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2021-TIOL-NEWS-057| March 09 2021
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INCOME TAX

2021-TIOL-565-HC-MAD-IT

CIT Vs Zylog Systems Ltd

Whether expenditure incurred by assessee in foreign currency falls under 'export turnover' for purpose of computing deduction u/s 10B of Act – YES: HC

- Case remanded: MADRAS HIGH COURT

2021-TIOL-564-HC-MAD-IT

CIT Vs S Vimal Kumar

Whether the substantive right of appeal should not be denied to the assessees on hand on a technical ground - YES: HC

- Revenue's appeal dismissed: MADRAS HIGH COURT

2021-TIOL-563-HC-KAR-IT

CIT Vs Quest Global Engineering Services Pvt Ltd

On appeal, the High Court finds there to be no merit in the present appeal, as the issues raised herein are settled against the Revenue vide the judgment in another case. Hence the present appeal is disposed off accordingly.

- Revenue's appea dismissed: KARNATAKA HIGH COURT

2021-TIOL-562-HC-KAR-IT

Karnataka Financial Services Ltd Vs ACIT

Whether the effect of quashing of an order of Appellate Authority is that the appeal is restored before the Appellate Authority - YES: HC Whether it is fit case for remand where the Tribunal sustains an assessment order without adjudicating upon the issue of limitation, based on the erroneous premise that doing so is beyond purview of remand - YES: HC

- Case remanded: KARNATAKA HIGH COURT

2021-TIOL-555-HC-DEL-IT

Simi Sandhu Vs ACIT

In writ, the High Court acknowledges the Revenue's statement that the reason behind the assessee's refund with interest would be investigated & that the payable amount would be disbursed within 6 weeks' time. Hence it disposes off the present petiton binding the Revenue to such statement.

- Writ petition disposed of: DELHI HIGH COURT

2021-TIOL-464-ITAT-DEL

Usk Healthcare Pvt Ltd Vs ITO

Whether penalty u/s 271(1)(c) can be imposed even when there is no concealment or any inaccuracy in the particulars of income disclosed by the assessee - NO: ITAT

- Assessee's appeal allowed: DELHI ITAT

2021-TIOL-463-ITAT-DEL

Star Realcon Pvt Ltd Vs ITO

Whether Section 40A(3) can be made applicable for disallowing the cash payment made for purchase of land, even when the land is shown in 'non-current investment' in Audited Financial Statements - NO: ITAT

- Decided partly in favour of assessee: DELHI ITAT

2021-TIOL-462-ITAT-DEL

Inland Stone India Pvt Ltd Vs DCIT

Whether expenses incurred on electricity in & security for factory premises can be allowed as business expenses, where although there were no full-fledged business operations, the factory was in assessee's control & certain stocks were lying therein - YES: ITAT

- Assessee's appeal allowed: DELHI ITAT

2021-TIOL-461-ITAT-ALL

Mahavir Prasad Satish Chandra Vs ITO

Whether power of revision can be exercised where the relevant issue is highly debatable & due to which the AO took opted for one of several views possible in respect of this issue - NO: ITAT

- Case remanded: ALLAHABAD ITAT

2021-TIOL-460-ITAT-BANG

Sri Maurice Patrick De Rebello Vs ITO

Whether exemption u/s 54 would be allowed to several flats of the claimant, where all such flats are located in the same premises & such benefit is allowed in respect of the entire built up area as per JDA - YES: ITAT

- Assessee's appeal partly allowed: BANGALORE ITAT

2021-TIOL-459-ITAT-BANG

Centre For Learning Vs ITO

Whether it is a fit case for remand where the issue of depreciation is not properly considered by the lower authorities & proper hearing is not given to the assessee - YES: ITAT

- Case remanded: BANGALORE ITAT

 
GST CASE

2021-TIOL-567-HC-MUM-GST

BA Continuum India Pvt Ltd Vs UoI

GST - The petitioner has assailed legality and correctness of five identical orders passed by respondent No.4 for five quarters covering the period from April, 2018 to June, 2019 rejecting the refund claims made by them in respect of unutilized input tax credit - The petitioner in its detailed reply had specifically requested respondent No.4 to withdraw the proposal to pass ex-parte orders in its case without granting personal hearing based on detailed legal and factual submissions - This was followed by a number of e-mails requesting respondent No.4 for granting opportunity of being heard in person - Section 54 of CGST Act deals with refund of tax - When the law requires that no application for refund shall be rejected without giving an applicant an opportunity of being heard, the same cannot be substituted by telephonic conversations and exchange of e-mails - This is more so in the case of a claim for refund where no timelimit is fixed vis-a-vis rejection of claim - Under sub-section (7) of section 54, a time-limit of 60 days is prescribed for making of an order allowing claim of refund; but that period of 60 days would commence from the date of receipt of the application complete in all respects without there being a corresponding provision for rejection of application not complete in all respects - Admittedly in this case, no hearing was granted to the petitioner - Impugned orders, therefore, would be in violation of the proviso to subrule (3) of rule 92 of the CGST Rules and also in violation of the principles of natural justice - The matter is remanded back to the original authority for a fresh decision in accordance with law after giving an opportunity of being heard to the petitioner - Since respondent No.4 has already taken a view on merit by disclosing her mind which is adverse to the petitioner, it would be in the interest of justice and fairness if another competent officer is assigned the task of deciding the refund applications of the petitioner de novo on remand: HC

- Writ petition allowed :BOMBAY HIGH COURT

 
MISC CASE

2021-TIOL-122-SC-MISC-LB

Cognizance For Extension Of Limitation

Apex Court uncaps limitation period extension granted in view of COVID-19

- Case Deferred : SUPREME COURT OF INDIA

  
INDIRECT TAX

2021-TIOL-139-CESTAT-MUM

Vantage International Management Company Vs CCGST

ST - The appellant was engaged in providing mining services to M/s. ONGC for performing drilling operations on Oil Wells in the East and West Costs of India - The issue involved is, whether the appellant has taken the correct legal stand in not including the cost of free supply diesel made by M/s ONGC in the value of taxable service for running the drilling vessel - The period of dispute involved in this case is from December 2010 to December 2015 - The provisions of valuation of taxable services for charging service tax are contained in Section 67 ibid - The said statutory provision has defined the term 'consideration', to include any amount that is payable for taxable services provided or to be provided for provision of taxable service - Section 67 ibid was amended by Finance Act, 2015 w.e.f. 14.05.2015 - It is an admitted fact on record that the appellant had never charged any cost of fuel to M/s. ONGC over and above the amount claimed by it for providing the taxable service - Since, M/s. ONGC was not required to make payment of fuel to the appellant, its value cannot be added to the taxable value both under the un-amended and amended provisions of Section 67 ibid - Further, the appellant had received the entire consideration for provision of service in monetary terms - Hence, it cannot be said that it was not properly able to determine the value of taxable service, in order to attract the provisions of Rule 3 (b) of Service Tax (Determination of Value) Rules, 2006 - Similarly, the provisions of Rule 5 ibid also would not attract in this case inasmuch as no cost of fuel was charged or billed by the appellant to the recipient of service - The issue is no more res integara, in view of the judgement of Supreme Court in case of M/s. Bhayana Builders (P) Ltd. wherein it is held that value of free supplies made under the contractual arrangement by the service receiver to the service provider cannot be added to the value of taxable service provided by the service provider - No merits found in the impugned order, same is set aside: CESTAT

- Appeal allowed: MUMBAI CESTAT

2021-TIOL-138-CESTAT-DEL  

Madhya Pradesh Poorva Kshetra Vidyut Vitran Company Ltd Vs PR CCGST & CE

ST - The appellant is a wholly owned undertaking of Government of Madhya Pradesh and is engaged in distribution of electricity in the eastern area of State - The "transmission or distribution of electricity by an electricity transmission or distribution utility" is included in negative list of services in section 66D(k) of Finance Act, 1994 and so the power charges collected from consumers of electricity are exempted from levy of service tax - The period of dispute is from July, 2012 to March, 2017 and the dispute raised is as to whether service tax is payable on the amount of late payment surcharge, meter rent and supervision charges received by appellant from the electricity consumers - The late payment surcharge, meter rent and supervision charges are collected by appellant in terms of Madhya Pradesh Electricity Regulatory Commission Regulations, 2009 - In this connection it needs to be noted that prior to introduction of negative list regime for service tax under the Finance Act, there was no specific clause in the charging provisions of the Finance Act requiring payment of service tax on the amount collected from the consumers in relation to transmission and distribution of electricity - Thereafter, the negative list regime was introduced with effect from July 01, 2012 - The issue as to whether the charges collected in connection with transmission of electricity even after July 01, 2012 would be subjected to tax as according to the Department they would not be exempted under section 66D(k) of Finance Act, came up for consideration before Gujarat High Court in Torrent Power after referring to the position prior to the introduction of negative list and the Notifications and the introduction of the negative list regime w.e.f July 01, 2012 - It is clear from the said judgment of Gujarat High Court that the activities that are related/ancillary to transmission and distribution of electricity would be exempt from payment of service tax since transmission and distribution of electricity is exempted - It is also clear that all services related to transmission and distribution of electricity are bundled services, as contemplated under section 66F(3) of Finance Act, and are required to be treated as a provision of a single service of transmission and distribution of electricity, which service is exempted from payment of service tax - Thus, it is not possible to sustain the levy of service tax on the amount collected by appellant for late payment surcharge, meter rent and supervision charges - The imposition of penalty under 'lease rent' is confirmed: CESTAT

- Appeal partly allowed: DELHI CESTAT

 

 

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NOTIFICATION

cgst_rule_05

Seeks to implement e-invoicing for the taxpayers having aggregate turnover exceeding Rs. 50 Cr from 01st April 2021

 
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