B&B Tax

Pr. CCIT Knp has issued letter on 27.01.2023 stating that CBDT Chairman has instructed that  reassessment proceedings u/s 148A(b) consequent to Supreme Court judgement in the case of Ashish Aggarwal will be completed by 31st May,2023.

" In view of the various decisions passed by the High Court, the Special Bench of the ITAT [( 2017) 55 ITR (Trib) 1]  and decisions passed by the Ahmedabad ITAT in various cases on this same issue and also the decision of ITAT Ahmedabad on this issue in favour of the assessee in the assessee’s own case for assessment year 2016-17, we are of the considered view, that Ld. CIT(Appeals) has not erred in facts and in law in holding that in case of payments made to non-residents, the assessee was entitled to deduct taxes at source at the rates applicable in the respective Tax Treaties in case PAN of non-resident payee is not available. In the instant facts, it is not the allegation of the Department that taxes have not been deducted at source by taking recourse to relevant clauses of the Tax Treaty enabling the assessee not to deduct tax at source in respect of payments made to non-resident payees. In the instant facts, the assessee has deducted taxes at the beneficial rate of 10% as ap...

"We with the petitioner that the impugned judgment rejecting the writ petition on the ground of alternative remedy does not take into consideration several judgments of this Court, on the jurisdiction of High Court, as writ petitions have been entertained to be examined whether the jurisdiction preconditions for issue of notice under Section 148 of the Income Tax Act, 1961 is satisfied. The provisions of reopening under the Income Tax Act, 1961 have undergone an amendment by the Finance Act, 2021, and consequently the matter would require a deeper and in depth consideration keeping in view the earlier case law. Accordingly, we set aside the observations made by the High Court in the impugned judgment observing that the writ petition would not be maintainable in view of the alternative remedy, clarify that this issue would be examined in depth by the High Court if and when it arise for consideration. We do deem it open to examine this issue in the present case after having examined...

"In the present case, the appellant was manufacturing / producing “Spun Line Crown Cork” used for sealing the glass bottles. With the use of modern technologies, now the appellant is manufacturing “Double Lip Dry Blend Crowns”, which is also used for sealing the glass bottles. The earlier product being manufactured by the appellant was used for sealing glass bottles and subsequently the additional product produced with the use of modern technology is also being used for the same purpose namely, “sealing glass bottles”. Therefore, the same cannot be said to be manufacturing of goods different from being manufactured before such diversification. With the passage of time, due to advancement in technology, if there is a replacement of the old machinery with the new machinery for improvement in quality and quantity of a product, at the most, it can be said to be expansion and/or modernization, but it cannot be said to be “diversification”, which is “manufacturing of goods different fro...

"While passing the impugned judgment and order, the High Court has relied upon earlier decision of this Court in the case of Suresh N. Gupta (supra). However, the said decision has been specifically overruled by this Court in the case of Vatika Township Private Limited  (supra) 9.2 In view of the above, the question of law with respect to levy of the surcharge under proviso to Section 113 of the Income Tax   is   held   in favour   of   the   assessee   and   against   the revenue. It is observed and held that in the present case the assessee is not liable to pay the surcharge under proviso to Section   113   of   the   Income   Tax   Act.   To   that   extent   the impugned judgment and order passed by the High Court and the assessment order qua the surcharge under proviso to Section 113 of the...

 "At this stage, it is required to be noted that as observed by this Court in the case of Vatika Township Private Limited (supra), Chapter XIV­B prescribes a special procedure for computation of income for the block period in search and seizure cases. Section 158BD shall be applicable in case of any person other than a person with respect to whom search was made. As observed Chapter XIV­B is a complete code in itself providing for self­-contained machinery for assessment of undisclosed income for the block period. Therefore, in case of the person other than searched person the notice under Section 158BD would be required/sufficient and in case of late filing of the return under Section 158BC, the interest will   be   leviable   under   Section   158BFA.  Any other interpretation would lead to Section 158BD nugatory. It can be seen that by inserting the words “under Section 158BC” in Section 158BD, the Parliament intended to cla...

"Section 285BA of the Income Tax Act, 1961 and Rule 114E requires specified reporting persons to furnish statement of financial transaction (SFT). For the purposes of prefilling the return of income, CBDT has issued Notification No. 16/2021 dated 12.03.2021 to include reporting of information relating to interest income. The Format, Procedure and Guidelines for submission of Statement of Financial Transactions (SFT) for Interest income was notified via Notification 2 of 2021 dated 20th April 2021.  2. As per sub-rule (4)(b) of Rule 114E Director General of Income-tax (Systems) shall specify the procedures, data structures and standards for ensuring secure capture and transmission of data, evolving and implementing appropriate security, archival and retrieval policies.  3. The Remarks column point 1 at Annexure A-- Guidelines for Preparation of Statement of Financial Transactions (SFT) mentioned "The information is to be reported for all account/deposit holders where cumulativ...

CBDT, in exercise of its power u/s 119 of the Act, provides that the compliances which was/is to be made by the taxpayers  between 01" April, 2021 to 28th February, 2022 (both days inclusive), may be completed on or before 31st March 2023. S uch compliance are in the nature of  investment, deposit, payment, acquisition, purchase. construction or such other action, by whatever name called, for the purpose of claiming exemption under the provisions contained in Section 54 to 54 OB of the Act. Circular No. 1 of 2023 dated 06.01.2023

" As noticed above, this judgment in Sundaram Finance Limited (supra) relates to the true nature of hire in hire-purchase agreements as in the context of the sales tax enactment. In the present case, however, we are dealing with and interpreting Section 2(7) of the Act, which has been interpreted in two decisions, that is, in the case of Sahara India Savings and Investment Corporation Limited (supra) and State Bank of Patiala Through General Manager (supra), which have given a very limited and restricted meaning to Section 2(7) of the Act as interest directly arising “on” loans and advances, and not any other interest, be it interest earned on investment or interest payable on delayed payment of the discounted bill of exchange. 18.Taxation depends upon the language of the charging section and what is brought to tax within the four corners of the charging section. Therefore, one should be careful and cautious when applying the ratio of judgments relating to one tax enactment as a p...

CBDT clarified that in respect of Co -operative Societies, a dealership/ distributorship contract by itself may not constitute an event or occasion for the purposes of clause (c) of Section 269ST. Cash receipt rela ted to such a dealership/distributorship contract by the Co-operative Society on any day in a previous year, which is within 'the prescribed limit'  [ two lakh rupees]  and complies with claus e  ( a )  in aggregate from a person in a day; or  ( b )  in respect of a single transaction  of Section 269ST, may not be aggregated across multiple days for purposes of clause (c) of Section 269ST for that previous year. Circular No. 25 of 2022 dated 30.12.2022