- CBDT ORDER DATED 31.01.2024 [F. NO. 225/132/2023/ITA-II, DATED 31-1-2024]
The CBDT vide this order dated 31.01.2024, to resolve grievance of taxpayer related to issue of refund in respect of returns of income validly filed electronically up to AY 2020-21, time limit of processing the same further extended the time till 30.04.2024.
- On 1st February 2024, Union Finance Minister Nirmala Sitharaman presented the Interim Budget. Vide this Budget / Finance Bill 2024, existing rates of income-tax are continues for the Financial Year (‘FY’) 2024-2025 and to provide for certain relief to taxpayers
Withdrawal of outstanding direct tax demand – Relief to Taxpayer’s
Up to Rs. 25,000 pertaining to up to AY 2010-11.
Up to Rs. 10,000 for AY 2011-12 to AY 2015-16.
Existing Benefit to Startups / Pension Fund / International Financial Service Centres (‘IFSC’) units extended to 31.03.2025
Certain existing tax benefits to Start-ups and investments made by sovereign wealth funds/pension funds, tax exemption of some IFSC units earlier expiring on 31.03.2024 extended up to 31.03.2025.
Important Judicial Precedents
- Solvay Asia Pacific (P.) Ltd. vs. DCIT. (IT), Circle-3(1)(2); [2024] 159 taxmann.com 90 (Delhi – Trib.)
Where assessee, a company incorporated in Thailand, had rendered business support services to its Indian group entities and AO held same to be taxable as FTS, in absence of Fee for Technical Services (FTS) clause in India-Thailand DTAA, such receipts could not be brought to tax in India
- Virendra Behari Aggarwal vs. CIT [2024] 159 taxmann.com 28 (SC)
Section 68 of the Income-tax Act, 1961 – Cash credits – (Gift) – Assessment year 2001-02 – High Court by impugned order held that where assessee claimed to have taken loans from his two minor sons and source of loan was stated to be gift received by assessee’s sons from their uncle i.e., brother of assessee, since assessee’s brother categorically stated that he had not given any gifts to anybody, impugned addition made by Assessing Officer in respect of loan amount was to be confirmed – Whether SLP filed by assessee against said impugned order was to be dismissed – Held, yes [Para 2][In favour of revenue]
- AEP Investments (Mauritius) Ltd. vs. ACIT, Circle (IT) 1(1)(1) [2024] 158 taxmann.com 472 (Delhi – Trib.)
Where assessee, a tax-resident of Mauritius, invested in shares of an Indian company, thereafter made foreign remittance from sale of said investments and did not file return claiming that capital gains were exempt in terms of article 13(4) of India-Mauritius DTAA, since AO issued reopening notice merely on basis of such remittances which he came to know from form 15CA filed by assessee, there was no prima facie satisfaction from reasons recorded, and notice issued under section 148 was considered to be void ab initio.
- Commissioner of Income-tax vs. Ad2pro Media Solutions (P.) Ltd. [2024] 158 taxmann.com 432 (SC)
SLP dimissed against order passed by High Court that where assessee-company made payments to US Company for marketing services and scope of work was to generate customer leads using/subscribing customer data base, market research, analysis, and online research data and that service provider had not made available any technical knowledge, experience, knowhow, process to develop and transfer technical plan or technical design, in view of admitted fact that services were utilized in USA, payments so made could not be considered as royalty or FTS and hence, no TDS was required to be deducted
- SHRI RUMNEEK BAWA Vs. ACIT Circle 10(1) _2024-TIOL-190-ITAT-DEL_ITA No.3083/Del/2012_AY: 2009-10
Whether when undisclosed income already having been taxed in hands of Flagship Company the same can be again subjected to tax in the hands of assessee company – NO: ITAT
It is the plea of the assessee that the amount has been already added in the assessment of M/s. Zoom Developers Pvt. Ltd. In such circumstances, the same amount cannot be again added in hands of the assessee. For this proposition, we refer to the decision of Delhi High Court in the case of PCIT vs. Surya Agrotech Infrastructure Ltd. where it was held that when undisclosed income already having been taxed in hands of Flagship Company the same could not be again subjected to tax in the hands of assessee company. This case law is applicable in this case and the sum which has been taxed in the hands of Zoom Developers Pvt. Ltd. cannot again be taxed in the hands of assessee. Thus, the addition needs to be deleted on this count also. Since the addition has been deleted as above, adjudication on other aspects, in this case is of academic interest. Hence, we are not engaging into the same.
- PRAGATI POWER CORPORATION LTD Vs. DCIT, CIRCLE-10(1), NEW DELHI [2024]-TIOL-84-ITAT-DEL_ITA No. 632/Del/2019_AY: 2005-06
Whether penalty can be levied on the addition/disallowance made on the basis of retrospective amendment under the law – NO: ITAT
No penalty can be levied on the addition/disallowance made on the basis of retrospective amendment under the law. In the circumstances of the assessee’s case, levy of the impugned penalty by the AO and confirmation thereof by the CIT(A) is wholly unwarranted, unjustified and is unsustainable on merits. We, therefore, vacate the orders of the AO/CIT(A). Consequently, the appeal of the assessee is allowed.
- ITO, Vs. MEYER APPAREL PVT LTD [2024] TIOL-88-ITAT-DEL_ ITA No. 6453/Del/2019_AY: 2006-07
Whether waiver of loan does not amount to cessation of trading liability – YES : ITAT
Supreme Court in the case of Mahindra & Mahindra held that waiver of loan for acquiring capital assets cannot be taxed as perquisite under section 28(iv) as receipt in hands of debtor/assessee are in form of cash/money and it also cannot be taxed as a remission/cessation of liability under section 41(1) as waiver of loan does not amount to cessation of trading liability. Furthermore, again reiterating the preposition the Supreme Court in its subsequent judgment in the case of PCIT vs. Gujarat State Financial Corp. held that where the loan amount was never claimed by assessee as expenditure, waiver of same could not amount to cessation of trading liability and was not chargeable to tax under section 41(1) of the Act. In view of legal prepositions rendered by Apex Court and respectfully following the same, inclined to agree with the conclusion returned by the CIT(A) while granting relief to the assessee. Tribunal was unable to see any ambiguity, perversity or any other valid reason to interfere with the findings and conclusion drawn by the First Appellate Authority and hence, uphold the same. Accordingly, grounds of Revenue being devoid on merits are dismissed.
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