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Home e-Newsletters Index Year 2019 July Day 17 - Wednesday

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TMI Tax Updates - e-Newsletter
July 17, 2019

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws



Highlights / Catch Notes

    GST

  • Job-work - supply of goods or supply of services - use of own material substantially - the value of the material used/ skill and labour applied by them and the value of input supplied by the customer is almost equal. In our opinion this is a clear case of supply of goods, i. e. ready to use sugar mill roller.

  • Composite supply or Mixed supply or works contract - contract for supply, Installation, testing & commissioning Air-Conditioners (involving indoor units, outdoor units, insulation, drain pipes, cabling, additional refrigerant and associated electrical works etc.) - cannot be considered as a ‘mixed supply’ - liable to GST @28%

  • Income Tax

  • Reopening of assessment u/s 147 - notice against dead person - The legal representative not having waived the requirement of notice u/s 148 and not having submitted to the jurisdiction of the AO pursuant to the impugned notice, the provisions of section 292B of the Act would not be attracted.

  • Allowability of replacement of dies and moulds as current repairs - when the dies and moulds were attached to the machine to manufacture the designed product, the claim would fall for consideration only u/s 31 as revenue expenses

  • Addition u/s 40(a)(ia) - society has failed to deduct TDS - section 40(a)(ia), 40A(3) and section 43B falls in Chapter IV-D which are applicable for computing profits and gains of business or profession - Chapter IV-D is not applicable in respect of charitable trust or institution whose income is to be computed under Chapter-III - no disallowance

  • Claim of exemption u/s 11 while filing return u/s 147 - no return originally filed - the income has to be computed on the basis of such return in accordance with the provision of the Act, which of course will be subject to any specific provision in the Act which itself bars a claim or an exemption - AO was not justified in denying the benefit of the exemption u/s 11

  • Ad-hoc disallowance of 25% of construction expenses - AO rejected the books of accounts u/s 145 - the income of the assessee should be based on average GP declared by the assessee in the preceding years or the prevailing GP in the same trade or business - disallowance of expenses is not a permissible course of action.

  • Allowability of interest on borrowed funds - loan taken for acquisition of share - assessee acquired shares of DPSC Ltd which is in the similar business to control stake is a commencement of business - allowable as deduction u/s 36(1)(iii) as it is a commercial expediency with a view to expand business and acquiring, controlling interest in subsidiary companies

  • income of the JV as AOP - formed to secure the work, and after that, there was no involvement in the execution of the work which was done by member - members of the JV have disclosed the entire income which was originally received by JV in their books of accounts and income tax returns who are chargeable to tax at the maximum marginal rate - no addition in the hands of the assessee(JV)

  • Capital gain computation - cost of acquisition - assessee was not confronted by the AO before estimating the cost of acquisition of land as on 01.04.1981 without any basis - keeping aside rather ignoring the report of the registered valuer without any discussion is unjustified

  • Assessment u/s 153A - Addition u/s 41(1) - No material was recovered during search which could have been treated as incriminating material and would be a base for supporting the action u/s 153(C) - the addition on account of Cessation of liability u/sn 41(1) is illegal, in valid and not sustainable in the eye of law and If such course is permitted it would amount to reopening assessment without any new material - not permissible

  • Reassessment u/s 147 - failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment - AO had examined the claim for deduction u/s 80IB(10) in detail, therefore, merely because he did not examine such claim from the angle of clauses (e) and (f) thereof, would not be a valid ground for reopening the assessment - it is mere change of opinion - notice unsustainable

  • Addition u/s 40A(3) - the finding of fact has been recorded by two revenue authorities that the payments made by the assessee on a single day did not exceed ₹ 20,000/- to a person - no disallowance u/s 40A(3) - no substantial question of law arises

  • Correct head of taxability of interest income - business income or income from other sources - the assessee firm had availed overdraft facility from the bank against the pledged of fixed deposit and overdraft amount was used for the purpose of business and interest was paid - since it is inextricably linked with the business activity, the impugned interest income has to be treated as business income

  • Penalty u/s 271(1)(c) - addition sustained by denying the exemption u/s 47(xiv) to the extent of self-generated Goodwill - all the details necessary for assessment were very much available in the return of income itself as well as the entire facts of proprietory concern getting converted into public limited company - no malafide on the part of the assessee in making the claim of exemption - no penalty

  • Addition of unexplained loan - taken from a credit institution - Assessee has named the credit institutions where from he received such loans to stand testimony to their irrefutable and impeccable character - AO could not bring on record any conclusive evidence - no addition permissible

  • Addition u/s 68 - share capital account received from Director by way of two cheques who was produced before AO alongwith their copy of account, balance-sheet income-tax return and even they are assessed in the same jurisdiction - order passed without dealing with all these details, before terming the amount to be non-genuine and making addition is not sustainable

  • Unexplained credit u/s. 68 - addition of share premium being in excess of NAV and balance excepted - section 56(2)(viia) and (viib) are not applicable to the instant assessment year i.e. 2011-12 and applicable only for the assessment year 2013-14 - no addition

  • Revision u/s 263 - Deduction U/s. 35D - effect of omission of word ‘industrial’ by the Finance Act, 2008 w.e.f 1/04/2009 - expenses incurred prior to 1/04/2009 - since assessee has fulfilled all the conditions stipulated under the Act for the residual period, there is no error in the order of the Ld. AO granting deduction - CIT is not right in his rem to invoke the revision provisions

  • Revision u/s 263 - the sole reason for completing the scrutiny assessment was suspicious LTCG earned by assessee based on information received from Investigation Wing, it could not be believed that A.O. would not have gone through the material available - non discussion the details in the assessment order would not give right to the Ld. Pr. CIT to hold that no investigation or enquiry was made - A.O. has taken one of permissible view - no revision

  • Customs

  • Procedure for safety and security of export cargo & Avoidance of pilferage from Export warehouse in CFS ports under Chennai-IV Commissionerate

  • 100% EOU - it is not necessary that the material which is imported into India has to be used in the manufacture of articles which are to be exported out of India. Even if the said material is used “for the purpose of manufacture of articles” or “for being used in connection with the production or packaging or job work”, the same shall still be covered by the aforesaid notification and thus would not attract any customs duty.

  • IBC

  • Approval of Resolution plan under I&B Code - Operational Creditor has been paid Nil as against 27.83% to the Financial Creditor - distribution as made between the FC and the OC is arbitrary and discriminatory and in contravention of Section 30(2)(b) of the ‘I&B Code’ - directed to modify the plan with same treatment to OC

  • Service Tax

  • Since the penalties imposed under Section 76 is upheld, penalties imposed under Section 78 cannot be justified, Hence the penalties imposed u/s 78 is set aside - In the present case demand of service tax confirmed invoking the extended period of limitation.

  • Waiver of penalties imposed - Short payment of service tax - There is no suppression of fact because the issue involved is of interpretation of law as the confusion was prevailing amongst the builders about the constitutional validity of the levy of service tax on Builders and Developers - Giving benefit of doubt, penalties were rightly set aside.

  • Central Excise

  • CENVAT Credit - ITC on Outward Transportation - letters/certificates have been obtained from the purchasers of the goods showing that the purchasers have not paid any freight charges separately which strongly implies that the appellants have borne the freight charges and have included it in the assessable value on which Excise Duty has been discharged by them - input allowable

  • Clandestine removal - allegation to avail the benefit of area based exemption(Rookee unit) wrongly - demand is being confirmed against Ghaziabad unit, without producing any evidence even no discrepancy was found in enquiry - It is well settled law that the findings of clandestine removal are required to be established on the basis of positive and sufficient evidences - demand canceled

  • CENVAT Credit - exempted goods as scrap produced in process of manufacture of dutiable good - demand @ 6% of the value of the zinc scarp - when the zinc scrap which is a waste arising out of process of manufacture of finished goods, is not goods manufactured by the appellant, the same cannot be considered as exempted goods manufactured by them - total credit allowable - demand canceled

  • VAT

  • Disallowance of ITC - perversity - alternative appeal remedy - even the exercise were for the limited purpose of finding out the ground of perversity, this Court may encroach into the function of an appellate authority where the facts threadbare are considered, thereafter principle of law decided - petitioner is given liberty to file appeal.

  • Refund claim - Review of finalized assessment order - cancellation of ‘C’ form - TIN No.of dealer issued form is not working because it has migrated in GST - once the C form was validly issued and verified by the AVATO while passing the original order then notwithstanding its subsequent cancellation, the assessment order finalised under the CST Act cannot be reviewed - directed to grant refund


Articles


Notifications


Circulars / Instructions / Orders


News


Case Laws:

  • GST

  • 2019 (7) TMI 759
  • 2019 (7) TMI 758
  • 2019 (7) TMI 757
  • Income Tax

  • 2019 (7) TMI 756
  • 2019 (7) TMI 755
  • 2019 (7) TMI 754
  • 2019 (7) TMI 753
  • 2019 (7) TMI 752
  • 2019 (7) TMI 751
  • 2019 (7) TMI 750
  • 2019 (7) TMI 749
  • 2019 (7) TMI 748
  • 2019 (7) TMI 747
  • 2019 (7) TMI 746
  • 2019 (7) TMI 745
  • 2019 (7) TMI 744
  • 2019 (7) TMI 743
  • 2019 (7) TMI 742
  • 2019 (7) TMI 741
  • 2019 (7) TMI 740
  • 2019 (7) TMI 739
  • 2019 (7) TMI 738
  • 2019 (7) TMI 737
  • 2019 (7) TMI 736
  • 2019 (7) TMI 735
  • 2019 (7) TMI 714
  • 2019 (7) TMI 713
  • 2019 (7) TMI 712
  • 2019 (7) TMI 711
  • 2019 (7) TMI 710
  • Customs

  • 2019 (7) TMI 728
  • 2019 (7) TMI 727
  • Corporate Laws

  • 2019 (7) TMI 726
  • Insolvency & Bankruptcy

  • 2019 (7) TMI 734
  • 2019 (7) TMI 725
  • Service Tax

  • 2019 (7) TMI 724
  • 2019 (7) TMI 723
  • 2019 (7) TMI 722
  • Central Excise

  • 2019 (7) TMI 733
  • 2019 (7) TMI 732
  • 2019 (7) TMI 731
  • 2019 (7) TMI 721
  • CST, VAT & Sales Tax

  • 2019 (7) TMI 730
  • 2019 (7) TMI 729
  • 2019 (7) TMI 720
  • 2019 (7) TMI 719
  • 2019 (7) TMI 718
  • 2019 (7) TMI 717
  • Indian Laws

  • 2019 (7) TMI 716
  • 2019 (7) TMI 715
 

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