The Italy Government has passed the New Value Added Tax (VAT) Measures. VAT measures which include:
But taxpayers who purchase diesel or gasoline for business purposes from identified suppliers will be allowed the use of the letter of intent.
Habitual exporters will only have to submit the letter of intent to the Italy VAT authority and will no longer need the form to be sent to the customs authority and suppliers.
The Income Tax Appellate Tribunal (ITAT) in the case of Uday Gopal Bhaskarwar vs ACIT allowed the appeal against CIT(A) and held that the losses which are incurred in the wife’s business are, which was operated by the gift of the husband as the consideration to start the business will clubbing of income into the total income of the husband and the losses incurred by his wife would be set off while computation.
The Appellant Uday Gopal Bhaskarwar is an assessee who has clubbed the losses of his wife’s business in his total income while the computation of his total income, the assessee contended that he has gifted the sum of Rs. 94.50 Lakhs in her wife’s business and unfortunately the wife’s business suffered losses. So the losses must be considered the part of assessee’s total income and losses must be set off while the computation of the total income is done. This contention was made by the assessee while taking the shelter of Section 64 of the Income Tax Act which pertains to clubbing of income.
The relief was sought based on the issue of whether the assessee is eligible to set off losses against his wife’s separate income or not?
The Income Tax Appellate Tribunal (ITAT) comprising of R.S. Syal, Vice President held that the wife’s separate income can be clubbed into husbands total income and in the case of any loss incurred by the wife’s business losses can be set off while the computation of the husband’s total income is done. The tribunal stated two circumstances in which the wife’s separate income can be clubbed into husbands total income which is as follows:
The new ITAT ruling is likely to aid the tax evaders who can tackle the tax authorities by investing money in their wife’s business. They can simply make set-off claims by declaring loss in the business in the audit reports.
Subscribe Taxscan Premium to view the JudgmentThe Reserve Bank of India (RBI) has, by an order dated January 29, 2020, imposed a monetary penalty of ₹ 1 crore on HDFC Bank Limited for non-compliance with Master Direction on Know Your Customer dated February 25, 2016 (updated as on December 08, 2016) (Direction).
The penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949, taking into accounts the failure of the bank to adhere to the aforesaid direction issued by RBI. This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Background
Based on the observations made during the on-site Inspection for Supervisory Evaluation of HDFC Bank Ltd undertaken by RBI for the financial year ended March 31, 2017, a scrutiny of 39 current accounts opened by its customers for bidding in Initial Public Offer was conducted by RBI which revealed, inter alia, that the bank had failed to exercise ongoing due diligence in those accounts. It was observed that the transactions effected in these current accounts were disproportionate to the declared income and profile of the customers.
On the above basis, a notice was issued to the bank to show cause as to why penalty should not be imposed for non-compliance with the direction. After considering the reply received from the bank and oral submissions made in the personal hearing, RBI came to the conclusion that the aforesaid charge of non-compliance with the direction was sustained and warranted imposition of monetary penalty.
The Income Tax Appellate Tribunal (ITAT) in the case of Shri Shanmugam Senthilkumar vs. The Income Tax Officer ordered Commissioner of Income Tax (Appeals) to elaborate on the reasons for the late-night hearing which was considered as a breach of onerous duty as it reduces working efficiency and as a consequence passing of a misleading order.
The petitioner named Shri Shanmugam Senthilkumar who was the Ld. counsel for the assessee was of the contention that a person who appeared before the Commissioner of Income Tax (Appeals) was the office staff and not the Chartered Accountant. And the Commissioner of Income Tax (Appeals) was negligent in making the note of this fact and as a consequence disposed of the appeal without taking into consideration the material facts on record. Also, the petitioner contended that the Commissioner of Income Tax (Appeals) used to make practitioners wait for a long duration i.e. from 9 PM to 10 PM and passed such misleading and erroneous order.
Further, it was also contended that instead of passing a speaking order the Commissioner of Income Tax (Appeals) disposed of the appeal on the basis of summarization of the material facts by the assessing officer.
The Income Tax Appellate Tribunal (ITAT) comprising of S. Jayaraman, Accountant Member, and N.R.S. Ganesan, Judicial Member allowed the appeal by passing an order stating that the order passed by Commissioner of Income Tax (Appeals) is set aside. Further the Commissioner of Income Tax (Appeals) is under the onerous duty of imparting justice cannot Working Efficiency in a negligent manner. Wherefore, the Commissioner of Income Tax (Appeals) was asked to give reasons for passing such kind of order. Also with regards to making practitioners wait from 9 PM to 10 PM needs to be avoided and the Commissioner of Income Tax (Appeals) needs to confine the hearing in the working hours only.
Subscribe Taxscan Premium to view the JudgmentThe Rajasthan Authority for Advance Ruling (AAR) on an application made by M/s Crown Tours and Travels while addressing the issue ruled that the services provided to the tour operators are covered within the ambit of ‘Support Service’ and as a result 18% Goods and Service Tax (GST) is applicable.
In the present application, the applicant is engaged in the business of providing the tour operators with the ‘Ancillary services’ such as Elephant Ride, guide charges, assistance charges, home host dinner, lunch/dinner at local restaurants, boat ride, camel ride, and saree turban tying, etc. Moreover, ancillary services do not include planning, scheduling, arranging tours, organizing tours by any mode of transportation.
Wherefore, in this case, the applicant has sought the advanced ruling on two issues namely:
The Rajasthan Authority for Advance Ruling (AAR) comprising of J.P. Meena, Member of Central Tax and Hemant Jain, Member of State Tax while addressing the issues raised by the applicant passed the advance ruling based on the rationale that the applicant is not a tour operator as it did not charge any charges for the accommodation and transportation services, therefore, the services provided by the applicant does not fall within the ambit of ‘supply of tour operator services’.
The AAR after taking into consideration the work of the applicant and observed that the services provided to the tour operators are covered within the ambit of ‘Support Services’ and as a result 18% Goods and Service Tax (GST) wherein 9% CGST and 9% SGST is applicable.
Subscribe Taxscan Premium to view the JudgmentThe Rajasthan Authority for Advance Ruling (AAR), in its advance ruling, ruled that the Fortified Rice Kernels (FRK) and Fortified milk are classified as ‘other’ and it doesn’t fall under the purview of Chapter 10 of GST tariff therefore 18% GST wherein the rate of 18% GST is divided into 9% of Central Goods and Service Tax (CGST) and 9% State Goods and Service Tax (SGST) is made applicable.
M/s JVS Food Private Limited is an applicant who is engaged in food production and is the largest producer of institutional food in the state of Rajasthan. The applicant has adopted the strategy of food fortification so as to check the nutrient value of the food to prevent malnutrition and this strategy is utilized globally. Further, this producer undertook the procedure of rice fortification and milk fortification. The rice fortification involves 2 steps namely:
Hence, the issue raised in this case was whether Fortified Rice Kernels (FRK) and Fortified milk will be taxable under Chapter 10 of GST Act which pertains to the natural form of any product or not?
The bench comprising of J.P. Meena, member of Central Tax and Hemant Jain, Member of state tax stated in the ruling that Fortified Rice Kernels (FRK) and Fortified milk are classified as ‘other’ and it doesn’t fall under the purview of Chapter 10 of GST Act therefore 18% GST on the following rationale:
The Ministry of Corporate Affairs (MCA) through a notification dated January 24, 2020, notifies the Companies (Winding Up) Rules, 2020 will be effective from April 1, 2020, which consists of Rule 1 to 191 and Forms WIN 1 to WIN 95, which pertains to the winding up of a company under the Companies Act, 2020.
The word ‘winding up’ is a process in which the dissolution of a company is brought about in which its assets are applied in the payment of its debts. After the payment of the debts, if in case any amount remains then that is paid to the members in proportion to the share or share capital held by them.
Basically, the Companies (Winding Up) Rules, 2020 provides the rules for prominent ways pertaining to winding up of a company namely Winding up by Tribunal; Liquidators; Winding up Order; application for the stay of suits, etc. on winding up order; report by Company Liquidator under Section 281; settlement of list of contributors; Advisory Committee, meeting of creditors and contributors and their proxies; registration and book of account to be maintained by the companies liquidators; investments of surplus funds; filing and audit of Company Liquidator’s account; winding up by tribunal debts and claims against the company other than summary winding up; attendance and appearance of the creditors and contributories; collection and distribution of assets, calls in winding up by the tribunal; examination under Section 299 and 300; application against the directors or promoters or officers; compromise of claims; sale by company liquidators; dividends and returns of capital in winding up by the tribunal; termination of winding up; payments of unclaimed dividends and the summary procedure for liquidation.
The Companies (Winding Up) Rules, 2020 elaborate on the procedure in which the winding up of a company can be commenced.
Subscribe Taxscan Premium to view the JudgmentThe Gujarat High Court has held that the Commissioner ought not to have delegated his powers of provisional attachments under Section 83 of the CGST Act to the Assistant Commissioner.
The ruling was made by a division bench comprising of members Justice J.B.Pardiwala and Justice Bhargav D. Karia in the case of Enprocon Enterprise Ltd. Vs. The Assistant Commissioner of State Tax. The office premises of the appellant company situated at Ahmedabad and Baroda were raided by the respondent-Authorities, in the exercise of their powers, under Section 67 of the CGST Act, 2017. The search and seizure were undertaken by the Authorities and the proceedings under Section 73 of the GGST Act, 2017, have been initiated against the appellant. Later an order of provisional attachment of the immovable property situated at Ahmedabad, came to be passed by the Assistant Commissioner of State Tax in the exercise of powers, under Section 83 of the Act, 2017. Being dissatisfied with the order of provisional attachment, the appellant is here before this Court, with the present Writ Application.
The respondent authority is submitted that with a view of unearthing the billing transactions had taken the statement of legal representative of the company and he has mentioned that he was given merely Rs.8,000/- per month for the purpose of making and providing fake bills with a view to avail the input tax credit (ITC), such bills were given to the petitioner company. The petitioner was involved in billing activities with Shivay Enterprise to the tune of Rs.49.80 Lakhs defrauding the government.
The Court ruled that the Commissioner ought not to have delegated his powers of provisional attachment under Section 83 of the Act to the Assistant Commissioner. Therefore, the orders of provisional attachment as well as the order of prohibition are not sustainable on two counts, i.e. (i) the order has been passed by the Assistant Commissioner, and (ii) the order has been passed without any credible materials, available for the purpose of passing such order of provisional attachments. The order of provisional attachment passed by the Assistant Commissioner, so far as the immovable property is concerned, is hereby quashed and set aside.
Subscribe Taxscan Premium to view the JudgmentThe Madras High Court has ruled that the amount received by an employee from the employer on premature termination of the contract/notice pay recovery of employment will not be chargeable to Service Tax.
The petitioner is a dealer assessed to service tax by the respondent. The terms of employment of the petitioner company include a stipulation for a notice period prior to quitting from employment, ranging from two to three months. An option is provided to the employees to the effect that if they are not in a position to stay and serve out the notice period, then in lieu of the same, the employee will be required to pay the equivalent pay of salary for the period for which notice was not served.
Thus, in a case where an employee wishes to quit, it is incumbent upon the employee to put the employer to notice in advance of a stipulated period to enable recruitment of a new employee and smooth transition of the work carried on by the employee, who proposes to quit. It also facilitates a situation where the employee may desire immediate quitting by enabling him to do so, however, also ensuring that some compensation is provided to the employer by virtue of the sudden and unexpected termination of duty.
The petitioner, in this case, had received certain amounts in lieu of notice period from outgoing employees. The Assessing Officer was of the view that this amount would attract service tax since the petitioner is deemed to have facilitated the termination of employment and thus a category of service entitled and described as ‘facilitation of termination of employment’ was carved out by the Assessing Officer.
While allowing the Writ Petition filed by GE T & D India Limited, Justice Anita Sumanth observed that, “the amounts paid by the employer to the employee for premature termination of a contract/notice pay recovery of employment are treatable as amounts paid in relation to services provided by the employee to the employer in the course of employment. Hence, amounts so paid would be chargeable to service tax”.
The Court also observed that the employer cannot be said to have rendered any taxable service and has merely facilitated the exit of the employee upon imposition of a cost upon him for the sudden exit.
Subscribe Taxscan Premium to view the JudgmentThe Gujarat High Court has held that the lawyer fee / legal assistance expenditure taken by the assessee on day to day basis for the purpose of business can be treated as revenue expenditure, deductable from Taxable Income.
According to the facts, the disallowance towards interest expenditure was worked out to Rs.2,77,28,566/- by applying the formula under Rule 8D(2)(ii). A disallowance of Rs.1,21,69,984/- was made towards administrative and managerial expenses by applying the formula under Rule 8D(2)(iii) of the IT Rules. The aggregate disallowance was thus worked out to Rs.3,98,98,550/-.
The division bench comprising of Justice J.B Pardiwala and Bhargav D. Karia observed that Section 14A elaborates as an Expenditure incurred in relation to income not includible in total income.—For the purposes of computing the total income under this Chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act.’
The court also observed that, regarding professional fees component of Rs.21,98,169/ disputed by the Revenue, bench finds that CIT(A) has observed that such expenditure has been incurred for legal assistance taken by the assessee on daytoday basis for the purposes of business.
While dismissing th Court further observed that, expenditure incurred on legal fees/ lawyer fee in our view has been rightly treated as revenue expenditure by CIT(A).
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Indirect Tax and Customs (CBIC) has implemented automated customs clearance on a pilot basis in two ports.
In a Circular issued by CBIC said that, using the electronic clearance of bills of entry with the help of advanced technology of Custom Automated Clearance on the pilot basis in two ports.
The circular was issued by Eric C Lallawmpuia, OSD Cus IV in the Department of Revenue under the Ministry of Finance to all the Principal Chief Commissioners and Commissioners of Customs, the Principal Chief Commissioner and Commissioners of Custom and Central Tax.
The circular also stated the certain condition and significance of Custom Automated clearance which are as follows:
The enforcement will be rolled out on a pilot basis, at the initial stage the Custom Automated clearance will be enforced just on 2 custom locations which are Jawaharlal Nehru Custom House and Chennai Customs House. Then the whole plan will be reviewed and if this plan will prove successful then this will be implemented to all the custom locations.
Subscribe Taxscan Premium to view the JudgmentThe Karnataka High court held that the entity registered under the Karnataka Souharda Sahakari Act 1997 fits into the definition of “co-operative society” as enacted by sec. 2(19) of the Income Tax Act, 1961 for the purpose of tax deduction under Section 80P(1).
The Petitioner is a Credit Cooperative, registered under the Karnataka Souharda Sahakari Act, 1997. The Petitioner is registered as the State-Federal Cooperative, as provided under Section 33 of the said Act. They have knocked at the doors of writ court in substance for a prayer that they are entitled to seek deduction in respect of their income in terms of the scheme envisaged under section 80P of the Income Tax Act, 1961, on the premises that they too are a Cooperative society.
A single-judge bench of Justice Krishna. S. Dixit delivered the order based on a writ petition filed by M/s Swabhimsni Souharda Credit Cooperative Ltd.
Section 2(19) elaborates as ” co-operative society” means a co-operative society registered under the Co-operative Societies Act, 1912 4 (2 of 1912 ), or under any other law for the time being in force in any State for the registration of co-operative societies;
Section 80P, (1) elaborates as, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2) in computing the total income of the assessee.
While allowing the writ petition the Court further observed that these writ petitions succeed; a declaration is made to the effect that the entities registered under the Karnataka Souhrada Sahakari Act, 1997 fit into the definition of “co-operative society” as enacted in sec.2(19) of the Income Tax Act, 1961 and therefore subject to all just exceptions, petitioners are entitled to stake their claim for the benefit of sec.80P of the said Act.
Subscribe Taxscan Premium to view the JudgmentThe Bombay High Court has held that no provisional attachment under Section 83 of the CGST Act can be made in absence of any specific proceedings pending against such taxable persons.
In the recent case i.e. Kaish Impex Private Limited v. Union of India and ors., The Petitioner- Kaish Impex Private Limited is a Company engaged in the export of perfumes and compound fragrance oil. The Petitioner, in pursuant of its activity of export, had carried out various transactions with different entities. The dispute arose when the respondents initiated an inquiry against an export firm namely M/s Maps Global. The Respondent-authorities suspected that M/s Maps Global was involved in fraudulent availing of Input Tax Credit (ITC), and this Input Tax Credit (ITC) was utilized for payment of export goods. On scrutinizing the bank account of M/s.Maps Global and noticed that an amount of Rs.28,50,000/- was transferred to one M/s.Balajee Enterprises, on 19 June 2019 and 12 July 2019 without any supply of material. Further, the Respondents have allegedly found that M/s. Balajee Enterprises transferred an amount of Rs.1,63,00,000/- to the account of the Petitioner on 17 October 2019. Consequently, the Directorate General of GST Intelligence issued a summons under section 70 of the CGST Act, 2017 to the Petitioner for inquiry against M/s.Maps Global. On the same day, the Directorate General issued a communication to the State Bank of India informing the Bank Manager of proceedings being initiated against the Petitioner and a provisional attachment of bank account is necessary under section 83 of the CGST Act. The Petitioner received a communication from the State Bank of India on 5 November 2019 regarding attachment by the Respondents.
The Petitioner has filed this writ petition challenging this action of attachment under section 83 of the Act by the Respondents.
The Petitioner contended that the action of the Respondents is beyond the power conferred under section 83 of the Act. The contingencies in which an order of provisional attachment can be made are enumerated in section 83 namely, the pendency of proceedings under section 62, 63, 64, 67, 73 and 74 of the Act. However, there were no proceedings initiated or pending against the Petitioner under these sections. Further, the amount transferred by M/s.Maps Global to M/s.Balajee Enterprises which was allegedly transferred by M/s.Balajee Enterprises to the Petitioner on 17 October 2019, it is certain that during this period M/s.Balajee Enterprises could have entered into various other transactions.
Whereas the primary defence of the Respondents is that even if section 62, 63, 64, 67, 73 and 74 mentioned in section 83 of the Act are not referable to the case of the Petitioner, but a summons issued to the Petitioner in pursuant to the inquiry initiated against M/s.Maps Global under section 67 of the Act, is enough to extend its applicability to the Petitioner.
The bench comprising of Justice Nitin Jamdar and Justice M.S. Karnik has observed that Section 83 read with section 159(2) and the form GST DRC-22 show that a proceeding has to be initiated against a specific taxable person, an opinion has to be formed that to protect the interest of Revenue an order of provisional attachment is necessary. The format of the order, i.e. the form GST DRC-22 also indicates that there must be a nexus between the proceedings to be initiated against a taxable person and provisional attachment of bank account of such taxable person. Further, the power to provisionally attach bank accounts is a drastic power and that must be used in the limited circumstances. It is therefore not allowed to make provisional attachment in the absence of any specific proceedings.
Thus it has been held that the order for provisionally attaching the bank account of the Petitioner was without jurisdiction and is liable to be quashed and set aside.
Subscribe Taxscan Premium to view the JudgmentThe Union Minister of State for Finance & Corporate Affairs, Shri Anurag Singh Thakur has expressed confidence that with concerted efforts of the Central Board of Indirect Taxes & Customs (CBIC), India would further improve its position in ranking for Ease of Doing Business. While addressing at Investiture Ceremony & International Customs Day 2020 here today, Shri Anurag Singh Thakur said that India has risen in the Ease of Doing Business Rankings by being transparent, accountable and logical. This rise in rankings is due to the efforts of the officers of CBIC as Trading Across Borders is one of the key parameters of the rankings and it is a credit to the efforts of CBIC that this key parameter has performed.
While stressing on harnessing technology for faster resolution, the Minister said that technology plays an important role by ensuring efficiency, transparency, and accountability. Shri Anurag Singh Thakur appreciated the response of Custom officials to the dynamics of changing ecosystems worldwide. Customs are doing well because they work as a team besides adapting and evolving, especially in a large and diverse country like India.
He said the 2020 theme of International Customs Organisation itself highlights the changing nature and role of customs today. The theme of International Customs Day, celebrated on 26th January every year, is dedicated to the contribution of Customs towards a sustainable future where social, economic, health and environmental needs are at the heart of our actions, with the slogan “Customs fostering Sustainability for People, Prosperity and the Planet”.
Shri Anurag Singh Thakur gave away the awards to CBIC Officers & Staff for their meritorious services on the occasion of Investiture Ceremony & International Customs Day. Presidential Award of Appreciation Certificates and World Customs Organization (WCO) Certificates of Merit Award were also presented to the distinguished officers of the CBIC.
Dr. Ajay Bhushan Pandey, Revenue Secretary, also spoke about the thrust on enhancing trade facilitation and the role of other stakeholders including participating government agencies. Revenue Secretary emphasized on the use of technology in ensuring Ease of Doing Business.
Dr. John Joseph, Chairman CBIC, while congratulating the awardees highlighted recent key initiatives taken by the Customs for enhancing trade facilitation in line with the Action Plan for implementing the Trade Facilitation Agreement of the WTO ratified by India. He also complimented the officers for their dedicated work especially in the area of preventing the smuggling of environmentally sensitive items, flora, and fauna. Chairman CBIC said that officers of CBIC are fully committed towards hassle-free trade and taking India to newer heights in Ease of Doing Business rankings.
Shri O. P. Dadhich, Principal Chief Commissioner of Customs Delhi Zone presented the vote of thanks.
The following officers received the Presidential commendation.
A. Exceptionally Meritorious Service rendered at the Risk of Life
B.Specially Distinguished Record of Service
C.World Customs Organisation (WCO) Certificate of Merit
OFFICERS of CBIC
Officers from other Government Agencies:
The recipient from Private Sector:
The Supreme Court of Washington reversed the earlier ruling of the Appellate Court by affirming that now the retailers are entitled to claim refunds of the bad debts on default Private Label Credit Card Payment (PLCCP).
Prior to this order passed by the Supreme Court of Washington, the ruling of the appellate court was that the retailer is not entitled to Washington’s bad debt sales tax refund in the case where retailer has entered into a contract with a bank financial company in order to provide Private Label Credit Card Payment (PLCCP) to the consumers.
The earlier ruling was based on the rationale that such bad debts are not at all directly attributable for a purpose of retail sales as per the ruling of the case law in 2009, moreover, it was not mentioned in writing in the retailer’s books of accounts and records.
Presently the Supreme Court of Washington reversed the earlier ruling by stating that in spite of the fact that the banks are generally involved in the credit transactions such as banks act as the facilitators of Credit sales, however, the retailer is still the sufferer wherein he is not paid by his customer which may include the customer’s non-payment of the sales tax. Further, the court elaborated on the meaning and affirmed that vai its separate guarantor arrangements with the respective banks, which facilitate the credit transaction, all the losses which were incurred because of the non-payment of the sales tax by the defaulting customer can be reimbursed by the retailer to the bank.
The Supreme Court also held that as per the Revenue Code of Washington the are empowered to claim a deduction for all the bad debts.
The Income Tax Appellate Tribunal (ITAT) allowed depreciation on goodwill resulting from the acquisition of Business Unit of Lee & Muirhead Pvt. Ltd.
The assessee during the relevant previous year had purchased the business of Lee and Muirhead P. Ltd. for a total consideration of 181,50,05,880. The purchase consideration has been apportioned between the movable assets and net current assets. The difference between the purchase consideration and the value apportioned to fixed assets and the net current assets has been recognized as goodwill in the nature of the intangible asset and the assessee had claimed depreciation both on tangible and intangible assets.
As it appears, in the original return of income the assessee claimed depreciation on all other fixed assets except the intangible asset viz. goodwill. In the course of assessment proceedings, the assessee filed a revised computation of income claiming depreciation @ 25% amounting to 39,75,25,000 on intangible assets of 159.01 crores.
The bench comprising of Judicial Member, Pawan Singh and Accountant Member Shamim Yahya pronounced the order on an appeal filed by DHL Logistics Private Limited.
The Tribunal examined the facts relating to assessee’s claim of depreciation on an intangible asset, it is apparent that all facts relating to the payment made towards goodwill are available in the annual report of the assessee submitted along with the original return of income.
The Tribunal observed that due to inadvertent mistake, the assessee could not claim depreciation on goodwill. Therefore, in the course of assessment proceedings, the assessee filed a revised computation claiming depreciation on goodwill from Acquisition of Business Unit.
Relying on the decision of Andhra Pradesh High Court in Bakelite Hylam Ltd. and the Gujarat High Court in Gujarat Gas Co. the contention of the Department that by virtue of CBDT circular no.549 dated 31st October 1989, the assessed income cannot be less than the returned of income is also not acceptable.
While allowing the appeal the tribunal also observed that the issue is squarely covered in favor of the assessee by its own case in the earlier years. CIT vs. Smifs Securities Ltd held that the assessee was entitled to depreciation on goodwill by following the decision of Apex Court.
Subscribe Taxscan Premium to view the JudgmentThe Karnataka Appellant Authority for Advance Ruling (AAAR) ruled that Pre-sale and Marketing Services by Indian Subsidiary to Foreign Parent Company is Intermediary services.
The Appellant is a 100% Export Oriented Unit under the STP1 scheme and is a wholly-owned subsidiary of Infinera Corporation, The Appellant is predominantly engaged in software development services for the products developed by Infinera Corporation.
In addition, the Appellant also provides pre-sale and marketing services for the optical networking equipment developed by Infinera Corporation. The Appellant and Infinera USA have entered into a “Pre-sale and Marketing Services Agreement”.
The scope of work involves:
The AAAR bench comprising of D.P Nagendra Kumar and Srikar pronounced the order based on an appeal filed by M/s Infinera India PVT Ltd.
Section 2(13) of the IGST Act elaborates intermediary as to mean a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods and/or services, between two or more persons but does not include a person who supplies main service or supplies the goods on his own account.
The bench observed that the demonstrating the products of Infinera US, obtaining the feedback of the customers and passing the same to Infinera US so that the necessary enhancements and notification can be made to suit the customer’s requirements. The pricing decisions and negotiations with the customers are done by Infinera US.
Thus the appellant act as a communication and coordination channel between their client and the customers in India. It clearly amounts to facilitating the supply between the two parties that is Infinera US and customers in India.
The bench further observed that the appellant is clearly facilitating the supply of the products of Infinera US directly to the client’s customers in the territory of India and is not supplying such goods on his own account and therefore appellant does not fall within the ambit of exclusion.
While upholding the decision of the AAAR, appellate bench observed that the pre-sale and marketing service provided by the Appellant of the products of the overseas client is in the nature of facilitating the supply of the products of the overseas client and is appropriately classified as an ‘intermediary service’ as defined under Section 2(13) of the IGST Act.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT), Cuttack held that the none-availability of PAN of the deductee is not an excuse to escape from filing TDS.
The assessee filed the quarterly statements of TDS in Form Nos.24Q and 26Q of different quarters for the financial year 2007-2008. Since there was no reasonable explanation for the huge delay in filing the 24Q and 26Q statements, the JCIT(TDS) concluded that the penalty u/s.272A(2)(k) of the Act is leviable in the case of the assessee.
The bench includes Judicial Member, C.M Garg and Accountant Member L.P Sahu pronounced order based on an appeal filed by Mahanadi Coal Fields Limited.
Section 272A(2)(k) elaborates as Penalty for Failure to Answer Questions, Sign Statements, Furnish Information, Returns or Statements, Allow Inspections, Etc. if any person fails to deliver or cause to be delivered a copy of the statement within the time specified in sub-section (3) of section 200 or the proviso to subsection (3) of section 206C.
The Tribunal observed that the penalty is provided in the Income Tax provisions u/s.272A(2)(k) of the Act is mandatory in nature except in case of reasonable cause proved by the assessee, which is the lack in this case.
The bench observed that the assessee could not demonstrate that the assessee has furnished any reasonable cause for non-furnishing of PAN by the deductee so as to enable him to get the benefit of Section 273B of the Act and he has deducted TDS and deposited to the Government within the time with the prescribed authority.
While upholding the action of the CIT(A) and dismiss the grounds of appeal raised by the assessee the bench further stated that the assessee could not demonstrate that the assessee has furnished any reasonable cause for non-furnishing of PAN by the deductee so as to enable him to get the benefit of Section 273B of the Act and he has deducted TDS and deposited to the Government within the time with the prescribed authority.
Subscribe Taxscan Premium to view the JudgmentThe Madras High Court has denied the exemption benefit on imports made before the registration under customs rules.
The Assessee M/s.Medreich Sterilab Limited holding that Rules 3 and 4 of the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 were only procedural in nature and therefore, though the Application for registration under Rule 3 was filed later on and the Registration granted to the Respondent/Assessee to avail the exemption from payment of duty in respect of import under Bill of Entry No.550344 dated 28.6.2003 under which goods imported in question which was cleared by the Customs Authority on 30.6.2003, prior to the date of registration under Rule 3 on 14.7.2003, the Tribunal upheld the order of the lower appellate authority and thereby granted the exemption claimed by the Assessee.
The division bench constituting of justices Vineeth Kothari and Suresh Kumar pronounced the judgment based on an appeal filed by Commissioner of Customs, Chennai.
Rules 3 and 4 of the said Rules 1996 are quoted as
Rule 3. Registration
(1) A manufacturer intending to avail of the benefit of an exemption notification referred in sub-rule (1) of rule 2, shall obtain a registration from the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise having jurisdiction over his factory.
(2) The registration shall contain particulars about the name and address of the manufacturer, the excisable goods produced in his factory, the nature, and description of imported goods used in the manufacture of such goods.
(3) The Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise shall issue a certificate to the manufacturer indicating the particulars referred to in sub-rule(2).
Rule 4. Application by the manufacturer to obtain the benefit.
(1) A manufacturer who has obtained a certificate referred to in sub-rule (3) of rule 3 and intends to import any goods for use in his factory at concessional rate of duty, shall make an application to this effect to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise indicating the estimated quantity and value of such goods to be imported, particulars of the notification applicable on such import and the port of import.
(1A) The manufacturer may, at his option, file the application specified under sub-rule (1), either in respect of a particular consignment, or indicating his estimated requirement of such goods for a period not exceeding one year.
(2) The manufacturer shall also give an undertaking on the application that the imported goods shall be used for the intended purpose.
The court opined that the learned Tribunal has erred in holding that the Rules are merely procedural or directory in nature and upholding the grant of exemption to the Assessee.
The Court further observed that there is no justification for the learned Tribunal to hold that these Rules are only procedural or directory in nature and therefore it could be applied for the import made at the prior point of time.
While allowing the appeal, the Court noted that the present case is not regarding the valuation of the goods in question or rate of duty, but, the question is of the wrong exemption claimed by the Assessee and granted by the Tribunal.
Subscribe Taxscan Premium to view the JudgmentThe Philippines Government has amended the National Internal Revenue Code (NIRC) which expanded the coverage of Value-Added Tax (VAT) on vape, tobacco, and liquor. This is primarily seen as a cost-effective measure of improving health and reducing non-communicable diseases. Secondly, this will bring in additional revenue that can benefit the underserved.
Vape products will be taxed from P37 per millilitre and tobacco P25 per pack. The regulation is with sight to numerous Filipinos at risk of dying due to tobacco-related diseases.
The excise tax will be levied on distilled spirits which is equivalent to 22% of the net retail price and on wines P50 per litre with effect from 1 January 2020.
Moreover, the sale or importation of drugs for diabetes, cholesterol, and hypertension are VAT exempt from 1 January 2020 and the drugs for cancer, tuberculosis, mental illness and kidney from 1 January 2023 which will make them cheaper, making it more affordable for Filipinos.
It is expected that the Philippines sin tax would bring P17 billion additional revenue. 60% of the additional revenue is decided to be allocated for the implementation of the UHC Act of 2019, 20% for health care facilities and requirements of the Department of Health (DOH) and the remaining for achieving Sustainable Development Goals.
The New York Tax Appeal Tribunal in an appeal by the Apple INC denied the sales tax refund on device sales in gift card promotion.
In this case, the petitioner is the Apple INC, which is a corporation engaged in designing and marketing of the software, electronics, and personal computers, further it also deals in the communication device such as mobile for example iPhone; personal computers such as MacBook, Macbook Pro, iMac, Mac Mini, etc.; portable digital music players such as iPods; device peripherals and accessories such as computer display, etc. There various modes of sales by which the petitioner sold his product i.e. directly or indirectly. The petitioner also launched the Mac App Store in 2011. In order to promote the Mac App Store, the petitioner started ‘back-to-school’ (BTS) in 2012.
As per the terms and conditions applied on the ‘back-to-school’ (BTS) all the qualified educational individuals which include staff, faculty, students, and parents who are living in the U.S.A. were eligible to avail ‘back-to-school’ (BTS) Gift Card on the purchase of any qualified Apple Product at the Mac App Store.
So the issues raised was whether the petitioner has properly collected and remitted sales commenced during 2011 and 2012 in back-to-school or not?
The New York Tax Appeal Tribunal reaffirm the fact which was highlighted by the Administrative Law Judge (ALJ) wherein he addressed the proper procedure for the computation of the sales tax, which is to be made in the ‘back-to-school’ (BTS) Gift card promotion for 2 years. Wherefore, in the light of this the New York Tax Appeal Tribunal held that the sales tax will be applicable on the qualifying purchase as it is impossible to take into account the discount availed under ‘back-to-school’ (BTS) Gift card as some availed the discount of $5 while others $10.
