Article
Impact analysis of the Supreme Court decision in Saraf Exports v. CIT: Worth the wager?
By Krishna Laasya V
The article in this issue of Direct Tax Amicus discusses a recent decision of the Supreme Court in the case of Saraf Exports v. CIT, wherein the Apex Court has held that export incentives like Duty Drawback and DEPB will not qualify as first-degree nexus for the purposes of claim of deduction under Section 80-IB of the Income Tax Act, 1961. The decision has also reiterated the principle laid down earlier that restrictive meaning must be given to the expression ‘derived from’. The article in this regard discusses the prominent decisions highlighted in this decision, and the judicial standing in various preceding decisions. Noting that the term ‘derived from’ has also been employed in other provisions of the Income Tax Act as well, the author points out that the factum of being able to ascribe the meaning of the term to usage in other similar provisions seems likely to be subject to litigation as well. The author also raises a pertinent question as to whether the ratio of this decision would also apply to other export incentives and all other incentives from the Government such as MEIS/SEIS scrips or those that may be rolled out in the future.
Notifications & Circulars
- Online gaming – Rules for calculation of net winnings notified
- Online gaming – Guidelines for removal of difficulties in relation to TDS on winnings issued
- Leave encashment – Exemption limit for cash equivalent of leave salary at the time of retirement increased
- E- Appeals Scheme, 2023 notified
- Charitable and religious trusts – Clarification regarding provisions relating thereto issued
- Refund claim and claim of carry forward of losses – Monetary limits of concerned authority revised for seeking condonation of delay
Ratio decidendi
- No TDS liability on year-end provisions reversed in the subsequent AY, when payee was not identifiable – ITAT Delhi
- Primary Agricultural Credit Societies cannot be termed as co-operative bank/ bank under Banking Regulation Act, for the purpose of Section 80(P)(4) of the IT Act – Supreme Court
- Assessment order is not rectifiable on jurisdictional issue, once the order passed in appeal against the order has attained finality – ITAT Hyderabad
- Derivative loss allowed to be set off against other business income by virtue of Sections 43(5) and 73 – Bombay High Court
- Trust cannot claim exemption under Section 80G merely because it has registration under Section 12AA – ITAT Pune
