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News Bulletinby Kanishka

Software firm wins transfer pricing case as tax officer's comparable selections rejected

This case involves LSI Technologies India (P.) Ltd., a wholly-owned subsidiary of a Cayman Islands company, rendering software development services to its associated enterprise (AE). The Income Tax Officer (ITO) made a transfer pricing adjustment, increasing LSI's arm's length price (ALP) for the services rendered to its AE. LSI challenged the ITO's selection of certain companies as comparables for determining the ALP. The Income Tax Appellate Tr ...

The petitioner’s participation in the reassessment proceedings precluded him from challenging the initial notice at a later stage

Chhagan Bhujbal, the petitioner, challenged a notice issued by the Income Tax Officer under Section 148 of the Income Tax Act, 1961, to reopen his assessment for the financial year 2012-13. The High Court dismissed the petition, holding that the tax authorities had tangible material to believe that income had escaped assessment, justifying the reopening.

AO can't solely rely on forced confessions during survey for add backs.

In a recent case involving Smt. Usha Rani Talla, the ITAT upheld the deletion of additions made by the AO to her income based on a statement recorded during a survey under Section 133A of the Income Tax Act. The additions pertained to Rs. 20 lakhs towards renovation of the showroom and Rs. 14 lakhs as cash found at the shop premises. The ITAT ruled that the statement, which was retracted immediately after the survey, was made under duress and lac ...

Assessee Triumphs in Bogus Purchase Case: Retracted Statement Insufficient for Additions

In a significant ruling, the Income Tax Appellate Tribunal (ITAT) allowed the appeals filed by M/s Yashasvi Fish Meal and Oil Company, Udupi, against the additions made by the Assessing Officer (AO) towards bogus purchases for various assessment years. The ITAT held that the AO cannot make additions solely based on a retracted statement recorded during a survey, without corroborative evidence or rejecting the books of accounts.

Tax Authorities should Limit Additions to Gross Profit Rate in Bogus Purchase Cases, Aligning with Rates on Genuine Purchases

The primary issue revolves around the addition of Rs. 1,25,62,972/- on account of alleged bogus purchases and commission, based on the findings of the Assessing Officer (AO) during the scrutiny assessment. After hearing both the parties, relying on the Jurisdictional High Court's decision, the Tribunal remitted the case back to the assessing officer with a direction to examine the profit percentage on the disputed transactions, the genuine purcha ...

Understanding Retirement Taxes and Voluntary Retirement: A Complete Overview

This extensive tutorial delves into the realm of retirement taxes and voluntary retirement, providing insights into the advantages of retirement plans, their various varieties, and the potential effects of taxes on investments. It emphasizes the importance of voluntary retirement savings and strategies to minimize taxes on retirement income, empowering readers to make future-focused financial decisions. The article also highlights the significanc ...

Revised TCS Rates and Credit Card Payments in Liberalised Remittance Scheme (LRS)

The Ministry of Finance has announced changes to the Tax Collection at Source (TCS) on payments under the Liberalised Remittance Scheme (LRS) and on overseas tour program packages. These changes were initially set to take effect from 1st July 2023 but have been postponed. The revised TCS rates and inclusion of credit card payments in LRS will now be implemented from 1st October 2023. Notably, there will be no change in the rate of TCS for all pur ...

Mere inclusion of the lands in a draft town planning scheme or their potential future non-agricultural use did not change their agricultural character at the time of sale.

The Gujarat High Court overturned the Income Tax Appellate Tribunal's decision and ruled in favor of the assessee, Chandulal Lallubhai (HUF). The court held that the lands sold by the assessee to a housing society were agricultural lands, and the profits from the sale were not liable to be taxed as capital gains.

Navigating Tax Compliance: The Revamped Income Tax Website Unveiled

The Income Tax Department has launched a revamped national website, incometaxindia.gov.in, designed to streamline tax compliance and enhance user experience. With a mobile-friendly interface, dynamic due date alerts, and cross-referencing capabilities, this comprehensive platform empowers taxpayers and professionals to navigate the intricate world of taxation with ease. Explore the new features that simplify tax filing, provide access to laws and ...

Trust providing coaching for Russian studies and paramedical courses allowed tax exemption under Section 10(22)

The case involved a trust, Indo-Soviet Medicare & Research Foundation, which entered into an agreement with the USSR State Committee to sponsor Indian students for higher studies in USSR. The trust collected fees from selected students to establish a center for Russian language and preparatory courses in India. After the dissolution of the USSR, the trust started its own paramedical education and training school and also provided financial assist ...

Navigating Angel Tax in India: Regulations, Exemptions, and Recent Amendments

The provisions relating to angel tax in the Income Tax Act, 1961 were introduced to regulate funding received by unlisted companies from angel investors and to prevent money laundering and funneling of black money into the start-up ecosystem. Originally, unlisted companies receiving consideration for issue of shares exceeding the face value from any resident were liable to tax under section 56(2)(viib) of the IT Act. This provision, commonly refe ...

Unlock Tax Benefits with Capital Gains Account

The Income Tax Act provides a unique opportunity for individuals to save on long-term capital gains tax by investing the proceeds from the sale of a property into a residential property or capital gains bonds. This strategic move, known as the Capital Gains Account, allows you to defer the tax liability and potentially maximize your investment returns. However, it’s crucial to understand the nuances and comply with the prescribed rules to fully b ...

Unlocking the Power of Tax-Free Bonds: A Savvy Investment Opportunity

Tax-free bonds offer investors a unique opportunity to earn fixed interest income while enjoying tax exemptions. These bonds, issued by government entities and public sector undertakings, provide a steady stream of tax-free returns, making them an attractive investment choice for individuals seeking to optimize their tax liabilities and build a diversified portfolio. With their low-risk profile and potential for capital appreciation, tax-free bon ...

Unraveling the Taxation Landscape for Non-Resident Indians

As a Non-Resident Indian (NRI), navigating the intricate web of taxation can be a daunting task. However, understanding the nuances is crucial to ensure compliance and maximize financial gains. This comprehensive guide delves into the key aspects of taxable income for NRIs, shedding light on the various sources of income, applicable tax rates, and deductions available. From rental income to capital gains, this overview equips NRIs with the knowle ...

High Court Dismisses Appeal by Principal Commissioner of Income Tax Asansol Against Gunja Samabay Krishi Unnayan Samity Ltd.

The case ITAT/270/2022 involved an appeal filed by the Principal Commissioner of Income Tax, Asansol against Gunja Samabay Krishi Unnayan Samity Ltd. The appeal was directed against the order passed by the Income Tax Appellate Tribunal for the assessment year 2016-2017. The appeal was filed under Section 260A of the Income Tax Act. The revenue raised substantial questions of law related to the quashing of the order passed under Section 263 of the ...