Tax
S.11A Central Excise Act | Revenue Can't Recover Refunded Cess Merely Because SC Judgment Permitting Refund Was Later Overruled: Sikkim HC
The Sikkim High Court recently criticized the Siliguri GST and Excise Commissionerate for seeking to recover the cess refunded to the claimants in terms of Supreme Court's judgment in M/s SRD Nutrients (P) Limited vs. CCE, (2018), on the basis of a subsequent judgment overruling it. The Apex Court in M/s SRD Nutrients (supra) had held that when payment of Excise Duty is exempt under the Central Excise Act, 1944, then the 2% Education Cess and Secondary and Higher Education Cess payable...
Taxpayer Can't Claim Credit Against Tax Payable In India If He Has Not Paid Any Tax In Country Where He Sourced Income: Mumbai ITAT
While observing that the assessee is a resident of India in terms of Article 4(2)(a) of the Indo-US DTAA, the Mumbai ITAT held that all his income derived in the USA, is chargeable to tax in India by virtue of the provisions of section 5 of the Income tax Act.Since the income tax return filed by the assessee in the USA, does not show that he is paid any tax in the USA, therefore, the ITAT clarified that in the absence of any payment of tax in the country of source, no credit is available against...
Capital Gains Arising Out Of Sale Of Long-Term Capital Assets Shall Be Taxable At Rate Of 20% U/S 112 Of IT Act: Mumbai ITAT Special Bench
While observing that the deeming fiction of section 50 cannot be imported u/s 112, the Mumbai ITAT in a split verdict ruled that capital gains u/s 50 of Income tax Act, arising out of sale of long-term capital assets, shall be taxable at rate of 20% u/s 112 of the Act. Section 50 of Income tax Act is a special provision for computation of capital gains in case of depreciable assets, whereas Section 112 deals with income arising from transfer of long-term capital asset. Relying upon...
Absence Of Controlling Interest Renders Sale Of Shares By Spanish Entity Not Taxable In India As Per Indo-Spain DTAA: Mumbai ITAT
The Mumbai ITAT held that capital gain arising out of transfer of shares of an Indian entity cannot be taxed at hands of foreign entity in India, if foreign entity has less than 10% shareholding in such Indian entity. The ITAT held so while referring to UN Model Convention commentary, which states that the provisions of Article 14(4) come into effect to prevent the case of indirect transfer of ownership of immovable property by transfer of shares owning these properties. The ...
Additions Made Under Income Tax Act Have No Bearing Under Black Money Act: Mumbai ITAT
The Mumbai ITAT held that any addition made as undisclosed foreign income and asset under the Black Money Act (BMA), shall not be repeated under the Income Tax Act. However, since there is no corresponding provision under the Income tax Act, the ITAT clarified that additions made under the Income tax Act have no bearing under the BMA. Single Third Member Bench comprising Narendra Kumar Billaiya (Accountant Member) observed that the entire BMA revolves around taxing only...
Assessee's Failure To Respond To Draft Assessment Order In Timely Manner No Grounds For AO To Exceed Limitation U/S 144C(4) Of IT Act: Delhi HC
The Delhi High Court has made it clear that an assessee's failure to timely respond to the 'draft assessment order' issued under Section 144C of the Income Tax Act, 1961 does not give leeway to the Assessing Officer (AO) to exceed the limitation period for passing the final assessment order. Section 144C prescribes special procedure whereby an 'eligible assessee' is issued a draft assessment order. The assessee is required to respond to the draft order within thirty days, by either...
Goods Shall Be Released Provisionally If Assessee Demonstrates Inclusion Of Transaction In GSTR-1 Return: Madras High Court
The Madras High Court stated that if the assessee is able to demonstrate that the transaction is included in the GSTR-1 Return, the goods shall be released provisionally. The Bench of Justice Mohammed Shaffiq directed the assessee to submit a copy of the GSTR-1 report, as it would reveal whether the subject transaction was disclosed as a zero-rated sale. Section 54 of the Central Goods and Services Tax Act, 2017 applies to persons who have paid a tax or any other amount, such as...
GST Exemption On 'Reinsurance Services' In Relation To Govt Insurance Schemes Applies With Retrospective Effect From July 01, 2017: Delhi HC
The Delhi High Court has held that GST exemption on foreign reinsurance services in relation to government insurance schemes applies with retrospective effect, from July 1, 2017 onwards. This was in light of the fact that though the exemption was notified only on July 27, 2018, the government regularized GST liability on such services for the period from July 01, 2017 till July 26, 2018. Entry 40 in Notification No.12/2017 exempts GST liability on reinsurance services provided to...
Assessment Was Based Solely On Existence Of Cash Deposits Linked To Incorrect PAN: Ahmedabad ITAT Deletes Addition U/S 69A Of IT Act
The Ahmedabad ITAT held that since the assessee/ appellant was consistently filing her returns under the original PAN and had also paid penalties for holding two PANs without contesting, the appellants effort reflects compliance of the provisions of Income tax Act rather than an intent to conceal any income. The Bench of T.R. Senthil Kumar (Judicial Member) and Makarand V. Mahadeokar (Accountant Member) observed that “the AO could not verify the books of account, tax audit report, or...
Stock-In-Trade Sold During Relevant Year Should Only Be Considered For Purpose Of Computing Capital Gains: Hyderabad ITAT
The Hyderabad ITAT held that the capital gain arising on account of conversion of capital asset into stock-in-trade should be proportionately computed by considering the stock-in-trade sold by the assessee and not the entire extent of land converted by the assessee. The Tribunal held so, after finding that the assessee has sold part of the stock-in-trade for the current financial year and remaining stock-in-trade is still held as closing stock. Referring to Section 45(2) of Income...
Who Qualifies As 'Proper Officer' To Issue Show Cause Notices U/S 74 Of CGST Act? Jharkhand High Court Clarifies
The Jharkhand High Court has provided a significant clarification regarding who qualifies as the “proper officer” empowered to issue a show cause notice under Section 74 of the Central Goods and Services Tax (CGST) Act, 2017. The Division Bench of Justices Sujit Narayan Prasad and Arun Kumar Rai observed that “If the definition of the Poper Officer will be taken into consideration along with the provision of Section 168 of the Act, 2017, the Commissioner if authorized to act by the...
S.107 CGST Act | Appellate Authority Cannot Suo Moto Enhance Tax Liability: Calcutta HC
The Calcutta High Court recently set aside an order of the GST Appellate Authority, suo motu enhancing tax liability on an assessee, without following the procedure under Section 107(11) of the CGST/ WBGST Act.Section 107 of the Act prescribes procedure for filing and adjudication of appeals by the Appellate Authority. Sub-section 11 thereof stipulates that the Appellate Authority can confirm, modify or annul the order appealed against, provided that an order enhancing any fee/ penalty/ fine...