Tax Cases Weekly Round-Up: 17 September To 23 September, 2023

Update: 2023-09-25 02:57 GMT
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Delhi High Court Tax Authority Based In Delhi Lacks Jurisdiction On Withholding Tax Liability On Share Purchase Transaction: Delhi High Court Quashes Tax Demand Against Sumitomo Case Title: Sumitomo Mitsui Financial Group Inc. Versus CIT The Delhi High Court has deleted the tax demand against Sumitomo Mitsui Financial Group on the grounds of lack of jurisdiction. Delhi...

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Delhi High Court

Tax Authority Based In Delhi Lacks Jurisdiction On Withholding Tax Liability On Share Purchase Transaction: Delhi High Court Quashes Tax Demand Against Sumitomo

Case Title: Sumitomo Mitsui Financial Group Inc. Versus CIT

The Delhi High Court has deleted the tax demand against Sumitomo Mitsui Financial Group on the grounds of lack of jurisdiction.

Delhi High Court Directs VAT Dept. To Refund Rs. 6.62 Crores To Flipkart

Case Title: Flipkart India Private Limited Versus Value Added Tax Officer

The Delhi High Court has directed the Value Added Tax (VAT) department to refund Rs. 6.62 crore to Flipkart along with interest.

Bombay High Court

DRP Can Give Directions Only In Pending Assessment Proceedings: Bombay High Court

Case Title: Undercarriage and Tractor Parts Pvt. Ltd. Versus DRP

The Bombay High Court has held that the Dispute Resolution Panel (DRP) could give directions only in pending assessment proceedings.

Bombay High Court Quashes Re-Assessment Order Based On Change Of Opinion Without Any Tangible New Information

Case Title: Ashraf Chitalwala Versus DCIT

The Bombay High Court has quashed the reassessment order based on a change of opinion without surfacing any tangible new information.

Kerala High Court

GST - Input Tax Credit Cannot Be Denied To Purchaser Merely Because Seller Didn't Record Transaction In GSTR-2A Form: Kerala High Court

Counsel for the Petitioner: Advocates Aji V. Dev, H. Abdul Lathief, Alan Priyadarshi Dev, and S. Sajeevan

Citation: 2023 LiveLaw (Ker) 495

The Kerala High Court recently held that Input Tax Credit (ITC) cannot be denied to a purchaser merely on ground of non-reflection of the transaction in the GSTR-2A Form.

Allahabad High Court

UP VAT | Burden To Prove Purchase From Registered Dealer On Assessee: Allahabad High Court

Case Title: The Commissioner, Commercial Tax v. M/S Ramway Foods Ltd. [SALES/TRADE TAX REVISION No. - 26 of 2023]

Case Citation: 2023 LiveLaw (AB) 334

In a revision preferred by the Tax Department, the Allahabad High Court has held that the burden to prove that purchases were made from registered dealer lies on the Assesee claiming the same. The Department cannot be made to discharge a negative burden to prove that the sales were made from unregistered dealers.

Patna High Court

Civil Liability Imposed for Failing to Settle Tax Dues Due to Incorrect Input Tax Credit Claim, Attracts Penalty: Patna High Court

Case Title: M/s Munna Traders vs. The State of Bihar and Others

LL Citation: 2023 Livelaw (Pat) 112

In a recent verdict, the Patna High Court upheld the imposition of interest and penalty on M/s Munna Traders, an assessee under the Bihar Goods and Services Tax Act (BGST Act). The penalties were enforced due to an excessive claim of input tax credit, with the Court deeming the penalty as a civil liability arising from the failure to pay the due tax, stemming from an erroneous input tax credit claim.

ITAT

Employee Stock Option Expenses Revenue In Nature: ITAT Deletes Disallowance Against Cleartrip

Case Title: Cleartrip Private Limited Versus DCIT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that employee stock option expenses are revenue in nature.

Assessment Invalid On Account Of A Mechanical Non-Speaking Approval Under Section 153D: ITAT

Case Title: Vrushali Sanjay Shinde Versus DCIT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that assessment invalid on account of a mechanical non-speaking approval under Section 153D of the Income Tax Act.

Issuance Of Bonus Shares Does Not Amount To Transfer Of Property And Does Not Attract Section 56(2)(vii)(c): ITAT

Case Title: DCIT Versus Aruna Chandhok

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that in the issue of bonus shares, the money remains with the company and nothing comes to the shareholders as there is no transfer of the property and the provisions of Section 56(2)(vii)(c) of the Income Tax Act.

TDS Not Required To Be Deducted At The Time Of Grant Of ESOP: ITAT

Case Title: DCIT Versus Total Energies Marketing India Pvt. Ltd.

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that TDS is not required to be deducted at the time of grant of an employee stock ownership plan (ESOP).

TNMM Should Be Applied In Respect Of International Transaction Of `Sale Of Finished Goods’: ITAT

Case Title: DCIT Versus M/s. Ampacet Speciality Products Private Limited

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the Transactional Net Margin Method (TNMM) should be applied in respect of international transactions of `Sale of finished goods’.

‘Non-Cooperative Attitude’ Cannot Be The Basis Of Imposing Penalty: ITAT

Case Title: Alankit Imaginations Ltd. Versus DCIT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that a ‘non-cooperative attitude’ as such in itself cannot be the basis for imposing penalties without specifically bringing on record the specific notices and their specific non-compliances.

Payment To UK-Based Company For Preparing Candidate Written Report By CAE Simulation Training Is Not A Royalty: ITAT

Case Title: CAE Simulation Training P. Ltd. Versus DCIT

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has held that payment to a UK-based company for preparing candidate written reports by CAE Simulation Training is not a royalty.

Capital Gain Exemption Not Available For A Residential House Purchased Abroad After April 1, 2015: ITAT

Case Title: Khalid Sayed Versus Centralized Processing Centre

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that capital gain exemption is not available for a residential house purchased abroad after April 1, 2015.

AO Can’t Ask Assessee To Prove Non-Occurring Of An Event, ITAT Deletes Income Tax Addition Worth Rs. 2 Crores

Case Title: ITO versus Gammon Construction Pvt. Ltd.

The Delhi Bench of Income Tax Appellate Tribunal (ITAT) has deleted the income tax addition worth Rs. 2 crores and held that the AO cannot ask the assessee to prove the non-occurring of an event.

CESTAT

CESTAT Directs Excise Duty Refund To IOCL Paid Under Protest

Case Title: Indian Oil Corporation Ltd. Versus C.C.E. & S.T.-Surat-ii

The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has directed the excise duty refund to Indian Oil Corporation Ltd. (IOCL) paid under protest.

Physician Sample Sold To Distributor For Free Distribution To Doctors Covered Under Section 4(i)(a) Of Central Excise Act: CESTAT

Case Title: Sun Pharmaceuticals Industries Limited Versus C.C.E. & S.T.-Vadodara-ii

The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that physician samples sold to distributors for free distribution to doctors are covered under Section 4(i)(a) of the Central Excise Act.

Pre-Fabricated Shelters, Towers Essential Ingredient Of Telecommunication Service: CESTAT Allows Cenvat Credit

Case Title: Tower Vision India Private Limited Versus Commissioner of Service Tax-Delhi

The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that prefabricated shelters and towers are essential ingredients of telecommunication services and qualify as input services.

Waste, Gums, Fatty Acids Arising During Manufacturing Of Vegetable Oils Are Eligible For Excise Duty Exemption: CESTAT

The Chandigarh Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that waste, gums, fatty acids, etc. arising during the course of the manufacture of vegetable oils are eligible for the excise duty exemption.

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