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Home e-Newsletters Index Year 2022 April Day 16 - Saturday

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TMI Tax Updates - e-Newsletter
April 16, 2022

Case Laws in this Newsletter:

GST Income Tax Benami Property Customs Corporate Laws Insolvency & Bankruptcy PMLA Service Tax CST, VAT & Sales Tax Indian Laws



Highlights / Catch Notes

    GST

  • Cancellation of registration of petitioner - non-furnishing of returns for continuous periods of six months - Petitioner is agreed to comply with the statutory requirement by depositing all the taxes, interest, penalty and late fee as may be due and comply with the formalities. - The delay in invocation of provision of sub-rule (1) of Rule 23 of the CGST Rules is condoned. Upon compliance as agreed by the Petitioner, within two weeks of receipt of the copy of this order, the application for revocation shall be considered by the competent authority in accordance with law. - HC

  • Principles of parity - mistake while generating E-way bill - intent to evade or not - In view of the above and the mistake in question being bonofide this Court invoking the principle of parity, directs that the impugned orders are quashed. - respondents will be at liberty to consider the case of the petitioner for imposition of a minor penalty, while treating the mistake in question, to be a clerical mistake - HC

  • Income Tax

  • Loss arising on account of exchange fluctuation - The analysis done by the ITAT and the conclusion arrived at in respect of the subject claim of the appellant being the correct approach consistent with the exposition of this Court, needs to be upheld. In our opinion, the High Court missed the relevant aspects of the analysis of the ITAT concerning the fact situation of the present case. As a matter of fact, the High Court has not even adverted to the aforementioned reported decisions, much less its usefulness in the present case. - The impugned judgment and order of the High Court needs to be set aside and instead, the decision of the ITAT in favour of the appellant on the two questions examined by the High Court in the impugned judgment, needs to be affirmed and restored - SC

  • Penalty u/s 271(1) (c) - The Tribunal came to a finding of fact that Revenue had no information of any undisclosed income in the hands of the assessee except the declarations made by the assessee. What also impressed the Tribunal was at no stage it was the case of the Revenue that the funds that were lying in the bank accounts held by the two entities JWL and SF with HSBC Bank, Zurich could have been brought to tax in India. These monies have been offered to tax in India because the assessee made voluntary declarations and considering that aspect the Tribunal felt that levy of penalty u/s 271 (1)(c ) of the Act, was not justified. - Order of ITAT sustained - HC

  • Net profit estimation - Without there being sales of the stock it would not be possible to estimate the net profit. Moreover, there has been no rejection of the books of account of the Assessee which reflects the ‘Completed Services Contract Method’ of accounting consistently followed by the Assessee. This was lost sight of by the ITAT as well as the CIT (A). That this has been the consistent practice of the Appellant was easily verifiable from the returns already filed in the earlier AYs. - HC

  • Reopening of assessment u/s 147 - Though in the instant case, the petitioner has written a letter in response to the reasons received by it, yet it has not filed any objections. In fact, in the said letter, a Power of Attorney, copy of ITR, Bank statement have only been enclosed and no specific objection has been raised. Consequently, this Court is in agreement with the preliminary objection raised by the learned counsel for the respondent revenue that the present writ petition is premature. - HC

  • Revision u/s 263 by CIT - Wrong claim of carry forward of long term capital loss - the long term capital gain, which is exempted under section 10(38) of the Act, would not enter in the computation of total income of the assessee, therefore, assessee cannot set off its current year and previous year`s long term capital loss against such long term capital gain, which is exempted under section 10(38) of the Act, therefore, the stand taken by the ld PCIT is wrong. - AT

  • Setting off the long term capital loss arising on sale of shares not subject to STT against long term capital gain arising from sale of Shares subjected to STT exempt from tax under section 10(38) - At this stage we would also like to make an additional mention that even if assume, without accepting, that the revenue’s contention is correct in setting off losses against exempt income [long term capital gain u/s 10(38)], there would be an absurd outcome. - the lower authorities are not justified in setting off losses against the exempted long-term capital gain thereby reducing the quantum of carry forward of losses claimed by the assessee - AT

  • Unexplained investment - Assessee has brought on record certain evidence before the AO - the Assessing Officer ought to have investigated from both the parties for verifying the veracity of the transaction. The assessee has discharged its primary burden by furnishing the source of the investment. Under these facts it was open to Assessing Authority to make further investigation. In the absence of bringing any adverse material regarding creditworthiness of the Director and genuineness of the transaction addition made and sustained by the learned CIT(Appeals) is not justified - AT

  • Disallowance of deduction u/s 54F - assessee has converted his capital asset into stockin- trade and accrued capital gains which he invested in construction of residential unit and claimed exemption under section 54F - the deduction u/s 54F of the Act claimed by assessee is allowable and therefore, we do not find any infirmity in the order passed passed by ld CIT(A). - AT

  • Long-term capital gain - Determining the cost of acquisition as NIL - Admittedly, the primary onus lies upon the assessee to furnish the necessary details but in the event, the assessee fails to discharge the onus, it does not mean that the revenue can determine the income in arbitrarily manner. It is incumbent upon the revenue to calculate the income chargeable to tax in the manner provided under the statute. If the assessee failed to furnish the cost of acquisition, then the revenue was empowered to find out the same by exercising the authority provided under the statute under the provisions of section 131/133 (6) of the Act. But we find that the revenue has not exercised such powers. - AT

  • Penalty u/s. 271(1)(c) - As the penalty proceedings are distinct and independent to the quantum proceedings, in our considered view, penalty cannot be levied merely on the reasoning that some addition was made by the AO during the quantum proceedings. There has to be independent verification by the revenue authorities with respect to the additions made during the quantum proceedings to arrive at the satisfaction that the assessee has concealed the particulars of income. But we find that, the authorities below have not done so. - AT

  • Capital gain computation - cost of acquisition of the immovable property - The deduction on account of cost of acquisition is to be allowed with reference to the property sold or transferred by the assessee and since there is nothing on record to conclusively prove that the residential and commercial construction was also transferred by the assessee, we find ourselves in agreement with the authorities below that what was transferred or sold by the assessee was only the non-agricultural open land and the assessee, therefore, was not entitled for deduction on account of cost of acquisition of residential and commercial construction - AT

  • Disallowance of commission paid - excessive expense on commission - the average rate of commission paid by the assessee to others in respect of rice was 20, but rate of commission paid to the employee, holding 17.05% shares in the company, was at 215 and the difference of rate of commission is at 195%. The said deference is not only excessive and the same is unrealistic in the market. The AO has rightly made the comparison of the average rate of commission paid by the assessee himself in the case of non related parties to come to the said conclusion. - AT

  • Penalty u/s 271(1)(C) - Unexplained Expenditure on Stamp Duty and Registration Charges made out of Undisclosed Income - There was no dishonest intent of the assessee particularly in the given facts and circumstances where the assessee had sufficient income i.e. exceeding the amount invested in purchases of properties. Accordingly, we are of the view that the assessee inadvertently omitted to disclose the impugned cost in the income tax return without having any dishonest intent. Thus in such facts and circumstances, we hold that the penalty u/s 271(1)(c) of the Act, is not sustainable. - AT

  • Long Term Capital Gains - Sale of society flat - proportionate portion of land in the society - As per the sale deed, it is clear that assessee gets a membership on the cooperative societies, it does mean that flat owners not only owns a super structure and also ownership right on the undivided share, therefore we are inclined to accept the findings of Ld. CIT(A) in distributing the sale proceeds into sale proceeds attributable to the land and super structure - AT

  • Direct Taxes

  • Qualifications for appointment of Chairperson and Members of Appellate Tribunal - Constitutional validity of Sections 9 and 32(2)(a) of the Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - It is true that the extent of judicial review that can be exercised in a given case is quite limited. Though a constitutional court can declare a provision to be unconstitutional, it should not give any direction to the Legislature to make an amendment in a particular way. The judicial restraint is, therefore, being hailed as a virtue. However, in a case where a direction has been given by the Apex Court to have the judicial independence, it is required to be followed by the High Courts as well as the Executive. - HC


Articles


Case Laws:

  • GST

  • 2022 (4) TMI 701
  • 2022 (4) TMI 700
  • 2022 (4) TMI 699
  • 2022 (4) TMI 698
  • 2022 (4) TMI 697
  • 2022 (4) TMI 696
  • 2022 (4) TMI 695
  • Income Tax

  • 2022 (4) TMI 694
  • 2022 (4) TMI 693
  • 2022 (4) TMI 692
  • 2022 (4) TMI 691
  • 2022 (4) TMI 690
  • 2022 (4) TMI 689
  • 2022 (4) TMI 688
  • 2022 (4) TMI 687
  • 2022 (4) TMI 686
  • 2022 (4) TMI 685
  • 2022 (4) TMI 684
  • 2022 (4) TMI 683
  • 2022 (4) TMI 682
  • 2022 (4) TMI 681
  • 2022 (4) TMI 680
  • 2022 (4) TMI 679
  • 2022 (4) TMI 678
  • 2022 (4) TMI 677
  • 2022 (4) TMI 676
  • 2022 (4) TMI 675
  • 2022 (4) TMI 674
  • 2022 (4) TMI 673
  • 2022 (4) TMI 672
  • 2022 (4) TMI 671
  • 2022 (4) TMI 670
  • 2022 (4) TMI 669
  • 2022 (4) TMI 668
  • 2022 (4) TMI 667
  • 2022 (4) TMI 666
  • 2022 (4) TMI 665
  • 2022 (4) TMI 664
  • 2022 (4) TMI 663
  • 2022 (4) TMI 662
  • 2022 (4) TMI 642
  • 2022 (4) TMI 641
  • Benami Property

  • 2022 (4) TMI 661
  • Customs

  • 2022 (4) TMI 660
  • Corporate Laws

  • 2022 (4) TMI 659
  • 2022 (4) TMI 658
  • 2022 (4) TMI 657
  • Insolvency & Bankruptcy

  • 2022 (4) TMI 656
  • 2022 (4) TMI 655
  • 2022 (4) TMI 654
  • 2022 (4) TMI 653
  • 2022 (4) TMI 652
  • 2022 (4) TMI 651
  • PMLA

  • 2022 (4) TMI 650
  • Service Tax

  • 2022 (4) TMI 649
  • CST, VAT & Sales Tax

  • 2022 (4) TMI 648
  • 2022 (4) TMI 647
  • 2022 (4) TMI 646
  • 2022 (4) TMI 645
  • 2022 (4) TMI 644
  • Indian Laws

  • 2022 (4) TMI 643
 

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