Supreme Court

Supreme Court Allows 2-Months Extra Window For Availing Transitional Credit; Directs GSTN To Open Portal For TRAN-1/TRAN-2 Forms

Case Title : Union of India vs. M/s Filco Trade Centre Pvt. Ltd. and Anr.

Citation : 2022 LiveLaw (SC) 628

In a relief to several assessees who missed the statutory deadline, the Supreme Court has directed the Goods and Services Tax Network (GSTN) to allow a 2-month additional window from September 1, 2022 to October 31, 2022 for claiming Transitional Credit.

TRAN-1 and TRAN-forms were brought to allow assessees to carry forward pre-GST credits to the GST system. As per the GST Rules, such claims had to be filed within 90 days from the date when the GST Act came into force (July 1, 2017). Different High Courts passed directions for extending the timeline, against which the GST department approached the Supreme Court.

Delhi High Court

Tax payment Software Has To Be Tailor-Made According To The Legal Rights Of The Taxpayers: Delhi High Court

Case Title: Celerity Infrastructure Pvt. Ltd. Versus Dy Commissioner Of Income Tax Circle 73-1

Citation: 2022 LiveLaw (Del) 706

The Delhi High Court has held that the tax payment software has to be tailor-made according to the needs, aspirations, and legal rights of the taxpayers and not that the taxpayers' legal rights have to be tailor-made in accordance with the software being used by the Tax Department.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has held that as the petitioners have paid the taxes, they should be given credit for the challans paid on Form 3 under the Direct Tax Vivad se Vishwas Act (DTVSV Act). The order/communication rejecting credit of taxes deposited under the DTVSV on the hyper-technical ground that challans have been deposited under the minor head '200' instead of '400' is unfair, illegal, and contrary to the objective of enacting the DTVSV Act.

Inapplicability Of MOOWR Scheme On Solar Power Generating Units:Delhi High Court Stays SCN Seeking To Revoke MOOWR License

Case Title: ACME Heergarh Powertech Private Limited vs. Central Board of Indirect Taxes and Customs and Anr.

The Delhi High Court bench of Justice Rajiv Shakdher and Justice Vitasta Ganju has stayed the show cause notice issued by the commissioner to revoke the licence under the Manufacturing and Other Operations in Warehouse (no. 2) Regulations, 2019 (MOOWR).

Delhi High Court Directs DSIR To Issue Report Quantifying Expenditure On Scientific Research Incurred By The Assessee

Case Title: SRF Ltd. versus Union of India

Citation: Citation: 2022 LiveLaw (Del) 714

The Delhi High Court has directed the Department of Scientific and Industrial Research (DSIR) to issue reports on the expenditure incurred by the assessee SRF Ltd. for the relevant assessment years in Form 3CL within six weeks.

The Division Bench of Justices Manmohan and Manmeet Pritam Singh Arora observed that the DSIR is statutorily bound to issue the Form 3CL within 120 days in accordance with Rule 6(7A) (ba) of the Income Tax Rules, 1962, certifying the expenditure incurred by the assessee on its in-house R&D units.

Bombay High Court

AO To Workout Pro Rata Deduction In Regard To Eligible Residential Units: Bombay High Court

Case Title: The Pr. Commissioner of Income Tax- 4 Versus Kumar Builders Consortium

Citation : 2022 LiveLaw (Bom) 265

The Bombay High Court has upheld the order of the ITAT directing the Assessing Officer to work out the pro rata deduction under Section 80IB(10) of the Income Tax Act, 1961.

The division bench of Justice Dhiraj Singh Thakur and Justice Abhay Ahuja has observed that Section 80IB(10) nowhere even remotely aims to deny the benefit of deduction in regard to a residential unit, which otherwise confirms the requirement of size at the cost of an ineligible residential unit with a built-up area of more than 1500 sq. ft.

Karnataka High Court

Karnataka High Court Directs Income Tax Department To Issue A 'Nil Tax Deduction At Source'Certificate To Flipkart For Reimbursements Made To Walmart

Case Title: M/S. Flipkart Internet Private Limited versus Deputy Commissioner Of Income Tax (International Taxation) and Ors.

The Karnataka High Courthas directed the Income Tax Department to issue a 'Nil Tax Deduction at Source' Certificate to Flipkart under Section 195(2) of the Income Tax Act, 1961, with respect to the reimbursements made by it to Walmart Inc.

Madras High Court

Dept. To Follow Procedure Set Out In Circular On The Issues Of Mismatch: Madras High Court Quashes VAT Assessment

Case Title: M/s.Gharpure Engg. & Construction (Pvt) Ltd. Versus Assistant Commissioner (ST)

Citation: 2022 LiveLaw (Mad) 324

The Madras High Court bench of Justice Anitha Sumnath has quashed the VAT assessment and directed the department to follow the procedure set out in the circular regarding the issue of mismatch.

Andhra Pradesh High Court

GST Demand On Events Posted On Facebook: Andhra Pradesh High Court Directs Company To Approach Appellate Authority

Case Title: Vasavi Wedding And Event Planners Vs State of Andhra Pradesh

Citation : 2022 LiveLaw (AP) 95

The Andhra Pradesh High Court, while considering a petition challenging GST demand based on events posted on social media, held that information available on the social media platform of the petitioner shows that the event was conducted.

The division bench of Justice C. Praveen Kumar and Justice Tarlada Rajasekhar Rao dismissed the petition by giving liberty to the petitioner to approach the Appellate Authority.

Jharkhand High Court

Inspection Report Does Not Fulfil The Ingredients Of Proper Show-Cause Notice: Jharkhand High Court

Case Title: M/s Shyam Hardware Store Versus The State of Jharkhand

The Jharkhand High Court has held that the inspection report does not fulfil the ingredients of a proper show-cause notice; it amounts to a violation of principles of natural justice.

The division bench of Justice Aparesh Kumar Singh and Justice Deepak Roshan has observed that the adjudication order is null and void in the eye of the law if it is passed without the issuance of proper show-cause notice.

Himachal Pradesh High Court

Cash Sales Accepted By VAT Dept. Not Sufficient To Hold It To Be Genuine: Himachal Pradesh High Court

Case Title: PCIT Versus M/s J.M.J. Essential Oil Company

Citation: 2022 LiveLaw (HP) 18

The Himachal Pradesh High Court has held that the cash sales accepted by the VAT department are not sufficient to hold that the cash sales were genuine.

The division bench of Justice Sabina and Justice Satyen Vaidya has held that the Assessing Officer was liable to independently look into the cash sales to come to a conclusion as to whether the said sales were genuine or not. The Assessing Officer, as well as the Appellate Authority, rightly gave the finding of fact that the cash sales put forth by the respondent were not genuine and that the respondent had introduced its unaccounted income in the garb of cash sales.

Calcutta High Court

Reopening Assessment Without Furnishing Information Violates Principles Of Natural Justice: Calcutta High Court

Case Title: Maharaja Edifice Pvt. Ltd. Vs. Union of India & Ors.

The Calcutta High Court bench of Justice T.S. Shivagnanam and Justice Bivas Pattanayak has held that failure to furnish information based on which assessment was reopened is a violation of principles of natural justice.

ITAT

Cash Deposit Of Firm Can't Be Added To Personal Income Of Partner Without Investigation: ITAT

Case Title: Srijal Gupta Versus Income Tax Officer of Income Tax Ward 6(3)

The Amritsar Bench of the Income Tax Appellate Tribunal (ITAT), consisting of Anikesh Banerjee (Judicial Member) and Dr. M. L. Meena (Accountant Member), has held that the cash deposit of a firm can not be added to the personal income of the partner without investigation.

The notice under section 148 of Income Tax Act was issued against the assessee on 15.03.2013. The assessee filed his return of income declaring the NIL income as there was no income and the assessee only purchased a property. The reasons were recorded by the AO.

Inland Haulage Charges Received By Shipping Companies NotTaxable As Business Profit: ITAT Mumbai

Case Title: Avana Global FZCO versus Deputy Commissioner of Income Tax

The Mumbai Bench of ITAT has reiterated that the activity of Inland Haulage is directly connected with the transportation of goods in international traffic and thus, Inland Haulage Charges are not taxable as business profit in India in view of Article 8 of the India-UAE DTAA (Double Taxation Avoidance Agreement).

The Bench, consisting of Vikas Awasthy (Judicial Member) and Gagan Goyal (Accountant Member), held that since the activity of Inland Haulage was directly connected with the transportation of goods in international traffic, and since it was an integral part of operation of ships; hence, the Inland Haulage Charges cannot be disintegrated from profits derived from shipping business, as envisaged under Article 8 of the DTAA.

ITAT Holds Revisionary Order Passed Without Mentioning DIN As Invalid

Case Title: Tata Medical Centre Trust versus Commissioner of Income Tax, (Exemption)

The Kolkata Bench of the ITAT has quashed the revisionary order passed by the Income Tax Authority without quoting the Document Identification No. (DIN) in the said order, as required by the CBDT Circular No.19/2019, dated 14.08.2019.

The Bench, consisting of Mr. Sanjay Garg (Judicial Member) and Mr. Girish Agrawal (Accountant Member), held that since the order passed by the Income Tax Authority failed to mention the DIN in its body, therefore, the said order was "invalid and deemed to have never been issued", as provided under the said CBDT Circular.

Loan Given To Shareholder For Consideration Beneficial To The Company Is Not A Deemed Dividend: ITAT

Case Title: Archana Sharma Versus DCIT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that if a loan or advance is given to a shareholder as a consequence of any consideration which is beneficial to the company, in such a case, the advance or loan cannot be said to be a deemed dividend.

The two-member bench of Astha Chandra (Judicial Member) and Anil Chaturvedi (Accountant Member) has observed that a gratuitous loan or advance given by a company to the classes of shareholders would come within the purview of a deemed dividend under section 2(22) of the Income Tax Act.

TPO Not Justified In Treating The Value Of International Transaction Of "Payment of Corporate IT Support Services" To Be Nil:ITAT

Case Title: M/s. Sulzer Tech India Pvt. Ltd. Versus Addl./Jt./Dy./Asstt. Commissioner Of Income Tax

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has observed that the TPO was not justified in treating the value of international transactions "Payment of Corporate IT Support Services" as NIL.

The two-member bench headed by Pramod Kumar (Vice President) and Sandeep Singh Karhail (Judicial Member) has observed that no search was conducted to find out the independent entity in a comparable transaction and the arm's length price of the international transaction was treated to be Nil.

ITAT Quashes Order Holding Air India An Assesssee In Default For Shortfall In Deduction Of TDS On Payments Made To Its Subsidiary

Case Title: Air India Ltd. versus Commissioner of Income-tax (Appeals), NFAC, Delhi

The Mumbai Bench of ITAT has ruled that Air India must be given the benefit of the Proviso to Section 201 (1) of the Income Tax Act, 1961 and hence, it cannot be considered as an assessee in default for shortfall in deduction of TDS on the payments made by it to its subsidiary - Air India Engineering Services Ltd.

The Bench, consisting of Kavitha Rajagopal (Judicial Member) and Baskaran B.R. (Accountant Member), remitted the matter back to the Assessing Officer for examining the claim of Air India for availing the benefit of the Proviso to Section 201 (1), as per which an assessee shall not be treated as an assessee in default, if the conditions specified therein are complied with.

Capital Gain Exemption Can Be Availed Only When The New Asset Is Purchased In The Name Of The Assessee: ITAT

Case Title: Dilip B. Mundada Versus The Dy.CIT

The Pune Bench of the Income Tax Appellate Tribunal (ITAT) has held that for availing the benefit of deduction under section 54F, the new asset shall be purchased in the name of the assessee.

The two-member bench of S.S.Godara (Judicial Member) and Dipak P. Ripote (Accountant Member) has observed that section 54F does not say that the assessee shall invest in the new house, but it says the assessee shall purchase a new house. The assessee claimed that the amount for the flat was invested by him. However, it was factually incorrect. As per the documents, the payments for the flat were made by his wife.

CESTAT

CESTAT Quashes Order Of Forfeiture Of Security Deposit, Sustained The Penalty On Customs Broker

Case Title: M/s Star CHA Management Services LLP Versus Commissioner of Customs, (Airport & General)

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the order of forfeiture of security deposit of Rs. 5 lakhs but sustained the penalty of Rs. 50,000 on the Customs Broker.

The two-member bench headed by Justice Dilip Gupta (President) and Raju (Technical Member) has observed that the forfeiture of security deposit of Rs. 5 lakhs and imposition of a penalty of Rs. 50,000 under Regulation 18 of CBLR, 2018 is excessive.

CESTAT Allows Cenvat Credit of 2% CVD Paid On Import Of Steam Coal

Case Title: Commissioner of Central Excise And Customs, Central Goods And Service Tax Versus M/s Shree Cement Ltd

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) consisting of Ajay Sharma (Judicial Member) and P.V. Subba Rao (Technical Member) has allowed the Cenvat credit of 2% CVD paid on the import of steam coal.

Seafarer's Recruitment Service Provider Is Not An intermediary:CESTAT Allows CENVAT Credit Refund

Case Title: M/s Anglo Eastern Maritime Services Pvt. Ltd. Versus Commissioner of CGST

The Mumbai bench of the Customs, Excise and Appellate Tribunal (CESTAT) consisting of Dr. Suvendu Kumar Pati (Judicial Member) has held that a seafarer's recruitment service provider, who processes the entire selection, medical test, insurance, transportation, training, etc. to the overseas client and receives convertible foreign exchange, is not an intermediary.

No Service Tax On Reimbursement Of Expenses From Customers On Account Of Water, Electricity And Diesel Expenses Incurred: CESTAT

Case Title: M/s. VITP Private Limited Versus Commissioner of Central Tax, Hyderabad-IV

The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the service tax is not applicable on reimbursement of expenses from its customers on account of water, electricity, and diesel expenses incurred for the provision of services.

The two-member bench of P.K. Chaudhary (Judicial Member) and P.V. Subba Rao (Technical Member) has observed that cenvat credit can be availed on work contract services and other services for the construction of immovable property. The Cenvat credit can be availed for event management services for the promotion of business.

AAAR

Supply Of Food And Drinks In Trains Or At Platforms Attracts 5%GST: AAAR

Applicant's Name: Deepak & Co.

The Delhi Appellate Authority of Advance Ruling (AAAR) has ruled that the GST rate on the supply of food and drinks, whether in trains or at platforms (static units), will attract 5% GST without an Input Tax Credit (ITC).

The two-member bench of Mallika Arya and Ankur Garg ruled that the supply of newspapers to passengers is exempt from GST.