Supreme Court

Disputes Related To Tax Concessions Are Not Arbitrable: SupremeCourt

Case Title: M/s Shree Enterprise Coal Sales Pvt Ltd. Versus Union Of India

Citation: 2022 LiveLaw (SC) 774

The Supreme Court has held that disputes related to tax concessions are not arbitrable.

The division bench of Justice Dhananjaya Y Chandrachud and Justice Hima Kohli has observed that the High Court was in error in holding that the terms of e-auction provided that any dispute was arbitrable. Undoubtedly, a contractual dispute would be amenable to being resolved by arbitration. However, in the present case, the relief related to tax concessions was not of an arbitrable nature.

Delhi High Court

Intention To Evade Tax Is Absent, Taxpayer Needs To Be Given Another Chance: Delhi High Court

Case Title: Nirmal Kumar Mahaveer Kumar Versus Commissioner of CGST

The Delhi High Court has held that the petitioner/taxpayer needs to be given another chance to establish why the subject goods did not reach their designated designation before the expiry of the e-way bill.

The division bench of Justice Rajeev Shakdher and Justice Tara Vitasta Ganju has remanded the matter to the respondent to take a fresh decision on the matter, after giving the petitioner due opportunity to produce relevant material and evidence to establish its case.

EOU Entitled To Claim Deemed Export Drawback On Inputs Which Remained Unutilized With Then-Existing DTA Unit: Delhi High Court

Case Title: M/s Combitic Global Caplet Pvt. Ltd. Versus Union Of India

The Delhi High Court has held that duty drawback for goods should extend to unutilized goods which were available at the time of conversion of the Domestic Tariff Area (DTA) unit into a 100% Export Oriented Unit (EOU).

The division bench of Justice Rajiv Shakhdher and Justice Tara Vitasta Ganju has observed that the restriction against the claim of concession in duties and taxes applied only vis-à-vis plants, machinery and equipment that had already been installed. The petitioner was allowed to carry forward the advance authorization to the convertedunit,t i.e., 100% EOU, and thereafter fulfil the outstanding export commitment.

Physical Verification Of Business Premises For GST Registration Without Issuing Notice Is Violation Of Principle Of Natural Justice: Delhi HighCourt

Case Title: Curil Tradex Pvt. Ltd. Versus The Commissioner

Citation: 2022 LiveLaw (Del) 905

The Delhi High Court has held that the physical verification of business premises for GST registration without issuing a notice is a violation of the principle of natural justice.

The division bench of Justice Rajeev Shakdher and Justice Taravitasta Ganju has noted that the proper officer opted to have the petitioner's business premises inspected, albeit without the presence of its authorised representative. Had notice or intimation been given, the glitch could have been overcome.

GST Not Payable On Renting Of A Residential Dwelling ForPersonal Use: Delhi High Court

Case Title: Seema Gupta Versus Union Of India

The Delhi High Court has held that Goods and Service Tax is not payable on renting a residential dwelling for personal use.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh has observed that the rental of a residential dwelling to a proprietor of a registered proprietorship firm who rents it in his personal capacity for use as his own residence and not for use in the course or furtherance of the business of his proprietorship firm and such renting is on his own account and not that of the proprietorship firm, shall be exempt from tax under Notification No.04/2022-Central Tax (Rate) dated 13.07.2022.

Bombay High Court

Secured Creditors Shall Take Priority Over Government Dues Under SARFAESI Act: Bombay High Court

Case Title: Jalgaon Janta Sahakari Bank Ltd. Versus Joint Commissioner of Sales Tax Nodal 9

The Bombay High Court has held that the rights of secured creditors to realise secured debts shall have priority over government dues, including revenues, taxes, cesses, and rates due to the Central Government, State Government, or local authority under the SARFAESI Act.

The three judge bench headed by Chief Justice Dipankar Dutta, Justice M.S.Karnik and Justice N.J. Jamadar has observed that the Sales Tax Commissioners did not claim that they registered the claim with the CERSAI to adhere to the mandate contained in section 26B(4) of the SARFAESI Act. Non-registration of the claim and/or order of attachment entails the consequences envisaged under section 26C (2) of the SARFAESI Act. Thus, dual disability sets in. Firstly, in the absence of material to show that the first charge under section 37 of the MVAT Act was enforced by a valid attachment order before the registration of security interest by the petitioner/secured creditors with the CERSAI, the petitioner cannot be deprived of the right of priority under section 26E of the SARFAESI Act. Secondly, with the registration of the security interest with the CERSAI on July 9, 2020, coupled with the absence of registration of the department's demand and order of attachment, the claim of the respondents/department becomes subservient to the right of the secured creditor.

Bombay High Court Issues Notice On Plea Challenging CGST Rules

Case Title – SAT Industries Limited v. Union of India & Anr.

The Bombay High Court on Monday issued notice to Maharashtra government and central government in a petition challenging amendment to Central Goods and Service Tax Rules, 2017 (CGST Rules).

"Petitioner is challenging both CGST as well as MGST Rules in this regard. Therefore, notice has to be issued to the learned Attorney General of India as well as the Advocate General", the court stated.

Justices K.R. Shriram and A.S. Doctor, were dealing with a writ petition challenging the amendment to Rule 21A of the CGST Rules, 2017.

It Is The Bonafide Mistake Of Taxpayer Paying To Railways Instead Of GST Department: Bombay High Court

Case Title: Arun Krishnachandra Goswami Vs. Union of India

The Bombay High Court has held that the taxpayer has made a mistake and instead of paying the Government of India through the CGST authorities and the State of Maharashtra through the SGST authorities, the entire amount was paid to the Government of India through Indian Railways.

The division bench of Justice K.R. Shriram and Justice A.S. Doctor has directed that the amounts which have been wrongly paid to railways should be paid to the CGST authorities and SGST authorities within two weeks.

Limitation Period Starts After Affixing Signatures On GST Registration Cancellation Order: Bombay High Court

Case Title: Ramani Suchit Malushte Versus Union of India and Ors.

The Bombay High Court has held that the limitation period would start only after the affixing of signatures on the GST registration cancellation order.

"Only on the date on which the signature of Respondent issuing authority was put on the order dated November 14, 2019, for the purpose of attestation, would time to file an appeal commence," the division bench of Justice K.R. Shriram and Justice A.S. Doctor said.

Kerala High Court

No Legislative Competence To Amend KVAT Act After Introduction Of GST Act: Kerala High Court

Case Title: State Tax Officer & Anr Vs. Baiju A.A

Citation: 2022 LiveLaw(Ker) 462

The Kerala High Court has held that legislative competence to amend the Kerala Value Added Tax (KVAT) Act after the introduction of the GST Act is impermissible.

The division bench of S.V.Bhatti and Justice Basant Balaji has observed that the amendment made by the Finance Act of 2018 to the provisions of the erstwhile KVAT Act to enable the department to initiate assessment proceedings in respect of assessments pending as of March 31, 2018 was illegal because the KVAT Act has already been repealed.

Jharkhand High Court

Show Cause Notice Containing "NA" In Column Of Date,Time, Venue Of Personal Hearing: Jharkhand High Court Quashes Adjudication Order

Case Title: M/s. Om Prakash Store Versus The State of Jharkhand

The Jharkhand High Court has quashed the adjudication order and held that the notice issued under notice under Section 73 of the CGST Act, in the column of date, time and venue of personal hearing, was indicated by the respondents as "NA", which means not applicable.

The division bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan has observed that the adjudication order was not in accordance with the procedure prescribed in law. The order deserves to be quashed on the grounds of non-compliance with the statutory provisions of the JGST Act and for non-compliance with the principle of natural justice.

Telangana High Court

ITC Refund Admissible If Output Supply Tax Rate Is Less ThanInputs Tax Rate: Telangana High Court

Case Title: Micro Systems And Services Sole Proprietorship Vs Union Of India

The Telangana High Court has held that refund of accumulated input tax credit (ITC) on account of inverted structure would be allowed if accumulation of ITC is on account of the rate of tax on output supply being less than the rate of tax on inputs (same goods) at the same point of time as per some concessional notification issued by the government providing for a lower rate of tax for some specified supplies subject to fulfilment of other conditions.

Madras High Court

Assessee Entitled To Avail Cenvat Credit Of Service Tax Already Paid During Transitional Period: Madras High Court

Case Title: The Assistant Commissioner of GST & Central Excise Versus M/s.Ganges International Private Limited

Citation: 2022 LiveLaw (Mad) 382

The Madras High Court, consisting of Justice R. Ramdevan and Justice Mohammed Shaffiq, has held that the assessee is entitled to avail cenvat credit of the service tax already paid but the assessee was unable to claim due to a transitional provision that has come into effect from 01.07.2017.

Interest Leviable On Belated Remittance of GST Even If Credit InCash/Credit Ledgers Is Available: Madras High Court

Case Title: India Yamaha Motor Private Limited Versus The Assistant Commissioner

Citation: 2022 LiveLaw (Mad) 384

The Madras High Court has ruled that interest on late GST remittances is levied even if credit in electronic cash or credit ledgers is available.

The single bench of Justice Anitha Sumanth has observed that unless an assessee actually files a return and debits the respective registers, the authorities cannot be expected to assume that available credits will be set-off against tax liability.

Transporter Of Goods May Seek Release Of Only The Conveyance:Madras High Court

Case Title: TCI Freight Versus The Assistant Commissioner

Citation: 2022 LiveLaw (Mad) 399

The Madras High Court has held that the transporter may seek release of only the conveyance upon satisfaction of the statutory conditions.

The division bench of Justice Anitha Sumanth has observed that the phrase 'person transporting the goods' in Sections 129(1) and (6) to mean the owner or his agent who has contracted to supply the goods, and not the transporter who will provide the carriage for the same. Both sub-Sections 129(1) and (6) use the phrase 'goods or conveyance' whereas the proviso extends the benefit of release, upon terms, to the transporter, but restricted to the conveyance alone.

Madras High Court Allows Concessional Customs Duty Benefit OnGoods Used In Rotor Of Windmills For Notional Billing To Customer

Case Title: Nordex India Private Limited Versus Commissioner of Customs

Citation: 2022 LiveLaw (Mad) 401

The Madras High Court has allowed the concessional customs duty benefit on goods used in the rotor of windmills for notional billing to customers.

The single bench of Justice M. Nirmal Kumar has observed that the imported rotor blades need no customization and mechanisation. Hence, raising an invoice in the name of the client after importing and transporting it to the customer's site is only a notional exercise. It cannot be said that the petitioner is not the importer and that he is the person who has used it for a specific purpose for which it was imported.

GST Department Did NotRecognize Concept Of 'Working Day' And 'Holiday' In Matters Of Interception,Seizure, Detention: Madras High Court

Case Title: M/s.D.K.Enterprises Versus The Assistant /Deputy Commissioner (ST)

Citation: 2022 LiveLaw (Mad) 408

The Madras High Court has held that in the matters of interception, seizure, and detention, the GST Department did not recognise the concept of "working day" and "holiday" since substantial civil rights of the parties were at stake.

The single bench of Justice Anitha Sumanth has observed that neither the assessee nor the department could have the luxury of reference to a holiday to delay or protract the proceedings. The acts of interception and retention, though an invasion of the rights of citizens have been accorded statutory sanction in pursuance of the aims and objects of the Goods and Services Act. Thus, it was imperative that the intrusive acts be carried out in strict compliance with the statutory provisions.

GST Registration Cancellation: Madras High Court Directs Changes In Architecture Of GST Portal

Case Title: M.Mallika Mahal Versus The Commissioner of Central GST and Central Excise

Citation: 2022 LiveLaw (Mad) 411

The Madras High Court has directed the GST department to take suitable steps by instructing GST Network, New Delhi to make suitable charges in the architecture of the GST Web Portal to allow the petitioners to file their returns and pay the tax/penalty/fine.

The single bench of Justice Anitha Sumanth has noted that payment of tax, interest, fine/fee, etc. shall not be allowed to be made or adjusted from and out of any input tax credit which may be lying unutilized or unclaimed in the hands of these petitioners.

Karnataka High Court

Export Of Software Embedded Into Hardware; Sale Proceeds From Export Of Hardware Eligible For Deduction :Karnataka High Court

Case Title: M/s. Subex Limited versus The Deputy Commissioner of Income Tax

Citation: 2022 LiveLaw (Kar) 373

The Karnataka High Court has ruled that where a software embedded into a hardware is exported by the assessee, the proceeds from export of the hardware component is eligible for deduction under Section 10A of the Income Tax Act, 1961, despite the fact that the hardware was separately invoiced and was not manufactured by the assessee, if the software cannot be used independently.

Allahabad High Court

GST Dept. Can Only Seize Goods In Transit And Not From Godown :Allahabad High Court

Case Title: Mahavir Polyplast Pvt. Ltd. Versus State Of U.P. And 2 Others

Case Citation: 2022 LiveLaw (AB) 418

The Allahabad High Court has held that the goods lying in the gowndown cannot be seized by invoking section 129 of the CGST Act. The power of seizure can be exercised only in the case of goods in transit and not for goods lying in godown.

The single bench of Justice Saumitra Dayal Singh has observed that it is unbelievable that two (not one) authorities of the Mobile Squad of the Commercial Tax Department chose to act with negligence. The provision of Section 129(3) of the CGST Act could not be invoked to subject a godown premises to a search and seizure operation. The department was unmindful of the Act as no action was taken under Section 67. Section 67 of the CGST relates to the existence of "reasons to believe" that premise is subject to search and seizure of goods or documents found therein.

GST Dept. Made Attachment Without Recording Opinion And Referring To Any Tangible Material: Allahabad High Court Imposes Cost

Case Title: Varun Gupta Versus Union Of India

The Allahabad High Court has held that the department has neither recorded the opinion nor referred to any tangible material which necessitated him to pass the provisional attachment order to protect the interest of the government revenue.

The division bench of Justice Surya Prakash Kesarwani and Justice Jayant Banerji has directed the department to pay the cost of Rs. 50,000 to the petitioner/assessee.

Rajasthan High Court

Person Making 'Voluntary Disclosure' After Subjected To Audit Is Ineligible To Avail Benefit Of SVLDRS, 2019: Rajasthan High Court

Case Title: Malik Builders Versus UOI

Citation : 2022 LiveLaw (Raj) 228

The Rajasthan High Court has held that a person making "Voluntary Disclosure" after being subjected to any enquiry, investigation, or audit is clearly ineligible to avail the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS, 2019).

The division bench of Acting Chief Justice Manindra Mohan Shrivastava and Justice Madan Gopal Vyas has observed that the petitioner fell within the mischief under Section 125(1)(f) of the Finance (No.2) Act, 2019 and was thus not entitled to avail the benefit of the SVLDRS, 2019 by submitting a declaration. The petitioner suppressed the most material fact of its having been subjected to audit proceedings vide intimation dated 28.11.2019 while submitting its declaration on 31.12.2019. It was to mislead the authorities by withholding relevant information, upon disclosure of which its declaration was not liable to be proceeded further. The petitioner, by suppression, procured benefit by way of the issuance of a discharge certificate.

Rajasthan High Court Dismisses Writ Petitions Challenging Levy Of GST On Royalty

Case Title: Sudershan Lal Gupta & Ors. versus Union of India & Ors.

The Rajasthan High Court has dismissed a batch of writ petitions challenging the levy of GST on reverse charge basis on royalty of mining extraction.

Noting that the Coordinate Benches of the Rajasthan High Court, in several cases, have dismissed the writ petitions challenging the levy of GST on royalty, the Division Bench of Acting Chief Justice Manindra Mohan Shrivastava and Justice Shubha Mehta ruled that it was bound by the final orders passed by the Coordinate Benches.

Madhya Pradesh High Court

'Mistake In E-way Bill WasHuman Error' | Madhya Pradesh High Court Quashes Penalty Under CGST Act

Case Title: Maharaja Cables (C/O Maxwell Logistic Pvt Ltd) Vs Commissioner (GST) State Tax Indore (M.P.)

The Madhya Pradesh High Court recently quashed the penalty imposed under the Central Goods and Service Tax Act, 2017 on a private company after the petitioner argued that the mistake while generating the e-way bill was an inadvertent human error.

The division bench of Justice Sheel Nagu and Justice Virendra Singh, while allowing the appeal, observed that the mistake in the e-way bill was bonafide. However, the court said the authorities will be at liberty to consider the case of the petitioner for the imposition of a minor penalty while treating the mistake in question to be a clerical mistake as per Circular dated 14.09.2018 issued by the Ministry of Finance, Government of India.

Calcutta High Court

Cancellation Of GST Registration Ultimately Impacts Recovery Of Taxes: Calcutta High Court

Case Title: Bisweswar Midhya, Proprietor of Midhya Construction Versus The Superintendent, CGST

The Calcutta High Court has held that if the registration of a dealer is cancelled, the dealer cannot carry on its business in the sense that no invoice can be raised by the dealer. This would ultimately impact the recovery of taxes.

The division bench of Justice T.S. Sivagnanam and Justice Prasenjit Biswas has held that the suspension of the appellant's registration should be revoked forthwith with a direction to the appropriate authority to issue a show cause notice within a time frame and take up the adjudication proceeding.

Calcutta High Court Allows Pharma Company To Avail CENVAT Credit On Sales Promotion Services

Case Title: Principal Commissioner Of Central Excise Versus M/s Himadri Speciality Chemical Ltd.

The Calcutta High Court has allowed the pharma company to avail CENVAT credit on sales promotion services.

The division bench of Justice T.S. Sivagnanam and Justice Supratim Bhattacharya has observed that the commission paid by the pharma company to the commission stockist is included in the assessable value of the goods on which excise duty has been paid by the respondent on the final products.

The court has noted that sales promotion would include services by way of the sale of goods on a commission basis.

Gauhati High Court

Betel Nuts Are Subject To Decay, Not Required For Investigation:Gauhati High Court Directs To Release

Case Title: Md. Rajibul Islam Versus State of Assam

The Gauhati High Court has directed the release of seized betel nuts as the betel nuts are subject to speedy natural decay and their retention was not required for the purpose of investigation.

The single bench of Justice Robin Phukan has observed that from the date of seizure till date, more than 128 days have already elapsed. There was no allegation of theft in respect of the seized betel nuts. The petitioner has also produced a certificate issued by Gaon Burah and the Chairman of Zutovi Village in respect of purchasing betel nuts from their village.

Uttarakhand High Court

Amount Paid Under ProtestPrior To SCN , Consider As Pre -Deposit Under SVLDR Scheme: Uttarakhand HighCourt

Case Title: Patanjali Ayurved Ltd. Versus Commissioner of Central Excise & Service Tax

Citation: 2022 LiveLaw (Utt) 36

The Uttarakhand High Court has held that the amount paid under protest, towards interest, prior to the issuance of show cause shall be considered as pre-deposit while disposing of the application for a waiver under the 'Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019' (SVLDR Scheme).

The single bench of Justice Sanjaya Kumar Mishra has observed that the statute does not make any distinction between the payment of taxes, interest thereon, or any penalty in the amount which has been deposited during enquiry, investigation, or audit shall be deducted while issuing the statement and shall be adjusted while calculating relief to the declarant.

Jammu & Kashmir & Ladakh High Court

GST Registration, FSSA License Cannot Be Granted If The PremiseIs Under Dispute: J&K&L High Court

Case Title: Parveez Ahmad Baba Versus Union Territory of J&K and others

Citation: 2022 LiveLaw (JKL) 152

The High Court of Jammu & Kashmir and Ladakh has held that the GST Registration cannot be granted if the ownership of the business owner's premise is under dispute.

The single bench of Justice Sanjeev Kumar observed that until the dispute is settled between the parties amicably or through intervention of the Court of competent jurisdiction, neither the designated authority under the Food Safety and Standard Act, 2006 shall issue the licence nor registration shall be accorded under the GST Act to either of the parties in respect of the premises "Samci Restaurant."

Andhra Pradesh High Court

GST Refund Application: Andhra Pradesh High Court ExcludesPeriod From 1st March, 2020 to 28th February, 2022 For Limitation

Case Title: M/S. Gandhar oil refinery (India) Limited v. Assistant commissioner of sales tax

The Andhra Pradesh High Court has relied on the notification dated 05.07.2022 and held that the period from 1st March, 2020 to 28th February, 2022, for the computation of the period of limitation for filing refund applications shall stand excluded.

The division bench of Justice C. Praveen Kumar and Justice A.V. Ravindra Babu has observed that the application for refund was not made beyond the period of limitation and remanded the matter back to the assessing authority for fresh consideration in accordance with the law.

Tripura High Court

Most People Possessing Exotic Species Are Animal Lovers, CannotDirect Govt To Criminalize Non-Declaration: Tripura High Court

Case Title: Adwitiya Chakrabarti Versus Union of India

Dismissing a PIL seeking to declare the possession of undeclared exotic animals and birds as illegal under the Customs Act and the Wild Life (Protection) Act and prosecution of their owners, the Tripura High Court has said it cannot direct or expect the government to take such drastic measure in haste without assessment of the impact and in absence of a detailed study.

The division bench of Chief Justice Indrajit Mahanty and Justice S.G. Chattopadhyay noted that a large number of citizens across India own pets which may be exotic species and might have been purchased or procured from those involved in captive breeding.

CESTAT

Cenvat Credit On Group Mediclaim Policy Cannot Be Disallowed:CESTAT

Case Title: M/s. Diamond Beverages Private Limited Versus Commissioner of CGST & CX, Kolkata South Commissionerate

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the cenvat credit on group mediclaim policy cannot be disallowed.

The two-member bench of P.K. Choudhary (Judicial Member) has observed that the insurance policy was taken by the Appellant for its factory employees. The appellant is registered under the Employees State Insurance Act, 1948 as well as the Factories Act, 1948, which mandates insurance policies to be obtained by the appellant.

CESTAT Allows Interest On Custom Duty Refund From Deposit DateTo Refund Date

Case Title: M/s BBM Impex Pvt. Limited Versus Principal Commissioner of Customs (Preventive)

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the 12% interest on custom duty refund from the deposit date to the refund date.

The bench of Anil Choudhary (Judicial Member) has observed that the amount of deposit made during investigation or audit becomes pre-deposit ipso facto upon contest of the dispute or filing of the appeal, and the assessee is entitled to interest as per law from the date of deposit till the date of refund.

Onus To Prove Charge Of Clandestine Clearance Of Goods Lies OnThe Department: CESTAT

Case Title: M/s. Shree Hari Sponge Private Limited Versus Commissioner of Central Excise & Service Tax, Bhubaneswar-II

The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the onus to prove a charge of clandestine clearance of goods lies with the department.

The two-member bench, P.K. Choudhary (Judicial Member) and Raju (Technical Member), have held that the charge of clandestine clearance of goods is a serious charge and cannot be made on presumptions and assumptions.

Paper Cess Is Not Includible In The Calculation Of Education Cess And Secondary & Higher Education Cess: CESTAT

Case Title: M/s. Uniglobal Paper Private Limited versus Commissioner of CGST & CX, Haldia Commissionerate

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that Paper Cess is not includible in the calculation of Education Cess and Secondary & Higher Education Cess.

The Bench of P.K. Choudhary (Judicial Member) held that though Cess on Paper is an excise duty, however, it is levied under the Industries (Development and Regulation) Act, 1951, and not under the Central Excise Act, 1944.

Amount Deposited Voluntarily During Investigation Can't Be Treated As Amount Towards Pre-Deposit: CESTAT

Case Title: Sky Airways Versus Commissioner of Customs,(Appeals)

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the amount deposited voluntarily during an investigation cannot be treated as an amount towards the pre-deposit as it was not an amount deposited at the time of the filing of the appeal.

The two-member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the appellant/assessee could not have asked for the refund of the amount deposited by the appellant voluntarily during investigation, which amount had been confirmed and appropriated by the order before the Tribunal in the earlier round of proceedings.

Customs Duty Exemption On Imported WAP: CESTAT

Case Title: Commissioner of Customs (Air) Chennai – VII Commissionerate Versus M/s. Ingram Micro India Pvt. Ltd.

The Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that imported WAP is entitled to an exemption from the whole of the customs duties under the ITA.

The two-member bench of Justice Dilip Kumar (President) and P.V. Subba Rao (Technical Member) has observed that imported WAP is a networking equipment working on LAN, connecting Wi-fi enabled devices such as laptops, smartphones, tablets, etc. to a wired network.

CESTAT Allows Cenvat Credit To Indian Oil On Excise Duty Paid Towards Manufacturing Activity

Case Title: M/s. Indian Oil Corporation Limited, Refinery Division Versus Commissioner of CGST & CX

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the cenvat credit to Indian Oil on excise duty paid towards manufacturing activity.

The bench of P.K. Choudhary (Judicial Member) has observed that once duty is paid by the assessee, treating the activity as manufacturing activity by the Department, Cenvat credit is available and there is no question of denial of Cenvat credit.

Losses Of Upto 1% Can Be Allowed Without Detailed Scrutiny : CESTAT

Case Title: Hindustan Petroleum Corporation Limited Versus Commissioner of Central Excise, Central Excise Building, Visakhapatnam

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the demand of excise duty against Hindustan Petroleum and held that losses of up to 1% can be allowed without detailed scrutiny.

The two-member bench headed by Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that there was no allegation, let alone evidence, that the losses were not genuine or that the products were suspected to have been diverted or pilfered.

Basic Customs Duty Exemption On Import Of Colour Data Projectors: CESTAT

Case Title: M/s BenQ India Pvt. Ltd. Versus Additional Director General (Adjudication)

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the import of colour data projectors is exempted from basic customs duty.

The two-member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that for the period prior to 01.01.2017, all goods falling under CTSH 8528 41, 8528 51, or 8528 61 were unconditionally exempted from payment of Basic Customs Duty under Serial No. 17 of the exemption notification. Post 01.01.2017, Serial No. 17 of the notification exempts all goods falling under CTSH 8528 42, 8528 52, or 8528 62 if they are of a kind solely or principally used in an automatic data processing machine of heading 8471. The goods imported by the appellant satisfy the description of the goods in the exemption notification for both periods and are, therefore, eligible for exemption.

Service Tax Exemption Available On Rendering Transmission Of Electricity: CESTAT

Case Title: M/s. KEC International Ltd. Versus Commissioner of CGST

The Chattisgarh Customs, Excise and Service Tax Appellate Tribunal (CESTAT), consisting of Justice Dilip Gupta (President) and P. Anjani Kumar (Technical Member), has held that the service tax exemption is available on the transmission of electricity.

Registration Of Premises Not A Necessary Prerequisite For Claiming A Refund Under Cenvat Credit Rules, 2004: CESTAT

Case Title: M/s. Selling Simplified India Private Limited Versus Commissioner of CGST, East Delhi

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the registration of premises is a necessary prerequisite for claiming a refund under Rule 5 of the Cenvat Credit Rules, 2004.

The bench of Rachna Gupta (Judicial Member) has observed that service providers are entitled to a refund under rule 5 of the Cenvat Credit Rules, 2004 when the output service is exported.

Vodafone Entitled To Claim CENVAT Credit On Tower And Prefabricated Buildings: CESTAT

Case Title: M/s Vodafone Mobile Services Limited Versus Commissioner of Central Excise

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that Vodafone is entitled to claim CENVAT credit on tower/tower material and pre-fabricated buildings/shelters.

The two-member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that Vodafone was entitled to take CENVAT credit since the items in dispute were "capital goods".

Exemption u/s 26 of Special Economic Zones Act, 2005 Is Overriding In Nature: CESTAT Quashes Service Tax Demand

Case Title: eClerx Services Limited Versus Commissioner of CGST &Central Excise

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the service tax demand and held that the exemption afforded by section 26 of the Special Economic Zones Act, 2005 is overriding in nature and the breach of conditions is procedural.

The two-member bench of Ajay Sharma (Judicial Member) and C.J. Mathew (Technical Member) has held that the required documentation was not available for the entire period of the dispute but, at the same time, it cannot be denied that at some point, the eligibility did exist. The procedural infirmities, for a shorter or longer time, do not in any way supplant the exemption accorded to the supply of services.

AO Treated Sundry Creditors As Bogus Based On His personal belief: ITAT Deletes Addition

Case Title: Assistant Commissioner of Income-tax, Circle-29, Kolkata Versus Shri Pradip Mullick

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has held that AO treated the sundry creditors as bogus at the instance of the report of the inspector for a few sample cases was based on AO's personal belief and not by virtue of any concrete facts and evidence placed on record.

The two-member bench of Rajpal Yadav (Vice-President) and Girish Agrawal (Accountant Member) has observed that the conclusion of the AO was based on imagination and directed to delete the addition.

Revenue Can't Characterize Preference Shares As Debt Instrument Ignoring Legal Consequences: ITAT

Case Title: M/s. Enzen Global Solutions Pvt. Ltd. versus ITO

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has reiterated that premium on redemption of preference shares is exigible to tax under the head 'Income from Capital Gains', liable to tax to the extent actually received on the redemption of shares.

The Bench of N.V. Vasudevan (Vice President) and Padmavathy S (Accountant Member) held that the revenue authorities cannot disregard the legal effect of issue of cumulative preference shares, and that they cannot ignore the legal consequences of a document by characterizing a share as a debt instrument.

AAR

GST Not Leviable On Employees' Portion Of Canteen Charges: AAR

Applicant's Name: M/s. Troikaa Pharmaceuticals Limited

The Gujarat Authority of Advance Ruling (AAR) has ruled that the GST is not leviable on the employee's portion of canteen charges.

The two-member bench of Amit Kumar Mishra and Atul Mehta has observed that GST is leviable on the amount representing the contractual worker portion of canteen charges, which is collected and paid to the canteen service provider.

No GST On Services Of Sweeping, Segregation And Transport OfGarbage: Karnataka AAR

Applicant's Name: Indian Security and Personnel arrangements

The Karnataka Authority of Advance Ruling (AAR) has ruled that GST is not payable on the services of cleaning and sweeping of lawns and garden path areas and segregating and transporting garbage.

The two-member bench of M.P. Ravi Prasad and T. Kiran Reddy has observed that no GST is payable on the supply of manpower for garden maintenance on an outsourced basis to the Department of Horticulture which is liable for GST at NIL.

12% GST Payable On Works Contract Services Executed To Karnataka Housing Board For Construction Of Police Station: AAR

Applicant's Name: Yankee Constructions LLP

The Karnataka Authority of Advance Ruling (AAR) has ruled that 12% GST is payable on work contract services executed for the Karnataka Housing Board for the construction of a police station.

The two-member bench of M.P. Ravi Prasad and T.Kiran Reddy has held that work contract services executed to the Karnataka Slum Development Board under the Pradhan Mantri Awas Yojana, as a main contractor, are liable to 12% GST till 17.07.2022 and liable to tax at 18% GST from 18.07.2022.

Supply Of Services For Plantation Of Mangrove Seeds AndSeedlings In Coastal Areas Attracts 18% GST: AAR

Applicant's Name: Raj Mohan Seshamani

The West Bengal Authority of Advance Ruling (AAR) has held that the supply of services for the plantation of mangrove seeds and seedlings in coastal areas would attract 18% GST.

The two-member bench of Brajesh Kumar Singh and Joyjit Banik observed that no GST is payable on the supply of services for cultivation, planting and nurturing of fruit trees.

Supply Of Services For Printing On Duplex Board Attracts 12%GST: AAR

Applicant's Name: Anamika Agrawal

The West Bengal Authority of Advance Ruling (AAR) has held that the supply of services for printing on duplex board belonging to the recipient, including cutting, punching, and lamination of the duplex board, so printed, would attract 12% GST irrespective of whether the recipient of the services is registered under the GST Act or not.

The two-member bench of Brajesh Kumar Singh and Joyjit Banik observed that the activities of printing on duplex boards belonging to its customer, including cutting, punching, and lamination, as and when required by the customer, shall be treated as services by way of job work.

GST Exemption On CompositeSupply Of Service By Milling Food Grains Into Flour To State Govt. For Public Distribution System: AAR

Applicant's Name: Himalayan Flour Mill Pvt. Ltd.

The West Bengal Authority of Advance Ruling (AAR) has ruled that the composite supply of services by way of milling of food grains into flour to the Government of West Bengal for distribution of flour under the Public Distribution System is eligible for GST exemption.

The two-member bench of Brajesh Kumar Singh and Joyjit Banik observed that the value of by-products retained by the appellant and yielded during CMR milling, which were allowed to be retained by the appellant to meet the CMR activity cost, must obviously be included as part of the value of supply and also be considered a bona fide form of consideration.The value of supply shall be the consideration in money and shall also include all the components for non-cash consideration.

Works Contract Services Executed To State Government For Construction Of Airport Terminal Building Attracts 18% GST: AAR

Applicant's Name: KMV Projects Limited

The Karnataka Authority of Advance Ruling (AAR) has ruled that 18% GST is payable on the work contract services executed for the state government for the construction of the airport terminal building and greenfield airport.

The two-member bench of M.P. Ravi Prasad and T. Kiran Reddy has observed that work contract services executed for Karnataka State Police Housing and Infrastructure Corporation Limited for the Construction of High-Security Prison are liable to tax at 18% GST with effect from 01.01.2022.

Supply Of AyurvedicProducts Under AYUSH Department Licences Attracts 12% GST: AAR

Applicant's Name: M/s. Incnut Lifestyle Retail Private Limited

The Telangana Authority of Advance Ruling (AAR) has ruled that 12% GST is payable on the supply of ayurvedic products under AYUSH department licences.

The two-member bench of B. Raghu Kiran and S.V. Kasi Visweswara Rao has observed that the products which are used for care are treated as "cosmetics" and therefore taxed at 18% GST. 12% GST is payable on the products which are used for cure and are treated as 'Medicaments' falling under Serial No. 63 of Schedule II.

Kingfisher Radler Attracts28% GST and 12% Cess: AAR

Applicant's Name: United Breweries Limited

The Karnataka Authority of Advance Ruling (AAR) has ruled that the Kingfisher Radler attracts 28% GST and 12% Cess.

The two-member bench of M.P. Ravi Prasad and T. Kiran Reddy has observed that the product "Kingfisher Radler" has different variants and all the variants merit classification as carbonated beverages of fruit drinks, all covered under tariff heading 2202 99 90.

Myntra Not Entitled To ITC On Vouchers And Subscription PackagesProcured From Third Party Vendors: AAR

Applicant's Name: Myntra Designs Pvt. Ltd.

The Karnataka Authority of Advance Ruling (AAR) has ruled that Myntra is not entitled to an Input Tax Credit (ITC) on vouchers and subscription packages procured from third-party vendors.

The two-member bench of M.P. Ravi Prasad and T. Kiran Reddy has observed that Myntra is not eligible to avail of the input tax credit, in terms of Section 16 of the CGST Act 2017, on the vouchers and subscription packages procured by the applicant from the third party vendors that are made available to the eligible customers participating in the loyalty programme against the loyalty points accumulated by the customers, as the ITC is not available in terms of Section 17(5)(h) of the CGST Act 2017.

Security Services Provided By LLP To Registered Person NotCovered Under RCM: AAR

Applicant's Name: AS&D Enterprise LLP

The Haryana Authority of Advance Ruling (AAR) has ruled that security services provided by LLP to any registered person are not covered by the Reverse Charge Mechanism (RCM) and are taxable on a forward charge basis.

The two-member bench of Sunder Lal and Kumud Singh has ruled that an LLP is a body corporate for the purpose of the Companies Act, 2013 and the same would apply to the term body corporate. As a consequence, the reverse charge mechanism would not be applicable. Moreover, the legislative intention behind the application of RCM is to those supplies in which the government or executive do not have control over the supplier or who are working in the unorganised sector. So, the RCM is made applicable to any person other than a body corporate.

AAAR

Agricultural Manually Hand Operated Seed Dressing, Coating andTreating Drum Is Covered Under HSN Code 8436: AAAR

Applicant's Name: M/s Adarsh Plant Protect Ltd.

The Gujarat Appellate Authority of Advance Ruling (AAAR) has held that the manually operated seed dressing, coating, and treating drum is covered within the description provided under the HSN Code 8436.

The two-member bench of Vivek Ranjan and Milind Toravane has observed that, as per HSN 843, other agricultural machinery includes seed dusting machines consisting of a revolving drum in which the seeds are coated with insecticidal or fungicidal powders.

"Flavoured Milk" Is Categorised As"Beverage": AAAR

Applicant's Name: M/s Vadilal Industries Ltd.

The Gujarat Appellate Authority of Advance Ruling (AAAR) has observed that the 'flavoured milk' is categorised as "beverage".

The two-member bench of Vivek Ranjan and Milind Torawane has upheld the AAR's ruling and ruled that the 'Flavoured Milk' is classifiable under Tariff Item 2202 99 30 of the First Schedule of the Customs Tariff Act, 1975.

Direct Taxes

Delhi High Court

Attempt By CIT To Exclude Genuine Disputes Under The VSV Act IsExtremely Hyper-Technical: Delhi High Court

Case Title: Kapri International Pvt. Ltd. Vs CIT

The Delhi High Court has held that the attempt by the CIT to exclude genuine disputants of tax liability from the possibility of settlement under the Direct Tax Vivad Se Vishwas Act (VSV) is extremely hyper-technical.

The division bench of Justice Mukta Gupta and Justice Anish Dayal has observed that any proceeding challenging a decision by the department in respect of tax, interest, penalty, fee, etc. would come within the purview of a "dispute", which would enable a party to approach the department for a resolution under the VSV Act.

Reassessment Notices Issued Between 1st April 2021 To 30th June,2021 Not Time Barred: Delhi High Court

Case Title: Touchstone Holdings Private Limited Versus Income Tax Officer

Citation: 2022 LiveLaw (Del) 890

The Delhi High Court has held that the reassessment notices issued between 1st April 2021 and 30th June 2021, will be deemed to have been issued under Section 148A of the Income Tax Act.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that the re-assessment notice dated 29.06.2021, which has been issued within the extended period of limitation, is not time-barred.

No PMLA Proceedings After Quashing Of FIR Against Accused: Delhi High Court Set Aside Proceedings Against IHFL And Its Employees

Case Title: Indiabulls Housing and Finance Limited v Enforcement Directorate

The Delhi High Court has set aside the proceedings under the Prevention of Money Laundering Act, 2002 against Indiabulls Housing and Finance Limited (IHFL) and its employees.

The division bench of Justice Anish Dayal and Justice Mukta Gupta relied on the decision of the Supreme Court in the case of Vijay Madanlal Choudhary & Ors Vs. Union of India & Ors. The supreme court held that authorities under the PMLA cannot resort to action against any person for money laundering on the assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed. The scheduled offence must be registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. In the event that there is already a registered scheduled offence but the person named in the criminal activity relating to a scheduled offence is finally absolved by a court of competent jurisdiction owing to an order of discharge, acquittal or quashing of the criminal case of the scheduled offence, there can be no action for money laundering against not only such a person but also any person claiming through him in relation to the property linked to the stated scheduled offence.

Issuance Of Notice To Unrelated Mail Address Does Not ConstituteDue Despatch: Delhi High Court

Case Title: Suman Jeet Agarwal Versus ITO

The Delhi High Court has held that the issuance of e-mail-attaching electronic notice to an unrelated e-mail address does not constitute due despatch and, therefore, the notices cannot be said to have been issued on 31st March 2021.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that since an authenticated copy of the notice was placed on the registered account of the assessee on the E-filing portal, as that is how the petitioners learnt about the notices, the notices will be held to have been issued on the date on which the notices were first viewed by the assessees on their e-filing portal.

Madras High Court

Audit Objection Can't Be The Basis Of AO's 'Reasons To Believe 'That Too After Lapse Of 6 Years: Madras High Court

Case Title: M/s.EIH Associated Hotels Ltd. Versus The Assistant Commissioner of Income Tax

Citation: 2022 LiveLaw (Mad) 385

The Madras High Court has quashed the reassessment proceedings and held that an audit objection does not satisfy the requirement of the Assessing Officer having an independent "reason to believe" that income has escaped assessment, that too after the elapse of nearly six years.

The single bench of Justice Anitha Sumanth has observed that all materials with regard to the computation of tax under the provisions of MAT were available before the Assessing Authority during the original assessment proceedings.

Allahabad High Court

PCIT Failed To Recorded Satisfaction Under His Signature PriorTo Issuance Of Reassessment Notice By AO: Allahabad High Court

Case Title: Vikas Gupta Versus Union Of India

The Allahabad High Court has held that the Principal Commissioner of Income Tax (PCIT) has not recorded satisfaction under his signature prior to the issuance of a reassessment notice by the Assessing Officer under Section 148 of the Act, 1961.

The division bench of Justice Surya Prakash Kesarwani and Justice Chandra Kumar Rai has observed that subsequent to the issuance of the reassessment notice by the Assessing Officer, the satisfaction under section 151 was digitally signed by the Prescribed Authority. Therefore, at the point of time when the Assessing Officer issued notices, he had no jurisdiction to issue the reassessment notices. Consequently, the notices issued by the Assessing Officer under section 148 were without jurisdiction.

Gujarat High Court

ITR Prior To Death Of Assessee Is The Basis For Computation OfLoss Of Future Income Including Future Prospects: Gujarat High Court

Case Title: Sonalben Alias Charmiben Hirenbhai Jivani Versus Naranbhai Chananbhai Babariya

The Gujarat High Court has held that an income tax return (ITR) filed prior to the death of the assessee is the basis for computation of loss of future income, including future prospects.

The single bench of Justice Gita Gopi has observed that both the parents are dependents of the deceased son and are entitled to apply for compensation. Both the parents are entitled to the compensation amount under the head of dependency loss.

ITR Prior To Death Of Assessee Is The Basis For Computation OfLoss Of Future Income Including Future Prospects: Gujarat High Court

Case Title: Sonalben Alias Charmiben Hirenbhai Jivani Versus Naranbhai Chananbhai Babariya

The Gujarat High Court has held that an income tax return (ITR) filed prior to the death of the assessee is the basis for computation of loss of future income, including future prospects.

The single bench of Justice Gita Gopi has observed that both the parents are dependents of the deceased son and are entitled to apply for compensation. Both the parents are entitled to the compensation amount under the head of dependency loss.

Calcutta High Court

Invalid Reassessment Notice, The Entire Proceedings have ToCollapse: Calcutta High Court

Case Title: CIT Versus B.P. Poddar Foundation For Education

The Calcutta High Court has held that the foundation of a reassessment proceeding is a valid notice, and if the notice is held to be invalid, the entire edifice sought to be raised has to collapse.

The division bench of T.S. Sivagnanam and Justice Hiranmay Bhattacharyya have observed that the assessing officer is bound to furnish reasons within a reasonable time, the noticee is entitled to file their objection to the notice, and the assessing officer is bound to dispose of it by passing a speaking order.

Rajasthan High Court

Reassessment Notice Can't Be Challenged If Assessee Failed ToSubmit Crypto Currency Account Transactions: Rajasthan High Court

Case Title: Parmesh Chand Yadav Versus Income Tax Officer

The Rajasthan High Court has held that the reassessment notice cannot be challenged if the assessee failed to submit crypto currency account transactions to the income tax department.

The division bench of Justice Manindra Mohan Shrivastava and Justice Shubha Mehta held that bank transactions alone are not sufficient to verify the trade in crypto currency. The assessee ought to have submitted before the department the relevant ledger statement evidencing that he had entered into trade of crypto currency in the manner as has been asserted by him by way of the information stated by him.

ITAT

Sum Received By Bank Under Liquidation, Whose Liability TowardsDICGCI Not Cleared- Not Taxable Due To Diversion Of Income At Source: ITAT

Case Title: The JCIT(OSD) versus General CO.OP Bank Ltd.

The Ahmedabad Bench of the ITAT has ruled that the sum received by a bank who is under liquidation, and whose statutory liability to repay the Deposit, Insurance and Credit Guarantee Corporation of India (DICGCI) is not fully satisfied, is not taxable since all the income received by the assessee bank is diverted at source.

The Bench of Members T.R. Senthil Kumar (Judicial Member) and Annapurna Gupta (Accountant Member) held that in view of the mandatory condition contained in Section 21 (2) of the DICGCI Act, till the liability of the assessee towards the DICGCI is cleared, the assessee bank has no discretion or authority to apply the funds received by it and that all the funds realized by the bank is diverted at source.

ITAT Quashes Time Barred TDS Default Order Passed Against GoogleIndia

Case Title: Google India Pvt. Ltd. Versus The Deputy Commissioner of Income Tax

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the TDS default order passed against Google India on the grounds that it was time barred.

The two-member bench of George George K. (Judicial Member) and Padmavathy S. (Accountant Member) has observed that for the years under consideration, the period of four years from the end of the financial year in which payment was made or credit was given expired on 31.03.2012, whereas the notice was issued by the AO on 20.11.2012.

ITAT Rejects The Claim Of NDTV To Treat Expenditure As Pre- OperativeIn Nature For The Assessment Year 2009- 2010

Case Title: M/s. NDTV Studios Ltd. Versus Income Tax Officer

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the business of the NDTV Studios had not been set up during the assessment year 2009- 2010 and all the expenses claimed by the assessee were pre-operative in nature, which should have been capitalised.

The two-member bench of Yogesh Kumar U.S. (Judicial Member) and N.K.Billaiya (Accountant Member) has observed that the expenses claimed by the assessee are not deductible as business expenditure and have been disallowed.

Addition Made By AO Despite Issue Pending Before AAR; AssessmentOrder Not Void: ITAT

Case Title: M/s. Think and Learn Private Limited versus Principal Commissioner of Income Tax - 3, Bengaluru

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that an assessment order passed by an Assessing Officer, deciding on an issue pending before the AAR, in contravention of the mandate laid down in Section 245R(2)(i) of the Income Tax Act, 1961, would not make the entire assessment order void.

The Bench of N. V. Vasudevan (Vice President) and Chandra Poojari (Accountant Member) held that merely because the additions made by the Assessing Officer were challengeable by the assessee before the appellate authorities, for being in contravention to the provisions of Section 245R(2)(i), it cannot be a ground to hold that the interest of the Revenue was prejudiced in order to exercise revisionary powers under Section 263 of the Income Tax Act.

Training Fee Paid To Professional Trainer Doesn't Amounts ToFees for Technical Services, No TDS Deductible: ITAT

Case Title: M/s. Infosys BPO Limited Versus DCIT

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has held that TDS is not deductible on training fees paid to professional trainers as it does not amount to fees for technical services.

The two-member bench headed by N.V. Vasudevan (Vice-President) and Chandra Poojari (Accountant Member) have observed that the nature of service rendered by the non-resident is neither in the nature of technical, managerial, or consultancy service. The nature of service rendered clearly shows that the services rendered by non-residents cannot be termed as technical services for the mere reason that technology is used in providing service. The delivery of a service via technological means does not make the service technical.

Litigation Expenditure Incurred To Protect Business Is CoveredUnder Revenue Expenditure: ITAT

Case Title: M/s. Mangalam Arts Govind Nagar (East) Versus Deputy Commissioner of Income-tax

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) has held that when litigation expenditure is incurred to protect the business, the same is revenue expenditure.

The two-member bench of Sandeep Gosain (Judicial Member) and Rathod Kamlesh Jayantbahi (Accountant Member) has observed that since the assessee has no interest in the ownership of the asset but he is in possession of the asset for conducting its business, the litigation expenditure incurred is only to protect his business and, therefore, it is revenue expenditure. The litigation expenditure incurred by the assessee is revenue expenditure and not capital expenditure.

ITAT Allows Deduction On Residential House Built Up On 3 Adjacent Contiguous Plots

Case Title: DCIT Versus Heera Lal Bhasin Legal Heir

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the claim of a deduction under section 54 of the Act for a residential house built on three adjacent contiguous plots. The principle of multiple residential houses/units holds good till the units are in the same physical location and contiguous to each other.

The two-member bench of Astha Chandra (Judicial Member) and Shamim Yahya (Accountant Member) has observed that the assessee sold his house in Delhi, which was falling short of his needs, and constructed a house on three separate plots adjoining each other to enable him to have a house for himself which could accommodate all his family members and the families of his children. The intention of the assessee was to acquire one large piece of land for the construction of a large residential house. Therefore, three similar units were constructed contiguous to each other in a single common compound wall.

Seller Of Agricultural Land Insisting Cash Payment; NoDisallowance Can Be Made Under Section 40A (3) Of IT Act: ITAT

Case Title: M/s. Geo Connect Ltd. versus DCIT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that no disallowances can be made under Section 40A (3) of the Income Tax Act, 1961 for payments made otherwise than by way of account payee cheques or bank drafts for purchase of agricultural land, where the seller of the agricultural land has insisted on payment in cash.

The Bench of Saktijit Dey (Judicial Member) and Pradip Kumar Kedia (Accountant Member) observed that considerations of business expediency and other relevant factors, which provide an exception to Section 40A(3), have not been diluted even after the amendment of Rule 6DD(j) of the Income Tax Rules, 1962.

Housing Credit To Poor Through Borrowings From FinancialInstitutions; Not A Charitable Activity: ITAT

Case Title: Dhan Housing and Habitat Development of Poor for Empowerment Confederation versus CIT (Exemptions)

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that grant of housing credit by the assessee trust to the lower strata of society, financed solely through the funds borrowed from financial institutions, is not a charitable activity and thus the assessee cannot be registered as a Charitable Trust under Section 12AA of the Income Tax Act, 1961.

The Bench of Sonjoy Sarma (Judicial Member) and Manoj Kumar Aggarwal (Accountant Member) held that the activity undertaken by the assessee trust was purely a money lending activity and though the objective of the assessee was noble, it was not eligible for registration under Section 12AA of the Income Tax Act.

Members Contributions To Club Towards Infrastructure, A CapitalReceipt: ITAT

Case Title: JCIT Versus M/s. Royal Western India Turf Club Ltd.

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT)consisting of Aby T. Varkey (Judicial Member) and Gagan Goyal (Accountant Member) has held that the voluntary contributions received from the members of the club towards infrastructure facilities were contributions received for a specific purpose and should be treated as a capital receipt.

The assessee submitted that the issue regarding the treatment of entrance fees received from the members was held by the AO as revenue receipts, whereas the assessee's claim was that it was a capital receipt, so not taxable. The assessee was aggrieved by the action of the AO and preferred an appeal before the CIT (A), who upheld the claim of the assessee and held it to be a capital receipt.

ITAT Allows Wastage LossDue To Diesel & Petrol Tank Breakage

Case Title: M/s. Mohammad Bhai Esufali & Sons Versus ITO

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the wastage loss due to diesel and petrol tank breakage.

The two-member bench headed by R.S.Syal (Vice President) has observed that where the assessee demonstrates specific reasons for excess wastage/evaporation, such reasons cannot be thrown to the dustbin. They need to be examined on a case-by-case basis.

Serving Of Liquor Is Not ACharitable Activity, Income Tax Exemption Can't Be Granted: ITAT

Case Title: Federation of Delhi Textile Merchants Versus Income Tax Officer

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that serving liquor is not a charitable activity and the income tax exemption cannot be granted.

The two-member bench of Yogesh Kumar (Judicial Member) and Shamim Yahaya (Accountant Member) has observed that the Commissioner of Income Tax (Exemption) has relied on various bills of the Appellant wherein the service of liquor has been mentioned. However, CIT(A) has not mentioned the details of the clarification/reply given by the appellant in the order and has not adjudicated the reply.

Transfer Of Non-SelfGenerated Goodwill At Book Value; No Tax Can Be Levied Despite Withdrawal OfTax Exemption: ITAT

Case Title: Dy. Commissioner of Income Tax versus M/s. Univercell Telecommunications India Pvt. Ltd.

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that, where a goodwill is acquired by incurring cost and it is transferred at book value, no tax can be levied on transfer of the goodwill despite withdrawal of exemption on capital gains tax on conversion of a sole proprietary concern into a company, for violation of the conditions provided in Section 47(xiv)(b) of the Income Tax Act, 1961.

The Bench of V. Durga Rao (Judicial Member) and G. Manjunatha (Accountant Member) held that if the goodwill is acquired by incurring cost and is not self-generated, and if after considering the cost incurred, the capital gains on transfer of the said goodwill amounts to 'nil', then even after invoking Section 47A(3) of the Income Tax Act, there can be no liability with respect to capital gains on conversion of the proprietary concern into a company .

TDS Exemption On PaymentsTo Agents Of Foreign Shipping Companies: ITAT

Case Title: DCIT Versus M/s Expeditors International [I] Pvt. Ltd

The Delhi Income Tax Appellate Tribunal (ITAT) has held that the payments to agents of foreign shipping companies are exempt from TDS deduction.

The two-member bench of Saktijit Dey (Judicial Member) and N.K.Billaiya (Accountant Member) has observed that provisions of section 172 of the Income-tax Act, 1961 apply to payments made to agents of foreign shipping companies; therefore, provisions of section 194C of the Income-tax Act, 1961 do not apply.

Ola Not Liable To Deduct Withholding TDS On Payments To Drivers: ITAT

Case Title: ANI Technologies Private Limited Versus DCIT

The Chandigarh Bench of the Income Tax Appellate Tribunal (ITAT) has held that Ola is not liable to deduct withholding TDS on the payments to drivers.

The two-member bench of Sudhanshu Shrivastava (Judicial Member) and Vikram Singh Yadav (Accountant Member) has observed that the AO and the CIT(A) erred in concluding that the assessee was providing transportation services which were subcontracted to the driver and, consequently, the assessee was liable to deduct tax at source while disbursing fare to the driver.

AO Not Justified InDisallowing The Claim Of Interest Expense : ITAT

Case Title: Sunny Rock Estates & Developers Pvt. Ltd. Versus Deputy Commissioner of Income-tax

The Kolkata Bench of the Income Tax Appellate Tribunal (ITAT) has held that the AO is not justified in disallowing the claim of interest expense and treating it for capitalization in the project cost.

The two-member bench of Rajpal Yadav (Vice President) and Girish Aggarwal (Accountant Member) has directed the AO to allow the claim of interest expenses of Rs.41,06,890.

Agricultural LandCultivated Only For A Few Days: ITAT Allows Exemption

Case Title: Mr. Mohammad Rafiq Ahemadsaheb Kokani Versus The Income Tax Officer

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the income tax exemption under Section 54B even when the land was cultivated only for a few days during the relevant years.

The two-member bench of S.S. Vishwanethra Ravi (Judicial Member) and Inturi Rama Rao (Accountant Member)has observed that part of the land could not be used for agricultural purposes but grass was grown owing to the conditions of drought. It does not disentitle the assessee as the land was held for agricultural purposes only.

No TDS On Payment Of FTS To Non-Resident Not Having PE In India:ITAT

The Kolkata Bench Income Tax Appellate Tribunal (ITAT) ordered no TDS on payment of fees for technical services (FTS) to non-residents not having a Permanent Establishment (PE) in India.

The two-member bench of Rajpal Yadav (Vice President) and Rajesh Kumar (Accountant Member) has observed that the payment made to non-resident recipients not having any permanent establishment in India and also that the services provided are not in the nature of royalty and fee for technical services.

Charitable Organisation Should spend grant As Per Terms AndConditions, not on whims and fancies: ITAT

Case Title: ITO (E) Versus Sports Good Export Promotion Council

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the assessee is not free to use the funds voluntarily as per its own whims and fancies and that the same has to be spent as per the terms and conditions of the grant.

The two-member bench of Yogesh Kumar U.S. (Judicial Member) and Shamim Yahya (Technical Member) has observed that the grants are given specifically for participation in a particular event held abroad. The grant approval includes a condition that a separate account for the projects has to be maintained. The assessee has utilised the funds as per the terms and conditions of the grant. The grants are not to be utilised for any other purpose than for which they are issued and also that the execution of the project is not to be entrusted to any other organisation. Further, the up-spent grant along with 10% interest from the date of release of the fund has to be reimbursed by the government.