Recent Developments in Direct Tax & Indirect Tax

Here is a short summary (10–11 bullet points) of the key topics covered in the PDF “Recent Developments in Direct & Indirect Tax – February 2026” :

• Section 263 Revision (Direct Tax): ITAT Bangalore upheld revision proceedings against a family discretionary trust due to lack of enquiry on large asset receipts under Section 56(2)(x).
• Goodwill & Buy-Back Taxation: ITAT Pune disallowed depreciation on artificially created goodwill in intra-group amalgamation and upheld buy-back tax under Section 115QA.
• Foreign Salary Taxability: ITAT Ahmedabad held that foreign salary credited to an NRE account is not taxable in India if first received outside India.
• FBT Refunds: Bombay High Court directed grant of long-pending Fringe Benefit Tax refunds, ruling that IT system glitches cannot deny statutory refunds.
• GST – Clubbing of Financial Years: Bombay HC (Nagpur Bench) ruled that Section 74 SCNs cannot consolidate multiple financial years into a single proceeding.
• Leasehold Assignment under GST: Bombay HC held that assignment of long-term industrial leasehold rights is not a “supply” under GST.
• Residuary Classification (VAT): Supreme Court classified “Sharbat Rooh Afza” as a fruit drink (not residuary entry), emphasizing common parlance test and burden on Revenue.
• Section 74 vs 73 (GST): GSTAT ruled that reconciliation mismatches alone do not justify invoking fraud provisions under Section 74; appellate authority cannot convert it to Section 73.
• ITC Denial & Supplier Default: Tripura HC held that bona fide purchasers cannot be denied ITC merely because the supplier failed to deposit tax.
• ITC on Mall Construction: Tamil Nadu AAR denied ITC on construction of mall intended for leasing, citing Section 17(5)(d).
• Double GST Payment Refund & Personal Penalties:
  • Orissa HC held that refund of double GST payments cannot be denied on limitation grounds (Article 265 prevails).
  • Bombay HC quashed personal penalties on company officials under Section 122(1A), holding no vicarious liability and no retrospective penalty.

If you want, I can also provide a separate short summary only for Direct Tax or only for Indirect Tax for easier presentation.

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