Undisclosed Income Taxed In The Hands Of Flagship Company Can’t Be Again Subjected To Tax In The Hands Of Assessee Companies: Delhi High Court

The Delhi High Court has held that undisclosed income taxed in the hands of flagship companies cannot be again subjected to tax in the hands of assessee companies.The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that since the undisclosed income, which is the subject matter of the present dispute, had already been taxed in the hands of the flagship company Surya Food & Agro Ltd., it cannot be again subjected to tax in the hands of the respondents or assessee...

Delhi High Court Upholds Validity Of Rule 8 of Chewing Tobacco And Unmanufactured Tobacco Packing Machines Rules 2010

The Delhi High Court has upheld the validity of Rule 8 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules 2010 (CTUT), which deals with the alteration in the number of operating packing machines.The bench of Justice Yashwant Varma and Justice Dharmesh Sharma has observed that Rule 8 notes that in case a machine is added to the production capabilities existing in a factory, the number of operating packing machines for the month...

Income Tax Raid, ITAT Finds Money Laundering, Directs Assessing Officer To Inform SEBI, PMLA Authorities

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has directed the AO to share information on all persons allegedly involved in the racket of money laundering.The bench of Sandeep Singh Karhail (Judicial Member) and Prashant Maharishi (Accountant Member) has issued the directions to the AO to communicate vital details on 32,855 beneficiaries involved in accommodation entering schemes.The ITAT's decision represents a key step towards dismantling a massive money laundering scheme. This...

GST | Show Cause Notice Must Clearly Indicate Reasons For Which Registration Cancellation Is Proposed: Delhi High Court

Delhi High Court has recently set aside show cause notice proposing to cancel GST registration and the consequential order cancelling the same on the ground that reasons for cancelling registration of assesee were not clearly mentioned in the show cause notice. A bench comprising of Justices Vibhu Bakhru and Amit Mahajan held “At the least, the Show Cause Notice must clearly indicate the reasons for which an adverse order is proposed to be passed in order for the noticee to respond to the...

No Income Tax Payable On Bonus Shares Under The Head ‘Income From Other Sources’: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that income tax is not chargeable on bonus shares under the heading ‘income from other sources’.The bench of Anubhav Sharma (Judicial Member) and M. Balaganesh (Accountant Member) has observed that the bonus shares are issued only out of the capitalization of existing reserves in the company. The AO had not disputed the fact that the overall wealth of a shareholder, post-bonus or pre-bonus, remains the same. It is wrong on his...

Taxpayers, Having Aggregate Annual Turnover Above Rs. 5 Crore To Use At Least 6 Digit HSN W.e.f 1 October 2023

The Goods and Service Tax E-way Bill System has notified that new HSN Code requirements will be effective from October 1, 2023.As per Notification No. 78/2020 dated October 15, 2020, the taxpayers, having Aggregate Annual Turnover (AATO) above Rs. 5 Crore, shall use at least 6 digit HSN code in the e-Invoices and e-Waybills and other taxpayers shall use at least 4-digit HSN code in E-Invoices and E-Way Bills.Most of the taxpayers are already following this, Other taxpayers are requested to adapt...

Can’t Deviate From Text Of GST Provisions, Rules And Forms In GST: Allahabad High Court Quashes Penalty

The Allahabad High Court has held that the Goods and Service Tax Act, 2017 is a complete code in itself and there can be no deviation from the text of the Act, Rules and Forms. A bench comprising of Justice Piyush Agrawal held,“The GST Act is a complete Code in itself. Various provisions, Rules and Forms are prescribed as well as various steps are also to be followed in an appropriate circumstances to be taken by the assessees as well as by the State authority. There is no room for deviation...

Tax Authorities Should Not Act As Extortionist, Act Like Business Facilitator; Patna High Court Imposes Cost On Officer

The Patna High Court has imposed a cost of Rs. 5,000 on officers for surreptitiously making tax recoveries contrary to GST enactment.The bench of Chief Justice K. Vinod Chandran and Justice Partha Sarthy has laid down the guidelines and observed that the tax authority should also act as a facilitator of business and the economy and not merely as an extortionist, always looking to have the pound of flesh to satisfy his or her hierarchical superiors and push his or her personal agendas. The action...

Lawyer-Client Privileged Communication; GST Dept. Can’t Issue Notice To Lawyer : Calcutta High Court

The Calcutta High Court has held that the GST department cannot issue notice to the advocate appearing on behalf of the assessee.The bench of Chief Justice T. S. Sivagnanam and Justice Hiranmay Bhattacharyya has observed that Sections 126 and 129 of the Evidence Act protect communications between a lawyer and a client made during the lawyer's employment. It is a settled legal position that a communication is privileged if it is made to a legal advisor by a client after the commission of a crime...

Delhi High Court Limits Adjustment Of Tax Refunds Against Disputed Demands At 20%

The Delhi High Court has limited the adjustment of tax refunds against disputed demands to 20%.The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that the action of the AO in adjusting the refund due to the petitioner/assessee for AY 2022–23 against the disputed demands for AYs 2011–12, 2012–13, and 2014–15 was not only hasty but was also contrary to law.The principal grievance of the petitioner is that the respondents/department have adjusted the refund payable for...

Write-Off Of A Bad Debt Can’t Be Held To Be An Asset Under Section 153A(1) Of The Income Tax Act, 1961: Bombay High Court

The Bombay High Court has held that a write-off of a bad debt cannot be held to be an asset under section 153A(1) of the Income Tax Act, 1961.The bench of Justice K. R. Shriram and Justice Firdosh P. Pooniwalla has observed that since the write-off of bad debt cannot be held to be an asset, clause (a) of the 4th proviso to Section 153A(1) of the Act would bar any assessment that is proposed to be made for the Assessment Years 2011-2012, 2012-2013 and 2013-2014.The petitioner/assessee is a...

Manufacture Of Barges, Cenvat Credit Available On Steel Used: CESTAT

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that cenvat credit is allowable on steel materials used in the manufacture of barges.The bench of Ramesh Nair (Judicial Member) and C.L. Mahar (Technical Member) has observed that any material used for making some equipment or building, and in turn that equipment or barge is used for providing output service, the material that was used shall be treated as input in terms of Rule 2(k) of the Cenvat...