issue Whether the Income Tax Department can legally raise, recover, or adjust an outstanding tax demand against a subsequent year’s refund in the absolute absence of proof that a statutory intimation under Section 143(1) was ever issued and served upon… Read More »
Transfer pricing adjustments, historical royalty, straight-line lease rents, and block depreciation are allowed; warranty provision is remanded. Issue Whether the revenue authorities are legally justified in: Determinining the Arm’s Length Price (ALP) of intra-group technical services and royalty as “nil” despite documented commercial benefits. Capitalizing recurring royalty expenses that were treated as revenue expenditures in… Read More »
A co-operative credit society is entitled to a deduction on interest earned from depositing its operational surplus funds in banks. Issue Whether a co-operative credit society can claim a statutory tax deduction under Section 80P(2)(a) on interest income earned from parking its operational surplus funds in bank deposits, or if such interest is disallowable because… Read More »
Section 80IB housing deductions cannot be denied based on subsequent-year events and untested statements. Issue Whether a housing project developer can be denied statutory deductions under Section 80IB(10) for prior assessment years based on an alleged single-allottee violation that took place in a subsequent financial year, especially when the allegation relies on an untested statement… Read More »
Reassessment notice is quashed as changing depreciation rates on fully exempt income causes no tax escapement. Reassessment notice is quashed as changing depreciation rates on fully exempt income causes no tax escapement. Issue Whether the tax department can validly initiate reassessment proceedings under Section 147/148 to adjust depreciation rates when the underlying business profit is… Read More »
An allotment letter cannot substitute an agreement for sale, and joint property additions must be apportioned. Issue Whether a preliminary builder’s allotment letter can be treated as an “agreement fixing the amount of consideration” under the first proviso to section 56(2)(x)(b)(B) to substitute the registration date’s stamp duty value, and whether the entire difference between… Read More »
Delayed EPF and ESI contributions cannot be disallowed under section 143(1)(a) when the issue is highly debatable. Issue Whether the Assessing Officer is legally justified in making a prima facie disallowance of delayed employees’ EPF and ESI contributions under Section 143(1)(a) when the underlying legal issue was highly debatable and subject to divergent High Court… Read More »
Royalty and straight-line lease rent are allowed, while the warranty provision is remanded for scientific verification. Issue Whether the tax authorities can determine the Arm’s Length Price (ALP) of intra-group technical services at nil despite documented commercial benefits, treat historically allowed monthly royalty payments as capital expenses, disallow Accounting Standard-19 straight-line lease rents as notional,… Read More »
Textile machinery replacement expenditure is remanded for fresh verification under Supreme Court repair guidelines. Issue Whether the expenditure incurred by a textile manufacturing company on replacing independent, sophisticated plant and machinery can be classified as a deductible revenue expenditure or “current repairs,” or if it must be treated as a capital expenditure. Facts The assessee… Read More »
Estimated circular trading commission is sustained, demonetization deposits are deleted, and standard business tax rates apply. Estimated circular trading commission is sustained, demonetization deposits are deleted, and standard business tax rates apply. Issue Whether estimated commission additions on circular trading are sustainable without adjustments, whether demonetization cash deposits backed by documented prior withdrawals can be… Read More »