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Home e-Newsletters Index Year 2019 August Day 17 - Saturday

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TMI Tax Updates - e-Newsletter
August 17, 2019

Case Laws in this Newsletter:

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



Highlights / Catch Notes

    Income Tax

  • Deduction u/s 80IB (7)(a) - assessee failed to establish that the saloon business was the part and parcel of the core activity of the hotel business - There must be, for the application of the word "derived from", a direct nexus between profits and gains and the industrial undertakings - Additions confirmed.

  • Bogus LTCG/LTCL - the assessee has duly placed on record the relevant contract notes, share certificate(s), detailed corroborative documentary evidence indicating purchase / sale of shares through registered brokers by banking channel, demat statements etc. - Additions deleted.

  • Common order passed by AO for more than one assessment years - Assessee has raised common grounds of appeal feeling aggrieved by the order of AO, and on the issue of DTAA, the assessee had raised general ground and therefore, there is no prohibition for the AO to pass a common order for all the assessment years.

  • TDS u/s 195 - rate of withholding tax - CIT(A) granted relief - if this is the contention of the revenue that the vendors of Ireland, Netherland, Singapore, Israel, France, Germany, Australia and Belgium etc. are not residents of respective countries, the revenue should have brought on record some evidence in this regard.

  • Bogus LTCG - AO has unearthed the bogus transaction of purchase and sale of shares which was not real and assessee has failed to dispel all the quarries raised by the AO to establish that the transaction in question was real and not beyond human probabilities.

  • Whether the compensation received by the Adidas AG has accrued u/s 5 or deemed to accrue as per section 9(1)(i) of the Act? - M/s Adidas AG has paid premium in respect of the policy from time to time and also paid tax in Germany in relation to the amount in question of insurance claim. - Amount not taxable in India.

  • Generation/Allotment/Quoting of Document Identification Number in Notice/Order/Summons/letter/correspondence issued by the Income-tax Department

  • Addition u/s 68 - loans from relatives through banking channel - it is also not in dispute that cash deposits were made in the bank account of the creditor just before advancing the loan and no explanation was forthcoming before the authorities below - the onus of proving the source of a sum of money found to have been received by the assessee is on him and if he disputes the liability for tax - addition sustained

  • Capital asset” u/s 2(14) - agricultural land - scope of word “any municipality” - Section 2(14)(iii)(b) contemplates calculating distance of the land in question from the nearest municipality it does not mean the jurisdictional municipality, it only means that the municipality from which the distance is calculated should have a population of not less than 10 thousand - capital assets

  • Addition of unaccounted money u/s 69A - cash found during the course of search u/s 132 - the assessee all along claims that said cash belongs to his brother in law who also confirmed then no adverse inference could be drawn against the assessee that said cash belongs to the assessee and assessee is unable to explain source of cash found during the course of search - no addition

  • Condonation of delay of 655 days - negligence of an employee - mistake of employee working at residence appears to be reasonable and comes within the meaning of reasonable cause, as provided u/s 273B - a litigant does not stand to benefit by filing an appeal late, rather it creates undue hardship to the litigant, because of tax demand - delay condoned

  • Reopening of assessment u/s 147 - the notice u/s 148 on the basis of “on verification of records” - the AO has power to reopen the assessment, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment and the reasons must have a live link with the formation of belief - in absence of tangible material it is mere change of opinion - notice quashed

  • Deduction granted u/s 32AB - appellant was amalgamated with its parent company - the assets in respect of which relief was allowed u/s 32AB are still held by the amalgamating company even after amalgamation and gets fused by one company - deduction rightly allowed

  • TDS u/s 194J - roaming charges paid by it to other service providers - the payments made for interconnection are not fees for rendering any technical services as envisaged in section 194J, therefore, no tax is de ductible at source u/s 194J on payment of roaming charges to the OTOs and the assessee therefore cannot be treated as an assessee in default

  • Allowability of expenditure u/s 37 - expenditure on scholarship - there are innovative ways visualized by the professional to make themselves visible in the professional circle and to build their own professional profile for generating higher and value added business - cannot be held to be capital expenditure in nature as no fresh new fixed assets is created by paying the scholarship sum - allowable expenditure

  • Reopening of assessment u/s 147 - when the issues were subject matter of appeal before the CIT(A) in the case of original assessment, the AO cannot re-visit the same by re-opening the assessment u/s. 147 and also in view of second proviso to section 147 - assessment order is quashed

  • Allowability of accumulation u/s 11(2) of the income assessed u/s 11(3)(c) - the benefit of accumulation shall be available only to the “income derived from the property” and not to “deemed income”, since the income assessed u/s 11(3) cannot be considered to be an income derived from the property, same is not be eligible to accumulate

  • Characterization of income - received to restrain the assessee firstly, preventing them from entering into insurance business, secondly, preventing them from entering into an agreement with any other foreign insurance company - the condition is clear and lucid and it is to be treated as a 'restrictive covenant' - amount received was a capital receipt

  • Depreciation @10% on residential flats used for its employees - CBDT Circular dated 12.12.1996 - there was no such restriction in the Circular issued by the Board stating that the benefit would accrue to the assessee only if the residential accommodation is situated within the factory premises nor if the accommodation is provided to all the employees - depreciation allowable @10%

  • Customs

  • Valuation of imported goods - related party transaction or not - Department has not adduced any evidence of any contemporaneous imports - Loading of value by 1% in respect of imported capital goods i.e. slitting line, which is already included in the value declared is sufficient.

  • 100% EOU - import of Fully Refined Paraffin Wax - The appellant has been cheated / duped by the supplier and the appellant immediately inform the Department regarding the conditions of the impugned goods and followed the procedure as per the guidance given by the Department - Demand of duty with interest and penalty set aside.

  • Classification of imported goods - Granola Bars - mixture of whole grain rolled oats - The alteration of character is a consequence of the baking after mixing which is substantively different from adding to pre-cooked or prepared grain. - It would not be appropriate to fit the imported goods under the category of cereals or prepared food in the absence of coverage by the residuary entry.

  • Extended period of limitation - suppression of facts - The Revenue had all resources and opportunities in 2013 to either know from the importer all the technical information that they required. Since Revenue have not done so, in 2016 they cannot make allegation that importer did not provide them all the information.

  • Levy of penalty - misdeclaration of goods - Equipment Type Approval (ETA) certificates have been found to be fake - mens-rea is not required - appellant are liable to penalty u/s 112 (a) (ii) of the Customs Act, 1962

  • Benefit of exemption notification -EOU - export of cotton waste generated in manufacturing of cotton yarn - the cost of production of the finished goods invariably subsume the value of the materials that are embedded in the waste, hence such value have already been either included in the obligation for export or subject to rate of duty not less than that suffered by a domestic unit - no need for repay duties foregone at the time of import

  • Corporate Law

  • Fine for non preparation & filing of Cost Audit Report in time - prosecution u/s 233B(11) of the Companies Act - the Company and the Directors have not been treated equally - reduced penalty from 2 lakhs to 40 thousands on director

  • Indian Laws

  • Dishonor of Cheque - Prosecution proceedings against the trustee who has not signed the cheque - The "trust" is not a "body corporate" or an "association of individuals" as provided in the Explanation to section 141 of the N. I. Act. Therefore, no prosecution against the trustees, invoking the provisions u/s 138 / 141 of the NI Act, can be maintained.

  • IBC

  • Admissibility of CIRP petition - Applicant seems to have deliberately concealed the filing of previous petition before this Tribunal based on the same original transaction - The petition is rejected in limine with cost of ₹ 2,00,000

  • Maintainability CIRP application - the amount paid to the CD towards brokerage can be "financial debt"? - There is nothing on record to show that the financial creditor gave loan after complying the conditions stated in section 186(2),(3) of the Companies Act - the transaction as potrayed by the financial creditor against the CD cannot be recognized as the transaction of loan - hence There is no default in paying such debt - application dismissed

  • PMLA

  • Money Laundering - Release of attached property - exercise of the powers of confiscation or release of the attached property by this Appellate Tribunal is beyond the scope of activities of this Tribunal and would be grossly illegal. Moreover as per Section 8(8) even the powers of restoration of such confiscated property or thereof to a claimant with a legitimate interest in the property vests with the Special Cour

  • Central Excise

  • Jurisdiction of Joint Commissioner to issue SCN - duty/tax involved in the present case exceeds ₹ 2 crore - By merely relying upon the circular, it cannot be said that the Joint Commissioner had no jurisdiction to issue the show-cause notice and adjudicate the same.

  • Waiver of pre-deposit - There is no good reason to waive the mandatory requirement of pre-deposit, which, in any case, cannot be waived as it is an appeal against the order passed by the Tribunal and not a writ petition under Article 226 of the Constitution of India.

  • Suit filed by the appellant/plaintiff claiming ₹ 2 Lakhs as compensation for the loss of reputation and goodwill caused by the officers of Central Excise - When the respondents acted in good faith under the provisions of the Central Excise Act or rule made there under, no suit, prosecution or other legal proceedings shall lie against the Officers.

  • Demand of interest on reversal of credit - The aforesaid provisions brought into effect on 14th March, 2015 cannot be applied (retrospectively) for the credit amount already shown in the returns prior to March 2015 (i.e. August 2011 when the fire incident occurred) - when the wrong credit is not utilized for payment of final output duty on final products, neither the assessee gets any advantage nor there is any Revenue loss to the Government - Demand of interest set aside.

  • Classification of ‘labels’ used in packing of cigarettes - ‘articles of paper’ and ‘not printed cartons’- if the alternative proposed in the show-cause notice is not defensible, the claimed classification will prevail even if other headings be more apt - the failure of the product to be covered by the heading proposed in the SCN suffices for acceptance of the one claimed by assessee - articles of paper

  • VAT

  • Deemed assessment - it is a tough case inasmuch as the assessment order was passed ex parte and none of the appeal authorities have considered the merits of assessment order, yet, this Court in exercise of its revision jurisdiction is constrained to answer the question in the affirmative i.e. against the assessee and in favour of the revenue in view of the fact that the assessee never raised such challenge on merits, before the appellate authorities.

  • Attachment of self acquired property other than dealer - arrears of tax revenues under GVAT Act - the writ applicant is neither dealer nor the agent but he is father of the dealer - the property which has been attached is self acquired property of the writ applicant, the same could not have been attached


Articles


Notifications


Circulars / Instructions / Orders


News


Case Laws:

  • GST

  • 2019 (8) TMI 713
  • 2019 (8) TMI 712
  • Income Tax

  • 2019 (8) TMI 739
  • 2019 (8) TMI 738
  • 2019 (8) TMI 737
  • 2019 (8) TMI 736
  • 2019 (8) TMI 735
  • 2019 (8) TMI 734
  • 2019 (8) TMI 733
  • 2019 (8) TMI 732
  • 2019 (8) TMI 731
  • 2019 (8) TMI 730
  • 2019 (8) TMI 729
  • 2019 (8) TMI 728
  • 2019 (8) TMI 727
  • 2019 (8) TMI 726
  • 2019 (8) TMI 725
  • 2019 (8) TMI 724
  • 2019 (8) TMI 723
  • 2019 (8) TMI 722
  • 2019 (8) TMI 721
  • 2019 (8) TMI 711
  • 2019 (8) TMI 710
  • 2019 (8) TMI 709
  • 2019 (8) TMI 708
  • 2019 (8) TMI 707
  • 2019 (8) TMI 706
  • 2019 (8) TMI 705
  • 2019 (8) TMI 704
  • 2019 (8) TMI 703
  • 2019 (8) TMI 702
  • 2019 (8) TMI 701
  • 2019 (8) TMI 700
  • 2019 (8) TMI 699
  • 2019 (8) TMI 698
  • 2019 (8) TMI 697
  • 2019 (8) TMI 696
  • 2019 (8) TMI 663
  • Customs

  • 2019 (8) TMI 720
  • 2019 (8) TMI 719
  • 2019 (8) TMI 695
  • 2019 (8) TMI 694
  • 2019 (8) TMI 693
  • 2019 (8) TMI 692
  • 2019 (8) TMI 691
  • 2019 (8) TMI 690
  • 2019 (8) TMI 689
  • 2019 (8) TMI 688
  • 2019 (8) TMI 687
  • 2019 (8) TMI 664
  • Corporate Laws

  • 2019 (8) TMI 718
  • Insolvency & Bankruptcy

  • 2019 (8) TMI 717
  • 2019 (8) TMI 686
  • 2019 (8) TMI 685
  • 2019 (8) TMI 684
  • FEMA

  • 2019 (8) TMI 683
  • 2019 (8) TMI 682
  • 2019 (8) TMI 681
  • PMLA

  • 2019 (8) TMI 680
  • Service Tax

  • 2019 (8) TMI 679
  • Central Excise

  • 2019 (8) TMI 716
  • 2019 (8) TMI 714
  • 2019 (8) TMI 678
  • 2019 (8) TMI 677
  • 2019 (8) TMI 676
  • 2019 (8) TMI 675
  • 2019 (8) TMI 674
  • 2019 (8) TMI 673
  • 2019 (8) TMI 672
  • 2019 (8) TMI 671
  • CST, VAT & Sales Tax

  • 2019 (8) TMI 715
  • 2019 (8) TMI 670
  • 2019 (8) TMI 669
  • 2019 (8) TMI 668
  • 2019 (8) TMI 667
  • 2019 (8) TMI 666
  • Indian Laws

  • 2019 (8) TMI 665
 

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