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Home e-Newsletters Index Year 2021 March Day 12 - Friday

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TMI Tax Updates - e-Newsletter
March 12, 2021

Case Laws in this Newsletter:

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



Highlights / Catch Notes

    GST

  • Requirement of registration - Tamil Nadu Skill development Corporation(TNSDC) - The applicant is not an SSC approved by the NSDC - In the instant case the activities of TNSDC are ‘Supply’ as per Section 7(1) and are not excluded under Section 7(2). Further by the definition of business, the intent of ‘profit’ is not necessary for the activity. Also, only the ‘subsidy’ granted by the Government, stands excluded from ‘Consideration’. Therefore, the supply undertaken by the applicant is liable to GST and subject to the monetary Turnover of the applicant, the applicant is liable to obtain GST Registration - AAR

  • Classification of goods - Air Springs - the product as a whole is not an article of vulcanized rubber other than hard rubber and not classifiable under Customs Tariff entry at 40169990. Customs heading entry at 87088000 specifically covers Suspension systems and parts thereof of Motor Vehicles classifiable under CTH 8701 to 8705 and the functional utility of the ‘Air Springs’ being extending suspension or acting as shock absorber designed specifically for Motor Vehicles, the said entry is to be preferred to the residual entry of CTH 8708 9900. - AAR

  • Grant of Bail - input tax credit - fake invoices - The rival contentions particularly those relating to delegation of power by the Commissioner regarding recording of reasons to believe for affecting arrest under section 69 of the MGST Act or under the CGST Act may require a deeper analysis by the Court. While we defer examination of the same to subsequent hearing, the same however should not prevent us from dealing with the bail prayer of the petitioner. - Bail granted subject to conditions - HC

  • Income Tax

  • Rectification of mistake u/s 254 - Penalty is levied in the instant case under Section 271(1)(i)(a) of the Act (as it then stood), while the explanation applies to the cases covered by Section 271(1)(i)(b) of the Act (as it then stood). Viewed in the above light also, we are of the view that the rectification petition could not have been allowed by the Tribunal. - HC

  • Disallowance on provision of loss on derivative contracts - The loss sustained by the assessee due to fluctuation in foreign exchange while implementing export contract is incidental to assessee's course of business, therefore, such a loss is not a speculative loss but a business loss. - HC

  • Revision u/s 264 - Scope of revision under section 264 of the Income Tax Act, 1961 cannot be abused as a substitute to get over an order of assessment passed second respondent without filing an appeal. Nothing to stopped the petitioner from filing a statutory appeal in time before the Commissioner of Income Tax (Appeals). - HC

  • Levy of penalty u/s 271D - Receipt of deposits in cash in contravention of provisions of section 269SS - The assessee explained before the authorities below that two of the neighbours of the assessee purchased the properties and they were to make payment to HUDA. Since there was having no bank account, therefore, on their request assessee received the amount and deposited in his bank account - assessee has reasonable cause for failure to comply with provisions of law contained u/s 271D - No penalty - AT

  • MAT Computation - computing book profits u/s.115JB - Provision for expenses - All these expenses are in the nature of regular business expenses incurred by the assessee during the year for which bills were not received by the year end, leading to creation of a provision. Since such provision is in respect of ‘ascertained liability, the same cannot be added back while computing book profit u/s.115JB - AT

  • Late fee levied u/s 234E - delay in furnishing the tax deducted at source statement - Late fee under section 234B cannot be levied for a period up to 01/06/2015. In the present years under consideration, interest u/s 234B is not leviable for asst. year 2013-14 & 2014-15. However for asst. year 2015-16 the amended provisions would be applicable. In respect of asst. year 2015-16, no interest would be chargeable for the first quarter. - AT

  • Addition u/s 56(2)(viib) - Share Capital - excessive Share premium - closely held company - Rule 11UA - Assessee has failed to explain and justify issue of preference shares with a face value of ₹ 10,000/- per share when the fair market value of the shares of the company is ₹ -4.73 per share. The reasons given by the Assessing Officer to treat the transaction as a colurable device to circumvent the provisions of section 56(2)(viib) of the Act, appears to be on sound footing. - AT

  • Addition of payment made for legal professional charges - CIT(A) observed that payments do not relate to the professional services received by the assessee but other members of the group companies. - Since no bifurcation has been provided by the assessee, it is very difficult to decide how much of the charges paid pertain to the professional services received by the assessee company. The CIT(A) found that 75% of the expenses must have been incurred on other group companies and accordingly, sustained the addition - For the lack of evidences, we decline to interfere with the findings of the CIT(A) - AT

  • Customs

  • SEIS Scheme - Validity and legality of Policy Circulars - Policy Circular No. 8/2018 dated 21.06.2018 clearly overrides the authority of the Reserve Bank of India and an attempt is made to introduce a provision for issuance of a certificate by the petitioner enabling the local domestic service provider, such as, ports to deem their INR billing as in foreign exchange. Such overriding policy decisions in our view would require an amendment in the FTP 2015-20 and as mandated under the provisions of section 5 of the FT (D&R) Act would have to be carried out only by the Central Government. - such circular is service provider are ultra vires the FTP - HC

  • Detention cum demurrage waiver certificate - respondent No.4 i.e., the shipping line and its principal have taken the stand that they are not customs cargo services provider and therefore the 2009 Regulations are not applicable to them. - conflict between provisions of a subordinate legislation and provisions of a contract - objection of respondent No.4 is not legally tenable. The detention cum demurrage waiver certificate dated 16th November, 2020 has been validly issued as it can be traced to Regulation 10(1)(l) of the 2018 Regulations and under Regulation 10(1)(m) thereof, respondent No.4 i.e., the shipping line is under a legal obligation to comply with the certificate. - HC

  • Import of branded goods in the name of fictitious entities - Misdeclaration and undervaluation - rejection of request for cross examination of the witness - during the course of investigation and while considering the entire matter, the Adjudicating Authority has been able to bring out the facts as to how the appellant has impersonated himself, opened bank account in the name of a fictitious person, remitted customs duty by effecting cash payment in dummy bank accounts, opened in the name of an Enterprise and one person. Therefore, the facts and circumstances of the case would clearly show that the request for cross examination is devoid of merits, lacks bonafide and rightly denied by the Adjudicating Authority. - HC

  • Appointment of members of CESTST - petitioner, Govt, contends that CAT did not consider (a) sub-section (7) added to Section 129 of the Customs Act 1962 (Customs Act), vide the same Finance Act 2017 and which Section 129(7) - contention of the counsel for the respondents is that if the respondents, under the impugned order of CAT were to be given the benefit of the 2017 Rules - Section 129(7) of the Customs Act having admittedly not been noticed by CAT in the impugned order, the same is per incuriam to that extent and cannot be sustained - HC

  • Levy of countervailing duty [CVD] - computation of amount of subsidy - Continuous Cast Copper Wire produced by Metrod Malaysia Sdn Bhd [the appellant] originating in Malaysia and exported from any country, including Malaysia, to India - It is not possible to sustain the CVD levied for “other program” and if this program is excluded from the subsidy margin determination, the appellant would fall below the de minimis level. The imposition of 2.47% CVD on the appellant at serial no. 8 of the notification dated January 8, 2020 is, therefore, liable to be set aside. - AT

  • Corporate Law

  • De-activation of the Director Identification Number (DIN) - The writ petition for challenge to the de-activation of the Director Identification Number are allowed. It was de-activated on account of dis-qualification in one company effecting Director Identification Number for the other companies. The opposite parties are directed to activate the Director Identification Number for use for other company - HC

  • Indian Laws

  • Period of limitation for filing an application u/s 11 of the Arbitration and Conciliation Act, 1996 - The period of limitation for filing an application under Section 11 would be governed by Article 137 of the First Schedule of the Limitation Act, 1963. The period of limitation will begin to run from the date when there is failure to appoint the arbitrator - It has been suggested that the Parliament may consider amending Section 11 of the 1996 Act to provide a period of limitation for filing an application under this provision, which is in consonance with the object of expeditious disposal of arbitration proceedings; - SC

  • Dishonor of Cheque - vicarious liability on Director - The prosecution under section 138 of the Act can be launched for vicarious liability against any person, who at the time of commission of offence was in charge and responsible for the conduct of the business of the accused company. Merely because the petitioner did not sign the cheques in question, is not decisive for launching prosecution against him - HC

  • Dishonor of Cheque - Personal liability of the Director / Signatory of the Company - The appellant is not entitled to contend that the offence has been committed by the Managing Director. Admittedly, the cheque is not drawn on a personal account maintained by the respondent. The cheque specifically states that it has been issued for and on behalf of the company. As such the company alone can be treated as the drawer of the ch - HC

  • IBC

  • Initiation of CIRP - transaction of Financial Debt or not - Loan taken by the Corporate debtor from the sister concern was assigned by the said sister concern to the present applicant - The basic nature of the loan as witnessed from the Loan Agreement (Annexure A-2) will not change. If it was a simple debt extended to the sister concern, merely because the original lender has now assigned the debt to the Appellant will not change the nature of the transaction. - AT

  • Service Tax

  • Cenvat Credit - Rejection of refund claim - Renting of immovable property services - General insurance service - The objection raised by the Department that office at Plot No. Y-14 has also been shared with the other company is not supported by any evidence and hence cannot be accepted merely on presumption basis. On the same count, there is no reason to deny credit on general insurance services availed by the appellant at their office premises i.e. South City Pinnacle - Credit allowed. - AT

  • Refund of CENVAT Credit - input services - input services in respect of STPI unit and used the same in the export of services - In view of the clarification given by the Tax Research Unit of CBEC vide their letter dated 16.3.2012, the amended Rule 5 of CENVAT Credit Rules does not require correlation between the output service exported and the input services used in such output services exported. - AT

  • Central Excise

  • Levy of penalty u/s 11AC of the Central Excise Act, 1944 - The appellant was all along filing statutory returns and being pointed out, they paid the duty and interest without disputing the same. There was no intention on their part to evade payment of duty - Penalty deleted - AT

  • VAT

  • Classification of goods - Glow Mint Moisturiser - Glow Fair Moisturiser etc. - Even the supplier is aptly described as Glamour World. It is of course unsafe to base our conclusions on the basis of a title of the product. However, the petitioner himself has brought about the situation since as noted by the Assessing Officer despite opportunity been given, the petitioner failed to provide samples which could be sent for chemical analysis. - HC

  • Allegation of taking Bribe - Petitioner, VAT officer, entered into a conspiracy with the assessee, under investigation, for an amicable settlement of the matter - It eludes comprehension how the petitioner is entitled to get immunity under Section 3 of the Judges (Protection) Act, 1985 for an act, which is not official or judicial, allegedly done by him. Accepting bribe cannot be considered as an act done by the petitioner in the course of discharge of his official or judicial duties or functions. Therefore, the petitioner is not entitled to get any immunity under the Judges (Protection) Act, 1985. - FIR is not liable to be quashed on any of the legal grounds raised by the petitioner - HC


Articles


News


Case Laws:

  • GST

  • 2021 (3) TMI 451
  • 2021 (3) TMI 450
  • 2021 (3) TMI 449
  • 2021 (3) TMI 448
  • 2021 (3) TMI 445
  • 2021 (3) TMI 441
  • 2021 (3) TMI 429
  • Income Tax

  • 2021 (3) TMI 442
  • 2021 (3) TMI 440
  • 2021 (3) TMI 435
  • 2021 (3) TMI 434
  • 2021 (3) TMI 431
  • 2021 (3) TMI 428
  • 2021 (3) TMI 427
  • 2021 (3) TMI 426
  • 2021 (3) TMI 425
  • 2021 (3) TMI 424
  • 2021 (3) TMI 419
  • 2021 (3) TMI 418
  • 2021 (3) TMI 417
  • 2021 (3) TMI 416
  • 2021 (3) TMI 412
  • 2021 (3) TMI 411
  • 2021 (3) TMI 409
  • 2021 (3) TMI 408
  • 2021 (3) TMI 407
  • 2021 (3) TMI 406
  • 2021 (3) TMI 405
  • 2021 (3) TMI 403
  • 2021 (3) TMI 401
  • 2021 (3) TMI 399
  • 2021 (3) TMI 398
  • 2021 (3) TMI 397
  • 2021 (3) TMI 395
  • 2021 (3) TMI 394
  • 2021 (3) TMI 393
  • 2021 (3) TMI 392
  • 2021 (3) TMI 391
  • 2021 (3) TMI 390
  • Customs

  • 2021 (3) TMI 444
  • 2021 (3) TMI 443
  • 2021 (3) TMI 439
  • 2021 (3) TMI 438
  • 2021 (3) TMI 423
  • 2021 (3) TMI 422
  • 2021 (3) TMI 415
  • 2021 (3) TMI 404
  • Corporate Laws

  • 2021 (3) TMI 433
  • 2021 (3) TMI 396
  • 2021 (3) TMI 389
  • 2021 (3) TMI 388
  • 2021 (3) TMI 387
  • Insolvency & Bankruptcy

  • 2021 (3) TMI 430
  • 2021 (3) TMI 413
  • 2021 (3) TMI 386
  • Service Tax

  • 2021 (3) TMI 421
  • 2021 (3) TMI 420
  • 2021 (3) TMI 414
  • Central Excise

  • 2021 (3) TMI 410
  • 2021 (3) TMI 402
  • 2021 (3) TMI 400
  • CST, VAT & Sales Tax

  • 2021 (3) TMI 436
  • 2021 (3) TMI 432
  • Indian Laws

  • 2021 (3) TMI 447
  • 2021 (3) TMI 446
  • 2021 (3) TMI 437
 

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