Top 15 Supreme Court Tax Cases 2024 ( Income Tax )
Relief to Acer: No TDS on Income in payments received by distributors from Customers: Supreme Court dismisses SLP THE COMMISSIONER OF INCOME TAX (TDS) BENGALURU vs M/S ACER INDIA PVT. LTD CITATION: 2024 TAXSCAN (SC) 191 In the case of M/S Acer India Pvt Ltd, the Supreme Court of India upheld that Tax deduction at source ( TDS ) does not apply to income from payment received...
Relief to Acer: No TDS on Income in payments received by distributors from Customers: Supreme Court dismisses SLP THE COMMISSIONER OF INCOME TAX (TDS) BENGALURU vs M/S ACER INDIA PVT. LTD CITATION: 2024 TAXSCAN (SC) 191
In the case of M/S Acer India Pvt Ltd, the Supreme Court of India upheld that Tax deduction at source ( TDS ) does not apply to income from payment received by distributors from customers. The two-judge bench dismissed the Special Leave petition( SLP ) which arose out of impugned final judgment and order passed by the High Court of Karnataka.
The issue was related to the liability to deduct tax at source under Section 194-H of the Income Tax Act, 1961 on the amount which, as per the Revenue, is a commission payable to an agent by the assessees under the franchise/ distributorship agreement between the assessees and the franchisees/distributors.
As per the assessees, neither are they paying a commission or brokerage to the franchisees/distributors nor are the franchisees/distributors their agents. The High Courts of Delhi and Calcutta have held that the assessees were liable to deduct tax at source under Section 194-H of the Act, whereas the High Courts of Rajasthan, Karnataka and Bombay have held that Section 194-H of the Act is not attracted to the circumstances under consideration.
THE DEPUTY COMMISSIONER OF INCOME TAX vs APPLE INDIA PRIVATE LIMITED CITATION: 2024 TAXSCAN (SC) 192
The Supreme Court of India dismissed the special leave petition filed against Apple India Private Limited, affirming that warranty claims are allowable when made in accordance with provisions and guidelines.
The petition arose from a final judgment by the Karnataka High Court concerning the disallowance of warranty provisions claimed by the assessee company, engaged in trading Apple products in India. Despite the company’s explanations, the Court noted a delay of 225 days in filing the special leave petition and found the explanation for condonation of delay unsatisfactory.
Considering similar matters previously dismissed and the lack of merit, the Court dismissed the special leave petition on both grounds of delay and merits.
SLP Against Income Tax Order: Supreme Court Issue Notice against Central Bank of India COMMISSIONER OF INCOME TAX 2 vs CENTRAL BANK OF INDIA CITATION: 2024 TAXSCAN (SC) 163
The Supreme Court of India has issued notice against the Central Bank of India regarding a Special Leave Petition (SLP) stemming from a final judgment by the High Court of Judicature at Bombay dated July 21, 2023, in ITA No. 1683/2018. The Bombay High Court disposed of the petition in light of a prior judgment in Commissioner of Income Tax-LTU v/s. Union Bank of India, which raised questions about the taxation of interest on sticky loans.
The Court clarified that the Tribunal’s decision not to treat interest on sticky loans as accrued income was based on instructions issued by the Board in a 1984 circular.
Delay of 596 Days in Filing SLP against Income Tax Appeal: Supreme Court Dismisses SLP in Absence of Valid ReasonPR. COMMISSIONER OF INCOME TAX -2 THANE vs INDO AMINES LTD CITATION: 2024 TAXSCAN (SC) 164
The two-judge bench of the Supreme Court of India dismissed a Special Leave Petition (SLP) due to a significant delay of 596 days in filing the petition against an Income Tax Appeal. The SLP, filed by the Commissioner of Income Tax against the final judgment and order dated February 26, 2022, in ITA No. 760/2022 passed by the High Court of Judicature at Bombay in favor of Indo Amines Ltd., lacked a valid reason for the delay.
Justices B V Nagarathna and Augustine George Masih noted the substantial delay and found the explanation for condoning it unsatisfactory. Considering a previous order dated January 2, 2024, where a similar petition was dismissed on merits, the court ruled to dismiss the current SLP both due to the delay and on its merits.
Deletion of Addition on Submission of Proper Cash Book: SC dismisses SLP filed by Income Tax Dept PR. COMMISSIONER OF INCOME TAX GANDHINAGAR vs OM SHREE NAGRAJ GINNING FACTORY CITATION: 2024 TAXSCAN (SC) 168
The Supreme Court of India dismissed a special leave petition ( SLP ) filed by the Income Tax Department in the challenge regarding the deletion of addition on submission of proper cash book. The SLP arose out of impugned final judgment and order dated 27-11-2017 in ITA No. 923/2017 passed by the High Court of Gujarat at Ahmedabad.
Two Judge Bench of the Supreme Court of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar observed that “Delay in the matters is condoned. Having heard the counsel for the petitioner(s), we are not inclined to interfere. Hence, the special leave petitions are dismissed.”
Software Firms that Purchase Computer Software from Foreign Software Suppliers exempted from Deducting TDS: SC dismisses SLPCOMMISSIONER OF INCOME TAX INTERNATIONAL TAXATION 2Petitioner(s) vs MICROSOFT CORPORATION CITATION: 2024 TAXSCAN (SC) 170
The Supreme Court of India dismissed a special leave petition ( SLP ) in the challenge regarding the judgment on software firms that purchase computer software from foreign software suppliers exempted from deducting TDS.
The Court noted that the issue raised by the Revenue in the present special leave petition is covered against them vide judgment dated 02.03.2021 in the case of Engineering Analysis Centre of Excellence Private Limited vs.
The Commissioner of Income Tax &Anr. A Two-Judge Bench of Justice Sanjiv Khanna and Justice Dipankar Datta observed that “Recording the aforesaid, the special leave petition is dismissed, as the said decision of this Court covers the same. In case the review petition on the issue raised in the present special leave petition is allowed, it will be open to the petitioner(s) to get the present special leave petitions revived.”
Monetary Limits for Filing of Income Tax Appeals by Department: SC dismisses Revenue Appeal w.r.t low Tax Effect COMMISSIONER OF INCOME TAX vs JAGSON INTERNATIONAL LTD 2024 TAXSCAN (SC) 173
The Supreme Court while observing the monetary limits for filing of income tax appeals by the department dismissed the revenue appeal with respect to the low tax effect.
The aforementioned appeal, filed by the revenue concerning the case involving Jagson International Ltd., saw Senior Counsel Mr. Arijit Prasad representing the appellant(s). Mr. Prasad suggested that “considering the low tax effect, as per the Notification dated 08.08.2019 at Instruction No.17 of 2019, these appeals could be resolved.”
The division bench of the supreme court, comprising B.V. Nagarathnaand Sanjay Kumar dismissed the revenue appeal with respect to the low tax effect.
Challenge on Disallowance u/s 14A of Income Tax Act to be restricted to exempt Income Earned: SC Condones delay in SLP filed by Income Tax DeptTHE PR. COMMISSIONER OF INCOME TAX vs GMR ENTERPRISES PVT. LTD 2024 TAXSCAN (SC) 175
The Supreme Court condoned delay in special leave petition ( SLP ) filed by Income Tax Department in the matter regarding a challenge on disallowance under Section 14A of the Income Tax Act, 1961 to be restricted to exempt income earned.The SLP arose out of the impugned final judgment and order dated 13-03-2023 in ITA No. 175/2022 passed by the High Court of Karnataka at Bengaluru.
A Two-Judge Bench of Justice Abhay S Oka and Justice Ujjal Bhuyan observed that “Application seeking exemption from filing certified copy of the impugned order is allowed. Delay condoned. Issue notice.”
Supreme Court dismisses Appeal of Income Tax Department on ground of Low Tax Effect COMMISSIONER OF INCOME TAX vs JAGSON INTERNATIONAL LTD 2024 TAXSCAN (SC) 173
A two-judge bench of the Supreme Court dismissed the appeal on the ground of low tax effect as being covered by the Circular No. 17 of 2019 issued by the Department of Revenue, Ministry of Finance.
The two-judge bench of the Supreme Court comprising Justice B V Nagarathna and Justice Sanjay Kumar Court bench comprising dismissed the appeal on the ground of low tax effect.
Variable Licence Fee paid annually by Telecommunication Companies to DOT is Capital Expenditure: SC dismisses Review PetitionBHARTI HEXACOM LTD vs COMMISSIONER OF INCOME TAX 2024 TAXSCAN (SC) 176
The Supreme Court dismissed a review petition, challenging the judgment wherein it was held that variable licence fee paid annually by telecommunication companies to DOT is capital expenditure.
The review petition arose out of the impugned final judgment and order dated 16-10-2023 in C.A. No.11128/2016 passed by the Supreme Court of India.
A Two-Judge Bench of Justice BV Nagarathna and Justice Ujjal Bhuyan observed that “Application for oral hearing is rejected. The Review Petition is dismissed in terms of the signed order.”
Supreme Court Defers SLP Involving Alleged Rs.38,000 Crore Tax Evasion, calls on Revenue to file Supplementary Affidavit M/S S.N. SODHANI HUF vs PRINCIPAL COMMISSIONER INCOME TAX 5 CITATION: 2024 TAXSCAN (SC) 302
The Supreme Court of India recently adjudicated a Special Leave Petition involving an alleged tax evasion of Rs.38,000 Crore, providing a period of three weeks to the Petitioner to find Rejoinder.
The Division Bench of the Supreme Court comprising Justice Sanjay Karol and Justice NongmeikapamKotiswar Singh observed that the counter affidavit filed by the Revenue had pointed out that the tax evasion involved has an estimated revenue impact exceeding Rs.38,000 crores.
Calling on the Revenue to file a supplementary affidavit explaining the actions taken against the erring officials who allowed the appeals to be filed before the Court after a prolonged delay, the Apex Court proceeded to pass an order requiring all the directives to be fulfilled within a period of two weeks while also providing the Petitioner to file a Rejoinder is required while listing the matter after 37 days.
Failure to Deduct TDS due to Lack of Awareness: Supreme Court Upholds Allahabad HC Order, Dismisses SLPNARENDRA DEV UNIVERSITY OF AGRICULTURE AND TECHNOLOGY vs COMMISSIONER, COMMERCIAL TAX, U.P. CITATION: 2024 TAXSCAN (SC) 127
The Supreme Court of India has upheld the judgment of the High Court of Judicature at Allahabad, Lucknow Bench, regarding the failure to deduct Tax Deducted at Source (TDS). The dismissal of the SLPs by the Supreme Court emphasises the position that an awareness gap regarding TDS obligations does not constitute a valid ground for interference. It also clarified that a lack of awareness or understanding of tax deduction requirements is not a valid excuse for non-compliance.
In conclusion, the two-judge bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan of the Supreme Court upheld the Allahabad High Court Order and dismissed the Special Leave Petitions filed by the petitioner.
Interpretation of Section 32(2) of Income Tax Act: SC disposes of SLP filed by Income Tax DeptPRINCIPAL COMMISSIONER OF INCOME TAX 2 vs GUJARAT LEASE FINANCE LTD CITATION: 2024 TAXSCAN (SC) 169
The Supreme Court of India disposes of the Special Leave Petition ( SLP ) filed by the Income Tax Department in the challenge regarding the interpretation of Section 32(2) of the Income Tax Act, 1961. The SLP arose out of impugned final judgment and order dated 05-02-2018 in ITA No. 46/2018 passed by the High Court of Gujarat at Ahmedabad. A Two-Judge of the Supreme Court of Justice Pamidighantam Sri Narasimha and Justice Aravind Kumar observed that “In view of the order passed in PCIT vs. Petrofils Co-operative Ltd, the Special Leave Petitions are disposed of. Pending applications, if any, shall stand disposed of.”
The provision for permitting depreciation is included in Section 32 of the Income Tax Act of 1961. This section is governed by Rule 5 of the Income Tax Rules, 1962. The Income Tax Act permits the deduction when the cost of the tangible or intangible asset utilised by the assessee decreases. The income-tax department determines the depreciation at the time of the deduction based on the asset’s life cycle cost, not the asset’s total cost.
Vi not Obligated to Deduct TDS on Non-Resident Telecom Operator Payments: Supreme CourtDEPUTY DIRECTOR OF INCOME TAX & ANR vs VODAFONE IDEA LTD CITATION: 2024 TAXSCAN (SC) 251
The Supreme Court has ruled that Vodafone India is not obligated to deduct income tax TDS ( tax Deduction at Source ) on payments made to the non-resident telecom operators. The bench also condoned the delay of 222 days in favour of the department. In this Special Leave Petition ( SLP ) filed by the Income tax department, the Supreme Court stated that “During the course of submissions, we realised that this petition is covered by the judgment of this Court in Engineering Analysis Centre of Excellence Private Limited vs. Commissioner of Income Tax and Anr. reported in (2022) 3 SCC 321, which has been followed in other cases also.
When this fact was brought to the notice of the learned senior counsel appearing for the petitioners, it was pointed out that in similar matters, this Court has issued notice.”
Licensing of software products of Microsoft in Territory of India is not taxable in India: Supreme Court Dismisses SLPCOMMISSIONER OF INCOME TAX vs GRACEMAC CORPORATION CITATION: 2024 TAXSCAN (SC) 204
The Supreme Court dismissed Gracemac Corporation’s appeal challenging the High Court’s ruling that Microsoft’s software licensing in India isn’t taxable. Gracemac argued the licensing constituted taxable royalty, but the High Court disagreed, stating the payments were for software use, not royalties. Upholding this decision, the Supreme Court emphasized the irrelevance of rights acquired by EYGSL (UK) from vendors in determining royalty.
Justices B V Nagarathna and Augustine George Masih upheld this decision, citing precedent. The Court rejected Revenue’s appeal, affirming the High Court’s ruling in Commissioner of Income Tax vs. M/s Gracemac Corporation.
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