Tax Law and International Tax Law

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) in T. Srikanth v. DCIT [ITA No. 3792/Chny/2025] has unequivocally held that the deeming fiction created u/s 50C of the Income-tax Act, 1961 (‘the Act’), which substitutes stamp duty value as the "full value of consideration" for computing capital gains u/s 48, cannot be imported into section 54F to reduce the quantum of exemption available to a taxpayer who has reinvested the entire actual sale consideration in a new residential house.

The issue of taxability of corporate guarantees issued by a holding company to a financial institution for the benefit of its subsidiary company emerged as one of the most contentious issues in the Goods and Services Tax (GST) regime pursuant to the introduction of the levy in 2023. The controversy centers on a fundamental question: when a holding company furnishes a corporate guarantee, without charging any fee from its subsidiary company, to a bank to enable its subsidiary to secure credit facilities, does such activity constitute a taxable “supply of services” under the Central Goods and Services Tax Act, 2017 (CGST Act)?

The Madras High Court has ruled on a significant Cenvat credit dispute involving the interpretation of 'within the factory of production' when intermediate products are stock-transferred between units of the same company. The decision addresses whether input credit on furnace oil used in manufacturing an exempt intermediate product can be claimed when that product is transferred to another unit for final dutiable goods production.