No Tax Implications On Business Profits Earned On Reinsurance Business In Absence Of Fixed Place PE in India: ITAT

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that there are no tax implications on business profits earned on account of the reinsurance business in the absence of a fixed place permanent establishment (PE) in India.The two-member bench headed by Pramod Kumar (Vice President) and Anikesh Banerjee (Judicial Member) has observed that the existence of the dependent agent permanent establishment (DAPE) is wholly tax-neutral in India. The business profits earned by the...

CBIC Exempts Export Duty On Several Varieties of Rice From November 1, 2022

The Central Board of Indirect Taxes and Customs (CBIC) has exempted several varieties of rice from export duty with effect from November 1, 2022.The varieties of rice that are exempt from export duty include husked (paddy or rough) rice, husked (brown) rice, and semi-milled or wholly-milled rice subjected to certain conditions.Firstly, goods meant for export to Nepal when exported through the customs station located at Raxaul or Jogbani or Sonauli, up to an aggregate quantity not exceeding six...

Capitation Fee collected indirectly by educational institutions, no tax exemption: Madras High Court

The Madras High Court has lifted the corporate veil of the educational institution for collecting involuntary capitation fees.The division bench of Justice R. Mahadevan and Justice Mohammed Shaffiq, while cancelling the registration under Section 12A of the Income Tax Act, noted that the amounts collected by the assessees were capitation fees for allotment of seats in deviation of the Tamil Nadu Educational Institutions (Prohibition of Collection of Capitation Fee) Act, 1992. The capitation fee...

Existence Of Dependent Agent Permanent Establishment (DAPE) Is Of No Tax Consequence, If Agent Is Paid Arm's Length Remuneration: ITAT

The Mumbai bench of the Income Tax Appellate Tribunal (ITAT)has ruled that the business profits embedded in the reinsurance premium received by a non-resident reinsurance company, is not taxable in India if the company has no permanent establishment (PE) in India which is at its disposal.The bench of Pramod Kumar (Vice President) and Anikesh Banerjee (Judicial Member) held that unless it is shown that an agent has not been paid an arm's length remuneration by the assessee, the...

Demand Of Tax and penalty can't be imposed on the basis of conjecture : Allahabad High Court

The Allahabad High Court has held that the demand for tax and penalty cannot be imposed on the basis of conjecture and surmise, especially in cases where the goods were accompanied by a tax invoice and E-way bill.The single bench of Justice Pankaj Bhatia has observed, "As the respondent has not approached for availing of the benefits that flow from Section 129, coupled with the fact that the appellate authority found that the basis for initiating proceedings was non-existent, I do not see any...

Setting up of Electric Loco Shed For Railway Constitutes Composite Supply Of Works Contract Service: AAAR

The Uttar Pradesh Appellate Authority of Advance Ruling (AAAR) has held that the setting up of an Electric Loco Shed for the Railway constitutes a composite supply of work contract service.The two-member bench of S. Kannan and Ministhy S. has observed that the project of setting up an electric loco shed at Saiyedpur Bhitri, Uttar Pradesh, fulfils the conditions of it being an immovable property.The appellant has entered into a joint venture with M/s Indwell Constructions Private Limited and...

Tax Cases Monthly Round-Up: October, 2022

Indirect Taxes Supreme court Supreme Court Directs Andhra Pradesh To Transfer To Jharkhand CST Collected From Tata Motors In Respect To Sale To APSRTC Case Title: Tata Motors Limited Versus Central Sales Tax Appellate Authority & Others Citation: 2022 LiveLaw (SC) 847 The Supreme Court has directed the state of Andhra Pradesh to transfer to Jharkhand the amount of central sales tax deposited by Tata Motors with respect to the sale of buses to the Andhra Pradesh State...

CBDT Issues Draft common Income-tax Return-request for inputs from stakeholders and the general public

The Central Board of Direct Taxes (CBDT) has issued the draft common income-tax return request for inputs from stakeholders and the general public.Depending on the type of person and the nature of their income, taxpayers are currently required to file income tax returns on ITR-1 through ITR-7. The current ITRs are in the form of designated forms, and the taxpayer is required to go through all of the schedules, regardless of whether or not that particular schedule is applicable. This lengthens...

CBDT Notifies Krea University To Be Eligible For Income Tax Deduction

The Central Board of Direct Taxes (CBDT) has approved Krea University, Sricity, Chittoor under the category of "University, College or other institution' for research in "Social science or Statistical research" and allowed income tax deduction."In exercise of the powers conferred by clause (iii) of sub-section (1) of section 35 of the Income-tax Act, 1961 (43 of 1961) read with Rules 5C and 5E of the Income-tax Rules, 1962, the Central Government hereby approves 'Krea University, Sricity,...

Admission of Appeals As A Condition Precedent To Be Eligible For Settlement Under Vivad Se Vishwas Scheme Is Contrary To Law: Delhi High Court

The Delhi High Court has ruled that the Central Board of Direct Taxes (CBDT) FAQ No. 59 of Circular No.21/2020 dated December 4, 2020, which contemplates admission of appeal before the filing of declaration as a condition precedent for the appeal to be treated as pending and eligible for settlement under the Vivad Se Vishwas Scheme (VSV Act) is contrary to law.The division bench of Justice Manmohan and Justice Manmeet Pritam Singh Arora has observed that Section 10 of the VSV Act gives power to...

ITAT Suggests Government To Work-Out Mechanism To Ensure Tax Recovery From ARCs/Banks On sale Of Security Assets

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has suggested the government work out a mechanism to ensure tax recovery from Asset Reconstruction Companies (ARCs)/banks on the sale of security assets."It is time that the Government seriously considers protecting its legitimate interests by ensuring some mechanism to ensure that the tax liability on the capital gains is duly recovered from the borrower whose property is sold, and when it is not possible to do so on account of the...

CBIC Issues Instructions on Pre-deposit payment method In Central Excise and Service Tax Cases

The Central Board of Indirect Taxes and Customs (CBIC) has issued instructions on pre-deposit payment methods in central excise and service tax cases.Some Commissioners (Appeals) rejected appeals for non-compliance with pre-deposit requirements mandated under Section 35F of the Central Excise Act, 1944 (CEA) and Section 83 of the Finance Act, 1994, read with Section 35F of the CEA. Payments were made through Form GST DRC-03 on the common GST portal. The appeals were rejected on the grounds that...