Compensation On Cancellation Of Leasehold Rights Over A Plot, Capital Receipt: Delhi High Court

Case Title: PCIT Versus Pawa Infrastructure (P) Ltd.

Citation: 2022 LiveLaw (Del) 1215

The Delhi High Court has held that the leasehold rights held by the assessee in the plot were a capital asset and that the compensation received by the assessee from the Government of Goa on the cancellation of the plot was a capital receipt and not a revenue receipt.

The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that if an agreement for the transfer of rights in an immovable property is not performed by the transferor, the transferee is entitled to compensation as he/she is deprived of the price of escalation. Therefore, the character of the payment received as compensation by the transferee bears the character of a capital receipt. The payment of interest in the facts of the present case is compensatory in nature and, therefore, does not bear the character of a revenue receipt.

Bombay High Court

Marine Paint As Part Of Vessel? Bombay High Court Confirms AAAR Decision

Case Title: Jotun India Private Limited Versus The Union of India

The Bombay High Court has dismissed the writ petition challenging the advance ruling given by the Maharashtra Appellate Authority for Advance Ruling (AAR).

The division bench of Justice Nitin Jamdar and Justice Gauri Godse has observed that the authority and the appellate authority followed the entire procedure and that full opportunity was given to the petitioner. There was no evidence of a violation of natural justice principles due to a lack of opportunity to be heard.All points put forth by the petitioner as to why anti-fouling paint should be considered part of the ship were taken into consideration, and the authority and the Appellate Authority took a particular view of the matter.

Madras High Court

Madras High Court Upholds State's Decision To Increase Property Tax In Chennai, Coimbatore Municipal Areas

Case Title: K.Balasubramaniam v. The Commissioner, Greater Chennai Corporation and others (batch cases)

Citation: 2022 LiveLaw (Mad) 524

The Madras High Court recently upheld the validity of the Government Order issued by Tamil Nadu's Municipal Administration and Water Supply Department and the consequential resolutions of Greater Chennai Corporation and Coimbatore Corporation by which the property taxes in Chennai and Coimbatore were revised and increased.

Gujarat High Court

Gujarat High Court Quashes Assessment Order Of Income Tax Worth Rs. 101 Crores For Not Following Natural Justice

Case Title: Map Refoils India Ltd. Versus National Faceless E-Assessment Center

The Gujarat High Court has quashed the assessment order of income tax worth Rs. 101 crores on the grounds of a violation of the principle of natural justice by the National Faceless Assessment Center.

The division bench of Justice N.V. Anjaria and Justice Bhargav D. Karia has observed that the respondent/department will be at liberty to proceed with assessment under the provisions of Section 144B of the Income Tax Act, 1961, as permissible under the law, after issuance of a show cause notice and draft assessment order so as to provide an opportunity of hearing to the petitioner.

Directors Not Negligent; Wrong Invocation Of Section 179 IT Act: Gujarat High Court

Case Title: Devendra Babulal Jain versus Income Tax Officer

The Gujarat High Court has ruled that the Directors of the assessee company cannot be held negligent merely because they failed to deposit before the Assessing Officer 20% of the demand raised, so as to seek stay of demand during the pendency of an appeal before the CIT(A). Thus, the Court held that jurisdiction under Section 179 of the Income Tax Act, 1961, holding the Directors of the assessee company liable to pay the company's outstanding tax dues, could not have been invoked by the Income Tax Authorities.

Himachal Pradesh High Court

Rejection Of Appeal For Restoration Of GST Registration - Delay Of 1 Day Is Hyper Technical: Himachal Pradesh High Court

Case Title: Sunil Kumar Vij Versus Union Of India

The Himachal Pradesh High Court has held that the rejection of an appeal for the restoration of GST registration for a delay of 1 day is hyper-technical.

The division bench of Justice Tarlok Singh Chauhan and Justice Virender Singh has allowed the claim of the petitioner, stating that the view taken by the appellate authority is quite hyper-technical and academic and that rejecting the appeal for a delay of one day is in gross violation of the principle of natural justice and that cancellation would prevent the fundamental right of doing business.

ITAT

Property Transferred to Mother Through Sale Deed Is A Sale And Not Gift, Taxable As Capital Gain: ITAT

Case Title: Shri Jay Atulbhai Mody Versus ITO

The Rajkot Bench of the Income Tax Appellate Tribunal (ITAT) has held that the property transferred by the assessee to his mother for consideration of Rs. 5 lakh is liable to be brought under the ambit of capital gain.

The two-member bench of Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member)has directed the AO to refer the matter to the Department Valuation Officer (DVO) to determine the value of the property in accordance with the provisions of Section 50C of the Income Tax Act.

ITAT Allows Expenses Incurred Towards Transfer Of Shares

Case Title: Pallav Pandey Versus ACIT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the expenses incurred towards the transfer of shares.

The two-member bench of Yogesh Kumar U.S. (Judicial Member) and B.R.R. Kumar (Accountant Member) has observed that the expenses incurred by the assessee are allowable transfer expenses as per Section 48 of the Income Tax Act, and both the lower authorities have committed an error in disallowing the expenses incurred by the assessee.

CESTAT

Confiscated Currency Need To Be Returned With Interest On Release: CESTAT

Case Title: Matta Paints And Hardware Store Versus The Commissioner

The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has observed that the amount seized in cash by the authorities is to be refunded along with the interest.

The bench of Rachna Gupta (Judicial Member) has observed that the appellant is entitled to a refund of interest on the principal amount at the rate of 12% from the date of its seizure.

Service Tax Refund Admissible On Trenching Pipeline Installed Partly In SEZ And Partly Outside But For Use In Operation Of The SEZ: CESTAT

Case Title: Reliance Jamnagar Infrastructure Limited Versus Commissioner of Central Excise & ST

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax refunds on trenching pipelines installed partly in SEZ and partly outside but for use in the operation of the SEZ are admissible.

The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the construction service received in relation to trenching and pipeline construction was exclusively for SEZ only. A part of the same will be outside the premises of the SEZ, but that does not mean that service was received for anything other than authorised operations in the SEZ.

No Service Tax Is Payable On Commission Received In Convertible Foreign Exchange: CESTAT

Case Title: J M Huber India Pvt Ltd. Versus C.C.E. & S.T.-Surat-ii

The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that no service tax is demandable when the commission received is in convertible foreign exchange.

The two-member bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the commission agent service provided to a foreign-based entity for promoting or marketing their goods in India constitutes an export of services, given that the Indian agent's activity includes providing promotion or marketing, technical support, installation, commission, etc. for the sale of goods by foreign-based entities in India on a commission basis.

​​Charge Of Double Benefit Sustains Only If Assessee Claims Refund, Utilises It For Paying Excise Duty: CESTAT

Case Title: Bright Engineering Works Versus C.C.E. & S.T.-Daman

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad Bench has ruled that the charge of double benefit is only valid when the assessee claims a refund and uses it to pay excise duty.

The bench of Ramesh Nair (a judicial member) has observed that it set aside the order passed by the Revenue Department rejecting the refund application of the assessee. The refund cannot be denied on the basis of the Appellant receiving a double benefit as a result of the non-transfer of unutilized CENVAT credit.

CESTAT Allows Cenvat Credit On Parts For Efficient Functioning Of Machine For Sugar Production

Case Title: Vriddheshwar SSK Ltd. Versus The Commissioner of CGST & C.Ex

The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the cenvat credit on parts for the efficient functioning of machines for manufacturing.

The bench of Ajay Sharma (Judicial Member) has observed that the appellant is justified in availing the Cenvat credit on various items, namely, S.S. Welding Tube, Steel, Tubes, Alloy Steel Pipe, Prime HR Steel Coil, M.S. Wire, M.S. Slate, S.S. Welded Tube, HR Steel Pipe, and Link Outer, which are used in those machines that are manufacturing the final product.

AAR

Rajasthan Housing Board, A Govt. Authority - Services Exempted From GST: AAR

Applicant's Name: Rajasthan Housing Board

The Rajasthan Authority for Advance Ruling (AAR) has held that services provided by the Rajasthan Housing Board in relation to any function entrusted to a municipality under Article 243 W of the Constitution are exempt from GST.

The two-member bench of Umesh Kumar Garg and M.S. Kavia has observed that the Rajasthan Housing Board is covered under the definition of "government authority."

Transfer Of Fintech App To Subsidiary Is Transfer Of Going Concern: Karnataka AAR

Applicant's Name: Capfront Technologies Pvt. Ltd.

The Karnataka Authority for Advance Ruling (AAR) has held that the GST exemption is available on the transfer of an independent part of business pertaining to mobile software.

The two-member bench of M.P. Ravi Prasad and Kiran Reddy T. has observed that the transfer of an independent part of business pertaining to the "Loan Front" app, a mobile software, qualifies as a transfer of going concern, and the said activity amounts to "service by way of transfer of going concerned as an independent part" and thus is exempt from GST.