Bombay High Court

Customs Authorities Cannot Encash Bank Guarantee Before Expiry Of The Limitation Period For Filing An Appeal: Bombay High Court

Case Title: S. J. Enterprises & Anr. versus Union of India

The Bombay High Court has reiterated that Customs Authorities cannot encash the Bank Guarantee furnished by the assessee before the expiry of the statutory period available for filing an appeal.

The Division Bench consisting of Chief Justice Dipankar Datta and Justice M. S. Sonak ruled that despite the assurances given to the Bombay High Court in the case of Legrand (India) Pvt. Ltd. versus Union of India (2007), the Customs Authorities had breached the law by adopting coercive measures and encashing the Bank Guarantees before the expiry of the limitation period available for filing a statutory appeal.

Madras High Court

Madras High Court Stays IT Dept's Order Imposing ₹1.5 Crore Penalty On Actor Vijay For Undisclosed Income

Case Title: C Joseph Vijay v. The Deputy Commissioner of Income Tax and others

Case No: WP No. 21006 of 2022

The Madras High Court on Tuesday granted an interim stay on the proceedings initiated by the Income Tax Department against Actor Vijay for "admitted" undisclosed income of Rs. 15 crore in the financial year 2015-16.

The bench of Justice Anita Sumanth passed the interim order on an application filed by the actor and directed the Department to file its counter by September 16.

Orissa High Court

12% Sales Tax Applicable On Robinson Barley And Purity Barley: Orissa High Court

Case Title: Reckitt Benckiser (India) Ltd. versus State of Odisha and Others

Citation : 2022 LiveLaw (Ori) 124

The Orissa High Court has held that a 12% sales tax is applicable on Robinson Barley and Purity Barley.

The division bench of Chief Justice S. Muralidhar and Justice R.K. Pattanaik has observed that if a customer went to a shop and asked for barley, such a customer would not be supplied with Robinson Barley or Purity Barley. Conversely, if the customer was to ask for Robinson Barley or Purity Barley, he would not be supplied with plain barley. The distinct commercial product "Robinson Barley" cannot be classified as "cereal".

Allahabad High Court

Illegal Demand Of Income Tax Mechanically- Allahabad High Court Imposes Cost Of 50 Lakhs On Income Tax Authorities

Case Title: SR Cold Storage versus Union of India and Ors.

Case Citation: 2022 LiveLaw (AB) 374

The Allahabad High Court has directed that the Union of India or other authorities under the Income Tax Act, 1961 shall not interfere with the quasi-judicial functions and discharge of statutory duties by the Assessing Officers unless permitted by the Income Tax Act.

Further, the High Court directed the Union of India to put in place a mechanism to ensure that the information fed on data-base/ portal of the revenue department is verified in reality, and not as an empty formality, before initiating proceedings under the Income Tax Act, 1961.

Punjab & Haryana High Court

Insurance Company Not To Deduct TDS On Interest On Compensation Awarded To The Claimant Till 01.06.2015: Punjab & Haryana High Court

Case Title: New India Assurance Company Limited versus Ravinder Kumar @ Vickey and others

Citation: 2022 LiveLaw (PH) 227

The Punjab and Haryana High Court has ruled that the Insurance Company is not required to deduct TDS on the interest on the compensation awarded to the claimant uptil 01.06.2015, even if the interest amount exceeds Rs. 50,000 per claimant in the financial year.

The Single Bench of Justice Arvind Singh Sangwan reiterated that 194A of Income Tax Act, 1961 is not a charging provision and hence, the provisions of Section 194A that deal with tax deducted at source, do not make the interest income chargeable to tax if it is otherwise not taxable.

Jharkhand High Court

Goods Or Conveyance Can't be Detained Without Service of detention Order: Jharkhand High Court

Case Title: M/s. AMI Enterprises Pvt. Ltd. Versus Union of India

Citation: 2022 LiveLaw (Jha) 81

The Jharkhand High Court has held that no goods or conveyance shall be detained or seized without serving an order of detention or seizure on the person transporting the goods.

The division bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan has observed that the adjudication order and the appellate order both suffered from procedural infirmities and lacked proper opportunity for the person transporting to defend himself.

CESTAT

Refractories Meant For Re-lining Of Furnaces Is Covered Under"Capital Goods": CESTAT Allows Customs Duty Exemption Under EPCGScheme

Case Title: M/s. Jai Balaji Industries Limited Versus Commissioner of Customs (Port), Kolkata

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the customs duty exemption on refractories meant for re-lining of furnaces.

The two-member bench of P.K. Chaudhary (Judicial Member) and P. Anjani Kumar (Technical Member) has observed that refractories meant for re-lining of furnaces, i.e., for replacement, are covered by the "means" part of the definition of "capital goods". It is in any way restricted or controlled by the use of the expression "refractories for initial lining'' used in the inclusive part of the definition of "capital goods".

Job Worker Liable To Pay Excise Duty For Unloading Chemicals From Tankers, Repacking and Labelling In Small Drums: CESTAT

Case Title: Dow Chemical International Pvt Ltd Versus C.C.E.-Kutch (gandhidham)

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the job worker has carried out all the activities which, as per the department, amount to manufacturing. The job worker is alone to pay the excise duty.

The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that irrespective of the ownership of goods, whoever undertakes the manufacturing activity has to pay the duty.

ITAT

Gain Or Loss Arising Out Of Change In Foreign Exchange Rate Can Be Treated As An Income Or Loss After Computation: ITAT

Case Title: M/s. Altisource Business Solutions Private Limited Versus The Deputy Commissioner of Income Tax, NFAC, Delhi

The Banglore Bench of the Income Tax Appellate Tribunal (ITAT) has held that the gain or loss arising out of a change in the foreign exchange rate can be treated as an income or loss provided that it is computed in accordance with the Income Computation and Disclosure Standards (ICDS) notified under section 145(2) of the Income Tax Act, 1961.

The two-member bench of George George K. (Judicial Member) and Padmavathi S. (Accountant Member) observed that the amount claimed is a net loss after considering the foreign exchange gains arising in certain transactions and that the assessee has also submitted the invoice-wise details of foreign exchange loss and gain. The foreign exchange loss claimed by the assessee is an allowable expenditure.

Expenditure In Carrying Out Foreign Travel Directly Relating To Securing Capital Investment In The Business Is Capital In Nature: ITAT

Case Title: M/s. Balkrishna Live Stock Breeders Pvt. Ltd. Versus ACIT

The Bangalore Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the expense of carrying out foreign travel directly relating to securing capital investment in the assessee's business cannot be in the revenue nature. On the other hand, it is capitalist in nature.

The two-member bench of Beena Pillai (Judicial Member) and Chandra Poojari (Accountant Member) has observed that the assessee furnished only the supplementary agreement with the above party and did not furnish the main agreement also. It can be inferred that the assessee wanted to hide the real intention of going abroad to go to foreign countries and incur expenditure.

Non-Existence Of Parties Who Gave Loan To Assessee Is Indication Of Its Prima Facie Bogus Nature: ITAT

Case Title: ACIT Versus M/s Hare Krishna Orchid

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the non-existence of the parties who have given loans to the assessee is a clear indication of their nature being prima facie bogus.

The two-member bench of Yogesh Kumar US (Judicial Member) and Shamim Yahya (Accountant Member) has observed that in the entire proceeding, there is no discussion about the loan documentation and terms of condition of the loan, the issue of TDS, and nothing has been examined.

Non- Deliberate Delay In Late Filing SFT Return : ITAT Quashes Penalty

Case Title: The Rewari Central Co- operative Bank Ltd. Versus Directorate of Income Tax, (I & CI)

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has quashed the penalty on the grounds that the delay in the late filing of the Statement of Financial Transaction (SFT) return was not deliberate.

The two-member bench of Yogesh Kumar (Judicial Member) and Shamim Yahya (Accountant Member) observed that an order imposing a penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding. The penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of the law or was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation.

Activity Of Chemist/Pharmacy Is Incidental To Dominant Object For Running A Hospital: ITAT

Case Title: Dy. Commissioner Income Tax (E)-1(1) Versus M/s. Karuna Medical Society

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) consisting of Rahul Choudhary (Judicial Member) and M. Balaganesh (Accountant Member) has held that the activity of a chemist or pharmacy is incidental or ancillary to the dominant object of running a hospital.