Tax Cases Weekly Round-Up: 4 June To 10 June, 2023

Delhi High CourtDelhi High Court Directs Dept. To Reconsider Travelport UK’s Refund AdjustmentCase Title: Travelport International Operations Limited United Kingdom Versus Commissioner Of Income Tax International Taxation 3 N.Delhi & Ors.Citation: 2023 LiveLaw (Del) 506The Delhi High Court has directed the department to reconsider Travelport UK’s refund adjustment on the basis of the contents of the writ petition.Bombay High CourtBombay High Court Upholds The Validity of Provisions Dealing...

200% Penalty Can’t Be Levied Unless Dept. Specifies Misreporting: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that a 200% penalty can’t be levied unless the department specifies misreporting.The bench of Aby T. Varkey (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that AO failed to bring the addition or disallowance he made in quantum assessment under the ken of (a) to (f) of Section 270A (9) of the Act, and the penalty levied for misreporting at the rate of 200% cannot be sustained because it is trite law that...

Benefits Of India- Mauritius DTAA Available To Collective Investment Vehicles: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the benefits of the Double Taxation Avoidance Agreement (DTAA) are available to collective investment vehicles.The bench of Saktijit Dey (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member) has observed that the TRC is statutorily the only evidence required to be eligible for the benefit under the DTAA, and the respondent’s attempt to question and to hide behind the Tax Residency Certificate (TRC) is wholly...

SGST Dept. Can Initiate Proceedings Against The Unit Situated In SEZ: Gujarat High Court Imposes Rs.10K Cost

The Gujarat High Court has held that the state GST department can initiate proceedings against the unit situated in the Special Economic Zone (SEZ).The bench of Justice Ashutosh Shastri and Justice J. C. Doshi has observed that respondent departments are empowered to carry out proceedings in SEZ. Their jurisdiction is unquestionable, as the Central Government has already authorized those officers by virtue of a notification dated August 5, 2016. Section 6(2) of the GGST Act indicates that where...

Delhi High Court Directs Dept. To Reconsider Travelport UK’s Refund Adjustment

The Delhi High Court has directed the department to reconsider Travelport UK’s refund adjustment on the basis of the contents of the writ petition.The bench of Justice Vibhu Bakhru and Justice Amit Mahajan has set aside the department’s action in adjusting a sum of Rs. 6,27,20,736 under Section 245 of the Income Tax Act and remanded the matter to the concerned authority to decide afresh, within a period of four weeks.The petitioner/assessee has challenged the order by which a sum of Rs....

Dept. To Reconsider The Application Under Karasamadhana Scheme: Karnataka High Court Quashes Recovery From The Banker

The Karnataka High Court has quashed the recovery from the banker and directed the department to reconsider the application under the Karasamadhana Scheme.The bench of Justice S. Sunil Dutt Yadav has observed that in the event that the application is rejected, it is needless to state that the petitioner cannot be placed in a position worse off, and the petitioner is entitled to the restoration of his appeal, which would be a logical course of action.The petitioner has challenged the endorsement...

Certificates Issued By Qualified Professionals Like CAs Can’t Be Brushed Aside Merely For Lack Of Corroborative Evidence: CESTAT

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has observed that certificates issued by qualified professionals like cost accountants, chartered accountants, and chartered engineers should not be brushed aside merely with the statement that corroborative evidence was not produced.The bench of Ramesh Nair (Judicial Member) and C. L. Mahar (Technical Member) has observed that certificates issued by qualified professionals need to be accepted by the...

Bombay High Court Upholds The Validity of Provisions Dealing With Place Of Supply Under IGST

The Bombay High Court has upheld the validity of Section 13(8)(b) and Section 8(2), which deal with place of supply under the Integrated Goods and Service Tax Act, 2017 (IGST Act).The Bench of Justice Sunil B. Shukre and Justice Abhay Ahuja has observed that the provisions of Section 13(8)(b) and Section 8(2) of the IGST Act are legal, valid, and constitutional, provided that the provisions of Section 13(8)(b) and Section 8(2) are confined in their operation to the provisions of the IGST...

Manufacturing Without Proper Manufacturing Facilities: CESTAT Upholds Excise Duty Demand, Penalty

The Ahmedabad Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that manufacture and clearances made by the four units availing the benefit of Notification No. 8/2003-CE have to be clubbed together as these units are one and the same. Their operations are under common management/family members and financial control, and they have mutual financial interests with each other.The bench of Ramesh Nair (Judicial Member) has observed that the appellant/assessee failed...

Provisions Of Section 44BB Not Applicable In Absence Of PE: ITAT

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has held that the provisions of Section 44BB of the Income Tax Act are not applicable in the absence of a permanent establishment (PE).The bench of Kul Bharat (Judicial Member) and Shamim Yahya (Accountant Member) has observed that the burden of proving the existence of PE lies on the department, which has not been discharged. There is no finding of PE; hence, Section 44BB will not apply.The appellant/assessee is a company incorporated...

GST ITC Available On Work Contract Services For The Construction Of Hotel Building: Tripura High Court

The Tripura High Court has held that in providing taxable work contract services for the said construction of a hotel building, the assessee is entitled to take an input tax credit on the goods and services being utilized for providing the taxable work contract services.The bench of Acting Chief Justice Aparesh Kumar Singh and Justice Arindam Lodh has observed that the assessee has fulfilled all the conditions of work contracts as he is providing work contract services under a contract for the...

Deemed Dividend Cannot Be Taxed In The Hands Of Non-Shareholders: ITAT

The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) has held that deemed dividends cannot be taxed in the hands of non-shareholders.The bench of Annapurna Gupta (Accountant Member) has observed that the deeming fiction envisaged in Section 2(22)(e) of the Income Tax Act is only with respect to dividends, and its scope, therefore, cannot be enlarged to extend to shareholders also. The deemed dividend could not be taxed in the hands of non-shareholders.The additions in respect of...