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Home e-Newsletters Index Year 2020 December Day 8 - Tuesday

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TMI Tax Updates - e-Newsletter
December 8, 2020

Case Laws in this Newsletter:

GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise



Highlights / Catch Notes

  • Income Tax:

    Exemption u/s 10(10D) - addition of the surrender value of the assigned keyman insurance policy - On the basis of Section 10(10D) of the Act, with its Explanation 1, the clear position of law which emerges is that the character of the Keyman Insurance Policy does not get converted into ordinary Life Insurance Policy despite its assignment and therefore, any benefit accruing to the employee upon its surrender or encashment will be taxable in the hands of the Employee as "perquisite". - HC

  • Income Tax:

    Deduction u/s 36 or 37 - provisions for claims and compensation - A developer of a building could claim it as an expenditure in the year in which such expenditure is actually incurred or the advance is written off and its right to claim the refund of such security is completely waived off. Nothing of this sort has happened in the present case and merely by making a book entry for creating a provision for future expenditure or compensation, the Assessee cannot be permitted to claim deduction under Section 36 or 37 of the Act. - HC

  • Income Tax:

    Penalty u/s 271(1)(c) - The considerations for imposition of penalty under Section 271(1)(c) of the Act are however entirely different. It requires existence of mens rea on the part of the Assessee and either of the twin conditions of (i) concealment of income or (ii) filing of inaccurate particulars by Assessee, are required to be satisfied and the burden of proving that lies upon the revenue authority and not on the Assessee. - HC

  • Income Tax:

    Disallowance on account of interest on the capital account - The withdrawals made by the assessee from the other partnership firms on which interest was paid by him, thus, were not utilized for non-business purpose and interest paid thereon in my opinion, cannot be disallowed on the ground that there was utilization of corresponding funds for non-business purpose as alleged by the authorities below. - AT

  • Income Tax:

    Income accrued in India - interest income and commitment fees earned by DZ Bank from its Indian clients - PE in India - Once entire interest revenues earned in India in the hands of the foreign enterprise is taxed in its hands under article 11- as is the undisputed position in this case, nothing survives for taxation under article 7, and, given the fact that entire related revenues are taxed in the hands of the assessee on gross basis under article 11, directly or indirectly, nothing more than entire business receipts can be brought to tax in India. - AT

  • Income Tax:

    Disallowance of stock written off - Books of accounts of the assessee were not rejected by AO in the instant case. It is pertinent to note that no benefit has been derived by the assessee by this write off of stocks during the year under consideration. Due to exceptional circumstances that had prevailed during this year, the Directors of the assessee company had decided to write off the stocks that were more than two years old. - No additions - AT

  • Income Tax:

    Deduction u/s 80IB - Whether Ld.CIT(A) can re-estimate average profit @ 38.40%? - The powers given to assessing officer under sub-section 8 of section 80IA or 80IA(10) should not be used to restrict the benefit given to assessee under section 80IB(10) of the Act, as schemes of these sections are different. We also note that the Assessing Officer has estimated the assessee’s average profit @16.02%. On appeal, Ld.CIT(A) reestimated the assessee’s average profit @38.40% and computed the eligible amount of deduction u/s.80IB(10) of the Act, without rejecting books of accounts. - AT

  • Income Tax:

    Capital gain on tenancy rights - transfer u/s 2(47) - Even if the assessee has not paid any amount for purchase of tenancy rights, the nature of rights would remain tenancy right and this is a capital asset. Section 55(2)(a) of the Act clearly stipulates that in case no price is paid for acquisition of an asset mentioned in clause (a) to Section 55(2) of the Act, then the cost shall be taken as Nil. Hence the Assessing Officer was legally incorrect in his view. - AT

  • Income Tax:

    Disallowance being commission paid to Directors - expenses were incurred in accordance with the provisions of Companies Act. - The commission expenses were paid by passing the Board’s resolution. And in earlier years such commission expenses were claimed and allow to the assessee. The assessing officer made disallowance on ad- dock basis which is not sustainable. - AT

  • Income Tax:

    Capital gain - Land (asset) held as stock-in-trade in the partnership firm - Considering the legal position as explained by us in the relevant provisions of subsection (2) of Section 45, sub-section (3) of section 45 and sub-section (14) of section 2 of the Income Tax Act 1961 and taking into account the facts of the assessee`s case, we hold that Land (asset) held as stock-in-trade in the partnership firm is not a capital asset and would not attract the provisions of section 45(3) - AT

  • Income Tax:

    Addition u/s 40A(3) - Bogus purchases - there is no evidence whatsoever available on record to show that the said purchases were actually made by the assessee from the grey market and payments against the same were made in cash as alleged by the Ld. DR. In our opinion, this case is therefore not a fit case where the provision of section 40A(3) can be invoked and that too for the first time at this stage before the Tribunal. - AT

  • Income Tax:

    Penalty u/s 271AAB - Section 271AAB of the Act, contemplates imposition of a penalty pursuant to the disclosure of income in statement recorded u/s. 132(4) of the Act by the assessee. It is an admitted fact that no such statement has been recorded from the assessee. Thus, on this ground also, the levy of penalty fails. - AT

  • Income Tax:

    Revision u/s 263 - the notice u/s. 143(2) of the Act, was issued much prior to the assessee filing his return of income. This is not in accordance with law. Hence the order passed u/s. 148 of the Act without issuing valid notice u/s. 143(2) of the Act, makes the reassessment order dt. 20/05/2016, passed u/s. 143(3)/147 of the Act, bad in law - Consequently, the revision of the assessment u/s. 263, revising such illegal assessment order is also bad in law. - AT

  • Customs:

    Non renewal /extension of the Warehouse License - Demand of customs duty - goods were moved from one warehouse to another - There are no reason for the appellant/ petitioner to have invoked the writ jurisdiction of this Court on the basis of a status quo order granted by the trial Court in a civil Suit in which Customs Department was not at all a party. Nothing prevented him to even implead Customs Department also as Defendant in that very suit, so that all related issues could be adjudicated by one Court. This is what, the abuse of process of law is and if an observation of a learned single Judge in this process is given against the appellant/petitioner, he cannot be permitted to raise a plea against that in the intra court appeal. - HC

  • Customs:

    Refusal to issue Certificate of Origin to the petitioner for export of red sanders - permission to petitioner to export - The attitude of the Principal Chief Conservator of Forests, Telangana at Hyderabad to be wholly vexatious considering the above background and arbitrary too having regard to her decision to grant Certificate of Origin - HC

  • Customs:

    Refund of the Extra Duty Deposit (EDD) - Provisional Assessment not finalised - No such material has been placed before this court to justify the action of the Customs Department not to finalise the Provisional Assessment for 16 years and even by now to keep the EDD a mere Security Deposit by Importer/Petitioner with them like this. - HC

  • Customs:

    Release of confiscated goods - condition of re-export imposed on the importer while redeeming the goods - the imposition of condition of re-export under Section 125 of the Act was not justified and the imposition of such a condition is not envisaged in law and therefore, the order imposing such condition is liable to be set aside. The same is accordingly set aside. - HC

  • Customs:

    Classification of imported goods - ‘catalytic converter assembly’ which is attached with an inlet and an outlet pipe - The appellant has wilfully suppressed as well as mis-stated the actual/complete description of the impugned goods under import, etc., thereby claiming the benefit of concessional rate of duty, to justify the invoking of extended period of limitation in terms of Section 28 (1) / 28 (4) of the Customs Act, 1962, as applicable during the period. - AT

  • Service Tax:

    Benefit of SVLDRS scheme - due date of quantification of liability - The amount had been wrongly quantified for no fault of the petitioners. It was an apparent mistake made by the Department. The Department thus ought not to have rejected the application of the petitioners by alleging that the quantification had been made after the cut off date. - HC


Articles


Notifications


Circulars / Instructions / Orders


Case Laws:

  • GST

  • 2020 (12) TMI 233
  • Income Tax

  • 2020 (12) TMI 232
  • 2020 (12) TMI 231
  • 2020 (12) TMI 227
  • 2020 (12) TMI 226
  • 2020 (12) TMI 225
  • 2020 (12) TMI 224
  • 2020 (12) TMI 223
  • 2020 (12) TMI 222
  • 2020 (12) TMI 221
  • 2020 (12) TMI 220
  • 2020 (12) TMI 230
  • 2020 (12) TMI 219
  • 2020 (12) TMI 229
  • 2020 (12) TMI 218
  • 2020 (12) TMI 217
  • 2020 (12) TMI 216
  • 2020 (12) TMI 228
  • 2020 (12) TMI 215
  • 2020 (12) TMI 214
  • 2020 (12) TMI 213
  • 2020 (12) TMI 212
  • 2020 (12) TMI 211
  • 2020 (12) TMI 210
  • 2020 (12) TMI 209
  • 2020 (12) TMI 208
  • 2020 (12) TMI 207
  • 2020 (12) TMI 206
  • 2020 (12) TMI 205
  • Customs

  • 2020 (12) TMI 204
  • 2020 (12) TMI 200
  • 2020 (12) TMI 203
  • 2020 (12) TMI 202
  • 2020 (12) TMI 201
  • Corporate Laws

  • 2020 (12) TMI 199
  • 2020 (12) TMI 198
  • 2020 (12) TMI 197
  • 2020 (12) TMI 196
  • 2020 (12) TMI 195
  • Insolvency & Bankruptcy

  • 2020 (12) TMI 193
  • 2020 (12) TMI 192
  • Service Tax

  • 2020 (12) TMI 194
  • 2020 (12) TMI 234
  • Central Excise

  • 2020 (12) TMI 191
 

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