"23 March 2019" Archive

Reopening u/s 148 not sustainable in absence of reason to believe that income has escaped assessment

DCIT V/s. M/s Kargwal Products P. Ltd. Vs (ITAT Mumbai)

Basic requirement of reopening of assessment is ‘reason to believe’ that the income has escaped assessment without which reopening under Section 148 of Income Tax Act, 1961 is is not sustainable ...

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Capital gain assessable in the hands of legal heirs who inherited the land and shared sale consideration

Sushila Devi Meena Vs ITO (ITAT Jaipur)

Capital gain to be assessed in the hands of all the legal heirs who have inherited the land and also shared the sale consideration. Cost of acquisition has to be determined by considering relevant provisions of the Act as well as the fair market value of the land as on 01.04.1981....

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AO must prove that sale of agricultural land is in the nature of trade to tax gain as business income

Pr. CIT Vs Heenaben Bhadresh Mehta (Gujarat High Court)

Sale of Agricultural Land by the assessee was not 'adventure in the nature of trade' and therefore, profit earned on such sales cannot be taxed as business income....

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How to Claim Deduction of Interest Payments on Home Loan of Under-construction House

A home loan must be taken for the purchase/construction of a house and the construction of the house must be completed within 5 years from the end of financial year in which loan was taken. If you are paying EMI for the housing loan, it has two components – interest payment and principal repayment. The […]...

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Posted Under: Income Tax |

GST on Fixed Assets

GST Provisions for Fixed Assets Background Fixed Assets were subjected to separate provisions under Excise and Service Tax under Cenvat credit rules, 2004. There were several restriction on availability of Cenvat credit, Sale and disposal of Fixed Assets under the previous regime. Under GST, the provision are more liberal as compared to r...

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Posted Under: Income Tax |

GST Impact: Transfer of Business conversion of Pvt Ltd to LLP

Company Act, 2013 or LLP Act, 2008 allows companies or LLP or Partnership Firms to change their constitution or convert them i.e. from Private limited to LLP or any other combination. In such a situation, it’s very important to understand the impacts of the GST. We observed that their merger, demerger or amalgamation or conversion [&hel...

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Posted Under: Income Tax |

SEBI circular on Valuation of money market & debt securities

SEBI/HO/IMD/DF4/CIR/P/2019/41 (22/03/2019)

Valuation of money market and debt securities which are rated below investment grade:2.1 In order to have uniformity and consistency across the Mutual Fund industry on valuation of money market and debt securities rated below investment grade, the following has been decided:...

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CESTAT expresses serious concern on communications to appellants citing Asian Resurfacing case

Vijayanagar Sugars Pvt Ltd Vs Commissioner of Central Excise, Customs and Service Tax (CESTAT Bangalore)

Vijayanagar Sugars Pvt Ltd Vs Commissioner of Central Excise, Customs And Service Tax (CESTAT Bangalore) These applications of M/s Wellcast Steels Ltd, M/s Vijayanagar Sugars Pvt Ltd and of Shri R Rajendra Kumar under section 35F of Central Excise Act, 1944, read with section 35C(2A) of Central Excise Act, 1944 and with rule 41 of [&helli...

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CAIT not happy with calling of GST as ‘ Gabbar Singh Tax’

Dear Shri Rahul ji,We have come across one of your statement made yesterday at a Rally that traders are suffering from GST and if you come to power you will abolish Gabbar Singh Tax as called by you for GST....

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Posted Under: Income Tax |

Addition cannot be made for Share Capital as undisclosed Income merely on surmises

ACIT Vs Gowthami Chemicals & Pesticides (P) Ltd. (ITAT Visakhapatnam)

ACIT Vs Gowthami Chemicals & Pesticides (P) Ltd. (ITAT Visakhapatnam)  In this case, the assessee has furnished the confirmation letters explaining the identity of the shareholder, address and sources of income of the contributor to the share capital along with the evidence for land holdings and copies of IT returns in 4 cases before...

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Arrest by DGCEI without SCN is Unconstitutional: SC

Union of India & Ors. Vs Ms. Make My Trip (India) Pvt. Ltd. (Supreme Court)

Union of India & Ors. Vs Ms. Make My Trip (India) Pvt. Ltd. (Supreme Court) The issue is as to whether the power of arrest under Section 91 of the Finance Act, 1994 can be exercised without following the procedure as set out in Section 73A(3) and (4) of the said Act. The High Court […]...

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Cash Loan- Penalty justified on failure to establish Business exigency or urgency 

M. Sougoumarin Vs ACIT (Madras High Court)

M. Sougoumarin Vs ACIT (Madras High Court) High Court held that there was no such reason for regular loan transactions of borrowing and repayment in cash of amounts exceeding Rs.20,000/- so as to escape penal liability under Sections 271E and 271D of the IT Act. FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT These […]...

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High Sea Sales- Procedure & Implications under GST & Customs

The economy and the trade have grown to a greater extent as compared to the ancient period and people have come with many types of dealings and transactions over a period of time to either attract the customers, to reduce their costs or to make things easier for conducting their business. One such transaction is High Sea Sale....

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Posted Under: Income Tax |

Test of Proportionality must guide in determining if presumption under Sec.139 was rebutted

Anss Rajashekar Vs Augustus Jeba Ananth (Supreme Court)

It was held that in determining whether the presumption has been rebutted, the test of proportionality must guide the determination. The standard of proof for rebuttal of the presumption u/s 139 is guided by a preponderance of probabilities. ...

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Addition for LTCG on mere surmises not justified

M/s. J.V.S. Foods Pvt. Ltd. Vs DCIT (ITAT Jaipur)

Denial of assessee’s claim under section 10(38) on the basis of suspicion without any cogent material to show that the assessee had brought back its own unaccounted income in the shape of long-term capital gain was not justified....

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No Service Tax on Site Formation & Clearance Services provided as Self-Service before Sale of Land

Hallmark Infrastructure Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)

Hallmark Infrastructure Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai) During the adjudication proceedings appellants have contended that the said activities were undertaken before sale of land took place, hence the service was a self-service and there is no service provider and service recipient relationship and t...

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Re-Opening not allowed for issue Investigated during original assessment

Nu Power Renewables Pvt. Ltd. Vs ACIT (Bombay High Court)

The channel of movement of the fund, the source of the fund, purpose of investment and the ultimate destination of the fund, were all part of the record during the assessment proceedings. There is nothing in the reasons recorded by the Assessing Officer to suggest that, such investment is bogus....

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HC explains Law on reopening to assess alleged Bogus Capital gains from penny stocks

Purviben Snehalbhai Panchhigar Vs ACIT (Gujarat High Court)

Purviben Snehalbhai Panchhigar Vs ACIT (Gujarat High Court) In the present case the Assessing Officer has heard the material on record which would prima facie suggest that the assessee had sold number of shares of a company which was found to be indulging in providing bogus claim of long term and short term capital gain. […]...

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In case of Encumbered Property, Stamp Duty value cannot be adopted as Sale Value

Sir Mohd. Yusuf Trust Vs ACIT (ITAT Mumbai)

Where property held by assessee was encumbered and, thus, she was not absolute owner of property, while computing capital gain arising from transfer of such a property, market value of property as taken for purpose of payment of stamp duty could not be adopted as sale consideration by applying provisions of section 50C....

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DGFT amends Conditions of application for import of Pet coke

Public Notice No. 81/2015-2020-DGFT [S.O. 1405(E)] (22/03/2019)

Procedure for allocation of quota for import of (i) Calcined Pet Coke for use as Calcined Pet coke (CPC) in Aluminum Industry and (ii) Raw Pet Coke for CPC manufacturing industry is notified....

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Period for installation & operationalisation of Radiation Portal Monitors & Container Scanner

Public Notice No. 80/2015-2020-DGFT (22/03/2019)

The period for installation and operationalisation of Radiation Portal Monitors and Container Scanner in the designated ports is extended up to 30.06.2019....

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Companies (Incorporation) Third Amendment Rules, 2019

Notification No. [G.S.R. 275(E)] (29/03/2019)

These rules may be called the Companies (Incorporation) Third Amendment Rules, 2019. They shall come into force on the date of publication in the official gazette....

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It is mandatory to link your PAN with Aadhaar?

Link your Aadhaar with PAN today to enjoy seamless Income Tax services online How to link your PAN with Aadhaar Through SMS facility Send SMS to 567678 or 56161 in following format: UIDPAN<SPACE><12 digit Aadhaar><Space><10 digit PAN> Example : SMS to 567678 or 56161: UIDPAN 111122223333 AAAPA9999Q Through a-filing...

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Posted Under: Income Tax |

Disallowance U/s 40(a)(ia) cannot be made for shortfall due to difference of opinion as to taxability

DCIT Vs Morgan Stanley (I) Capital (P) Ltd. (ITAT Mumbai)

DCIT Vs Morgan Stanley (I) Capital (P) Ltd. (ITAT Mumbai) Conclusion: Where there was any shortfall due to any difference of opinion as to taxability of any item or nature of payments falling under various TDS provisions, assessee could be declared to be an assessee-in- default under section 201, however, no disallowance could be made [&h...

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Income from leave and licence fee was property income not a business income

DCIT Vs. Magnus Properties (P) Ltd. (ITAT Mumbai)

Income derived by assessee from leave and licence fee was to be treated as income from house property not as business income as assessee company’s primary object was not to construct, develop and lease property out for earning rental income but to engage itself as real estate developer....

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Capital gain on transfer of land notified for establishing industrial park was liable to tax as it was non-agricultural land

Shraddha Bagla Vs ITO (ITAT Mumbai)

Assessee was not entitled to claim exemption from capital gains on transfer of rural agricultural land as State Government had notified the said land for establishing industrial park and consequently, the land had become non-agricultural urban land....

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Assessment against a non-existent entity is nullity in the eyes of law

Vertex Customer Management India Pvt. Ltd. Vs DCIT (ITAT Delhi)

Framing of an assessment against a non-existent amalgamating entity was not procedural irregularity but a jurisdictional defect not covered under section 292B, therefore, assessment made by AO was nullity in the eyes of law and the same was liable to be quashed....

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Validity of exclusive method of accounting for valuing closing stock

DCIT Vs. Ms. Adani Gas Ltd. (ITAT Ahmedabad)

Assessee was justified in following exclusive method of accounting for valuation of closing stock as entire exercise was tax neutral and there was no impact on the profitability of assessee due to method of accounting followed. ...

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Once Presumption U/s 139 is drawn, Complainant need not prove source of fund till accused discharges his burden

Rohitbhai Jivanlal Patel Vs State of Gujarat & Anr. (Supreme Court)

SC held that once the court has drawn presumption of existence of legally enforceable debt as per Section 139 of the NI Act, factors like source of funds are not relevant if the accused has not been able to rebut the presumption....

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Huge Investment with no Income Source: ITAT upheld Addition

ITO (Exemptions) Vs M/s. Synergy Finlease Pvt. Ltd. (ITAT Delhi)

In present case there are evidences and material to show that the shareholder company was only a paper company having no source of income, but had made substantial and huge investment in the form of share application money....

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AD-Hoc determination of ALP by TPO Not Sustainable in Law

Ms CLSA India Private Limited Vs DCIT (ITAT Mumbai)

Ms CLSA India Private Limited Vs DCIT (ITAT Mumbai) ITAT Mumbai held that AD-Hoc Determination of Arm’s Length ALP) Price By Transfer Pricing Officer (TPO) Not Sustainable in Law. FACTS – Assessee is a subsidiary of Credit Lyonnais Securities Asia, Netherland. Return of assessee was selected for scrutiny and international transaction ...

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Statutory dues for taxes is Operational Debt: NCLAT

Pr. Director General of Income Tax Vs M/s. Synergies Dooray Automotive Ltd. & Ors. (NCLAT, Delhi)

Pr. DGIT Vs M/s. Synergies Dooray Automotive Ltd. & Ors. (NCLAT, Delhi) ‘Operational Debt’ in normal course means a debt arising during the operation of the Company (‘Corporate Debtor’). The ‘goods’ and ‘services’ including employment are required to keep the Company (‘Corporate Debtor’) operational as a going conc...

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Posted Under: Income Tax | |

Accounting of Service Concession Agreements under Ind AS

Infrastructure for public services—such as roads, bridges, hospitals, airports, water distribution facilities, energy supply etc.—constructed, operated and maintained by the public sector and financed through public budget appropriation. Scope: arrangement involves a private sector entity (an operator) constructing, operating and main...

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Posted Under: Income Tax |

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November 2020