Supreme Court

Advise States To Implement Digital DIN System : Supreme Court To Centre & GST Council

Pradeep Goyal vs Union of India

Citation: 2022 LiveLaw (SC) 654

The Supreme Court has directed the GST Council to issue advisory / instructions / recommendations to the respective States regarding implementation of the system of electronic (digital) generation of a Document Identification Number (DIN) in the indirect tax administration.

The bench comprising Justices MR Shah and BV Nagarathna observed that the system, which is already being implemented by the States of Karnataka and Kerala, would be in the larger public interest and enhance good governance. It will bring in transparency and accountability in the indirect tax administration, which are so vital to efficient governance, the bench said.

Service Tax On Composite Works Contracts Not Leviable Prior To2007 Amendment To Finance Act 1994 : Supreme Court

Case Name: M/s. Total Environment Building Systems Pvt. Ltd. v. Deputy Commissioner of Commercial Taxes And Ors.

Citation: 2022 LiveLaw (SC) 656

The Supreme Court, on Tuesday, held that service tax could not be levied on composite works contracts prior to the introduction of the Finance Act, 2007, which by amending the Finance Act, 1994 had introduced Section 65(105)(zzzza) defining works contracts. The Apex Court noted that in the absence of a charging section and the modalities to levy and assess, service tax cannot be levied on the service element of works contract.

Delhi High Court

Delhi High Court Directs Income Tax Dept. To Decide TheRectification Applications Filed By Jones LNG Lasalle

Case Title: Jones LNG Lasalle Property Consultants Versus DCIT

The Delhi High Court directed the income tax department to decide the rectification applications filed by Jones LNG Lasalle Property Consultants.

The division bench of Justice Manmohan and Justice Preetam Singh Arora has directed that if any refund is due and payable to the petitioner, it shall be refunded within eight weeks.

No Material Found On Search, Income Tax Additions Can't Be Made On Presumption: Delhi High Court

Case Title: PCIT Versus Mamta Agarwal

Citation: 2022 LiveLaw (Del) 740

The Delhi High Court bench of Justice Manmohan and Justice Manmeet Preetam Singh Arora held that if no incriminating material is found during the course of the search, then no addition can be made in the assessment under Sections 153A and 153C of the Income Tax Act.

Show Cause Notice And Reassessment Order Based On Distinct And Separate Grounds, No Details Of Bogus Purchases Were Given: Delhi High Court Quashes The Order

Case Title: M/s Best Buildwell Private Limited Versus ITO

Citation: 2022 LiveLaw (Del) 755

The Delhi High Court has held that the show cause notice as well as the reassessment order under Section 148A(d) of the Income Tax Act were based on distinct and separate grounds. The department failed to provide the details of the transaction and the vendors from whom the bogus purchases were made.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that "the show cause notice primarily states that "it is seen that the petitioner has made purchases from certain non-filers." However, no details or any information about these entities were provided to the petitioner. It is not understood as to how the petitioner was to know which of the entities it dealt with were filers or non-filers!"

Recovery Of Demand Against Issues Decided In Favour Of AssesseeIs Unwarranted: Delhi High Court

Case Title: M/s Expeditors International Of Washingtion, Inc. Versus ACIT

Citation: 2022 LiveLaw (Del) 759

The Delhi High Court has held that the recovery of demand against issues decided in favour of the assessee is unwarranted.

The division bench of Justice Manmohan and Justice Manmeet Singh Arora has found that the Central Board of Direct Taxes (CBDT) has itself issued an Instruction dated February 2, 1993, giving guidelines for Stay of Demand. One of the guidelines for the grant of complete stay was "if the demand in dispute relates to issues that have been decided in assessee's favour by an appellate authority or court earlier...."

Bombay High Court

Recovery Of Tax Dues Of A Company From Its Directors Under Section 179 Of Income Tax Act, Cannot Be Invoked Casually: Bombay High Court

Case Title: Rajendra R. Singh versus Assistant Commissioner of Income Tax and Ors.

The Bombay High Court has ruled that exercise of jurisdiction under Section 179 of the Income Tax Act, 1961 against the director of a public company, to recover the tax dues of the said company, is violative of the principles of natural justice, where the Income Tax Authority has failed to give any opportunity of hearing to the director before applying the principle of 'lifting the corporate veil'.

The Bench, consisting of Justices Dhiraj Singh Thakur and Abhay Ahuja, held that the recovery procedure under Section 179 against the directors of the assessee company cannot be resorted to casually.

Allahabad High Court

Land Transferred After Cut-Off Date, Applicant Not Entitled To Trade Tax Exemption Under U.P. Trade Tax Act: Allahabad High Court

Case Title: M/s Bindal Smelting Pvt. Ltd. versus Commissioner of Trade Tax, Lucknow

The Allahabad High Court has ruled that the conditions enumerated in the Exemption Notification No. KA-NI-2-3867, dated 22.12.2001, for availing exemption from Trade Tax under Section 4-A of the U.P. Trade Tax Act, 1948, are mandatory in nature and have to be strictly complied with.

The Single Bench of Justice Alok Mathur held that since the land was not transferred to the applicant before the cut-off date as prescribed under the said Exemption Notification, the applicant could not be considered as a "new unit" and hence, it was not eligible for trade tax exemption under Section 4-A.

10% VAT Payable On Insulated Glass: Allahabad High Court

Case Title: The Commissioner Commercial Tax U.P. Lucknow Versus S/S G.S.C. Toughened Glass

The Allahabad High Court has held that 10% Value Added Tax (VAT) is payable on insulated glass.

The single judge bench of Justice Saumitra Dayal Singh has observed that insulated glass is nothing but double glazed dual sheet (DGDS).

Rajasthan High Court

Rajasthan Stamp Act | Duty Can't Be Levied On Transaction Not Having 'Territorial Nexus' With State: High Court

Case Title: Himachal Futuristic Communications Limited v. State of Rajasthan & Ors.

Citation: 2022 LiveLaw (Raj) 211

The Rajasthan High Court recently set aside a single bench decision which permitted levy of duty under the Rajasthan Stamp Act, 1998 on an amalgamation instrument executed outside the State pursuant to sanction of Himachal Pradesh High Court, not only in relation to properties situated in Rajasthan, but also on the transfer of shares.

Orissa High Court

Tax Exemptions Given With Benevolent Object, Approach For 'Exempting' & 'Including' Subject Matters Under Tax Purview Can't Be Same: Orissa HC

Case Title: State of Odisha represented by Commissioner of Sales Tax, Cuttack v. M/s. Geetashree Industries & Ors.

Citation: 2022 LiveLaw (Ori) 119

The Orissa High Court has held that the approach which is employed to exempt a commodity from the purview of taxation is not the same which is used to bring a good under the umbrella of taxation.

While applying this principle, a Division Bench of Chief Justice Dr. S. Muralidhar and Dr. Justice Sanjeeb Kumar Panigrahi held that 'Chuni' is different from 'Cattle feed' under entry 66 of para-I of the Schedule attached to theOdisha Entry Tax Act, 1999 ('OET Act') and thus, the former is not amenable to entry tax under the statute.

CESTAT

Extra Duty Deposit Should Be Refunded Without Filing Refund Claim: CESTAT

Case Title: China Steel Corporation India Pvt Ltd Versus C.C.-Ahmedabad

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the Extra Duty Deposit (EDD) should be refunded without filing a refund claim.

The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that if and when the refund claim of EDD is filed by the appellant, it cannot be barred by limitation.

"Pandal and Shamiana" Services Can't Be Charged With Service Tax Before 01.06.2007: CESTAT

Case Title: M/s Sconce Global Private Limited Versus Commissioner of Service Tax

The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that the "Pandal and Shamiana" services could not have been charged with service tax before 01.06.2007.

The two-member bench headed by Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the appellant's contract involved provisions of services as well as supply/deemed supply of goods and they can only be classified under the head "works contract services".

No Deliberate Non-Compliance In Depositing Service Tax Under RCM: CESTAT Deletes Penalty

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) bench of Anil Choudhary (Judicial Member) has deleted the penalty on the grounds that there was no deliberate non-compliance in depositing service tax under the Reverse Charge Mechanism (RCM).

Services Tax Demand Not Sustainable On The Basis Of TDS/26AS Statements: CESTAT

Case Title: Forward Resource Pvt. Ltd. Versus C.C.E. & S.T.

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that service tax demand is not sustainable on the basis of TDS/26AS statements.

The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the value of taxable services cannot be determined only based on TDS statements produced by clients. The expenditures are booked based on when the form 26AS is filed, which cannot be considered as the value of taxable services for the purpose of demand of service tax.

Charges For Transportation Of Goods From Factory To Buyer's Premises, can't be Assessed: CESTAT

Case Title: M/s Jindal Tubular (India) Limited Versus The Principal Commissioner, Central Goods & Service Tax & Central Excise, Ujjain

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the service tax demand and penalty and held that the freight charges incurred for transportation of goods from the place of removal to the buyer's premises cannot be included in the assessable value.

The two-member bench headed by Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the "place of removal" continues to be the seller's premises, whether it be the factory gate or depot or any other place relatable to the seller. In terms of Section 4 of the Central Excise Act, the value of the goods is the transaction value of the goods for delivery at the time and place of removal.

CESTAT Allows CENVAT Credit On Service Tax Paid On Input Services Received By The SEZ Unit

Case Title: M/s Global Logic India Limited Versus Commissioner of Central Goods & Service Tax

The Allahabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the CENVAT credit on service tax paid on input services received by the SEZ unit.

The two-member bench headed by Justice Dilip Gupta (President) and Raju (Technical Member) has observed that the assessee could forego exemption and claim the benefit of the CENVAT credit on the amount of service tax paid on input services as would have been available as a refund to an SEZ Unit.

ITAT

Loss On Trading In Shares Done By Directors In Individual Capacity, Cannot Be Attributed To Company: ITAT

Case Title: Nekkanti Systems Private Limited versus Income Tax Officer, Ward – 16(2), Hyderabad

The Hyderabad Bench of theIncome Tax Appellate Tribunal (ITAT) has ruled that trading losses sustained by the directors of the assessee company in their individual accounts, cannot be allowed as deduction in the hands of the assessee company.

The Bench, consisting of members Laliet Kumar (Judicial Member) and Rama Kanta Panda (Accountant Member), held that as per the Companies Act, 2013 and the Income Tax Act, 1961, the company and its directors are two distinct juristic entities, and the act done by the directors in their individual capacity cannot be said to be an act on behalf of the company.

Purchase Of New House Without NOC From AO Within 2 years: ITAT Allows Capital Gain Exemption

Case Title: Ramesh Chander Nijhawan Versus ACIT

The Income Tax Appellate Tribunal (ITAT), Delhi Bench has held that the capital gain exemption is allowable even when the amount invested in a capital gain account is utilised for the purchase of a new house without a NOC from AO within 2 years.

The two-member bench of Saktijit Dey (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member) has allowed the expenditure incurred of Rs. 1,65,000, being the commission incurred for the purchase of a residential house and payment made for the deed writer.

Lands Re-Purchased Not To Be Mandatorily Agricultural On The .Date Of Re-Investment: ITAT Allows Capital Gain Exemption

Case Title: Shri Adit Rathi Versus I.T.O.

The Pune Bench of theIncome Tax Appellate Tribunal (ITAT), consisting of Satbeer Singh Godara (Judicial Member) and Dipak P. Ripote (Accountant Member), has ruled that the legislature has nowhere incorporated that for claiming the deduction under section 54B of the Income Tax Act, the lands re-purchased have to be agricultural on the date of re-investment.

Cash Gifts Received From Close Relatives To Treat Cancer Can't Be Termed As "Unexplained":ITAT

Case Title: Ms. Ritu Jain Versus Income Tax Officer

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition and held that the cash gifts received by the assessee from her close relatives to treat her husband suffering from cancer cannot be treated as "unexplained".

The bench of Anil Chaturvedi (Accountant Member) has observed that the assessee discharged her initial onus by proving the identity, creditworthiness, and genuineness of the transactions. Therefore, the AO cannot insist on the assessee proving the source of the source.

Income Tax Authorities Cannot Impose Conditions Beyond The Scheme Of Law While Granting Registration To Charitable Institutions: ITAT

Case Title: Bai Navajbai Tata Zoroastrian Girls School versus Commissioner of Income Tax (Exemptions), Mumbai

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that the Income Tax Authorities cannot impose additional conditions beyond the scheme of law while granting registration to charitable institutions and trusts under Section 12A of the Income Tax Act, 1961.

The Bench, consisting of Pramod Kumar (Vice President) and Aby T Varkey (Judicial Member), held that the Commissioner of Income Tax (CIT) plays a limited role under Section 12AB (1), while granting registration to the trust/institution under Section 12A, and the CIT cannot supplement the law by laying down the conditions which are not a part of the scheme of registration visualized by law.

Revisionary Order Invalid Due to Lack of DIN: ITAT

The Kolkata Income Tax Appellate Tribunal (ITAT) has declared the revisionary order passed by the CIT(E) and deemed to have never been issued as it fails to mention Document Identification Number (DIN) in its body by adhering to the CBDT circular.

The two-member bench of Sanjay Garg (Judicial Member) and Girish Aggarwal (Accountant Member) observed that there was no reference to the fact that the order was issued manually without a DIN for which the written approval of the Chief Commissioner/Director General of Income-tax was required to be obtained in the prescribed format in terms of the CBDT circular. In terms of the CBDT circular, the lapse renders the order invalid and deemed to have never been issued.

Deposit Received From Nominal Members Of Society, Non-Deduction Of TDS On Interest Paid By Them: ITAT Deletes Addition Of Income

Case Title: Mandheshwari Urban Development Bank Ltd. Versus ACIT

The Income Tax Appellate Tribunal (ITAT) of the Pune Bench struck down the addition made under section 40(a)(ia) of the Income Tax Act for the non-deduction of TDS on interest paid on deposits received from nominal members of the society.

The two-member bench of S. S. Viswanethra Ravi (Judicial Member) and Inturi Rama Rao have observed that the cooperative bank is also a species of cooperative society, and is entitled to the benefit of the general exemption provided to all cooperative societies from the deduction of tax on payment of interest to its members.

Compensation With Interest Received Up To The Date Of Land Acquisition Is Taxable Under The Head "Capital Gains": ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the compensation with interest received by the assessee up to the date of land acquisition should be taxed under the head "Capital Gains".

The two-member bench of Amit Shukla (Judicial Member) and Gagan Goyal (Accountant Member) has observed that the interest paid to the assessee for any delay in payment of the compensation from the date of acquisition of the property should be taxed under the head "Income from other sources".

AAR

Product Marketed Under Brand Name "Ber Berry" Is Classifiable Under GST Tariff Heading 2008: AAR

The Madhya Pradesh Authority of Advance Ruling (AAR) has ruled that the product marketed under the brand name "Ber Berry" manufactured and supplied is covered and classifiable under the GST Tariff heading 2008.

The two-member panel of Virendra Kumar Jain and Manoj Kumar Choubey observed that chapter 8 exclusively covers fresh fruit or fruit cooked by steaming or boiling in water. However, the applicant's procedure exceeds the process covered by chapter 0811. In the applicant's case, the product is soaked in boiling water before being transported to a steamed jacketed tank where it is cooked with steam and additional components such as sugar, salt, preservatives, and spices are added. The process of manufacture of the product of the applicant is not simple to cover in chapter 0811. The applicant's procedure involves the production of fruit that incorporates preservatives as well as additional additives such as sugar, salt, and spices. The tariff classifies it as chapter heading number 2008.

Supply Of Telecommunication Services To Local Authority Is A Taxable Service: AAR

Applicant's Name: M/s. Vodafone Idea Limited

The Telangana Authority of Advance Ruling (AAR) has ruled that the supply of telecommunication services to local authorities is a taxable service.

The two-member bench of B. Raghu Kiran and S.V. Kasi Visweswara Rao has observed that Vodafone Idea Limited is providing data and voice services to the Greater Hyderabad Municipal Corporation (GHMC) and to the employees of the municipalities. There is no direct relation between the services provided by Vodafone Idea Limited and the functions discharged by the GHMC under Article 243W read with Schedule 12 of the Constitution of India. Therefore, the telecommunication services do not qualify for exemption under Notification No. 12/2017.