Monthly Digest Of Tax Cases: May 2022

Indirect Taxes Supreme Court GST Council Recommendations Not Binding On Centre & States; Both Parliament & State Legislatures Can Legislate On GST : Supreme Court Case Title : Union of India and Anr versus M/s Mohit Minerals Through Director Citation : 2022 LiveLaw (SC) 500 In a significant verdict, the Supreme Court held that the recommendations of the GST council are not binding on the Union and the State Governments. A bench led by Justice DY Chandrachud held...

Assessee Entitled To Additional Depreciation On The Power Plant And Installed Windmill: Delhi ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) consisting of Yogesh Kumar U.S. (Judicial Member) and B.R.R. Kumar (Accountant Member) has ruled that assessees are entitled to additional depreciation on the power plant and the installed windmill. The assessee/appellant is engaged in the fields of manufacturing and selling of sponge iron, billets, wire rod, TMT, and generation of power, etc. The assessee filed its e-return declaring total income and the return was revised by...

Onus To Prove Identity, Creditworthiness And Genuineness Of Transaction Lies On Assessee: Pune ITAT

The Pune Bench of the Income Tax Appellate Tribunal (ITAT), consisting of Partha Artha Sarathi Chaudhury (Judicial Member) and Inturi Rama Rao (Accountant Member), has ruled that the onus to prove identity, creditworthiness, and genuineness of a transaction lies with the assessee. The assessing officer found that during the year under consideration, the share capital of the company was increased, showing an increase of Rs. 9,30,00,000/-. On being asked to explain, it was contended that...

Tax Cases Weekly Round-Up: 22 May To 28 May 2022

Supreme Court Case Name: Union of India And Anr. v. M/s. Mohit Minerals Through Director Citation: 2022 LiveLaw (SC) 500 Separate IGST On Indian Importers For Ocean Freight Against Concept Of "Composite Supply", Violates Section 8 CGST Act : Supreme Court The Supreme Court has held when the Indian importer is liable to pay Integrated Goods and Services Tax (GST) on the 'composite supply', which includes supply of goods and supply of services of transportation, insurance, etc. in...

Loss Arising Out Of Sale Of Government Securities Is A Trading Loss: ITAT

The Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT) held that the loss arising out of the sale of government securities is a trading loss. The two-member bench of Duvvuru Rl Reddy (Judicial Member) and S. Balakrishnan (Accountant Member) observed that the treatment of securities of the AFS (available for sale) categories has to be seen in contradiction and contrast with securities of the HTM (held to maturity) categories, which are purchased and held for the purpose of ...

Income Tax Penalty Can't Be Imposed For Committing Unintentional Error In Form-16: ITAT

The Pune bench of the Income Tax Appellate Tribunal (ITAT) consisting of S.S. Viswanethra Ravi (Judicial Member) and Inturi Rama Rao (Accountant Member) has ruled that the income tax penalty cannot be imposed for committing an unintentional error on Form-16. The appellant/assessee is an individual who filed a return declaring a total income of Rs. 5,39,360. A notice under section 143(2) of the Income Tax Act was issued seeking an explanation regarding the return of income. According to...

Failure Of Assessee To Reply To Income Tax Notice Due To COVID: ITAT Directs Fresh Adjudication

The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee could not respond to the notices in view of the pandemic situation, which has to be accepted as a reasonable cause.The two-member bench headed by N.V. Vasudevan (Vice President) and Chandra Poojari (Accountant Member) set aside the orders of the CIT (A) and remanded the issue to the CIT (A) for a decision afresh after affording the assessee an opportunity to be heard. The ITAT directed the assessee to...

Delay In Filing Appeal Based On COVID-19 Reasons: ITAT Imposes Penalty Of Rs.25,000

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) headed by Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) has imposed a penalty of Rs. 25,000 on the assessee for the delay of 1217 days in filing the appeal due to COVID-19. The appellant/assessee has challenged the order of CIT (A) in the matter of assessment framed by AO under section 143(3) of the Income Tax Act. The sole issue in the appeal was disallowance under section 14A. In an assessment...

Weekly Round-Up of Tax Cases: May 15 To May 21

Supreme Court GST Council Recommendations Not Binding On Centre & States; Both Parliament & State Legislatures Can Legislate On GST : Supreme Court Case Title : Union of India and Anr versus M/s Mohit Minerals Through Director Citation : 2022 LiveLaw (SC) 500 In a significant verdict, the Supreme Court held that the recommendations of the GST council are not binding on the Union and the State Governments. A bench led by Justice DY Chandrachud held that the Parliament...

Husband Entitled Capital Gain Exemption For Asset Bought In The Name Of The Wife: ITAT

The Jaipur Bench of the Income Tax Appellate Tribunal (ITAT) consisting of Dr. S. Seethalashmi (Judicial Member) and Rathod Kamlesh Jayantbhai (Accountant Member) held that the husband was entitled to a capital gain exemption for assets bought in the name of the wife. The assessee, Kaushlendra Singh, sold immovable property for a consideration of Rs.14,75,000. The value of which was evaluated at Rs. 14,79,960 by the Stamp Duty Authority. Out of sale consideration, the assessee made an...

No Further Verification Required If Cash Deposit Is Up To Rs 2.5 Lakhs During The Demonetization: ITAT Delhi

The Delhi Bench of ITAT, consisting of judicial member Chandra Mohan Garg, has held that no further verification is required in the case of an individual earning income from salary, who has deposited an amount of up to Rs 2,50,000 during the demonetization period. The assessee Aniket Agarwal filed his income tax return, which was selected for limited scrutiny to verify the cash deposited by the assessee during the demonetization period. The assessee explained the source of cash deposits...

Consideration Paid For Purchase Of Advertisement Space Does Not Amount To 'Royalty' Under Income Tax Act: ITAT Chennai

The Chennai Bench of ITAT has ruled that consideration paid for purchase of advertisement space does not amount to 'royalty' under the Income Tax Act, 1961. The Bench, consisting of members Mahavir Singh (Vice President) and Dr. M. L. Meena (Accountant Member), held that the Finance Act, 2016 recognizes providing advertising space as a 'specified service', which is subject to Equalisation Levy. The ITAT added that the contention that sale of advertising space was 'royalty' under the...