Annual Digest 2024: Supreme Court and High Court Cases on Taxation [Part 38]

This annual round-up analytically summarizes the key Direct and Indirect Tax Judgments of the Supreme Court and all High Courts of India reported at Taxscan.in during 2024.

Purchases Claimed by Assessee not Proven to be Non-Business Related: Delhi HC Upholds ITAT’s Findings [Read Order] PR. COMMISSIONER OF INCOME TAX vs M/S PARAMOUNT RESIDENCY LTD CITATION:   2024 TAXSCAN (HC) 2409

In a recent ruling, the Delhi High Court upheld the findings of the Income Tax Appellate Tribunal ( ITAT ) and held that the purchases claimed by the assessee were solely and exclusively for business purposes, as there was no evidence to show that the purchases claimed by the assessee were non-business related.

The bench further observed that ‘As noted by the learned ITAT, there is no evidence to suggest that the amounts paid by the assessee for the supplies booked in its books of accounts had been returned to the assessee in a form of cash or through any accommodation entry. ‘ The High Court dismissed the appeal filed by the revenue and upheld the decision of ITAT.

Delhi HC Rejects Challenge to Assessment Order u/s 143(3), Imposes Rs. 1 Lakh Cost for Frivolous Litigation [Read Order] BT GLOBAL COMMUNICATIONS INDIA PVT.LTD vs DEPUTY COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 2410

The High Court rejected a petition challenging the assessment order passed under Section 143( 3 ) of the Income Tax Act, 1961, as it was frivolous and imposed a Rs. 1 lakh cost.

The HC, comprising Justice Vibhu Bakhru and Justice Swarna Kanta Sharma, noted that the clear language of the contents of the impugned order is unsustainable. There was no scope for raising such a challenge after the AO had amply clarified that the impugned order was issued under Section 143(3) of the Act and the assessee’s contentions to the contrary are insubstantial. The HC dismissed the above petition and imposed a fine of Rs. 1 lakh due to frivolous litigation.

Cross Empowerment of State Officials under GST: Kerala HC refers matters to Division Bench [Read Judgment] PINNACLE VEHICLES AND SERVICES PRIVATE LIMITED vs JOINT COMMISSIONER CITATION:   2024 TAXSCAN (HC) 2411

In a recent case, the Kerala High Court has remanded the matter of cross empowerment of State Goods and Services Tax ( GST ) Officials to take actions such as issuance of show cause notices ( SCN ) in the absence of specific notifications under Section 6(1) of the Central Goods and Services Tax Act.

It was thus held that, “ Since the issue raised in this writ petition will affect several proceedings, and taking note of the view expressed by the Madras High Court in Tvl. Vardhan Infrastructure (Supra), which is contrary to the prima facie view that I have taken, I am of the opinion that this issue requires an authoritative pronouncement by a Division Bench of this Court.” The case is still under consideration and will proceed to a Division Bench for further analysis. To Read the full text of the Order CLICK HERE

Reassessment Based on Insight Portal Information must be u/s 147/148, Not Section 153C: Delhi HC [Read Order] DAISY DISTRIBUTORS PVT. LTD. vs THE INCOME TAX OFFICER WARD 7(1) NEW DELHI CITATION:   2024 TAXSCAN (HC) 2414

In a recent ruling, the Delhi High Court ruled that reassessment was initiated based on insight portal information so it must be under Section 147 or 148 of the Income Tax Act, 1961 not under Section 153C.

The court dismissed the petitioner’s argument and upheld the validity of the reassessment proceedings under Section 148A of the Income Tax Act, 1961 for the assessment year 2015-16.

Assessment Year in Dispute falls beyond the period of Ten years stipulated u/s 149: Delhi HC Restrains Reassessment Proceedings [Read Order] KAD HOUSING PRIVATE LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 2415

In a recent ruling, the Delhi High Court held that the assessment in question falled beyond the period of ten years stipulated under Section 149 of the Income Tax Act, 1961, and restrained the department from initiating reassessment proceedings for the assessment year ( AY ) 2015-16.

The bench relied on the judgment of the coordinate bench in the case of The Pr. Commissioner of Income Tax—Central-1 v. Ojjus Medicare Pvt. Limited, in which the bench held that ‘the period of ten years is required to be reckoned from the end of the assessment year relevant to the year in which the notice under Section 148 of the Income Tax Act is issued.; By relying on the above judgment, the High Court, comprising of Justice Vibhu Bakhru and Justice Swarna Kanta Sharma, set aside the impugned notice.

Delhi HC Quashes GST Proceedings Against HCL Amalgamated Company Over Issuance to Non-Existent Entity Post-Merger [Read Order]HCL INFOSYSTEMS LTD vs COMMISSIONER OF STATE TAX CITATION:   2024 TAXSCAN (HC) 2413

In a recent ruling, the Delhi High Court quashed the Goods and Service Tax (GST) proceedings against HCL Infosystems’ amalgamated company due to issuance in the name of the non-existent entity after the merger.

The court quashed the SCN dated December 3, 2023, and the final order dated April 27, 2024. The court allowed the department to initiate fresh proceedings against the amalgamated entity if permissible by law.

Jharkhand HC Upholds GST Cancellation due to Lethargic Approach of Filing Appeal u/s 107 of GST After 1 year [Read Order] Marang Buru Trust vs The State of Jharkhand CITATION:   2024 TAXSCAN (HC) 2416

In a significant ruling, the High Court of Jharkhand held that the lethargic approach of filing appeal under section 107 of Central Goods and Service Tax (CGST), Act 2017 before the appellate forum after a delay of 1 year and 20 days is not acceptable and upheld the cancellation of GST Registration.

While dismissing the appeal, the court observed that “neither there is any perversity in the order of cancellation of GST registration; nor is there any necessity for interference with the appellate order, inasmuch as, the same is filed beyond the statutory period of limitation.”

ITC u/s 16(2)(c) of CGST Act Denied: Kerala HC Allows Benefit of Circular [Read Order] ARAFA PLYWOOD AND VENEERS vs STATE TAX OFFICER CITATION:   2024 TAXSCAN (HC) 2417

In a recent case regarding a challenge against the denial of Input Tax Credit (ITC) under section 16 (2)(c) of the Central Goods and Service Tax (CGST) Act , 2017, the High Court of Kerala allowed the benefit of Circular and set aside the orders to the extent it denies input tax credit on account of the provisions.

The single bench of Justice Gopinath P. allowed the writ petition by setting aside orders to the extent it denies input tax credit on account of the provisions contained in Section 16(2)(c) of the CGST/SGST Acts and directing that the claim of the petitioner shall be considered in terms of the Circulars referred to in paragraph No.101 of the judgment of this Court in M.Trade Links (Supra)after affording an opportunity of hearing to an authorised representative of the petitioner.

Lack of Opportunity to Counter Allegations : Delhi HC upholds ITAT’s Decision to set aside Order Pertaining to India-Singapore DTAA Issue [Read Order] THE COMMISSIONER OF INCOME TAX vs ZEBRA TECHNOLOGIES ASIA PACIFIC CITATION:   2024 TAXSCAN (HC) 2412

The Delhi High Court upheld the decision of the Income Tax Appellate Tribunal ( ITAT ) in an issue pertaining to India-Singapore DTAA to set aside the order as the assessee was not given an opportunity to counter the allegations.

The bench observed that the assessee was not given an opportunity to counter the CIT’s allegations that it was a conduit company without substance. The High Court dismissed the appeal filed by the revenue and upheld the decision of ITAT.

Delhi HC Upholds ITAT’s Decision on Genuine Loss Claim in Tool and Die Transactions [Read Order] THE PR. COMMISSIONER OF INCOME TAX vs M/S G-TEKT INDIA PVT. LTD CITATION:   2024 TAXSCAN (HC) 2420

The Delhi High Court has upheld the Income Tax Appellate Tribunal’s ( ITAT ) decision regarding the loss claim in a tool and die transaction as it observed that the loss incurred by the asseseee was genuine.

It further observed that “there is also no allegation that the assessee is affiliated to HCIL. It is, thus, apparent that the transaction for sale and purchase of dies was a purely commercial transaction entered into by the assessee in its commercial wisdom.” The Delhi High Court, comprising Justice Vibhu Bakhru and Justice Swarna Kanta Sharma, upheld ITAT’s decision and dismissed the appeal filed by the revenue.

Review Petitions Qualify as Pending Litigation Under DTVSV Act, Extending Scope Beyond Appeals, Writs, or SLPs: Delhi HC [Read Order] NRA IRON AND STEEL PVT LTD vs INCOME TAX DEPARTMENT & ORS CITATION:   2024 TAXSCAN (HC) 2421

In a recent ruling, the Delhi High Court ruled that review petitions qualify as “pending litigation” under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act) expanding the scope of the DTVSV Act beyond appeals, writ petitions, or Special Leave Petitions (SLPs).

The court observed that a narrow interpretation excluding review petitions would defeat the purpose of the Act particularly when other pending applications were allowed to qualify. So, the court set aside the rejection order dated February 13, 2021, and directed the Income Tax Department to accept and process the revised declaration filed by the petitioner on January 28, 2021, as per the provisions of the DTVSV Act.

Relief to Burberry: Delhi HC upholds RPM Method for Distributors Reselling AE Products Without Modification [Read Order] PR. COMMISSIONER OF INCOME TAX vs M/S. BURBERRY INDIA PVT. LTD CITATION:   2024 TAXSCAN (HC) 2419

The Delhi High Court granted relief to Burberry India and upheld the RPM method for the distributors reselling the AE products without modifications.

The bench of Justices Vibhu Bakhru and Swarana Kanta Sharma upheld the Tribunal’s decision, dismissing the Revenue’s appeal. It found no merit in the argument that AMP expenses disqualified the assessee as a routine distributor. The Court concluded that no substantial question of law arose and affirmed that the Tribunal’s findings were justified in the provided facts. The appeal was accordingly dismissed.

‘Makaan in registered deed was not a residential house’: Delhi HC upholds ITAT’s Interpretation of ‘Residential House’ for S. 54F Exemption [Read Order] HIMANSHU GARG vs ASSISTANT COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (ITAT) 1519

In a recent ruling, the Delhi High Court upheld the decision of the Income Tax Appellate Tribunal ( ITAT )  that the reference to a ‘makaan’ in the registered deed was not a residential house and disallowed exemption claimed under Section 54F of the Income Tax Act, 1961.

The bench upheld the findings of ITAT that the reference to a ‘makaan’ in the registered deed was not a residential house The Delhi High Court, comprising Justice Vibhu Bakhru and Justice Swarna Kanta Sharma, upheld ITAT’s decision and dismissed the appeal filed by the assessee.

Dissimilar comparables in Transfer Pricing Owing to Intangibles as Goodwill and Product Development Costs: Delhi HC upholds Exclusion [Read Order] PR. COMMISSIONER OF INCOME TAX-6 vs FREESCALE SEMICONDUCTOR INDIA PVT CITATION:   2024 TAXSCAN (HC) 2418

In a recent ruling, the Delhi High Court upheld the exclusion of dissimilar comparables in transfer pricing due to intangibles such as goodwill and product development costs.

The High Court bench, comprising Justice Vibhu Bakhru and Justice Swarna Kanta Sharma, observed that the functional differences pointed out by the ITAT cannot be considered insignificant. The High Court dismissed the appeal filed by the revenue as there was no substantial question of law and upheld the decision of ITAT.

Use of Two Flats in Different Floors as Unified Residence Impractical: Delhi HC upholds Disallowance of S. 54 Capital Gains Exemption [Read Order] MRS. KAMLA AJMERA vs PR. COMMISSIONER OF INCOME TAX CITATION:   2024 TAXSCAN (HC) 2422

In a significant judgment, the Delhi High Court upheld the disallowance of a full exemption claim under Section 54 of the Income Tax Act for capital gains used to purchase multiple flats. The Division Bench of the court that heard the case ruled that two flats purchased by the appellant, located on different floors of the same residential tower, do not qualify as a single residential house for exemption purposes.

The court dismissed the appellant’s claim for full exemption under Section 54, affirming the ITAT decision to grant partial exemption only for the flat with the higher investment. The bench of Justice Swarna Kanta Sharma and Justice Vibhu Bakhru reiterated that multiple residential units cannot be treated as a single house unless they are physically and functionally unified.

Madras HC quashes Arbitrary Property Tax Revision, Upholds Principles of Natural Justice [Read Order] A.S.Narayanasamy vs The Commissioner CITATION:   2024 TAXSCAN (HC) 2427

In a recent ruling, the Madras High Court quashed the arbitrary property tax revision and upheld principles of natural justice.

The high court bench, comprising of Justice Krishnan Ramaswamy, set aside the impugned order and remanded the case back for reconsideration to pass fresh orders within a period of eight weeks from the date of receipt of a copy of this order. The assessee was represented by Mr. M. Velmurugan, and the department was represented by Mr. N. Umapathy.

Reassessment Valid Despite Jurisdictional Challenge: Delhi HC Restores ITAT Proceedings [Read Order] PRINCIPAL COMMISSIONER OF INCOME TAX-1 vs M/S AGROHA FINCAP LTD. CITATION:   2024 TAXSCAN (HC) 2424

In a recent ruling, the Delhi High Court held that the reassessment of income under Section 147 of the Income Tax Act, 1961, was valid despite challenges to jurisdiction and restored the case to ITAT for proceedings.

The bench, comprising Justice Vibhu Bakhru and Justice Swarna Kanta Sharma, allowed the revenue’s appeal and restored the case before the ITAT for consideration on the other grounds raised by the assessee.

Concealment Or Inaccurate Particulars u/s 271(1)(c) of Income Tax Carry Different Meanings, Revenue Fails To Specify: Delhi HC Invalidates Penalty [Read Order] COMMISSIONER OF INCOME TAX vs GRAGERIOUS PROJECTS PVT. LTD CITATION:   2024 TAXSCAN (HC) 2425

In a recent ruling, the Delhi High Court invalidated penalty proceedings under Section 271(1)(c) of the Income Tax Act stating the different meanings of “concealment of income” and “furnishing inaccurate particulars of income” and revenue failure to specify the charge.

The court pinpointed that penalty proceedings are penal require strict procedural compliance, and reliance on vague notices undermines their validity. The court ruled that the revenue’s failure to strike off irrelevant portions of the penalty notices and specify the charge invalidated the proceedings. The court dismissed the Revenue’s appeals, upholding the ITAT’s decisions to quash the penalties.

No Customs Duty on Personal Jewellery: Delhi HC [Read Order] SABA SIMRAN vs UNION OF INDIA & ORS CITATION:   2024 TAXSCAN (HC) 2428

The Delhi High Court recently quashed an Order passed by the Joint Commissioner of Customs levying penalty on the Petitioner for not declaring personal jewellery while passing through Customs.

Referencing the judgment of the Kerala High Court in Vigneswaran Sethuraman vs. Union of India (2014), the Division Bench held that the Respondent Joint Commissioner of Customs had misconstrued the scheme as well as the objectives of the 2016 Rules. In light of the observations, the Delhi High Court proceeded to quash the order-in-original dated 21.09.2023 while remitting the matter back to the Joint Commissioner for reevaluation, bearing in mind the observations and outcome of the present case.

Plea Partially Ignored while issuing SCN u/s 74(1) of GST Act: Allahabad HC directs Deposit of 50% of Disputed Tax for Reconsideration [Read Order] M/S Kashi Vishwanath Mfg vs State of U.P CITATION:   2024 TAXSCAN (HC) 2423

The Allahabad High Court directed the petitioner to deposit 50% of the disputed tax of Rs. 73.8 lakhs for providing fresh hearing and issuance of fresh order. The bench noted that the plea of the petitioner was not considered by the Goods and Services Tax ( GST ) department to some extent while issuing the SCN under Section 74(1) of GST Act, 2017.

If the deposit is made within the directed time, the impugned order dated July 24, 2023, will be set aside, and the respondent will provide the petitioner with an opportunity for a fresh hearing and issue a revised order. Failure to comply with the deposit requirement would result in the dismissal of the writ petition.

Delhi HC Upholds ITAT Decision on Non-Deductibility of TDS for fees paid to Overseas Associated Enterprise under India-US DTAA [Read Order] PR. COMMISSIONER OF INCOME TAX- 2 vs CIENA COMMUNICATIONS INDIA PVT. LTD CITATION:   2024 TAXSCAN (HC) 2426

The Delhi High Court upheld the ruling of the Income Tax Appellate Tribunal ( ITAT ) on the non-deductibility of TDS for fees paid to overseas associated enterprises under the India-US Double Tax Avoidance Agreement ( DTAA ).

The Delhi HC held that the revenue’s claim that payments constitute fees for included services under Article 12 of the DTAA lacks merit, as no perversity in ITAT’s factual findings was alleged. The High Court, comprising Justices Vibhu Bakhru and Swarna Kanta Sharma, upheld ITAT’s decision and dismissed the appeal filed by the revenue.

Clear Violation of Principles of Natural Justice: Madras HC remands GST ITC Discrepancy for reconsideration on Rs. 1.4 Cr Pre-Deposit Condition [Read Order] M/s.Aadhi Cars Private Limited vs The Assistant Commissioner CITATION:   2024 TAXSCAN (HC) 2430

In a recent ruling, the Madras High Court remanded the case concerning a GST ITC discrepancy for reconsideration, imposing a pre-deposit condition of Rs. 1.4 crore as there was a clear violation of the principles of natural justice.

The Court, comprising Justice Krishnan Ramaswamy, remanded the matter to the respondent for fresh consideration, on the condition that the petitioner pays a sum of Rs. 1,40,00,000 to the respondent within four weeks from the date of receipt of a copy of this order.

GST Payment and TDS Claims must be State-Specific based on Work Executed: Telangana HC in L&T-PES Matter [Read Order] M/s. L and T PES JV vs Assistant Commissioner of State Tax and 5 others CITATION:   2024 TAXSCAN (HC) 2431

In a recent ruling, the Telangana High Court ruled that GST payments and TDS claims must be state-specific based on the proportion of work executed in each state.

It was observed discrepancies between GSTR-3B and GSTR-7A filings due to the respondent’s erroneous TDS remittance practices and pinpointed that such mismatches could not be used to hold the petitioner liable for tax in Telangana for work executed in Maharashtra. The court directed the adjudicating authority to reassess the refund claims upon submission of relevant documents by the Joint Venture ( petitioner ).

TPO Compared Dissimilar Companies for Determining ALP for Future First Info: Delhi HC Directs Exclusion of Infosys BPO, Acropetal, and e-Clerx as Comparables [Read Order] PR. COMMISSIONER OF INCOME TAX-1 vs FUTURE FIRST INFO. SERVICES PVT. LTD CITATION:   2024 TAXSCAN (HC) 2429

In a recent ruling, the Delhi High Court directed exclusion of Infosys BPO, Acropetal, and e-Clerx as Comparables after Transfer Pricing Officer (TPO) compared dissimilar companies for determining Arm Length Pricing (ALP) for Future First Info Services Pvt. Ltd., (the petitioner).

The court found no substantial question of law requiring intervention stating that the exclusion of comparables was justified based on functional dissimilarity and precedents like Rampgreen Solutions Pvt. Ltd. vs. CIT. So, the court upheld the ITAT’s decision and dismissed the revenue’s appeal.

Allow Visually Challenged Students to attend AIBE Exam On Computer: Supreme Court tells BCI [Read Judgement]YASH DODANI & ORS vs UNION OF INDIA & ORS CITATION:   2024 TAXSCAN (SC) 295

The Supreme Court of India, in a hearing, addressed a writ petition (No. 785/2024) filed by Yash Dodani and others, seeking enhanced accessibility for visually impaired candidates in examinations conducted by the Bar Council of India ( BCI ). The bench comprised of Justices Surya Kant, Dipankar Datta, and Ujjal Bhuyan.

Thus,the BCI was directed to make all necessary arrangements to enable visually impaired candidates to answer questions on computers, should they choose this option. The Supreme Court emphasized compliance with the directive to ensure inclusivity and empowerment of visually impaired candidates. The matter has been adjourned to January 22, 2025, for further review of the progress.

Is Cash a “Thing” under GST Section 67(2)? Supreme Court to Decide [Read Judgement] COMMISSIONER OF CGST vs ANSHUL JAIN CITATION:   2024 TAXSCAN (SC) 293

The Supreme Court is to decide whether Cash qualifies as ‘Thing’ for the purposes of Section 67(2) of Goods and Services Tax ( GST Act ).

The seizure is only applicable when the cash is stock-in trade otherwise not. With the Supreme Court set to address this important question of law, a definitive and uniform clarification is expected, allaying any lingering vagueness.

Imported Cars: No Duty Liability on Mere Possession, rules Supreme Court [Read Judgement]

In a landmark judgment, the Supreme Court of India ruled that subsequent purchasers of imported vehicles cannot be held liable for customs duty evasion committed by the original importer.

In result, the Supreme Court Bench of Justice B.V. Nagarathna and Justice Nongmeikapam Kotiswar Singh quashed the High Court decision, reinstating the Appellate Tribunal’s order in favor of the appellant. The Customs Department was directed to pursue claims against the original importer instead. This decision is expected to set a significant precedent in similar disputes involving subsequent purchasers of imported goods.

ITC not available for Goods Purchased for Sales Promotion Activities under GST: Madras HC [Read Order] M/s.ARS Steels and Alloy International Private Limited vs The State Tax Officer CITATION:   2024 TAXSCAN (HC) 2433

In a recent ruling, the Madras High court has ruled that the Input Tax Credit ( ITC ) is not available under the Goods and Services Tax ( GST ) for the goods purchased for the sales promotion activities.

The court provided the clarity of Section 17(5)(h) of the GST Acts, which explicitly disallows ITC for items disposed of as gifts or free samples, regardless of their use in promotional activities. Consequently, the petitioner’s claim for ITC on T-shirts and gold coins was found untenable under the law. The writ petitions were dismissed accordingly.

Non-Issuance of Income Tax Notice u/s 143(2) cannot be Cured u/s 292BB: Delhi HC dismisses Revenue’s appeal [Read Order] COMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION-1 vs ORACLE SYSTEMS CORPORATION CITATION:   2024 TAXSCAN (HC) 2434

In a recent ruling, the Delhi High Court dismissed the Revenue’s appeal ruling that non-issuance of notice under Section 143(2) is a fatal procedural lapse that cannot be validated under Section 292BB of the Income Tax Act, 1961

The court explained that Section 292BB cannot cure the defect of non-issuance of notice under Section 143(2) if no notice was issued in the first place. The court rejected the revenue’s argument. The Court dismissed all appeals filed by the revenue.

Co-Accused Statements u/s 50 of PMLA Not Substantive Evidence, To Be Tested During Trial Not Bail Stage: Calcutta HC [Read Order] Sujay Krishna Bhadra vs Enforcement Directorate Kolkata Zonal Office-II CITATION:   2024 TAXSCAN (HC) 2435

In a recent ruling, the Calcutta High Court held that statements made by co-accused under Section 50 of the Prevention of Money Laundering Act (PMLA) cannot be treated as substantive evidence and such statements must be tested during the trial and cannot form the sole basis for denying bail at the preliminary stage.

The court explained that these allegations must be supported by other evidence during the trial and cannot be the only basis for keeping the petitioner in jail. Considering the petitioner’s long time in jail without trial and no further need for custody. The court granted him bail.

Foreign Trade Policy Provision Cannot Authorise Levy Of Interest u/s 28AA Of Foreign Trade Act: Kerala HC [Read Order] BRADDOCK INFOTECH PRIVATE LIMITED vs JOINT DIRECTOR GENERAL OF FOREIGN TRADE CITATION:   2024 TAXSCAN (HC) 2436

In a significant case, the Kerala High Court held that the provisions of the Foreign Trade Policy cannot by itself authorise the levy of interest under Section 28AA of the Foreign Trade (Development and Regulation) Act, 1992, as such levy must be supported by plenary legislation.

The Court while allowing the petition held that the petitioner is not liable to pay interest under Section 28AA of the 1962 Act on the amounts repaid by the petitioner on the petitioner being found ineligible for the benefit of the Scheme introduced by the Foreign Trade Policy which was in force for the period from 01-04-2015 to 31-03-2020.

Loss in Derivatives can be set off against Business Income as it not a Speculative Transaction: Kerala HC [Read Order] THE PRINCIPAL COMMISSIONER OF INCOME TAX KOCHI-1 vs DEWA PROJECTS PVT. LTD CITATION:   2024 TAXSCAN (HC) 2437

In a recent case, the Kerala High Court ruled that loss in derivatives is not a speculative transaction and can be set off against business income of the assessee. Further, this is not a case where Section 73 of Income Tax Act is attracted since it deals with losses in speculation business.

While dismissing the appeal, the single Bench of Justice A.K. Jayasankaran Nambiar observed that “a loss in the derivative business would consequently be a business loss for the purposes of Section 72, and a set off of such business loss would have to be permitted against profits and gains of business as computed in terms of the I.T. Act”.

Mere Mentioning of Sale of Entry as Purchase Does Not Invalidate Income Tax Notice Flagging Bogus Transactions: Gauhati HC [Read Order] ABHISHEK MITTAL vs UNION OF INDIA AND 2 ORS CITATION:   2024 TAXSCAN (HC) 2438

The Gauhati High Court in a significant case has dismissed a challenge to an order under Section 148A(d) of the Income Tax Act, 1961. The bench held that mere mentioning of sale of entry as purchase does not invalidate Income Tax notice flagging bogus transactions.

While dismissing the appeal, the bench viewed that there was no violation to Section 148A of the Act of 1961 while passing the impugned orders and as such the said impugned orders do not come within the ambit of the exceptions as settled by the Supreme Court as referred to supra. It is the opinion of the Court that both the writ petitions challenging the impugned orders dated 10.09.2022 in WP(C) No.7014/2022 and the order dated 31.05.2022 in WP(C) No.4975/2022 do not call for interference under Article 226 of the Constitution.

Loss of FD Investments is Capital Loss Not a ‘Trading Loss’: Telangana HC Upholds Disallowance of Deduction Claim u/s 28 Of Income Tax Act [Read Order] M.Vinayak vs Dy Commissioner of Income Tax CITATION:   2024 TAXSCAN (HC) 2439

In a significant case, the Telangana High Court has held that the loss of fixed deposit investments does not qualify as a ‘trading loss’ for the purposes of claiming deduction from income under Section 28 of the Income Tax Act, 1961.

The division bench of Chief Justice Alok Aradhe and Justice Sreenivas Rao held that the loss suffered by the assessee, when the bank went to liquidation, is only a capital loss and cannot be treated as bad debt or trading loss.

Validity of SCN issued by Anti-Evasion Wing under Challenge: Delhi HC stays Transfer of GST Proceedings M/S SIEMENS HEALTHCARE PVT LTD vs UNION OF INDIA & ORS CITATION:   2024 TAXSCAN (HC) 2441

In a significant development, the Delhi High Court has stayed proceedings related to a contested Show Cause Notice ( SCN ) issued by the Anti-Evasion Wing of the Central Goods and Services Tax ( CGST ) Commissionerate. The matter pertains to a writ petition filed by M/S Siemens Healthcare Pvt. Ltd., challenging the legality of the transfer of an ongoing GST audit to the Anti-Evasion Wing.

The respondents have been directed to file their reply within three weeks, while the petitioner has two weeks thereafter to file a rejoinder. The case is scheduled for its next hearing on January 17, 2025.

Central Tax Officers and DGGI Hold Nationwide Authority to issue SCNs: Rajasthan HC [Read Order] M/s Baba Minerals vs Union Of India CITATION:   2024 TAXSCAN (HC) 2444

In a recent ruling, the Rajasthan High Court confirmed that Central Tax Officers and the Directorate General of Goods and Services Tax Intelligence ( DGGI ) have nationwide authority to issue Show Cause Notices ( SCNs ) under the Goods and Services Tax ( GST ).

The court held that the writ petition was premature and should have been filed after responding to the show cause notice. The writ petition was dismissed.

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