Direct Tax Weekly Flashback for the period 13 April to 19 April 2025.
ITAT
No Capital Gain Tax Payable By NRI On Mutual Fund Gains: ITAT [READ ORDER]
Case Title: Anushka Sanjay Shah Versus ITO
Case No.: IT(IT)A No.174/MUM/2025
The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that no capital gain tax payable by Non-Resident Indian (NRI) on Rs. 1.35 Crore Mutual Fund Gains Under India-Singapore tax treaty.
The bench of Beena Pillai (Judicial Member) and Renu Jauhri (Accountant Member) has observed that the assessee, who is a resident of Singapore for the purposes of the Tax Treaty, short term capital gain (STCG) arising from sale of units of equity oriented mutual funds and debt oriented mutual funds should not be liable to tax in India in accordance with the provisions of Article 13(5) of the Tax Treaty.
Compensation For Delay In Property Handover By Builder Not Taxable: ITAT
Case Title: Atul Sharma Versus ACIT
Case No.: ITA No.6055/Del/2018
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that the compensation for delay in property handover by builder is not taxable under Income Tax Act.
The bench of Sudhir Kumar (Judicial Member) and Shamim Yahya (Accountant Member) has observed that the compensation received by the assessee from Jaypee Greens Greater Noida for cancelling the allotment of unit due to not handed over within time in the sum of Rs 5947980/-is not chargeable to tax in the hands of the assessee.
Mere Loose Papers Not Admissible Evidence For Making Income Tax Addition: ITAT
Case Title: Shyam Sunder Bang Versus ACIT
Case No.: ITA No. 1887/DEL/2023 (A.Y. 2016-17
The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that loose papers cannot be considered as admissible evidence for making an addition unless backed by independent corroborative material.
Supreme Court
Sub-Registrars To Report Cash Payments of Rs. 2 Lakh and Above In Property Deals To Income Tax Dept.: Supreme Court
Case Title: The Correspondence, RBANMS Educational Institution Versus B. Gunashekar & Another
Case No.: Civil Appeal No. 5200 Of 2025
The Supreme Court directed the sub-registrars to report cash payments of Rs. 2 lakh and above in property deals to the income tax department.
The bench of Justice J.B. Pardiwala and Justice R. Mahadevan has observed that when the Bill was passed, the permissible limit was capped under Rupees Two Lakhs, instead of the proposed Rupees Three Lakhs. When a suit is filed claiming Rs.75,00,000/- paid by cash, not only does is create a suspicion on the transaction, but also displays, a violation of law.
Kerala High Court
Compensation For Compulsory Acquisition Of Landed Property Is Income Under Capital Gains: Kerala High Court
The Kerala High Court has held that amount received as compensation for compulsory acquisition of landed property is income under capital gains.
The bench of Justice A.K.Jayasankaran Nambiar and Justice Easwaran S. has observed that interest amounts received by an assessee in respect of delayed payment of compensation under the LAA will be treated as accruals to the principal compensation amount and be classified as “Capital Gains’ for the purposes of the Income Tax Act. Consequently, the interest amounts will also get the benefit of Section 10 (37) of the Income Tax Act if the land compulsorily acquired is agricultural land. Further, since the interest amounts so received are not in the nature of interest as defined under Section 2 (28A), the provisions of Section 56 of the Income Tax Act will not be attracted.
Delhi High Court
Delhi High Court Quashes Reassessment Against Departmental Stores Selling Wine, Beer
The Delhi High Court has quashed reassessment against departmental stores selling wine and beer.
The bench of Justice Vibhu Bakhru and Justice Tushar Rao Gedela has observed that there was no allegation in the notice issued under Section 148A(b) of the Income Tax Act that the cash deposited by the Assessee in its bank account during the demonetization period was disproportionately higher in comparison with the cash deposited during the corresponding period in the previous financial year. Thus, the Assessee had no opportunity to provide any explanation in respect of such allegations.
