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Home e-Newsletters Index Year 2021 April Day 19 - Monday

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TMI Tax Updates - e-Newsletter
April 19, 2021

Case Laws in this Newsletter:

GST Income Tax Customs Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Indian Laws



Highlights / Catch Notes

    Income Tax

  • Disallowance u/s 40A(3) - cash paid against purchase of land - Genuineness of the transaction is not in doubt. Assessee being in the business of real estate has entered into such transaction for business and commercial expediency. - Ld. CIT(A) has rightly deleted the disallowance - AT

  • TP Adjustment - Addition considering the interest free loan and advances to its Associated Enterprises - As assessee got such huge business from its associated enterprises based in the USA. In the absence AE in UK the assessee would have taken services from third party which would have led to more cost than the notional interest income. In other words, the transaction for advancing the interest-free loans to the associated enterprises has to be seen in the context of the benefit received by it from such associated enterprises. - no adjustment under the transfer pricing provisions is required to be made with respect to the interest free loans and advances by the assessee to its associated enterprises in the given facts and circumstances. - AT

  • Correct head of income - Gain on sale of shares - short term capital gain or business income - If we analyze given chart, then it can be clearly seen that out of above scripts, the gain/profit is mainly from one scrip, that is, DLF Ltd. Hence, it cannot be held the transaction is in the nature of business or profession. - AT

  • Estimation of Net profit - difference between the amount shown as turnover by the assessee and as reflected in Form 26AS - only because there is a mismatch between TDS certificate (26AS) and turnover shown by the assessee in its P& L account cannot be the sole basis on which the entire addition of the difference could have been brought to tax. - AT

  • TDS u/s 195 - Payment of Royalty or not - The assessee agreed for reimbursement of cost incurred by the GTRC for doing research activity as a part of joint research on which both the parties have equal right on result of such joint research project - AO has not carried out any verification/investigation to disprove the claim of pure reimbursement of expenses made by the assessee on the basis of relevant supporting material as reflected in this order. - payment made to GTRC was towards cost reimbursement for joint research project and not royalty - AT

  • Revision u/s 263 - claim of depreciation - no business activity - the assessee is not carrying on any business activity. Indeed the manufacturing activity of the assessee was closed down but the assessee changed its object clause which can be verified from the memorandum of association. As such the assessee got inserted new objects in the main object clause of memorandum of association by passing special resolution - It seems that the assessee was carrying on the business activities and therefore the depreciation claimed by the assessee on the cars cannot be disallowed on the ground that there was no business activity carried out by the assessee in the year under consideration. - AT

  • Bad debts - Disallowance of deduction claimed in respect of notional interest taxed as income in earlier year, which was not realized by the appellant - the assessee is not in money lending, therefore, the assessee cannot claim that the assessee made inter corporate deposit in the course of his business. During the earlier years the assessee never claimed as a business loss on account of non-receipt of interest on such inter corporate deposit, therefore, the assessee is also not entitled for business loss as well. - AT

  • Addition on account of estimation of net taxable profit earned on the total 'on money' - difference in the sale price - The statement of purchaser cannot alone prove that they were having any agreement with the assessee regarding any payment made outside books of accounts. The contention of assessee that both the buyers paid extra money for extra work agreement is also proved by proof of disbursal of bank loans as well as by extra work agreements. - The adoption of huge 'on money' without iota of evidence is not justified - AT

  • Penalty u/s. 271(1)(c) - unexplained share application money and unsecured loans - No incriminating material was found during the curse of search relating to the alleged surrender of income made by the assessee in the Income Tax Return. The assessee suo moto offered the additional income in the return and paid taxes there on. It is also an established fact in the instant case that Ld. A.O. was not sure that which assessee has concealed the particulars of income or furnished inaccurate particulars of income. - AT

  • Disallowance of interest - As rightly noted by Ld. CIT(A), it was not the case the case where the funds were borrowed for the purpose of business and the excess funds were parked by the company for earning interest income. This was a case where the funds for the Lohegaon project were transferred separately and the loan to GBL in the books of the holding company was transferred to the assessee along with equal liability. - Claim of interest expenditure cannot be denied - AT

  • Customs

  • Rewards under the Merchandise Exports from India Scheme ('MEIS') - Seeking completion of process of sanctioning and grant of the reward - the petitioner had not intimated the intent for claiming MEIS benefits initially on their shipping bills dated 30.03.2015. There is so much of impact prevailing on the export being made from SEZ unit as it was from Kandla SEZ that the export has been made by the petitioner - there could be no exclusion of SEZ or non-EDI Port unit for availing the benefit. - HC

  • Indian Laws

  • Dishonor of two cheques - dispute remained pending for past 16 years - humongous pendency of complaints u/s 138 of the Act - The High Courts may issue practice directions to the Magistrates to record reasons before converting trial of complaints under Section 138 from summary trial to summons trial in exercise of power under the second proviso to Section 143 of the Act. - The evidence of witnesses on behalf of the complainant shall be permitted on affidavit. If the Magistrate holds an inquiry himself, it is not compulsory that he should examine witnesses. In suitable cases, the Magistrate can examine documents for satisfaction as to the sufficiency of grounds for proceeding under Section 202. - SC

  • IBC

  • Initiation of CIRP - Time limitation - The Annual Returns/Audited Balance Sheets, one-time settlement proposals, proposals to restructure loans, by whatever names called, cannot be simply ignored as debarred from consideration and in every given matter, it would be a question of applying the facts to the law and vice versa, to see whether or not the specific contents, spell out an acknowledgement under the Limitation Act. - AT

  • Service Tax

  • CENVAT Credit - exempted activity or not - trading in mutual funds - The appellant cannot be termed as “service provider” because he only makes an investment in the mutual fund and earn profit from it which is shown in the Books of Accounts under the head “other income”. Hence the question of invoking Rule 6 does not arise and hence the Department has wrongly invoked the provisions of Rule 6(3) demanding the reversal of credit on the exempted services. - AT

  • Central Excise

  • CENVAT Credit - exempt goods - On merits, it is a case that the appellant is manufacturing dutiable goods not exempted goods. Some clearances were exempted from payment of duty by way of Notification No.10/1997 dt.1.3.1997, (amended) to specified buyer of the goods if those buyers fulfil condition of the said notification. Buying goods from the appellant under Notification No.10/1997 dt.1.3.1997 without payment of duty does not change the character of the goods as exempted goods - Rule 6(3) of Cenvat Credit Rules are not applicable to the facts of the present case. - AT


Articles


Notifications


News


Case Laws:

  • GST

  • 2021 (4) TMI 694
  • 2021 (4) TMI 660
  • Income Tax

  • 2021 (4) TMI 701
  • 2021 (4) TMI 698
  • 2021 (4) TMI 690
  • 2021 (4) TMI 686
  • 2021 (4) TMI 685
  • 2021 (4) TMI 684
  • 2021 (4) TMI 682
  • 2021 (4) TMI 681
  • 2021 (4) TMI 680
  • 2021 (4) TMI 679
  • 2021 (4) TMI 677
  • 2021 (4) TMI 676
  • 2021 (4) TMI 675
  • 2021 (4) TMI 674
  • 2021 (4) TMI 672
  • 2021 (4) TMI 671
  • 2021 (4) TMI 670
  • 2021 (4) TMI 667
  • 2021 (4) TMI 666
  • 2021 (4) TMI 665
  • 2021 (4) TMI 664
  • 2021 (4) TMI 663
  • 2021 (4) TMI 662
  • 2021 (4) TMI 661
  • Customs

  • 2021 (4) TMI 704
  • 2021 (4) TMI 700
  • 2021 (4) TMI 696
  • 2021 (4) TMI 695
  • 2021 (4) TMI 692
  • 2021 (4) TMI 691
  • 2021 (4) TMI 659
  • Insolvency & Bankruptcy

  • 2021 (4) TMI 689
  • 2021 (4) TMI 688
  • 2021 (4) TMI 678
  • 2021 (4) TMI 673
  • Service Tax

  • 2021 (4) TMI 699
  • 2021 (4) TMI 687
  • Central Excise

  • 2021 (4) TMI 693
  • 2021 (4) TMI 683
  • 2021 (4) TMI 669
  • 2021 (4) TMI 668
  • CST, VAT & Sales Tax

  • 2021 (4) TMI 697
  • Indian Laws

  • 2021 (4) TMI 703
  • 2021 (4) TMI 702
 

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