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INCOME TAX
SECTION 9 OF THE INCOME-TAX ACT, 1961 - INCOME - DEEMED TO ACCRUE OR ARISE IN INDIA
Interest/premium paid on capital borrowed outside India would fall within ambit of exception carved under section 9(1)(v)(b) and, thus, was not taxable in India under section 195 - Sun Pharmaceutical Industries Ltd. v. Income-tax Officer - [2025] 171 taxmann.com 469 (Delhi)
SECTION 11 OF THE INCOME-TAX ACT, 1961 - CHARITABLE OR RELIGIOUS TRUST - EXEMPTION OF INCOME FROM PROPERTY HELD UNDER
Accumulation under section 11(1)(a) has to be computed on gross receipts of assessee and not on net receipt - Sai Baba Sansthan Trust v. Deputy Commissioner of Income-tax (Exemption)-2(1) - [2025] 171 taxmann.com 392 (Mumbai - Trib.)
Lack of declaration in Form No. 10 regarding specific purpose for which funds were being accumulated by assessee-trust, would not be fatal to exemption claimed under section 11(2) - Sai Baba Sansthan Trust v. Deputy Commissioner of Income-tax (Exemption)-2(1) - [2025] 171 taxmann.com 392 (Mumbai - Trib.)
SECTION 12AB OF THE INCOME-TAX ACT, 1961 - CHARITABLE OR RELIGIOUS TRUST - PROCEDURE FOR FRESH REGISTRATION
Where Commissioner (Exemption) rejected assessee-trust's application for registration under section 12AB vaguely on ground that assessee-trust did not conclusively prove genuineness of its activities, since show-cause notice was not issued before passing order, same was in violation of principles of natural justice and matter was to be remanded back to Commissioner (Exemption) - Ram Phool Hooda Charitable Trust v. CIT (Exemption) - [2025] 171 taxmann.com 390 (Delhi - Trib.)
SECTION 28(i) OF THE INCOME-TAX ACT, 1961 - BUSINESS INCOME - CHARGEABLE AS
Where assessee-company engaged in business of investment counselling, borrowed funds and invested in shares, since investment in shares was out of borrowed capital, it was to be treated as a business venture for trading in shares and, thus, income from sale of shares was to be treated as business income and not as income from short-term capital gains - Commissioner of Income-tax II v. First Choice Professional Services (P.) Ltd. - [2025] 171 taxmann.com 134 (Madras)
SECTION 36(1)(va) OF THE INCOME-TAX ACT, 1961 - EMPLOYEE'S CONTRIBUTIONS
Delayed payment of employee's contribution towards PF and ESIC could not be allowed as deduction under section 37(1) - Diebold Nixdorf India (P.) Ltd. v. Commissioner of Income-tax - 56 - [2025] 171 taxmann.com 339 (Mumbai - Trib.)
SECTION 37(1) OF THE INCOME-TAX ACT, 1961 - BUSINESS EXPENDITURE - ALLOWABILITY OF
Licence fee paid by assessee, a law firm, to RSCPL, a partnership firm which was owner of goodwill, for use of goodwill in law firm was wholly and exclusively for business of assessee and thus allowable as deduction under section 37(1) - Pr. Commissioner of Income-tax -21 v. Remfry & Sagar - [2025] 171 taxmann.com 391 (Delhi)
SECTION 45 OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - CHARGEABLE AS
Where assessee along with three co-owners entered into a JDA with builder and handed over land for development and construction of flats, assessee claimed that as per partition deed, constructed flats were handed over to respective owners and owners sold their share of property to buyers and thus, LTCG should be computed on his share of 25 per cent alone, matter was to be restored to Assessing Officer to call for details from assessee as well as co-owners to prove that they sold their respective shares separately in favour of buyers - Vadagur Narayanappa Premachandra v. Assistant Commissioner of Income-tax, International Taxation - [2025] 171 taxmann.com 471 (Bangalore - Trib.)
SECTION 54 OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - PROFIT ON SALE OF PROPERTY USED FOR RESIDENCE
Assesseee would be entitled to claim exemption under section 54 in respect of investment made in new property, if construction was commenced within period of three years, even if same was completed after period of three years - Vadagur Narayanappa Premachandra v. Assistant Commissioner of Income-tax, International Taxation - [2025] 171 taxmann.com 471 (Bangalore - Trib.)
SECTION 69A OF THE INCOME-TAX ACT, 1961 - UNEXPLAINED MONEYS
Notice under section 148 issued to a deceased-assessee is legally invalid, and any assessment or reassessment proceedings initiated against such deceased would not be tenable in eyes of law. - ACIT v. Fakhruddin Taiyebali Padaria - [2025] 171 taxmann.com 93 (Mumbai - Trib.)
SECTION 80-IA OF THE INCOME-TAX ACT, 1961 - DEDUCTIONS - PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS
Where assessee was awarded a contract for widening of roads as part of a highway project and infrastructure development and it had made investments for carrying out works and had not merely supplied labour, assessee was a developer and not mere contractor and, thus, was eligible for deduction under section 80-IA(4) - Deputy Commissioner of Income-tax v. Patil Construction and Infrastructure Ltd. - [2025] 171 taxmann.com 389 (Mumbai - Trib.)
SECTION 115BBC OF THE INCOME-TAX ACT, 1961 - ANNONYMOUS DONATIONS
Where Assessing Officer sought to reopen assessment on ground that cash donations received by assessee-trust fell within definition of 'anonymous donations' under section 115BBC(3) and hence, such donations were taxable under section 115BBC(1), since Assessing Officer had entertained belief on basis of view taken by him in Assessment Year 2015-16 which had been held by High Court as opinion of Assessing Officer on legal provisions, i.e., same could not be considered as tangible material warranting reopening of assessment, reopening of assessment of year under consideration was not valid - Sai Baba Sansthan Trust v. Deputy Commissioner of Income-tax (Exemption)-2(1) - [2025] 171 taxmann.com 392 (Mumbai - Trib.)
SECTION 145 OF THE INCOME-TAX ACT, 1961 - METHOD OF ACCOUNTING - SYSTEM OF ACCOUNTING
Where assessee earned gain on account of revaluation of outstanding dues payable to its overseas sister concern due to fluctuation in valuation of foreign exchange, since offer of gain as income was consistent with accounting principle regularly followed by assessee, claim of withdrawal of such income could not be accepted - Diebold Nixdorf India (P.) Ltd. v. Commissioner of Income-tax - 56 - [2025] 171 taxmann.com 339 (Mumbai - Trib.)
SECTION 226 OF THE INCOME-TAX ACT, 1961 - COLLECTION AND RECOVERY OF TAX - OTHER MODES OF RECOVERY
Where assessee claimed exemption from attachment of his property for tax recovery on ground that he was a labourer in terms of rule 10 of Second Schedule read with section 60 of Code of Civil Procedure, 1908, change in status of assessee after rights accrued to Income-tax Department to attach property of assessee could not be whittled down and, therefore, a reference to rule 10 of Second Schedule to Income-tax Act could not come to rescue of assessee - Maniyan Sureshkumar v. Tax Recovery Officer - [2025] 171 taxmann.com 422 (Madras)
Where assessee's property was attached on 27-1-2015 and auction was fixed to be held on 25-3-2021, however, there were no bidders during auction, it could be construed that situation was covered by first instance under second proviso to Rule 68B of Second Schedule to Income-tax Act, 1961 i.e., where immovable property was required to be resold due to amount of highest pay being less than reserve price fixed, thus, Chief Commissioner was justified in extending time limit for sale of attached immovable property of assessee by one year - Maniyan Sureshkumar v. Tax Recovery Officer - [2025] 171 taxmann.com 422 (Madras)
SECTION 239 OF THE INCOME-TAX ACT, 1961 - REFUNDS - LIMITATION
Limitation of two years for making a claim of refund of excess TDS stipulated under paragraph 9 of CBDT Circular No. 7/2007, dated 23-10-2007 is ultra vires provisions of Act - Sun Pharmaceutical Industries Ltd. v. Income-tax Officer - [2025] 171 taxmann.com 469 (Delhi)
SECTION 254 OF THE INCOME-TAX ACT, 1961 - APPELLATE TRIBUNAL - ORDER OF
Restriction imposed on Assessing Officer in entertaining an additional claim not made through revised return of income, does not apply to appellate authorities - Diebold Nixdorf India (P.) Ltd. v. Commissioner of Income-tax - 56 - [2025] 171 taxmann.com 339 (Mumbai - Trib.)
SECTION 269SS OF THE INCOME-TAX ACT, 1961 - DEPOSITS - MODE OF TAKING /ACCEPTING
An agent in a transaction of transfer of immovable property between a buyer and seller, cannot be held liable for penal consequence under section 269SS for receiving, for or behalf of and handing over money to, his principal - R. Anbuvelrajan v. Additional Commissioner of Income-tax - [2025] 171 taxmann.com 499 (Chennai - Trib.)
SECTION 270A OF THE INCOME-TAX ACT, 1961 - PENALTY FOR UNDER-REPORTING AND MISREPORTING OF INCOME
Where neither in assessment order nor in notice issued under section 274 read with section 270A Assessing Officer had specified as to under which limb of provisions of section 270A(2) or 270A(9) assessee had misreported or under-reported it's income, no penalty under section 270A was leviable - DCIT v. Chakradhar Contractors and Engineers (P.) Ltd. - [2025] 171 taxmann.com 133 (Pune - Trib.)
GOODS AND SERVICES TAX LAWS
SECTION 9 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - LEVY & COLLECTION OF TAX
Contractor cannot claim GST over and above quoted rates when agreement specifically states rates are GST-inclusive, despite subsequent government circulars, as it would affect tender process sanctity where selection was based on GST-inclusive lowest bid. - Sreedhanya Construction Company v. State of Kerala - [2025] 171 taxmann.com 362 (Kerala)
Where assessee was awarded contract prior to commencement of GST and had paid GST, however there was total inaction on part of respondent authority with regard to refund of GST, respondent was to be directed to process claim of assessee within 90 days - B.K. Chawla Contractor v. State of Chhattisgarh - [2025] 171 taxmann.com 430 (Chhattisgarh)
Where assessee had completed works and completion certificate was issued however claim of assessee for reimbursement of GST had not been processed, respondent was to be directed to process claim of assessee within 8 weeks - Banka Constructions v. State of Chhattisgarh - [2025] 171 taxmann.com 431 (Chhattisgarh)
SECTION 16 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - INPUT TAX CREDIT - ELIGIBILITY AND CONDITIONS FOR TAKING CREDIT
Under Section 16(2), since the burden is on recipient to prove receipt of goods, and petitioner failed to provide any documents confirming receipt or an accompanying e-Way bill,ITC granted based on invoices from proprietary firm supplying rubber to petitioner had to be treated as provisional and had to be reversed, instant writ petition was to be dismissed - Devi Traders v. The State Tax Officer - [2025] 171 taxmann.com 350 (Madras)
Where as per notifications, time limit for furnishing details of return, under section 39(1) of CGST Act for months of July, 2019 to September, 2019 was to be notified in Official Gazette, which was not notified, if assessee had complied with requisite conditions under provisions of Act and Rules and was lawfully entitled to input tax credit, same was not be denied on technicalities - Pioneer Cooperative Car Parking Servicing And Construction Society Ltd. v. State of West Bengal - [2025] 171 taxmann.com 153 (Calcutta)
SECTION 16 OF INTEGRATED GOODS AND SERVICES TAX ACT,2017 - SUPPLY - ZERO RATED SUPPLY - GENERAL
Where petitioner-assessee was denied an IGST refund due to a mismatch of PAN details in shipping bill and GST returns, which was caused by an inadvertent error, further, despite correcting requisite details under Section 149, ICEGATE system failed to reflect amendment as a result of which refund process was blocked, therefore, respondent-department was directed to update system within given time to enable refund. - Tulip Turnomatic v. Commissioner of Customs - [2025] 171 taxmann.com 363 (Gujarat)
SECTION 30 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REGISTRATION - REVOCATION OF CANCELLATION OF
Registration cancellation for non-filing of GST returns can be revoked upon filing application with pending returns and tax dues within prescribed timeframe. - Saurabh Semwal v. Assistant Commissioner - [2025] 171 taxmann.com 361 (Uttarakhand)
Delay in filing application for revocation of cancellation of registration was to be condoned subject to deposit of taxes etc. - Jyotiranjan Nayak v. Additional Commissioner of GST - [2025] 171 taxmann.com 405 (Orissa)
SECTION 44 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - RETURNS - ANNUAL RETURN
Word “reconciliation” used in section 44 of CGST Act could mean that there can be a rectification of any error which might have occurred when taxpayer files his return in FORM GSTR -3B - Pioneer Cooperative Car Parking Servicing And Construction Society Ltd. v. State of West Bengal - [2025] 171 taxmann.com 153 (Calcutta)
SECTION 65 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - AUDIT - BY TAX AUTHORITIES
Section 65 stipulates that audit shall be completed within a period of three months from date of commencement of audit; where assessee made available documents called for by tax authorities on 9-4-2024, final audit report dated 8-7-2024 was proper - Rajive and Company v. Deputy Commissioner (Audit) - [2025] 171 taxmann.com 354 (Kerala)
SECTION 73 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY - TAX OR INPUT TAX CREDIT DUE NOT INVOLVING FRAUD, MISSTATEMENT, OR SUPPRESSION
Where petitioner-assessee challenged assessment order dated 03.07.2024 on ground of not being given a fair opportunity to submit required documents, which were demanded by respondent-department, further, reliance was placed on M/s K. Balakrishnan Balu Cables vs. O/o. Assistant Commissioner of GST & Central Excise, where a similar matter was remanded back under comparable circumstances, subject to payment of 25% of disputed taxes, consequently, impugned order was to be set aside on condition that petitioner-assessee would deposit 25% of disputed tax. - Tvl.Ragul Industries v. State Tax Officer - [2025] 171 taxmann.com 155 (Madras)
SECTION 75 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY - GENERAL
Where in response to show cause notice, assessee filed its reply seeking time to furnish some more documents and also requested for personal hearing, without considering request for personal hearing, if adjudication order was passed, same was to be set aside - JC Valvulas India (P.) Ltd. v. Commercial Tax Officer - [2025] 171 taxmann.com 404 (Madras)
RULE 78 OF THE CENTRAL GOODS AND SERVICES TAX RULES, 2017 - MATCHING OF DETAILS FURNISHED BY THE E-COMMERCE OPERATOR WITH THE DETAILS FURNISHED BY THE SUPPLIER
Where impugned demand order was issued for mismatch between GSTR-1 and GSTR-8, neither show cause notice nor order of assessment was served directly but uploaded under 'view additional notices' tab on GST Portal, denying assessee opportunity to file reply and participate in proceedings, impugned order was to be set aside subject to assessee depositing 25% of disputed taxes - Fazari Multicuisine Restaurant v. Assistant Commissioner (ST) - [2025] 171 taxmann.com 401 (Madras)
SECTION 83 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY - PROVISIONAL ATTACHMENT
On expiry of period of one year, provisional attachment order issued under section 83 of CGST Act loses its efficacy and automatically pales into insignificance and on same set of facts, a fresh order of provisional attachment under section 83(1) of CGST Act cannot be issued thereafter - Additional Director General v. Ali K. - [2025] 171 taxmann.com 429 (Kerala)
SECTION 129 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DETENTION, SEIZURE AND RELEASE OF GOODS AND CONVEYANCES IN TRANSIT
Where goods in vehicle matched invoices in quantity and description, inspection authority conducted a roving inquiry beyond invoice details, no intent to evade tax was established, and Section 129 proceedings were unjustified, requiring impugned order to be set aside - Ashok Sharma v. State of West Bengal - [2025] 171 taxmann.com 682 (Calcutta)
COMPANY AND SEBI LAWS
CIRCULAR SEBI/HO/MIRSD/MIRSD-POD1/P/CIR/2025/22, DATED 22-02-2025
SEBI modifies investor charter for Stock Brokers to boost financial consumer protection
Editorial Note: With a view to enhancing financial consumer protection alongside enhanced financial inclusion and financial literacy, the SEBI, has issued the modified investor charter for stock brokers. The modified charter includes vision, mission, services provided to investors by brokers, Dos and Don'ts for investors, grievance redressal mechanism and handling of investor's claims in case of default of a trading member along with the format for investor complaints data
SEBI proposes to expand QIBs definition under SEBI ICDR, Regulations; seeks Public Comments
Editorial Note: SEBI has issued Consultation paper on expanding definition of Qualified Institutional Buyers under SEBI (ICDR) Regulations, 2018. SEBI proposes to include Accredited Investors in QIB's definition for the limited purpose of investments in Angel Funds. Further, it is also proposed to remove the limit of maximum 200 investors in an investment of Angel Fund. The public can submit their comments latest by 14th Mar, 2025 via online web-based form
FEMA BANKING AND INSURANCE LAWS
NOTIFICATION NO. FMRD.DIRD.17/14.03.042/2024-25, DATED 21-02-2025
RBI issues new directions on forward contracts in government securities effective May 02, 2025
Editorial Note: The RBI, under sections 45W and 45U of the RBI Act, 1934, has issued the Reserve Bank of India (Forward Contracts in Government Securities) Directions, 2025. These apply to forward contracts in government securities (bond forwards) in the Over-the-Counter (OTC) market in India. The directions are effective from May 2, 2025. Eligible persons for bond forward transactions include residents and non-residents permitted to invest in G-Securities under the FEM (Debt Instruments) Regulations, 2019.
PRESS RELEASE: 2024-2025/2231, DATED 21-02-2025
RBI proposes removal of prepayment penalties on floating-rate loans for retail, MSME sectors
Editorial Note: The RBI has released draft norms for prepayment penalties on loans on Friday, February 21, whereby it has proposed scrapping foreclosure charges on floating-rate loans for retail and MSME borrowers, including loans granted to individual borrowers for business purposes. The draft norms provides that no minimum lock-in period can be stipulated by REs for foreclosure or pre-payment. Once approved, these changes will apply to all floating-rate loans.
SECTION 6 OF THE FOREIGN EXCHANGE MANAGEMENT ACT, 1999 - CAPITAL ACCOUNT TRANSACTIONS
Omission of section 6(3) of FEMA by Finance Act 20 of 2015 would not make show cause notice issued for contravention of FEMA as one without sanctity of law - Sachin Bansal v. Directorate of Enforcement - [2025] 171 taxmann.com 412 (Madras)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 5(6) OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - DISPUTE
Where corporate debtor failed to pay outstanding amount with respect to printing and allied products purchased from operational creditor and claimed that there existed a pre-existing dispute, since said dispute was not with regard to defect in goods supplied, rather with regard to specific performance, possession or in alternate recovery of amount along with permanent injunction with regard to an immovable property, same could not be considered as a dispute between operational creditor and corporate debtor and application under section 9(5) was to be admitted - Silverline Graphics (P.) Ltd. v. India Offset Printers (P.) Ltd. - [2025] 171 taxmann.com 204 (NCLT - New Delhi)
SECTION 5(21) OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - OPERATIONAL DEBT
Where corporate debtor acknowledged receipt of goods supplied by operational creditor and made part-payment against invoices raised by operational creditor, debt claimed by operational creditor for provision of goods came under purview of 'Operational Debt' within meaning of section 5(21) - Silverline Graphics (P.) Ltd. v. India Offset Printers (P.) Ltd. - [2025] 171 taxmann.com 204 (NCLT - New Delhi)
SECTION 208 OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - INSOLVENCY PROFESSIONALS - FUNCTIONS AND OBLIGATIONS OF
Where IRP appointed in case of corporate debtor misled NCLT by stating that no claim had been received from any claimant and no claim was outstanding, however, fact was that IP had received claims from Financial Creditor, said omission reflected a serious lapse in professional conduct and, therefore, AFA of IRP was to be suspended for a period of three months - Ramkripal Sharma, In re - [2025] 171 taxmann.com 161 (IBBI)
SECTION 238A OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - LIMITATION PERIOD
Where operational creditor supplied printing and other allied materials to corporate debtor on running account basis and last payment was made by corporate debtor on 02-03-2022, on corporate debtor's failure to pay outstanding amount, instant application filed by operational creditor on 21-09-2023 was well within period of limitation - Silverline Graphics (P.) Ltd. v. India Offset Printers (P.) Ltd. - [2025] 171 taxmann.com 204 (NCLT - New Delhi)
ACCOUNTS AND AUDIT
Accounting treatment of borrowing costs in Hybrid Annuity Model (HAM) projects under Ind AS framework
Editorial Note: This document examines the accounting treatment of borrowing costs in Hybrid Annuity Model (HAM) projects under the Ind AS framework, specifically for an SPV undertaking a highway project for NHAI. It explores whether borrowing costs, including Interest During Construction (IDC), should be considered part of the project cost for revenue recognition or capitalized as a financial asset with reference to Ind AS 115, Ind AS 23, and Ind AS 109.
OPINIONS
Middle Class Cheers Budget 2025 Changes - Rohit Garg, Partner, Shardul Amarchand Mangaldas & Co. , Priyanka Jain, Principal Associate, Shardul Amarchand Mangaldas & Co. - [2025] 171 taxmann.com 610 (Article)
Challenging GST Authorities' Inconsistent Approach in First Appeals Using the Approbate and Reprobate Doctrine - Sabyasachi Chakraborty, Chartered Accountant, Company Secretary and LLB (Hons) - [2025] 171 taxmann.com 677 (Article)
IPO Preparedness - Composition of Board of Directors - CS Vallabh M Joshi, Senior Manager - RND Team, Makarand M Joshi and Co. , Animesh Joshi, Associate - R&D Team, Makarand M Joshi and Co. - [2025] 171 taxmann.com 678 (Article)
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