📰 𝗕𝗼𝗺𝗯𝗮𝘆 𝗛𝗶𝗴𝗵 𝗖𝗼𝘂𝗿𝘁 𝗥𝘂𝗹𝗶𝗻𝗴: 𝗡𝗼 𝗧𝗗𝗦 𝗥𝗲𝗾𝘂𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗳𝗼𝗿 𝗥𝗲𝘁𝗿𝗼𝘀𝗽𝗲𝗰𝘁𝗶𝘃𝗲 𝗧𝗮𝘅 𝗔𝗺𝗲𝗻𝗱𝗺𝗲𝗻𝘁𝘀 📢 The bench of Justice M.S. Karnik and Justice Valmiki Menezes stated,

"It is not open to the department to take a divergent view on the expenditure for renovation and construction of schools or temples when it has allowed the expenditure on the purchase of ambulances."

🔍 𝗙𝗮𝗰𝘁𝘀: 𝗖𝗮𝘀𝗲 𝗧𝗶𝘁𝗹𝗲: ACIT vs. Sociedade de Fomento Industrial Pvt. Ltd. 𝗜𝘀𝘀𝘂𝗲: The respondent/assessee was not expected to deduct tax at source from payments that became taxable due to a retrospective amendment.

𝗣𝗿𝗼𝗰𝗲𝗲𝗱𝗶𝗻𝗴𝘀: The Income Tax Appellate Tribunal (ITAT) upheld the assessee's appeal, allowing various business expenditures as revenue in nature and disallowing tax deductions for expenditures incurred on donations, renovations, and purchases of ambulances.

The department's appeal was dismissed by the Tribunal. ⚖️ 𝗝𝘂𝗱𝗴𝗲𝗺𝗲𝗻𝘁: The Bombay HC at Goa upheld the ITAT's decision, confirming that the assessee cannot be expected to apply a retrospective tax provision that was not in the statute book at the time of the transaction.

The court ruled that the expenditure was allowable as revenue expenditure since no capital asset was acquired by incurring it. 𝗖𝗮𝘀𝗲 𝗜𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻: 𝗖𝗮𝘀𝗲 𝗧𝗶𝘁𝗹𝗲: ACIT vs. Sociedade de Fomento Industrial Pvt. Ltd. 𝗖𝗮𝘀𝗲 𝗡𝗼.: Tax Appeal No. 4/2024

📜 This ruling clarifies that companies shouldn't be penalized for not deducting tax on payments that became taxable due to retroactive law changes, emphasizing that compliance can't be expected for laws that didn't exist at the time of the actions. #TaxLaw #arr4nirc #BombayHC