ACIT Vs Anumod Sharma

Whether the provisions of section 2(22)(e) relating to deemed dividend is attracted to transactions where advance received is in the normal course of business & not in the nature of loan - NO: ITAT

- Revenue's appeal dismissed: DELHI ITAT

2020-TIOL-100-ITAT-DEL

Goel Wax Pvt Ltd Vs ITO

Whether the issue of reopening notice just on the basis of information received from investigation wing without making any independent inquiry by the AO, amounts to mechanical application of mind & hence, is unsustainable - YES: ITAT

- Assessee's appeal partly allowed: DELHI ITAT

2020-TIOL-99-ITAT-HYD

Sri Rajendra Prasad Agarwal Vs ACIT

Whether even if the return is selected for scrutiny under CASS without identifying a particular issue, the AO has jurisdiction to pass order u/s 143(3) - YES: ITAT

Whether STCG accrued from the systematic activity of buying & selling of shares with the intention to make profit is taxable as business income - YES: ITAT

- Assessee's appeal dismissed: HYDERABAD ITAT

2020-TIOL-98-ITAT-JAIPUR

Raj Kumar Yadav Vs ITO

Whether if the character of agricultural land is transformed into an environment-friendly residence at the time of registration of sale deed, it becomes a capital asset & income accrued will not be exempted u/s 2(14) - YES: ITAT

- Assessee's appeal dismissed: JAIPUR ITAT

2020-TIOL-97-ITAT-SURAT

SR Corporation Vs Pr.CIT

Whether merely on the basis of inadequate inquiry made by the AO during the assessment proceedings, the CIT is not correct to exercise the revisionary jurisdiction without undertaking some minimal inquiry to record the satisfaction u/s 263 - YES: ITAT

- Assessee's appeal allowed: SURAT ITAT

Enprocon Enterprise Ltd Vs Assistant Commissioner of State Tax

GST - Question is whether the order of provisional attachment passed by the Assistant Commissioner in exercise of powers under Section 83 of the GGST Act, 2017, is sustainable in law - Order dated 20th September, 2019 of the Co-ordinate Bench in the matter also refers.

Held: Issue is no longer res integra inasmuch as in the case of Valerius Industries - 2019-TIOL-2094-HC-AHM-GST , a Co-ordinate Bench of this Court, had the occasion to consider two questions, (i) the power of Commissioner of State Tax to delegate his powers under Section 83 of the Act to the Assistant Commissioner, and (ii) assuming for the moment that it is permissible for the Commissioner to delegate his powers to the Assistant Commissioner, what is expected of the Assistant Commissioner while exercising his delegated powers under Section 83 of the Act, for the purpose of provisional attachment - Bench had inter alia held that the power conferred upon the Commissioner by the legislature could not have been delegated to the subordinate officers by virtue of the order dated 15th January 2018 passed in exercise of power u/ss (3) of s.5 r/w clause 19 of s.2 of the Act and the Rules framed thereunder; that in the absence of any cogent or credible material, if the subjective satisfaction is arrived at by the authority concerned for the purpose of passing an order of provisional attachment u/s 83 of the Act, then such action amounts to malice in law; that any use of discretionary power exercised for any unauthorised purpose amounts to malice in law; that subjective satisfaction which is required for the purpose of s.83 of the Act is not dependent upon s.67 of the Act or to put it in other words, just because, a search has been undertaken resulting in seizure of goods, by itself, may not be sufficient to arrive at the subjective satisfaction that it is necessary to pass an order of provisional attachment to protect government revenue; that the provisional attachment of stock of goods as well as bank accounts is quashed and set aside and blockage of input tax credit by way of computer entry is also held to be illegal - What is lacking in the present case is the credible material, in its true sense, for the purpose of arriving at the subjective satisfaction that the order of provisional attachment is necessary for the purpose of protecting the interest of the Revenue - in the case on hand, the order of provisional attachment as well as the order of prohibition are not sustainable on two counts, i.e. (i) the order has been passed by the Assistant Commissioner, and (ii) the order has been passed without any credible materials, available for the purpose of passing such order of provisional attachment - Writ Application succeeds and is hereby allowed - order of provisional attachment passed by the Assistant Commissioner, so far as the immovable property is concerned, is hereby quashed and set aside and so also the order of provisional attachment of the bank accounts is also quashed and set aside - order of prohibition dated 30th July, 2019, passed under Rule 139(4) of the Rules, 2017 , is also quashed and set aside [para 5, 9, 10]

GST - Attachment of immovable property/bank accounts - Bench clarifies that as the proceedings under Section 73 of the said Act are pending as on date, the writ applicant shall not destroy or secrete any books of account or any other documents relating to the same till the conclusion of the inquiry initiated under the provisions of the Act - In future, if the Authority is able to gather any credible material, on the basis of which it may arrive at the conclusion that it is necessary to order provisional attachment with a view to protect the interest of the Revenue, it shall be open for the Authority to do so, in accordance with law: High Court [para 11]

2020-TIOL-05-AAR-GST

Chowgule Industries Pvt Ltd

GST - Every model of demo cars is used by applicant for demonstration only for a limited period viz. every two years or 40,000 kms whichever is earlier and, thereafter, the said vehicle is sold after paying applicable taxes on sale value at that point of time - since the applicant would be making further supplies of the Demo vehicles and there is no time limit prescribed in the GST Act for making such supplies, Authority is of the opinion that applicant is eligible to avail ITC - Held that Applicant is entitled to avail ITC charged on inward supply of capital goods viz. Motor Vehicles which are used for demonstration purpose in the course of business of Supply of Motor Vehicle - such ITC availed can be utilised for payment of output tax payable under the GST Act - Availability of credit is dealt with u/s 18 of the Act and the manner of utilisation is provided u/s 49 of the Act: AAR

- Application disposed of: AAR

2020-TIOL-04-AAR-GST

Joyville Shapoorji Housing Pvt Ltd

GST - Dwelling units measuring less than 60 sq.mtrs. qualify as low cost houses and concessional rate of 12% is available w.e.f 25.01.2018 - Benefit of concessional rate would be available only in respect of Society formation charges; Club house development charges; Water, Electricity, Drainage, Sewerage charges; Legal service charges and Documentation charges which are collected from buyers of houses having area less than 60 sq. Mtrs. - project Joyville, Virar qualifies as an ‘ongoing project' under 3/2019-CTR - units which do not qualify the criteria of ‘low cost houses' will be taxed @18% GST: AAR

- Application disposed of: AAR

2020-TIOL-03-AAR-GST

Shapoorji Pallonji and Company Pvt Ltd

GST - Definition of “affordable housing” is confined to dwelling units with carpet area of not more than 60 square meters, hence concessional rate will be available only in respect of low cost houses along with amenities constructed - applicant will, therefore, have to discharge GST @12% (after deducting value of land) on works contract services provided for the construction of the units and common areas and amenities which qualify the criteria of low cost houses - benefit of reduced rate would be available only in the cases of supply effected after 25.01.2018 i.e. date on which 1/2018-CTR was issued - Building completion and finishing services will not be regarded as separate services - such services will be a part of composite supply of Works Contract services with the principal supply of building construction, being covered under entry (v)(da) of 11/2017-CTR - Since concessional rate would be available only for construction services pertaining to dwelling units less than 60 sq. mtrs, including common areas and amenities on pro-rata basis, construction services including common areas and amenities on pro-rata basis, performed by the applicant in respect of the dwelling units exceeding 60 sq.mtrs. would be liable to full rate of GST i.e. @ 18%: AAR

- Application disposed of: AAR

2020-TIOL-05-AAAR-GST

Specsmakers Opticians Pvt Ltd

GST - The appellant-company is engaged in carrying out business activities in respect of spectacle frames, sun glass lenses, contact lenses as well as reading lenses - The appellant procures these items locally as well as by way of import - The appellant has its main office in Tamil Nadu as well as various branches in other States - The goods procured or imported were transferred to various branches for subsequent supply to customers of those branches - The appellant had approached the AAR seeking to determine the value to be adopted in respect of transfer to branches located outside the State - The AAR held that the value in respect of supply of goods by the applicant to branches outside the State, shall be the open market value of such supplies that is available as per Rule 28(a) and Explanation (a) to Chapter IV of CGST/TNGST Rules 2017 r/w Section 15 of the CGST/TNGST Act - It was also held that where the goods were intended for further supply as such by the recipient, the appellant had the option to adopt an amount equivalent to 90% of the price charged for the supply of goods of like kind and quantity by the recipient to customer not being a related person as the value of such supplies to the distinct recipient as per proviso to Rule 28 and Explanation (a) & (b) to Chapter IV of CGST/TNGST Rules 2017 r/w Section 15 of the CGST/TNGST Act - Hence the present appeal.

Held: The appellant is eligible to adopt the value as per the second proviso to Rule 28 of the CGST/TNGST Rules, 2017 at the time of supply of goods from the State of Tamil Nadu, in as much as the recipient, a distinct person, is eligible for full Input Tax Credit as required under the said proviso: AAAR

- Appeal allowed: AAAR

2020-TIOL-04-AAAR-GST

Sanghvi Movers Ltd

GST - The appellant-company is engaged in the business of providing medium-sized heavy duty cranes on rental/lease/hire basis to its clients without transferring the right to use - So as to comply with the provisions of GST, the appellant's branch at Maharashtra entered to an MoU with all other branch offices, wherein the Maharashtra unit agreed to provide cranes and crane components to all branches of the appellant-company on hire charges - As part of the arrangement, whenever the appellant received a final work order from its customers for providing cranes on hire charges, a work order would be raised on the Maharashtra unit for providing the cranes required - The Maharashtra unit discharged IGST on the value of hire charges recovered from the appellant by treating the same as inter-State supply of service - Consequently, the appellant would avail credit of IGST charged/paid by the Maharashtra unit on the value of hire charges charged on the invoice - The appellant approached the AAR, seeking to determine the admissibility of ITC of IGST paid by the Maharashtra unit in the hands of the appellant - The AAR held that on the supplies received from the Maharashtra unit, the Tamil Nadu unit (the appellant) is ineligible for full ITC but only to the extent specified in the restrictions as per second proviso to Section 16(2) of CGST Act and Rule 37 of the CGST Rules r/w Section 20(iv) of the IGST Act, subject to fulfilment of all other conditions u/s 16 of the CGST Act r/w Section 20(iv) of the IGST Act - Hence the present appeal.

Held: The appellant is eligible to avail full Input Tax Credit of tax paid by the Head Office of the appellant-company on lease/hire of cranes for furtherance of business, subject to other conditions of eligibility to such credit as per Section 16 of the CGST/TNGST Act 2017: AAAR

- Appeal allowed: AAAR

2020-TIOL-120-CESTAT-CHD

Agarwal Traders Vs CCE & ST

ST - The assessee is engaged in providing ECIS service and WCS service to Dakshin Haryana Bijli Vitran Nigam and Uttar Haryana Bijli Vitran Nigam - During the relevant period, the assessee was not registered and was not paying service tax - Based on documents submitted by the assessee, it was found that it was providing ECIS and WCS - Two SCNs were issued raising duty demand on the activities - On adjudication, the adjudicating authority found that the services provided were in relation to distribution of electricity - Hence the assessee was found liable to pay tax as per Notfn No 45/2010-ST - However, it was also found that such notification was inapplicable post the commencement of the negative list regime - Hence the duty demand with interest and penalties were sustained for the rest of the period - Hence the present appeal.

Held - It is seen that the issue at hand stands settled in the assessee's own case - It was held therein that an exemption to the principal would be available to the agent as well - It was thus held that the as the assessee is providing services on behalf of the principal, which holds license for distributing electricity, the benefit of exemption notification no 32/2010-ST cannot be denied to the assessee -As the issue stands settled in the assessee's favor in its own case, the demands raised against it merit being quashed: CESTAT

- Assessee's appeal allowed: CHANDIGARH CESTAT

CENTRAL EXCISE

CUSTOMS

2020-TIOL-119-CESTAT-HYD

Coromandel International Ltd Vs CCT & C

Cus - The assessee-company manufactures fertilizers and imports inputs required for the same - The assessee imported Sulphuric Acid from Japan and paid customs duties as applicable on the goods - Thereafter the assesseerealised that the goods imported from Japan were covered by a preferential trade agreement which will make them eligible for exemption under Notfn No. 69/2011-Cus dated 29.07.2011 - Hence after clearing the goods the assessee filed a refund application for the differential duty - However, the same was rejected by the original authority on the ground that the bill of entry has not been challenged - Such findings were sustained by the Commr.(A) - Hence the present appeal.

Held - It is undisputed that the assessee was eligible for the exemption Notfn but they have not claimed the same in the bill of entry and paid excess duty - Thereafter, they filed the refund claim without challenging the bills of entry under which the duty was paid - It is settled by the Larger bench of the Apex Court in the case of ITC Ltd that no refund can be claimed once assessment is finalised without challenging the assessment even if such assessment was done under self assessment procedure - In light of such judgment, the appeal is not sustainable: CESTAT

- Assessee's appeal rejected: HYDERABAD CESTAT

TPO is not permitted to resort to ad-hoc unilateral pricing of management fees under CUP, without any benchmarking with comparable uncontrolled transactions: ITAT

I-T - Commission paid overseas for rendering services abroad, does not attract tax liability in India: ITAT

DTAA - Business income earned by non-resident entity from rendering of centralized hotel services, cannot be taxed as 'FTS' if it has no PE in India: ITAT

TIOL CORPLAWS

IBC - If Promoters of corporate debtor fails to avail benefit of being MSME within due time of EoI, Resolution Professional or NCLT cannot be expected to go for fact finding exercise to uncover correct classification of insolvent: NCLAT

IBC - Liquidation of corporate debtor is preferable if no resolution plan gets acceptance of committee of creditors within time allotted for insolvency process : NCLT