Direct Tax Weekly Flashback for the period 13 October 2024 to 19 October 2024.
Table of Contents
Supreme Court – Direct Tax Weekly Flashback
Royalty Imposed By Municipal Corporation On Advertising Companies For Putting Up Hoardings/Advertisements Can’t Be Termed As ‘Tax’: Supreme Court
Case Title: The Patna Municipal Corporation & Ors. V/S M/S Tribro Ad Bureau & Ors.
Case No.: Civil Appeal No. 11117 Of 2024
The Supreme Court has held that ‘royalty’ imposed by Municipal Corporation on the advertising companies for putting up hoardings/advertisements could not be termed as ‘tax’.
The bench of Justice Vikram Nath and Justice Ahsanuddin Amanullah has observed that the Resolution to charge enhanced royalty in exercise of purported power under Section 431 of the Act was misplaced as royalty is not tax. It has been authoritatively clarified by this Court that royalty and tax are not one and same. The Corporation’s power to charge royalty cannot be interfered with on the ground that the same is not available, either in the Act or in the Regulations concerned, as there is no question of the said ‘royalty’ being a tax. Section 431 of the Act, therefore, would not come into the picture where royalty, that too by way of and under an agreement/understanding is concerned.
Income Tax Deduction Allowable On Interest For Broken Period In Case Of Stock -In-Trade: Supreme Court
The Supreme Court has held that income tax deduction allowable on interest for broken periods in case of stock-in-trade.
The bench of Justice Abhay S Oka and Justice Pankaj Mithal has observed that while distinguishing the case of Vijaya Bank Ltd. v. Additional Commissioner of Income Tax, Bangalore observed that the decision of the Court in the case of Vijaya Bank Ltd. was rendered after considering Sections 18 to 21 of the Income Tax Act, which have been repealed. Therefore, the Tribunal rightly held that as the appellant/assessee was holding the securities as stock-in-trade, the entire amount paid by the appellant for the purchase of such securities, which included interest for the broken period, was deductible.
Gujarat High Court – Direct Tax Weekly Flashback
BREAKING | CA Files PIL Before Gujarat High Court Challenging Non-Allowing Rebate Guaranteed U/s 87A Of Income Tax Act 1961
CA Chintan Nareshkumar Patel has filed a Public Interest Litigation (PIL) challenging the action of the department for not allowing the rebate guaranteed u/s 87A Of Income Tax Act 1961.
Punjab and Haryana High Court
Cheque For Refund Issued By Income Tax Dept. Bounced Despite Court’s Clear Directions: Punjab & Haryana High Court Orders Departmental Action
Case Title: Suvidhi Udyog Private Limited V/S National Faceless Assessment Centre And Others
Case No.: CM-213-CWP-2024 and CM-214-CWP-2024 in/and CWP-8976-2022
The Punjab and Haryana High Court has directed the departmental action against the income tax officials as the cheque for refund issued by income tax dept. bounced despite the court’s clear directions.
The Bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth has observed that the concerned officers, who were holding the helms of affairs at that relevant time in the concerned offices, and their subordinates, have tried to mislead the Court. The departmental action, therefore, is required to be taken against them.
CBDT Circular Prescribing Monetary Limits To File Appeal/SLP Not Applicable On International Tax Appeal Involving DTAA: Punjab & Haryana High Court
Case Title: Commissioner Of Income Tax (International Taxation) Versus Perfetti Van Melle Ict B.V.
Case No.: ITA-40-2023 (O&M)
The Punjab and Haryana High Court has held that the circular issued by the Central Board Of Direct Taxes (CBDT) prescribing monetary limits to file appeal/SLP is not applicable on international tax appeal involving the provisions of Double Taxation Avoidance Treaty (DTAA).
The bench of Justice Sanjeev Prakash Sharma and Justice Sanjay Vashisth has observed that the monetary limits prescribed in Circular No. 5/2024 shall not be applicable on in respect of litigation arising out of disputes related to TDS/TCS matters in both domestic and International taxation charges where dispute relates to the determination of the nature of transaction such that the liability to deduct TDS/TCS thereon or otherwise is under question. The circular shall also not be applicable on appeals of International taxation charges where the dispute relates to the applicability of the provisions of a Double Taxation Avoidance Agreement.
Notifications – Direct Tax Weekly Flashback
CBDT Issues Revised Guidelines For Compounding of Offences Under Income Tax Act, 1961
The Central Board of Direct Taxes (CBDT) has issued Revised Guidelines for compounding of offences under the Income- tax Act, 1961.
