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Income Tax - Supreme Court - Case Laws
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- 2021 (4) TMI 369 - SUPREME COURT
Constitutional validity of the third proviso to Section 254(2A) - automatic vacation of a stay as granted on the completion of 365 days - HELD THAT:- It is settled law that challenges to tax statutes made under Article 14 of the Constitution of India can be on grounds relatable to discrimination as well as grounds relatable to manifest arbitrariness. These grounds may be procedural or substantive in nature There can be no doubt that the third proviso to Section 254(2A) of the Income Tax Act, introduced by the Finance Act, 2008, would be both arbitrary and discriminatory and, therefore, liable to be struck down as offending Article 14 of the Constitution of India. First and foremost, as has correctly been held in the impugned judgment, unequals are treated equally in that no differentiation is made by the third proviso between the assessee....... + More
- 2021 (3) TMI 138 - SUPREME COURT
TDS u/s 195 - Royalty - amounts paid by the concerned persons resident in India to non-resident, foreign software suppliers - Whether constitutes as taxable income deemed to accrue in India u/s 9(1)(vi) - income deemed to accrue or arise in India - computer software is purchased directly by an end-user, resident in India, from a foreign, non-resident supplier or manufacturer, resident Indian companies that act as distributors or resellers, by purchasing computer software from foreign, non-resident suppliers or manufacturers and then reselling the same to resident Indian end-user, distributor happens to be a foreign, non-resident vendor, who, after purchasing software from a foreign, non-resident seller, resells the same to resident Indian distributors or end-users and computer software is affixed onto hardware and is sold as an integrated....... + More
- 2021 (1) TMI 488 - SUPREME COURT
Deduction u/s 80P(2)(a) (i) - the credits given to such members being for purposes other than agricultural credit - eligibility after introduction of section 80P(4) - Assessee stated to be providing credit facilities to their members for agricultural and allied purposes, have been classified as primary agricultural credit societies by the Registrar of Cooperative Societies under the Kerala Co-operative Societies Act, 1969 - HELD THAT:- The ratio decidendi of Citizen Cooperative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT], must be given effect to. Section 80P of the IT Act, being a benevolent provision enacted by Parliament to encourage and promote the credit of the co-operative sector in general must be read liberally and reasonably, and if there is ambiguity, in favour of the assessee. A deduction that is given without any reference ....... + More
- 2020 (11) TMI 876 - SUPREME COURT
Validity of Section 40(a)(iib) - vires of Section 40(a)(iib) - HELD THAT:- The stage at which the appellant approached the High Court and challenged the vires of Section 40(a)(iib) of the Income Tax Act can be said to be an appropriate moment. Therefore, the High Court ought to have decided the issue with respect to the challenge to the vires of Section 40(a)(iib) of the Income Tax Act on merits. The High Court has failed to exercise the powers vested in it under Article 226 of the Constitution of India by not deciding the writ petition on merits and not deciding the challenge to the vires of Section 40(a)(iib) of the Income Tax Act on merits. As the High Court has not decided the issue with respect to vires of Section 40(a)(iib) of the Income Tax Act on merits, the matter is required to be remanded to the High Court to decide the writ pe....... + More
- 2020 (9) TMI 496 - SUPREME COURT
Interest income of the appellant-Corporation - whether would fall within the category of income from other sources under Section 56 for which allowable deductions are enumerated under Section 57 of the IT Act OR income from business - High Court opined that since the business of the appellant-Corporation was to receive funds and to then advance them as loans or grants, the interest income earned which was so applied would also fall under the head ‘D’ of Section 14 of Chapter IV of the IT Act under the head of ‘profits and gains of business or profession’ being a part of its normal business activity - HELD THAT:- We are in agreement with this view taken by the High Court, as the only business of the appellant-Corporation is to receive funds and then to advance them as loans or grants. The interest income arose on ac....... + More
- 2020 (8) TMI 731 - SUPREME COURT
Capital gains arising out of land acquisition compensation - date of accrual of capital gains for the purpose of Section 45 - Subject land had been given by the original owner on a lease for 20 years to a Government College - Whether chargeable to income-tax under Section 45 for the previous year referable to the date of award of compensation i.e., 29.09.1970 or date of notification for acquisition - question concerning date of accrual of capital gains - Whether High Court was right in taking the date of award as the date of accrual of capital gains for the purpose of Section 45 of the Act of 1961? - when did the transfer of the land in question, by way of compulsory acquisition, take place and when did the capital gains accrue to the assessee-appellant? - part of the land in question which was given on lease, possession of the College, a....... + More
- 2020 (8) TMI 23 - SUPREME COURT
TDS u/s 194C - Disallowance u/s 40(a)(ia) - non deduction of tds on payment to the truck operators/owners - payments exceeding ₹ 20,000/- in a single transaction or not? - Payments to contractors and sub-contractors - whether the payments in question have rightly been disallowed from deduction in computation of total income of the appellant? - HELD THAT:- AO held that the assessee had entered into a sub-contract with the said three persons within the meaning of Section 194C - Such findings of AO were concurrently upheld up to the High Court and, after interpretation of Section 40(a)(ia), this Court also approved the decision of the High Court while dismissing the appeal with costs. Appellant has made an attempt to distinguish the nature of contract in Palam Gas Service [2017 (5) TMI 242 - SUPREME COURT] by suggesting that therein, t....... + More
- 2020 (7) TMI 545 - SUPREME COURT
Income accrued in India - Taxability of income attributable to a “permanent establishment” - fixed place in India, arising from the ‘Agreement for avoidance of double taxation of income and the prevention of fiscal evasion’ with the Republic of Korea (“DTAA”) - to what extent activities of the business were carried on by the Assessee through the Mumbai Project Office? - High Court held that the question as to whether the Project Office opened at Mumbai cannot be said to be a “permanent establishment” within the meaning of Article 5 of the DTAA would be of no consequence AND there was no finding that 25% of the gross revenue of the Assessee outside India was attributable to the business carried out by the Project Office of the Assessee - HELD THAT:- A reading of the Board Resolution would sho....... + More
- 2020 (7) TMI 544 - SUPREME COURT
Receipt of non-competitive fee - non-compete fee payable under the Deed of Covenant - capital receipt or revenue receipt - substantial question of law that was raised by the High Court - difference in members of ITAT - majority decision of ITAT said that non-competitive fee was a capital receipt u/s 28(iv) income tax act and not a revenue receipt as envisaged in Section 28(ii) of I.T. Act - whether the said Deed of Covenant can be said to contain a restrictive covenant as a result of which payment is made to the appellant, or whether it is in fact part of a sham transaction which, in the guise of being a separate Deed of Covenant, is really in the nature of payment received by the appellant as compensation for terminating his management of CDBL, in which case it would be taxable under Section 28(ii)(a)? HELD THAT:- Clearly, without any re....... + More
- 2020 (6) TMI 158 - SUPREME COURT
Deduction u/s 80-O - Royalties etc. - income received by the appellants in foreign exchange, for the services provided by them to foreign enterprises - High Court has essentially held that the assessees were merely marine product procuring agents for the foreign enterprises, without any claim for expertise capable of being used abroad rather than in India and hence, the services rendered by them do not qualify as the ‘services rendered from India’, for the purpose of Section 80-O - HELD THAT:- In the setup of the present case, for a proper comprehension of the contents and text of the relevant provision of Section 80-O and Explanation (iii), which are carrying even the minute distinction of the expressions “from India” and “in India”, recourse to lexical semantics has been inevitable. However, in all fa....... + More
- 2020 (5) TMI 57 - SUPREME COURT
Income accrue or arise in India - Revenue from playing of the matches in India - mandate under Section 115 BBA (1)(b) - payment was towards grant of privilege and had nothing to do with matches that were played in India - HELD THAT:- In the present case, the Non-resident Sports Associations had participated in the event, where cricket teams of these Associations had played various matches in the country. Though the payments were described as Guarantee Money, they were intricately connected with the event where various cricket teams were scheduled to play and did participate in the event. The source of income, as rightly contended by the Revenue, was in the playing of the matches in India. The mandate under Section 115 BBA (1)(b) is also clear in that if the total income of a Non-resident Sports Association includes the amount guaranteed t....... + More
- 2020 (5) TMI 27 - SUPREME COURT
Refunds along with interest u/s 244A - initiation of proceedings pursuant to notice under sub-section (2) of Section 143 - exercise of power of withholding of refund - HELD THAT:- We hold that in respect of Assessment Years ending on 31st March 2017 or before, if a notice was issued in conformity with the requirements stated in sub-section (2) of Section 143 of the Act, it shall not be necessary to process the refund under subsection (1) of Section 143 of the Act and that the requirement to process the return shall stand overridden. Whether any intimation is required to be given to the assessee that because of initiation of proceedings pursuant to notice under sub-section (2) of Section 143 of the Act processing of return in terms of sub-section (1) of Section 143 of the Act, would stand deferred? - The processing of return in terms of su....... + More
- 2020 (4) TMI 827 - SUPREME COURT
Doctrine of mutuality - Exemption from taxability - excess of income over expenditure - Common Identity - Oneness with the members / contributors - Completeness of Identity - Non-profiteering and Obedience to Mandate - assessee incorporated by YRIPL as its fully owned subsidiary after having obtained approval from the Secretariat for Industrial Assistance (for short “SIA”) for the purpose of economisation of the cost of advertising and promotion of the franchisees as per their needs - HELD THAT:- What is prohibited is the infusion of a participant in the transaction who does not become a ‘member’ of the common fund, at par with other members, and yet participates either in the contribution or surplus without subjecting itself to mutual rights and obligations. The principle of common identity prohibits any one dimen....... + More
- 2020 (4) TMI 794 - SUPREME COURT
Income accrued in India - PE in India - liaison offices in India - India- UAE DTAA - second mode of remittance through the liaison offices in India on account of the activity undertaken in the liaison office in India of downloading the particulars of remittances through electronic media and printing cheques/drafts drawn on the banks in India, which, in turn, are couriered or dispatched to the beneficiaries in India, in accordance with the instructions of the NRI remitter - HELD THAT:- The expression “business connection” can be discerned from Section 9(1), as also, the meaning of expression “business activity”. We will advert to those provisions a little later and for the time being, assume that the stated activities of the respondent are business activities. However, since the stated activities of the liaison offi....... + More
- 2020 (4) TMI 793 - SUPREME COURT
Addition u/s 68 - Levy of penalty u/s 271(1)(c) - concealment of particulars - unexplained cash credit / bogus purchases - At the time of assessment, the appellant/assessee had failed to produce any explanation or evidence in support of the entries regarding purchases made from unregistered dealers. In the penalty proceedings, however, the appellant/assessee produced affidavits of 13 unregistered dealers out of whom 12 were examined by the Officer. HELD THAT:- The appellate authority vide order dated 13.1.2011, had not only accepted the explanation offered by the appellant/assessee but also recorded a clear finding of fact that there was no concealment of income or furnishing of any inaccurate particulars of income by the appellant/assessee for the assessment year 19981999. That now being the indisputable position, it must necessarily fol....... + More
- 2020 (4) TMI 792 - SUPREME COURT
Constitutional validity of clause (f) of Section 43B - Inconsistency of clause (f) and absence of nexus with Section 43B - actual payment of liability to the employees (leave encashment) as a condition precedent for extending the benefit of deduction under the 1961 Act - clause (f) was inserted in the already existing Section 43B vide Finance Act, 2001 with effect from 1.4.2002 - application of clause (f), the eligibility for deduction arises in the previous year in which the abovesaid payment is actually made and not in which provision was made in that regard, irrespective of the system of accounting followed by the assessee - High Court [2007 (6) TMI 175 - CALCUTTA HIGH COURT] has characterised clause (f) as “arbitrary” and “unconscionable” while imputing it with unconstitutionality HELD THAT:- From 1983 onwards,....... + More
- 2020 (4) TMI 133 - SUPREME COURT
Reopening of assessment u/s 147 - Valid reason to believe that undisclosed income had escaped assessment or not? - sufficient material before the assessing officer to take a prima facie view that income of the assessee had escaped assessment - failure to show non-disclosure of facts the notice having been issued after a period of 4 years - HELD THAT:- Obviously, during the assessment proceedings the assessee will have the right to place material on record to show that the transaction in question was a genuine transaction. It is trite law that an assessing officer can only reopen an assessment if he has ‘reason to believe’ that undisclosed income has escaped assessment. Mere change of opinion of the assessing officer is not a sufficient to meet the standard of ‘reason to believe’. Subsequent facts which come to the ....... + More
- 2020 (3) TMI 889 - SUPREME COURT
Demand of additional tax under the provisions of Section 143(1-A) - Prima facie adjustments - As per section 143(1A), additional tax has to be charged @ 20% of the tax payable on such ‘excess amount’. The ‘excess amount’ refers to the increase in the income and by implication the reduction in loss where even after the addition there is negative income. - disallowing 25% of the depreciation - HELD THAT:- This Court in Commissioner of Income Tax, Gauhati vs. Sati Oil Udyog Limited and another [2015 (3) TMI 854 - SUPREME COURT] had occasion to consider elaborately the provisions of Section 143(1-A), its object and validity. There was a challenge to the retrospectivity of the provisions of Section 143(1-A) as introduced by Finance Act, 1993. The Gauhati High Court had held that retrospective effect given to the amendme....... + More
- 2020 (3) TMI 510 - SUPREME COURT
Determination of additional income - notional sales - value of the unaccounted purchases made by the assessee - HELD THAT:- Learned counsel for the petitioner, on instructions issued by the Department of Revenue, Ministry of Finance vide F.No.390/Misc./116/20l7-JC dated 22.08.2019, seeks permission to withdraw this special leave petition along with pending applications therein due to low tax effect. Permission granted, subject to just exceptions. The special leave petition and pending applications are dismissed as withdrawn, leaving question(s) of law open.
- 2020 (3) TMI 509 - SUPREME COURT
ALP determination - determination of ALP of the alleged international transactions involving the Petitioner and its AE have been made without affording the Petitioner an opportunity of being heard - HELD THAT:- Leave granted.
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