S.153A Income Tax Act| Can Assessments Be Reopened If No Incriminating Material Is Found During Search? Supreme Court Reserves Judgment

Case Title : PR. COMMISSIONER OF INCOME TAX CENTRAL v. ABHISAR BUILDWELL P. LTD

The Supreme Court on Thursday reserved its judgment on whether in an assessment under section 153A of the Income Tax Act, besides the incriminating material found during search, such materials which the Assessing Officer has on hand and the third party records available can be relied on to assess total income, or whether the assessment has to confined only to the incriminating material seized during the search. The Court also discussed the issue whether there is no incriminating material seized during the search, then those assessments be reopened and reassessed under Section 153A.

Supreme Court Stays Madras High Court’s Order Directing Payment of Tax On Manufacture Of Water Borehole Drilling Rigs

Case Title: M/s. Paranthaman Hydraulics and Equipments Versus State Of Tamil Nadu

The Supreme Court has stayed the order passed by the Madras High Court directing the payment of a minimum 4% tax on the manufacturing of the water borehole drilling rigs.

The division bench of Justice Krishna Murari and Justice C.T. Ravi Kumar has observed that tax at the rate of 4% has already been deposited by the petitioner. The direction in the order to pay another 4% shall remain in abeyance until the next date of listing.

Delhi High Court

Claim That Investment In Shares Was A Capital Account Transaction, Non-Application Of Mind By AO: Delhi High Court Quashes Reassessment Notice

Case Title: Blackstone Capital Partner Versus ACIT

Citation: 2023 LiveLaw (Del) 92

The Delhi High Court has quashed the reassessment notice as the AO failed to apply his mind as to whether an investment in shares was a capital account transaction.

Explanation 2 To S. 37(1) of Income Tax Act, Which Bars Deduction of CSR Expenses, Is Prospective In Nature: Delhi High Court

Case Title: Pr. Commissioner of Income Tax versus M/s Steel Authority of India Ltd.

Citation: 2023 LiveLaw (Del) 95

The Delhi High Court has reiterated that Explanation 2 to Section 37(1) of Income Tax Act, 1961, inserted by the Finance Act, 2014, which bars deduction of CSR expenses while computing income from business or profession, is prospective in nature.

The bench of Justices Rajiv Shakdher and Tara Vitasta Ganju remarked that deductibility of CSR expenses under Section 37(1), prior to its amendment by the Finance Act, cannot depend upon how the funds are spent by the recipient.

Information Triggering Reassessment Proceedings Needs To Be Furnished To The Assessee: Delhi High Court

Case Title: Charu Chains & Jewels (P) Ltd. Versus ACIT

The Delhi High Court has held that the underlying information or material that formed the basis for triggering the assessment or reassessment proceedings was required to be furnished to the assessee.

The division bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju has noted that the petitioner has indicated that it will file a further response once the information or material is provided, and even if the information or material is not provided, it will reserve its right to file a further response.

Aircraft Imported For Private Purposes, No Customs Duty Exemption Allowed: Delhi High Court

Case Title: East India Hotels Ltd. Versus Commissioners of Customs, General Excise and Central GST

The Delhi High Court has held that the aircraft was imported for private purposes and not for providing non-scheduled passenger or charter services. Therefore, the condition for customs duty exemption was not available to the assessee.

Budgetary Support Under GST Regime Can’t Be Denied To Eligible Unit: Delhi High Court

Case Title: M/s Special Cables Pvt Ltd versus Central Board of Indirect Taxes and Customs & Ors.

Citation: 2023 LiveLaw (Del) 120

The Delhi High Court has directed the revenue authorities to grant budgetary support to a manufacturing unit under the “Scheme of Budgetary Support under Goods and Services Tax (GST) Regime”, available to ‘eligible units’ located in specified States. The Court took note that the petitioner was eligible for exemption from Central Excise Duty prior to 01.07.2017, i.e., before the introduction of the GST regime in India, and thus, in terms of the Scheme, it was entitled to avail budgetary support.

Madras High Court

Madras High Court Dismisses Plea By AR Rahman, GV Prakash and Santhosh Narayan Challenging GST Department’s Order Claiming Service Tax

Case Title: M/s. Amirta International Institute of Hotel Management v. The Principal Commissioner of CGST & Central Excise

Citation: 2023 LiveLaw (Mad) 41

The Madras High Court has recently dismissed the pleas filed by music composers AR Rahman, GV Prakash and Santhosh Narayan challenging the proceedings initiated by the Commissioner of the GST Department levying service tax on transfer of copyright in musical work for the period between 2013 and 2017.

Andhra Pradesh High Court

Since Investigation By DGGI Started Prior To Filing Of Application, AAR Order Is Invalid : Andhra Pradesh High Court

Case Title: M/s Master Minds versus AAAR (GST)

Citation: 2023 LiveLaw (AP) 6

The Andhra Pradesh High Court has ruled that the term ‘any proceedings’ referred to in the proviso to Section 98(2) of the CGST Act/ Andhra Pradesh GST Act (APGST Act), includes within its ambit the investigation initiated against the applicant under the said Act.

Calcutta High Court

Writ Court Can’t Classify Products Under Customs Tariff Act, Technical Analysis Is Required: Calcutta High Court

Case Title: M/s Harsh Polyfabric Versus UOI

Citation: 2023 LiveLaw (Cal) 18

The Calcutta High Court has held that a writ court cannot answer the classification of products under the Customs Tariff Act as it requires technical analysis.

Gujarat High Court

Sale Consideration Out Of Transfer Of Capital Asset Is Liable To Capital Gain: Gujarat High Court

Case Title: Deepak Nitrate Versus DCIT

The Gujarat High Court has held that the detachable warrant has an existence of its own along with the debenture purchased by the assessee for a sum of Rs. 50. The realization would be a sale consideration arising out of the transfer of a capital asset and is subject to capital gain.

Sales Tax or VAT Dues Payable Can't Be Claimed As Priority Over Dues Of Secured Creditor: Gujarat High Court

The Gujarat High Court has held that Sales tax or VAT dues payable cannot be claimed as priority over dues of the secured creditor.

The division bench of Justice N.V. Anjaria and Justice Bhargav D. Karia has observed that the charge in respect of the property in question created for sales tax dues is of no avail and has no efficacy in law.

Kerala High Court

Extension Of Limitation To Issue Order Under S. 73 Of CGST Act Would Also Extend Time Limit To Issue SCN: Kerala High Court

Case Title: Pappachan Chakkiath versus Assistant Commissioner & Ors.

The Kerala High Court has ruled that when the time limit for issuing an order under Section 73(10) of the CGST Act stands extended by a notification, the time limit for issuance of show cause notice under Section 73(2) would also stand extended.

Rajasthan High Court

Material Referred In “Reasons To Believe” Not Supplied To Assessee, Reassessment vitiated: Rajasthan High Court

Case Title: Micro Marbles Private Limited Versus Office of the Income Tax Officer

The Rajasthan High Court has held that the material referred to in the "reasons to believe" was not supplied to the assessee, and the entire proceedings for the reopening of the assessment and leading to the consequential assessment stand vitiated in law.

ITAT

Merely Making Unsustainable Claim Will Not Amount To Furnishing Of Inaccurate Particulars Of Income: ITAT

Case Title: Galaxy Construction and Contractors Pvt. Ltd. Versus DCIT

Citation: ITA No.1402/PUN/2019

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the mere making of a claim, which is not sustainable by the law itself, will not amount to furnishing inaccurate particulars of income.

The bench of S.S. Vishwanethra (Judicial Member) has observed that the appellant cannot be held guilty of furnishing inaccurate particulars of income, and, therefore, the Assessing Officer was not justified in levying a penalty under Section 271(1)(c) of the Income Tax Act.

Delay By State To Issue Necessary Certificates: ITAT Quashes Revision Order

Case Title: Kusum Mehta Versus CIT

The Calcutta Bench of Income Tax Appellate Tribunal (ITAT) has quashed the revision proceedings initiated in the name of the deceased person.

The revenue department acted quickly after receiving the legal heir certificate, according to the two-member bench of George Mathan (Judicial Member) and Arun Khodpia (Accountant Member). However, there has been a delay at the level of the state government in issuing the necessary certificates. Fault cannot be placed on the revenue or the assessee.

CESTAT

CENVAT Credit Can’t Be Denied For Use Of Prime Quality Materials In Manufacture: CESTAT

Case Title: M/s. Shakambari Overseas Traders Private Limited Versus Commissioner of CGST & CX

The Kolkata Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that there is no restriction in the CENVAT Credit Rules that the Appellants should not use prime quality materials for the manufacture of final products.

The single bench of P.K. Choudhary (Judicial Member) has observed that as long as there is no dispute regarding the receipt and consumption of the inputs of a duty-paid character, the benefit of the CENVAT credit cannot be denied.

Deputy Commissioner Not Empowered To Reassess After The Goods Were Cleared For Home Consumption: CESTAT

Case Title: M/s Holy Land Marketing Private Limited Versus Commissioner of Customs

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the Deputy Commissioner had the power to reassess the goods under Section 17(5) of the Customs Act, 1962, after the goods had been cleared for home consumption.

AAR

Solid Waste Management Services To Municipal Corporation Is Exempted From GST: West Bengal AAR

Applicant’s Name: Banchu Das

The West Bengal Authority for Advance Ruling (AAR) has held that the supply of conservation and solid waste management services to the municipal corporation is exempt from GST.

GST ITC Available On Trading Of Meat Products, Packed Cold Cuts Spices, Masala Powder: Karnataka AAR

Applicant’s Name: Meat Mart Unit of the New Bangalore Ham Shop

The Karnataka Authority for Advance Ruling (AAR) has ruled that the GST Input Tax Credit (ITC) is available for the trading of meat products, packed cold cuts, spices, and masala powder.

The two-member bench of M.P. Ravi Prasad and Kiran Reddy T. has observed that input tax credit has to be availed of in terms of sections 16 and 17 of the CGST Act 2017 read with Rule 42 of the CGST Rules 2017.

5% GST Payable On Pre-Packaged And Labelled Jaggery: Karnataka AAR

Applicant’s Name: Prakash and Company

The Karnataka Authority of Advance Ruling (AAR) has held 5% GST on pre-packaged and labeled jaggery.