Case Details: Vanraj Ranchhoddas Merchant vs. Income-tax Officer - [2026] 182 taxmann.com 18 (Mumbai - Trib.)

Judiciary and Counsel Details

• Smt. Beena Pillai, Judicial Member
• Makarand Vasant Mahadeokar, Accountant Member
• Ms Kinjal Bhutta, Ld. AR for the Appellant.
• Ms Kavitha Kaushik, Ld. DR for the Respondent.

Facts of the Case

The assessee, an individual, was holding a 20 per cent undivided share, along with his four brothers, in an ancestral family trust property. Out of his 20 per cent share, the assessee assigned 10 per cent undivided share in the said property to his nephew for a consideration of Rs. 28 lakhs vide registered deed.

The Assessing Officer (AO) issued a show cause notice stating as to why the provisions of section 50C should not be invoked. The assessee contended that what was transferred was only rights in land and building, and therefore, section 50C was not applicable. Unsatisfied with the assessee’s response, AO completed the assessment accordingly. On appeal, CIT(A) affirmed the order of AO. The aggrieved assessee filed the instant appeal before the Tribunal.

High Court Held

The Tribunal held that the assessee had not transferred land or building in his own right. The deed did not convey the corpus of the immovable property, nor did it divest the trust of its ownership in the land or building. The ownership of the immovable property continued to vest in the trust at all material times, and the assessee merely assigned a limited, determinable and beneficial interest arising therefrom.

In law, a life interest represents a limited estate, the duration of which is co-terminous with the life of the holder and which stands extinguished upon his death. Such an interest does not confer absolute ownership of the immovable property, nor does it vest in the holder the power to deal with the corpus of the property as an owner, which is a necessary incident of ownership under property law. The life tenant is entitled only to use, occupy or enjoy the income or usufruct of the property during his lifetime, subject to an overriding obligation to preserve the property for the benefit of the remaindermen.

This principle is statutorily reflected in sections 108(B)(m) and 108(B)(o) of the Transfer of Property Act, 1882, which, though framed in the context of leases, embody the broader doctrine that a person in limited possession cannot commit acts destructive or permanently injurious to the property. Where such a life interest arises under a trust arrangement, the position is even more restrictive. Under the Indian Trusts Act, 1882, the legal title vests in the trustee, and the beneficiary’s enjoyment is circumscribed by fiduciary and preservative obligations imposed on the trustee for the benefit of all beneficiaries, including remainder men.

The beneficiary holding a life interest acquires only a beneficial interest and not ownership of the trust property. Accordingly, the invocation of section 50C in the facts of the present case was not warranted.

List of Cases Reviewed

• V.S. Chandrashekar v. Asstt. CIT [2021] 129 taxmann.com 273 (Karnataka)/[2021] 282 Taxman 244 (Karnataka)/[2021] 432 ITR 330 (Karnataka) (para 31) Followed.

List of Cases Referred to

• Vidharbha Veneer Industries Ltd. (In Liquidation) v. ITO [ITA No. 34 of 2022, dated 1-4-2025] (para 9)
• V.S. Chandrashekar v. Asstt. CIT [2021] 129 taxmann.com 273 (Karnataka)/[2021] 282 Taxman 244 (Karnataka)/[2021] 432 ITR 330 (Karnataka) (para 17).

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Case Details: Balagan Beedi Company (P.) Ltd. vs. State Tax Officer - [2026] 182 taxmann.com 428 (Madras) 

Judiciary and Counsel Details

• Krishnan Ramasamy, J.
• Sudalai Muthu N. for the Petitioner.
• R. Suresh Kumar, AGP for the Respondent.

Facts of the Case

The petitioner received a show cause notice and submitted a response. Afterwards, multiple notices were issued to provide opportunities for personal hearings, but the petitioner failed to appear on any of the scheduled dates. The submitted replies were considered inadequate, and the officer subsequently passed the assessment orders ex- parte. These orders were challenged by filing writ petitions, contending that the assessment was made without adequate hearing and in violation of natural justice. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the petitioner had been afforded multiple opportunities for a personal hearing after filing replies, and therefore no breach of natural justice occurred. It was observed that the petitioner’s failure to attend hearings and the inadequacy of the replies amounted to a waiver of the right to be heard. The Court further held that once an adequate hearing opportunity had been provided, writ jurisdiction was not available. Consequently, the writ petitions were dismissed with liberty to file an appeal under Section 107 read with Section 75 of the CGST Act.

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Case Details: Bangalore Matics (P.) Ltd. vs. Union of India - [2026] 182 taxmann.com 429 (Karnataka)

Judiciary and Counsel Details

• S.R. Krishna Kumar, J.
• Harish Vashisth, Adv. for the Petitioner. 
• Jeevan J. Neeralgi, Adv. & K. Hema Kumar, AGA for the Respondent.

Facts of the Case

The petitioner was issued a show cause notice under Section 73 of the CGST Act, alleging that excess ITC was claimed in Form GSTR-3B compared to Form GSTR-2A. It did not respond to the notice, and an ex-parte adjudication order was passed confirming the demand along with interest and penalty. The petitioner challenged the order, arguing that the proceedings were barred by limitation and that the notice went unnoticed, thereby preventing the filing of a reply. The matter was accordingly placed before the High Court.

High Court Held

The High Court observed that the issue of limitation depended on the validity of the extension of limitation, which was pending adjudication before the Supreme Court. As the decision would directly affect the legality of the proceedings, the Court held that deciding the matter at that stage would be inappropriate. It was further noted that it would avoid multiplicity of proceedings and conflicting outcomes by awaiting the Supreme Court’s decision. Accordingly, the High Court set aside the demand order passed under Section 73 of the CGST Act and remanded the matter for fresh consideration.

List of Cases Reviewed

• HCC-SEW-Meil-AAG JV v. Asstt. CST [2025] 174 taxmann.com 1080 (SC) (Para 7) followed

List of Cases Referred to

• HCC-SEW-Meil-AAG JV v. Asstt. CST [2025] 174 taxmann.com 1080 (SC) (para 6).

The post GST Demand Quashed on Limitation Issue | HC appeared first on Taxmann Blog.

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1. Facts

Delight Solutions Limited (hereinafter referred to as “the Company”) is engaged in the manufacturing of agro-machinery.The company prepares its financial statements in accordance with Ind AS framework. During the financial year ended 31^st March 2025, the company undertook several revaluation and fair value measurements in compliance with various Ind AS requirements. These measurements resulted in differences between the carrying amounts of certain assets and liabilities in the financial statements and their corresponding tax bases, thereby giving rise to temporary differences and the need to evaluate deferred tax recognition under Ind AS 12.During the year under consideration, the company undertook the following transactions:

2. Revaluation of Freehold Land under Ind AS 16

The company revalued its freehold land by applying the revaluation model under Ind AS 16. The resulting revaluation surplus was recognised in Other Comprehensive Income (OCI) and accumulated in equity, giving rise to a question on whether the related deferred tax should also be recognised in OCI or routed through profit and loss.

3. Fair Value Gain on Strategic Equity Investments under Ind AS 109 – FVOCI

The Company held strategic equity investments designated as fair value through OCI. During the year, the fair value of these investments increased and the resulting gains were recognised in OCI, leading to differing views on whether deferred tax arising from such OCI-recognised gains should likewise be recognised in OCI or in profit and loss.

4. Fair Value Gain on Long-term Debentures Ind AS 109 – FVTPL

The Company had issued long-term debentures designated at fair value through profit or loss. Due to changes in market conditions, the fair value of the debentures decreased, resulting in a gain recognised in profit and loss.

Accordingly, the central issue in the aforementioned casesis the appropriate recognition and presentation of deferred tax under Ind AS 12, particularly whether deferred tax should be recognised in other comprehensive income or in profit and loss based on the component of the financial statements in which the underlying revaluation or fair value adjustment is recognised?

5. Relevant Provision

Ind AS 12 – Income Taxes

• Para 58 of Ind AS 12

Current and deferred tax shall be recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from:

(a) a transaction or event which is recognised, in the same or a different period, outside profit or loss, either in other comprehensive income or directly in equity, or

(b) a business combination (other than the acquisition by an investment entity, as defined in Ind AS 110, Consolidated Financial Statements, of a subsidiary that is required to be measured at fair value through profit or loss)

• Para 61A of Ind AS 12

Current tax and deferred tax shall be recognised outside profit or loss if the tax relates to items that are recognised, in the same or a different period, outside profit or loss. Therefore, current tax and deferred tax that relates to items that are recognised, in the same or a different period:

(a) in other comprehensive income, shall be recognised in other comprehensive income.

(b) directly in equity, shall be recognised directly in equity.

• Para 62 of Ind AS 12

Indian Accounting Standards require or permit particular items to be recognised in other comprehensive income. Examples of such items are:

a) a change in carrying amount arising from the revaluation of property, plant and equipment; and

b) exchange differences arising on the translation of the financial statements of a foreign operation

6. Analysis

Based on the relevant provisions of Ind AS 12, the following analysis can be made in respect of the above cases:

• Revaluation of Freehold Land:

The company revalued its freehold land under the revaluation model, with the surplus recognised in OCI and accumulated in equity. Considering the Paras 58, 61A, and 62, deferred tax arising from such temporary differences must also be recognised in OCI, consistent with the treatment of the underlying revaluation. This ensures that neither profit or loss nor retained earnings are affected by deferred tax on revaluation gains.

• Fair Value Gain on Strategic Equity Investments – FVOCI

The fair value gains on strategic equity investments designated as FVOCI were recognised in OCI. As per Ind AS 12, Para 58 and 61A, the deferred tax attributable to these gains must also be recognised in OCI, aligning the tax effect with the component in which the gain is recorded. This treatment preserves the integrity of OCI and ensures that the profit or loss is unaffected by such deferred tax.

• Fair Value Gain on Long-term Debentures – FVTPL (Ind AS 109):

The company recorded a gain due to changes in fair value of debentures designated at FVTPL in profit or loss. Consistent with Ind AS 12, Para 58, the related deferred tax should also be recognised in profit or loss, ensuring that the tax effect follows the accounting treatment of the underlying FVTPL instrument. This prevents mismatch between the recognition of the gain and the associated deferred tax.

7. Conclusion

In accordance with Ind AS 12, deferred tax must be recognised in the same component of the financial statements as the item that gives rise to the temporary difference. Accordingly, deferred tax on items recognised in OCI, such as the revaluation surplus on freehold land and FVOCI equity investments, should also be recognised in OCI, while deferred tax on items recognised in profit or loss, such as fair value gains on FVTPL debentures, should be recognised in profit or loss. This approach ensures consistency, avoids distortion of profit or loss, and faithfully reflects the tax consequences of the underlying transactions.

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Case Details: Shyam Emco Infrastructure Ltd. vs. Registrar of Companies West Bengal - [2025] 181 taxmann.com 869 (Calcutta)

Judiciary and Counsel Details

• Ravi Krishan Kapur, J.
• Jayanta Kumar Mitra, Sr. Adv., Rishav Dutt, Anuj Singh, Ms Patrali Ganguly and Ms Shrishti Roy Barman, Advs. for the Petitioner. 
• Ms Rashmi Bothra, Ms Shreya Choudhury and Jeet Barman, Advs. for the Respondent.

Facts of the Case

In the instant case, the respondent authorities, on the ground of alleged violations under section 129(1) read with Schedule III, found the company and its directors, namely the petitioners, to be in violation of the provisions of the Act and threatened prosecution against the petitioners by calling upon the company and its directors to file an application for compounding under the Act.

It was noted that the petitioners had throughout acted reasonably and had complied with all acceptable norms of accountancy, and this had been specifically brought to the attention of the respondent authorities. However, while issuing the impugned notice, the respondent authorities failed to consider and ignored the representations and responses submitted by the petitioners.

Further, the alleged violations could have been easily resolved through proper scrutiny of the company’s financial statements and records.

High Court Held

The High Court held that an infraction of such a technical and trivial nature did not warrant issuance of the impugned notice. Further, the respondent authorities had knowledge of the commission of the alleged offences beyond a period of one year and had remained inactive, in violation of the limitation period prescribed under section 129(1) read with Schedule III. Thus, the impugned notice was liable to be quashed.

List of Cases Referred to

• Girdhar Tracom Private Limited and Narendra Dhanuka v. Registrar of Companies 2024 SCC OnLine Cal 1671 (para 3)
• AI Champdany Industries Ltd. v. Registrar of Companies [2011] 16 taxmann.com 39/110 SCL 556 (Calcutta) (para 3)
• Bhagwati Foods P. Ltd v. Registrar of Companies [2008] 88 SCL 56 (Calcutta) (para 3)
• Deba Prasad Roy v. Regional Director, Department of Company Affairs [2008] 83 SCL 280 (CAL.) (para 8).

The post Directors Absolved of Liability for Technical Violations | HC appeared first on Taxmann Blog.

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Case Details: P.M. Cold Storage (P.) Ltd. vs. Goouksheer Farm Fresh (P.) Ltd. [2025] 180 taxmann.com 849 (NCLT - Kolkata)

Judiciary and Counsel Details

• Labh Singh, Judicial Member
•  Ms. Rekha Kantilal Shah, Technical Member
• Kuldip Mallick, Ms. Pallavi Ray, S. Dutta, Advs. Niraj Kumar, CS for the Appearing Parties.

Facts of the Case

In the instant case, the corporate Debtor was admitted into the CIRP and, as no resolution plan was received, the liquidation was ordered, and the applicant was appointed as the liquidator.

The liquidator thereafter filed an application seeking dissolution of the corporate debtor. It was noted that all assets of the corporate debtor had been disposed of and distributed in accordance with the Code and rules and regulations framed thereunder, and the final report had been submitted.
Further, it was noted that since the 4th SCC meeting, the Tribunal had considered circumstances necessitating the end of the liquidation process of the corporate debtor; therefore, the Financial Creditor was to be directed to proceed forthwith with the section 66 Application.

NCLT Held

The NCLT observed that since the liquidation process was fully complete and the Liquidator, in compliance, had filed the present application under section 54 of the IBC seeking an order of dissolution of the corporate debtor, dissolution of the corporate debtor was to be ordered and, consequently, the Liquidator stood relieved from his responsibilities, subject to procedural compliances.

The NCLT held that since the Liquidator’s fees claimed to the tune of Rs. 4.80 lakhs were more than double and no tangible basis or supporting rationale had been demonstrated justifying such a fee, the Liquidator was directed to consider the payment already made to be full and final and reduce the fees to the extent liquidation expenses were not paid for.

The post Liquidator Fee Limited After Liquidation Completion | NCLT appeared first on Taxmann Blog.

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Notification No. SEBI/LAD-NRO/GN/2026/296, Dated: 20.01.2026

1. Introduction: SEBI Notifies Amendment to NCS Regulations

The Securities and Exchange Board of India (SEBI) has notified the SEBI (Issue and Listing of Non-Convertible Securities) (Amendment) Regulations, 2026, vide Notification No. SEBI/LAD-NRO/GN/2026/296 dated 20 January 2026. The amendment brings clarity to investor classification and introduces flexibility in structuring incentives for certain investor categories.

2. Definition of Retail Individual Investor Introduced

A key change under the amendment is the formal definition of a “retail individual investor.” SEBI has defined a retail individual investor as an individual who applies or bids for debt securities up to ₹2 lakh. This definition aligns the NCS framework with existing market practices and provides regulatory certainty for issuers and intermediaries.

3. Incentives Permitted for Specified Investor Categories

The amended regulations permit issuers of non-convertible securities to offer incentives to specified categories of investors. Such incentives may include additional interest rates or discounts on the issue price, enabling issuers to attract targeted investor participation while remaining within a regulated framework.

4. Conditions Attached to Offering Incentives

SEBI has clarified that any incentive offered under the amended regulations shall be available only to the initial allottee of the securities. This restriction ensures transparency, prevents misuse in secondary market transactions, and maintains fairness among different classes of investors.

5. Conclusion: Enhanced Clarity and Market Flexibility

The SEBI NCS Regulations Amendment, 2026, strengthens the regulatory framework by clearly defining retail individual investors and permitting structured incentives for specified investor categories. These changes are expected to enhance investor participation, improve disclosure clarity, and provide issuers with greater flexibility while safeguarding market integrity.

Click Here To Read The Full Notification 

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Global Financial Insights is a weekly feature for the Accounts and Audit Module subscribers of Taxmann.com. It provides you with the latest updates on financial reporting and auditing practices from across the globe. Here is this week’s financial update:-

1. Financial Reporting Council disciplinary tribunal imposes sanctions against a member of the Chartered Institute of Management Accountants

The Financial Reporting Council’s (FRC) “Disciplinary Tribunal” has found a member of the Chartered Institute of Management Accountants (CIMA) guilty of serious professional misconduct arising from his sustained failure to cooperate with a regulatory investigation.

The misconduct relates to the repeated and prolonged non-compliance with the FRC’s investigation process. Despite being formally notified of the investigation in June 2023, the member failed to respond to multiple communications from the FRC over a period of more than twelve months. The Tribunal found that this conduct breached his fundamental duty under the “Accountancy Scheme” to engage with and assist regulatory inquiries.

In particular, the Tribunal held that the member ignored repeated attempts by the FRC to contact him by email, post, and telephone, even though the regulator had established his correct contact details. He also failed to comply with a formal notice issued under paragraph 14(2) of the Accountancy Scheme, which required him to propose dates for an interview with the FRC.

The Tribunal further noted that the member failed to submit any written representations in response to the “Proposed Formal Complaint” and did not engage meaningfully with the disciplinary process. Thus, failed to attend the Tribunal hearing itself. The Tribunal concluded that his non-attendance was deliberate and part of a broader pattern of disengagement.

Emphasising the public interest dimension of professional regulation, the Tribunal observed that cooperation with regulatory investigations is a core obligation of professional accountants. The member’s conduct was found to have frustrated the FRC’s investigation and undermined confidence in the disciplinary framework designed to protect the public and uphold professional standards.

On this basis, the Tribunal determined that the misconduct had been proved and proceeded to consider sanctions against the member. Considering all the irregularities, the Tribunal barred the member by excluding him as a member of the Chartered Institute of Management Accountants for a recommended period of 5 years.

Source : Financial Reporting Council

Click Here To Read The Full Story 

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Case Details: Deputy Commisioner of Income-tax vs. Anushka Estates [2026] 182 taxmann.com 446 (Bangalore - Trib.)

Judiciary and Counsel Details

• Prashant Maharishi, Vice President
• Keshav Dubey, Judicial Member
• Shivanand Kalakeri, DR for the Appellant.
• Nagin Kincha & Smt. Suman Lunkar, ARs for the Respondent.

Facts of the Case

The assessee, a real estate company, was engaged in real estate activity. During the survey proceedings, it was found that the assessee had entered into a Joint Development Agreement (JDA) with the developer. In respect of these joint development projects, the assessee adopted the project-completion method for recognising revenue/income.

Considering that the developer adopted the percentage completion method of accounting, the Assessing Officer (AO) contended that the assessee should also recognise the revenue accordingly. AO added to the assessee’s income under the percentage-of-completion method. The CIT(A) deleted the additions made by AO, and the matter reached the Bangalore Tribunal.

Tribunal Held

The Tribunal held that the assessee was only a landowner and not a developer or contractor. The assessee had granted the developer development rights to develop the property owned by the assessee. The developer was responsible for the construction of premium residential apartment buildings. The assessee, being the landowner, was the sole legal and beneficial owner of the scheduled property.

The assessee was recognising the revenue based on the ultimate registration of the sale deed. Since no part of the property had been registered under a duly registered sale deed, the amount received by the assessee was shown as a liability in the balance sheet. The assessee remained the owner of the land throughout the development of the property, and there was no transfer of ownership to the developer. At the highest, possession alone was given under the agreement and that too for a specific purpose.

The revenue cannot be thrust upon the assessee to adopt the percentage completion method of accounting merely because the developer was following it. The percentage completion method, as one of the recognised methods under the construction contract, is not applicable to the assessee firm, which is a landowner.

Since the assessee adopted the project completion method for revenue recognition and has consistently followed it over the years, the accounting method is also not subject to any change by the revenue.

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Case Details: Davinder Chicken Centre vs. Sales Tax Officer [2026] 182 taxmann.com 464 (Delhi)

Judiciary and Counsel Details

• Pratibha M. Singh & Shail Jain, JJ.
• Akshay Allagh, Adv. for the Petitioner.
• Sumit K. Batra & Ms. Priyanka Jindal, Advs. for the Respondent.

Facts of the Case

The petitioner challenged an adjudication order passed under Section 73 of the CGST Act and the Delhi GST Act. It stated that a show cause notice (SCN) and a reminder notice were issued, and a personal hearing was scheduled, but no reply was filed, and no hearing was attended. It was contended that the SCN and the impugned order were uploaded on the ‘Additional Notices Tab’ on the GST portal, which was not initially visible, and that the notices were not brought to its attention despite continuous filing of returns. The matter was accordingly placed before the High Court.

High Court Held

The High Court held that the petitioner did not have a proper opportunity to be heard and did not file a reply to the SCN, therefore, the matter required reconsideration by the adjudicating authority. The Court remanded the matter to the concerned adjudicating authority for fresh adjudication on merits, observing that the petitioner must be afforded an opportunity to be heard. Thus, the validity of the notifications was left open and subject to the Supreme Court’s decision.

List of Cases Reviewed

• DJST Traders (P.) Ltd. v. Union of India [2025] 174 taxmann.com 191 (Delhi) (para 5)
• HCC-SEW-Meil-AAG JV v. Asstt. Commissioner of State Tax [2025] 174 taxmann.com 1080 (SC) (Para 10) followed

List of Cases Referred to

• DJST Traders (P.) Ltd. v. Union of India [2025] 174 taxmann.com 191 (Delhi) (para 5)
• HCC-SEW-Meil-AAG JV v. Asstt. Commissioner of State Tax [2025] 174 taxmann.com 1080 (SC) (para 6)
• Engineers India Limited v. Union of India [W.P.(C) 9214 of 2024] (para 7)
• Sugandha Enterprises v. Commissioner of DGST [2025] 179 taxmann.com 399 (Delhi) (para 11).

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