Section 45(4) Of Income Tax Act Applicable To Cases Of Subsisting Partners Of A Partnership Transferring The Assets In Favour Of A Retiring Partner: Supreme Court

CASE TITLE: The Commissioner of Income Tax v. M/s. Mansukh Dyeing and Printing Mills

Citation : 2022 LiveLaw (SC) 991

A Supreme Court bench comprising Justices M.R. Shah and M.M. Sundresh held that Section 45(4) of the Income Tax Act was applicable to not only the cases of dissolution but also cases of subsisting partners of a partnership, transferring the assets in favour of a retiring partner.

Delhi High Court

DTVSV Act Is A Remedial Statute; Neither A Taxing Statute Nor Amnesty Act: Delhi High Court

Case Title: MUFG Bank Versus CIT

Citation: 2022 LiveLaw (Del) 1122

The Delhi High Court has held that the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act) is neither a taxing statute nor an amnesty act. It is a remedial or beneficial statute.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that any ambiguity in a taxing statute ensures the benefit of the assessee, but any ambiguity in the amnesty act or exemption clause in an exemption notification has to be construed in favor of the revenue. The amnesty or exemption has to be given only to those assesses who demonstrate that they satisfy all the conditions precedent for availing of the amnesty or exemption.

Notice Under Section 148 Of Income Tax Act Against A Struck-Off Company Valid, In View Of Subsequent Order Of NCLT Restoring The Company: Delhi High Court

Case Title: Ravinder Kumar Aggarwal versus Income Tax Officer

The Delhi High Court has ruled that the order passed by NCLT under Section 252(3) of the Companies Act, 2013, directing restoration of a struck off company, will have the effect of placing the company in the same position as if the name of the company had not been struck off from the register of companies. Thus, the Court held that the notice under Section 148 of the Income Tax Act, 1961 issued against a Company on the date it stood dissolved as a consequence of being struck off, was valid in view of the subsequent order passed by the NCLT.

Export Proceeds Not Remitted Within Time; Duty Drawback To Be Recovered: Delhi High Court

Case Title: R.K. Overseas Versus Senior Intelligence Officer, DRI

The Delhi High Court has held that the exporter is otherwise not entitled to duty drawback and, if already paid, is liable to be reimbursed because the buyer did not send any export proceeds within the required time frame.

The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju has observed that since the amount that is lying credited to the petitioner's account, concededly, represents a part of the duty drawback sanctioned in favor of the petitioner against 20 shipping bills, no such direction can be issued that would ultimately result in the petitioner getting access to the funds.

Jharkhand High Court

Dispute Arising Out Of Erstwhile Central Excise Act Has To Be Dealt With Under Its Provisions And Not Under GST: Jharkhand High Court

Case Title: M/s Usha Martin Limited Versus Additional Commissioner

The Jharkhand High Court has held that the initiation of proceedings by the department under section 73 (1) of the CGST Act, 2017 for alleged contravention of the Central Excise Act (C.E.A.) and Finance Act against the petitioner in terms of Section 140 of the CGST Act for the transition of CENVAT Credit as being inadmissible under GST was beyond his jurisdiction.

Madras High Court

Cancellation Of GST Registration On Health Issues; Madras High Court Revokes

Case Title: Tvl.Marimuthu Venkateshwaran Versus The Commissioner

Citation: 2022 LiveLaw (mad) 494

The Madurai Bench of the Madras High Court has lifted the cancellation of the GST registration as the tax returns were not filed by the taxpayer due to health-related issues.

The single bench of Justice Mohammed Shafiq, while considering the directions issued in the cases of Tvl. Suguna Cutpiece Vs Appellate Deputy Commissioner (ST) (GST) and others, has directed the department to revoke the cancellation of the GST registration.

Kerala High Court

Wrong VAT Rate Can Be Rectified: Kerala High Court

Case Title: M/s Crescent Construction Versus Deputy Commissioner of State Tax

Citation: 2022 LiveLaw (Ker) 631

The Kerala High Court has held that the mistake of applying the wrong value-added tax (VAT) rate can be rectified.

The single bench of Justice Gopinath P. has observed that, as per Section 66 of the KVAT Act, once it is brought to the notice of the officer that there is a mistake in applying the correct rate of tax, it is within the power conferred on the officer to rectify the mistake.

Allahabad High Court

Revocation of GST Registration Can't Be Rejected Solely For Delay In Moving Revocation Application: Allahabad High Court

Case Title: Umesh Kumar Versus State Of U.P. [Writ Tax No. - 648 of 2021]

Citation: 2022 LiveLaw (AB) 513

The Allahabad High Court has held that the rejection of registration solely on the ground of delay in moving the revocation application is not sustainable in law when the entire tax is deposited.

The single bench of Justice Rohit Ranjan Agarwal has observed that once the department has accepted the return and there are no outstanding dues, the department should not obstruct the business of an assessee.

ITAT

ITAT Deletes Addition On Cash Deposits Before Demonetisation

Case Title: Mrs. Umamaheswari Versus The Income Tax Officer

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has directed the Assessing Officer (AO) to delete the addition made on account of cash deposits made before demonetization.

The bench of G. Manjunatha (an accountant member) has observed that as per Section 5 of the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016, from December 31, 2016, no person shall, knowingly or voluntarily, hold, transfer, or receive any Specified Bank Notes. There was no prohibition on dealing with specified bank notes prior to December 31, 2016.

Department Is Not Allowed To Travel Beyond The Issues Involved In Limited Scrutiny Cases: ITAT

Case Title: Sudhir Chadha Versus ACIT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the department is not allowed to travel beyond the issues involved in limited scrutiny cases.

The two-member bench of N.K. Choudhary (Judicial Member) and Pradip Kumar Kedia (Accountant Member) have observed that the assessee was selected for limited scrutiny, and the addition in hand does not emanate from the grounds on which the case of the assessee was picked up for limited scrutiny.

Bogus Share Transaction: ITAT Denies Exemption Under Section 10(38) Of Income Tax Act

Case Title: Abhishek Ashok Lohade versus ITO

The Pune Bench of the Income Tax Appellate Tribunal has ruled that where the assessee fails to establish the genuineness of the transaction of sale and purchase of shares, and fails to rebut the findings of quasi-judicial bodies regarding the bogus transaction in shares, the said transaction is void ab initio. Thus, applying the principle of fraud, the ITAT held that the assessee was not eligible for exemption of capital gains under Section 10(38) of the Income Tax Act, 1961.

No Need Of Any "Occasion" For Receipt Of Gift By The Assessee: ITAT

Case Title: ITO Versus Dr. Satish Natwarlal Shah

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that there need not be any "occasion" for the assessee to receive a gift.

The two-member bench of T.R. Senthil Kumar (judicial member) and Annapurna Gupta (accountant member) noted that the assessee received the gift from his own brother, who has been a non-resident since 1966. The allotment of shares was made under the NRI quota to the assessee's brother in the USA. Thus, the source and genuineness are being proved beyond doubt.

CESTAT

Purchase Of ATM within India: CESTAT Deletes Penalty Under Customs Act Against CitiBank

Case Title: M/s. Citibank N.A. Versus Commissioner of Customs

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has deleted the penalty under the Customs Act against CitiBank on the purchase of an ATM within India.

The two-member bench of Suvendu Kumar Pati (Judicial Member) and Sanjeev Shrivastava (Accountant Member) has observed that a transaction concerning the purchase of an item within India, which is unrelated to its importation and to the importer as the transaction is confined between the Appellant Citibank and Philips India, does not support the imposition of a penalty under Section 112 of the Customs Act against Citibank.

Allegations based on assumptions In The SCN : CESTAT Deletes Penalty

Case Title: M/s. Maa Foundry Private Limited Versus Commissioner of Central Excise & Service Tax

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the allegation of clandestine manufacture and removal of finished goods by the Appellant made in the Show Cause Notice was merely based on assumption and presumption.

The bench of P.K. Choudhary (a judicial member) has observed that the charge of clandestine clearance is a serious charge, and the onus to prove the same is on the department to adduce concrete and cogent evidence. In the absence of corroborative evidence, the charge of clandestine clearance cannot be leveled against the assessee.

Scrap Neither Generated From Manufacturing Nor From Cenvatable Input/Capital Goods, No Excise Duty Payable: CESTAT

Case Title: Shreno Ltd. Versus C.C.E. & S.T.-Vadodara-i

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has observed that excise duty is not payable on scrap, which is neither generated from the manufacturing process nor generated from the cenvatable input or capital goods.

Onus To Prove The Goods Were Smuggled Lies On The Department: CESTAT

Case Title: Atul Dhawan Versus Commissioner of Customs

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the department bears the burden of proving that the goods are smuggled.

The bench of Anil Choudhary (a judicial member) has observed that the show cause notice is vague as the valuation of the goods has been done by the Revenue without any relied-upon documents, i.e., copy of any retrieved documents from the mobile/CPU of the appellant/assessee.

Credit Accumulated Due To Clearance Of Excisable Goods, Bar Of Unjust Enrichment Is Not Attracted: CESTAT

Case Title: M/s.Nitin Industries (Trade Name) Versus Commissioner of Goods & Service Tax

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that the credit has been accumulated due to the clearance of excisable goods during the Excise Law Regime for export and that the bar of unjust enrichment is not attracted.

The bench of Anil Choudhary (a Judicial Member) found that the appellant had not begun production or manufacturing activities, nor had any taxable goods been cleared, on or after 1.7.2017. The debit recorded by the appellant in the electronic ledger (DRC-3) amounts to a reversal of credit transferred to the GST regime. The appellant is entitled to a refund under the provisions of Section 142(3) of the CGST Act, which provides that the assessee can file a refund claim on or after the appointed day for a refund of any amount of credit, duty, etc. paid under the existing law (Central Excise/Service Tax), subject to clearing the bar of unjust enrichment.

Freight Charges Are Not Includible In Assessable Value Of Liquid Carbon Dioxide: CESTAT

Case Title: Bathinda Industrial Gas Pvt. Ltd. Versus Commissioner of CGST

The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has ruled that freight charges are not deductible from the assessable value of liquid CO2, despite the fact that they were separately charged in the invoices and the gas was sold at the time of clearance from the appellant's factory.

The two-member bench of Rachna Gupta (Judicial Member) and P. Venkata Subba Rao (Technical Member) has observed that the authorities below are held to have wrongly confirmed the duty demand against the appellant on the basis of the inclusion of freight charges in the assessable value.

CESTAT Allows Customs Duty Refund Claim Paid Through DEPB Scrip

Case Title: Virgo Suitings Pvt. Ltd. Versus Commissioner of Customs

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the customs duty refund claim paid through the Duty Entitlement Pass Book (DEPB) scrip.

The bench of Ajay Sharma (Judicial Member) has observed that the department has failed to establish through any kind of document or case law that debit of any amount under the DEPB scheme is not a mode of payment of duty, and therefore the benefit cannot be denied to the appellant.

AAAR

No GST Exemption On Sub-Contract Services To Educational Boards: Telangana AAAR

Applicant's Name: M/s. Magnetic Infotech Pvt Ltd

The Telangana Appellate Authority of Advance Ruling (AAAR) has ruled that there is no GST exemption on sub-contract services to educational boards.

The two-member bench of B.V. Sivanaga and Neetu Prasad has observed that the exemption would be available when the services are provided "to" an educational institution for services relating to admission to or the conduct of examination by the institution.

AAR

GST ITC Is Not Admissible On Amount Paid To Canteen Service Providers, Amount Recovered From The Employees: Uttarakhand AAR

Applicant's Name: Tube Investment of India Limited

The Uttarakhand Authority of Advance Ruling (AAR) has ruled that the Input Tax Credit (ITC) is not admissible on the amount paid to the canteen service providers and on the amount recovered from the employees.

The two-member bench of Rameshwar Meena and Anurag Mishra has observed that the nominal amount of recoveries made by the applicant from the employees who are provided food in the factory canteen would be considered a "supply."