CA / CMA / LLB vacancy in ALIMCO

The Artificial Limbs Manufacturing Corporation of India (ALIMCO) has invited applications for the post of Company Secretary on Direct Recruitment basis.

Artificial Limbs Manufacturing Corporation of India (ALIMCO)is  a CPSU working under Department of Empowerment of Persons with Disabilities, Ministry of Social Justice and Empowerment, Govt. of India.

Qualifications:

Last date of receipt of application in the Corporation is 14.06.2021

Location: Kanpur.

For more details and to apply, click here:

ITAT quashes Reopening of Assessment as there was Absence of Valid Assumption of Jurisdiction by AO

The Income Tax Appellate Tribunal (ITAT), Mumbai Bench quashed the reassessment as there was absence of valid assumption of jurisdiction by the AO.

The assessee company, M/s Shradha Tradelinks Pvt. Ltd. is engaged in the business of trading in shares and derivatives and filed its return of income declaring a total income. Original assessment was framed by the A.O vide his order passed under Section 143(3), at an income of Rs. 4,14,25,800/-.

The A.O reopened the case of the assessee under Section 147 of the Act. Notice under Section 148, was issued and served upon the assessee. In compliance, the assessee e-filed its return of income declaring an income of Rs. 3,69,05,065/-. After filing the return of income the assessee requested for a copy of the “reasons to believe” on the basis of which its case was reopened under Section 147 of the Act. Objecting to the reasons on the basis of which the AO had assumed jurisdiction under Section 147 of the Act the assessee assailed the validity of the reassessment proceedings vide its letter. However, not finding favour with the objections raised by the assessee the AO rejected the same vide his order.

The assessee assailed the assessment framed by the AO under Section143(3) read with section 147, in appeal before the CIT(A). Before the CIT(A) the assessee assailed the validity of the jurisdiction that was assumed by the AO under Section 147 of the Act, as well as the disallowance of its F&O loss of Rs.11,97,47,626/- on merits. Although, the CIT(A) did not find favour with the claim of the assessee that the AO had wrongly assumed jurisdiction and rejected the same, but on merits he accepted the claim of the assessee that in the absence of any material proving to the contrary its claim of F&O loss of Rs.11,97,47,626/- could not have been rejected. Accordingly, the CIT(A) partly allowed the appeal and vacated the disallowance of F&O loss of Rs.11,97,47,626/-.

It was submitted by the assessee that no infirmity did emerge from the order of the CIT(A) who after duly appreciating the aforesaid facts had vacated the addition/disallowance made in the case of the assessee. At the same time, it was averred by the assessee that the CIT(A) had erred in upholding the jurisdiction assumed by the A.O under section 147 of the Act.

On the other hand, the Departmental Representative relied on the order of the AO. It was submitted that as it was proved that the assessee had booked bogus F&O loss, the same, thus, was rightly disallowed by the AO. Rebutting the claim of the assessee’s counsel as regards the invalid assumption of jurisdiction by the AO for reopening the case of the assessee, it was submitted by the department that as observed by the CIT(A) no infirmity did therein emerge.

The coram of Shamim Yahya and Ravish Sood observed that as the AO had failed to independently apply his mind to the „material‟ available on his record and mechanically acting on the information supplied by the Directorate of Income Tax had on the basis of incomplete and incorrect facts reopened the case of the assessee under section 147 of the Act.

“We, thus, not being able to persuade ourselves to subscribe to the view taken by the CIT(A) that the A.O had validly assumed jurisdiction u/s 147 of the Act therein „set aside‟ his order to the said extent. Accordingly, in the absence of valid assumption of jurisdiction by the A.O u/s 147 of the Act, the consequential assessment framed by him u/s 143(3) r.w.s 147, dated 29.03.2015 cannot be sustained and is quashed,” the ITAT said.

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Amendment restricting Section 54 Deduction to only One Residential House is prospective: ITAT allows Deduction [Read Order]

The Income Tax Appellate Tribunal (ITAT), Agra Bench while allowing the deduction ruled that the Amendment restricting Section 54 deduction to only one residential house is prospective.

The assessee, Mr. Dinesh Chandra Dutta Bhargava sold a residential house in Agra on April 21, 2014 for Rs.1,20,00,000/- having the value for the purpose of stamps at Rs.1,22,78,000/-. Out of the long term capital gains, the assessee invested Rs.15,00,000/- in specified bonds under section 54EC and also invested a sum of Rs.43,85,000/- in purchase of a flat and Rs. 48,90,000/- in another flat.

The Assessing Officer observed that deduction under section 54 could be allowed only in respect of one flat.

The assessee preferred appeal before the CIT(A) who sustained the disallowance on the premise that the legal position has changed with effect from April 1, 2015 and in section 54, phrase “a residential house” has been substituted by “one residential house in India”.

The assessee submitted that the CIT(A) while sustaining the disallowance failed to appreciate that the changed legal position in section 54 by Finance Act (Bill No. 2) 2014 was not applicable in the year under consideration, as the amendment was made effective from April 1, 2015 with prospective effect. The two units purchased by assessee are adjacent to each other, as is evident by Khasra No. 519 and 520 and therefore, the same should be considered for deduction under section 54 as per law applicable in the year under consideration.

On the other hand the authority submitted that both the units of residential flats purchased by the assessee situate in different societies and the legislative intent has never been to invest the capital gains in multiple residential houses. Therefore, the impugned order does not call for any interference.

The coram of Dr. Mitha Lal Meena and Laliet Kumar noted that there is nothing on record from the side of Revenue to justify that the said amendment was made applicable with retrospective effect. As regards the disallowance on the premise of investment in two residential flats, the ITAT said that in the case of V.R. Karpaam (Smt.) v. ITO, Tribunal held that ‘a residential house’ in the context could not be construed as a singular and the meaning given in section 54 would apply to section 54F also.

The Tribunal found no justification to discard the claim made by the assessee under section 54 of the Act

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Subsequent Amendment to Application before Settlement Commission would invalidate the Original Application: Madras High Court

The Madras High Court ruled that the application filed under section 245(C) must contain true and full disclosure of income, subsequent modification would dis-entitle Settlement Commissioner to entertain application.

The writ petitioner is Commissioner of Wealth Tax and the order passed by the Settlement Commission is mainly challenged on the ground that there was no true and full disclosure by the respondent-assessee, Krishna Tiles and Potteries (Madras) Pvt Ltd. at the time of filing of an application under Section 245(C) of the Income Tax Act.

Even during adjudication, the petitioner/Department could able to establish that the assessee has not approached the Settlement Commission with true and full facts. In spite of the fact that the respondent/assessee approached the Settlement Commission with unclean hands, the Settlement Commission entertained the application in violation of the provisions of the Act and further, passed an order, which is not in consonance with the powers conferred to the Settlement Commission under the Income Tax Act.

The petitioner reiterated that they have raised strong objections before the Settlement Commission, stating that the basic jurisdictional fact of “full and true disclosure” was absent in the application. Thus, the Settlement Commission did not have the jurisdiction to take up the application or grant relief and further, challenged the order of admission by the Income Tax Settlement Commission. When the said writ petition was taken up for hearing the Vice Chairman of the Settlement Commission appeared in person and stated before this e Court that the Revenue’s objections would be taken into account at the time of passing the final order.

The coram of Justice S.M.Subramaniam clarified that the true and full disclosure must be with reference to the application submitted by the assessee at the first instance. Submission of additional statement of facts providing further disclosure would invalidate the application as the assessee has not filed the application with true and full disclosure.

The Court said that Section 245(C) of the Income tax is clear that the application filed under Section 245(C) must contain true and full disclosure of income. During the course of adjudication, if the Income Tax Department is able to establish that certain details and the properties and documents were not filed along with the application filed by the assessee or if the assessee files an additional statement of facts for the purpose of settlement, then it is to be construed that the application under Section 245(C) of the Income Tax Act was not filed with true and full disclosure, and the disclosures made cannot be trusted upon.

“Thus, to comply with the requirements of the provisions of Section 245(C), there is every reason to believe that the assessee has not approached the Settlement Commission with clean hands and thus, the Department is empowered to go for further adjudication. This being the very purpose and object of the condition imposed under Section 245(C) of the Act, there is no reason for the Settlement Commission to get along with the application, which was not filed with true and full disclosure. Thus, the Settlement Commission has committed an error apparent and allowed the application filed by the respondent in violation of the provisions of the Income Tax Act,” the court added.

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Income Tax: Carbon Credit Receipts being ‘Capital’ in nature, can’t be Taxed as Business Income, says Madras High Court

The Madras High Court while remitting the matter to AO for fresh adjudication ruled that Carbon Credit receipts cannot be considered as business income, it is a capital receipt.

The revenue raised the issue that the Appellate Tribunal is correct in holding that sale of Carbon Credits is to be considered as Capital Receipt and not liable for tax under any head of income under the Income Tax Act, 1961.

The revenue relied on the Ambica Cotton Mills Ltd., vs. DCIT wherein it was held that carbon credit receipts cannot be considered as business income and it is a capital receipt. Hence, the assessee’s claim under Section 80IA of the Act is untenable, as deduction under Section 80IA of the Act is allowable only on profits and gains derived by an undertaking.

The division bench of Justices M.Duraiswamy and R.Hemlatha noted that Carbon Credit is not an offshoot of business, but an offshoot of environmental concerns. No asset is generated in the course of business, but it is generated due to environmental concerns. It was also found that the carbon credit is not even directly linked with the power generation and the income is received by sale of the excess carbon credits.

The ITAT said that the disallowance under Section 14A of the Act read with Rule 8D of the Rules is remanded to the Assessing Officer for fresh decision on merits and in accordance with law, after opportunity to the assessee.

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Chartered Accountants Association condemns Illegal Arrest of CA, submits Representation to Police [Read Letter]

The Chartered Accountants Association, Surat has submitted a representation to the Commissioner of Police, Surat in the light of an illegal arrest of one its members last month.

As per the representation, CA Shri Bharat Rupareliya was made accused on 7th April without following due process of law. He was also subject to tremendous mental and emotional harassment besidesverbal abuse and illegal detention.

“We would like to bring to your notice that Chartered Accountants are an integral part of the taxation system. Only due to their timely response in liaison with their clients, the tax assessment and its collection takes place on time. Needless to say such tax money goes on to pay for administrative, development and welfare purposes,” the letter said.

The letter further pointed out that an atrocious environment is created where matters like illegal arrests, detention and mental harassment to ordinary citizens is a new normal.

“Amidst this environment, officers have now started making arrests without following due legal processes like issue of summons u/s 160 of CrPC, making illegal arrests without making prior inquiries to the satisfaction of the Investigating Officer, illegal detention of individuals without sufficient cause etc.”

“We regret to inform that now even the Police has started booking members belonging to the respectable fraternity of Chartered Accountants for bonafide actions done by these professionals in their routine course of work on behalf of their clients,” it added.

The letter further mentioned that they expect more maturity and responsible behaviour from the Police Department when allegations are made on citizens and especially on revered citizens like Chartered Accountants.

“We also demand an inquiry in the said matter and suitable punitive action be taken against those found guilty, so that no such incidents recur in future on any of our member. Your timely action and response on the said matter would be highly appreciated,” it said.

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12% GST applicable on Plastic Toys: AAR [Read Order]

The Authority for Advance Rulings (AAR), Ahmedabad bench has held that 12% GST is applicable on the plastic toys.

The applicant-Company is engaged in the business of manufacturing and supply of toys made up of plastic and/or rubber or both wherein essentially plastic is the main component. According to the applicant, the plastic toys manufactured and supplied by the applicant would squarely be eligible to be classified under Chapter Heading 9503 for which 12% of GST.

ReferringHeading 9503 as well as the Chapter Notes pertaining to Chapter 95 of the First Schedule to the Customs Tariff Act, 1975, in depth, the bench observed that the provision covers various kinds of toys for children such as Tricycles, scooters, pedal cars and similar wheeled toys, dolls’ carriages, dolls, other toys, reduced-size (“scale”) models and similar recreational models, working or not as well as puzzles of all kinds.

“We have also seen the pictures/photographs of some of the Plastic toys given by the applicant along with their submission as well as some of the samples of toys shown/produced by the representative of the applicant during the course of personal hearing. After going through the above, and comparing the same to the issue in hand, we find that the said toys are made of plastic meant for children and are not electronic toys, and therefore conclude that the plastic toys manufactured and supplied by the applicant are correctly classifiable under Heading 95030030 of Chapter 95 of the First Schedule to the Customs Tariff Act, 1975(51 of 1975),” the bench said.

“We therefore conclude that the Toys of plastic manufactured and supplied by the applicant fall under Sr.No.228 of Schedule-II of Notification No.01/2017- Central Tax(Rate) dated 28.06.2017 and the GST applicable on the said product is 12% (6% SGST + 6% CGST),” the bench said.

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Sales Tax Subsidy received for expansion of Assessee’s existing industry is Capital in Nature: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench ruled that the Sales Tax subsidy received for expansion of Assessee’s existing industry is Capital in Nature.

The respondent assessee, Emami Agrotech Limited has obtained incentive in the form of Sales Tax assistance of Rs.29,40,26,606/- in Assessment Year 2013-14 as Industrial Promotion Assistance (IPA) under “The West Bengal Incentive Scheme (WBIS) 2004” issued vide Notification dated March 24, 2004. The said incentive has been granted to encourage additional investments for setting up and/or expansion and modernization of the industrial undertaking located at the respective place to accelerate the development of the backward area of the State and to create large scale employment opportunities.

The company has received sales tax assistance, being capital receipt, for expansion of existing industrial undertaking involving huge capital outlay. Similarly, the company has also set up a new plant at Krishnapatnam, Andhra Pradesh and is eligible for incentives in the form of sales tax incentive, etc as per the scheme of Andhra Pradesh Gout. known as “Industrial Investment Promotion Policy (1IPP) 2010-2015” of Rs. 13,68,70,416/- for its new unit involving huge capital outlay.

The incentives were set off against sales tax liability payable to the Government and accordingly credited to the profit and loss account in the books of accounts. Since the said incentives have been granted with the objective of setting up of industries in backward areas, the amount equivalent to sales tax exemption, availed during the year, would constitute capital receipts in the hands of the appellant and should not be taxable.

However, while filing original as well as revise return of income, by an inadvertent error, the above amount being capital receipt which was credited to P&L was not excluded from computation of total income under the normal provisions as well as not excluded from Book Profit under section 115JB and has been offered to tax. The same was considered and excluded from Computation both under normal provision and under u/s 115JB through letter of modification in the return of income on August 12, 2015.”

The A.O did not accept the contention of the assessee that the sales tax assistance given by the State govt. as incentive is a Capital Receipt and not taxable, and he held it as a revenue receipt and did not allow the claim of the assessee.

The assessee preferred an appeal before the CIT(A) who deleted the addition by taking note of the orders of his predecessor for A.Y 2011-12 wherein the CIT(A) has held that sales tax incentive enjoyed by the assessee was for setting up industry in the backward areas in the State and hence it is a Capital Receipt not taxable as per the provisions of the Act. Thereafter the CIT(A) followed the view of his predecessor for A.Y 2011-12 and gave relief to the assessee.

The coram of J.Sudhakar Reddy and A. T. Varkey ruled that the subsidy in question received by the assessee in the form of refund of sales tax under the West Bengal Incentive Scheme, 2004 was capital in nature as the purpose of the same was for the expansion of the existing industry of the assessee.

The ITAT further ruled that the amounts which are not taxable in the normal computation cannot be included while computing the book profit because such amounts do not really reflect a receipt in the nature of income and cannot form part of the book profit.

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CS Exam: ICSI relaxes requirements for Pre-Examination Test and One Day Orientation Programme

The Institute of Company Secretaries of India (ICSI), has allowed a temporary relaxation to the requirement of the Pre-Examination test and One Day Orientation Programme for enrollment to the June, 2021 session of CS Examinations.

As per the guidelines, for enrollment to June, 2021 Session of CS Examinations, the students are required to comply with the Pre-Examination Test (Applicable for students of Executive and Professional Programme under 2017 New Syllabus) and a one-day Orientation Programme (Applicable for students of Foundation and Executive Programme registered on or after 1st June, 2019).

The Institute, in a press release issued todaydecided to temporarily relax the said two pre-requisites. Firstly, such students who could not complete above two prerequisites till date due to any reasons, are temporarily allowed to appear in Company Secretaries Examinations, June 2021 Session, without complying the said two requisites. However, they are required to comply with the said requisites on or before 31st July 2021, at 16:00 Hours. Secondly, the students enrolled for Company Secretaries Examinations, December 2020 Session and opt out for June 2021 Session of Examination, are also allowed to complete the said two requisites on or before 31st July 2021, at 16:00 Hours, if not complied earlier.

The relaxation has been granted in view of the difficulties faced by the students on account of the unprecedented crisis due to Corona Virus outbreak in the country.

“This relaxation is granted only for company secretaries Examinations, June 2021 Session without creating any precedent for future,” the Institute said.

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Assessee failed to discharge onus of proving Genuineness of Income from Undisclosed Sources: ITAT upholds addition of Rs.1.81 Cr [Read Order]

The Income Tax Appellate Tribunal (ITAT), Hyderabad Bench while upholding the addition of Rs.1.81 Crores observed that the assessee failed to discharge onus of proving the genuineness of income from undisclosed sources.

The assessee, Chinta Reddy Venugopal Reddy submitted that the sources for cash deposits and time deposits are out of advances received for sale of agricultural land and out of own funds. The assessee submitted that he had entered into agreement for sale of agricultural lands and received advances during the FY 2013-14. The Assessing Officer asked the assessee to submit the details of sale of agricultural land along with copies of agreement of sale/Registered deed etc. The assessee has submitted copies of agreements of sale entered on plain paper showing that the purchasers who are agricultural farmers from the native village of the assessee i.e. Eturu Village, Thirumalgiri Mandal Nalgonda District, given advance for purchase of agricultural land from the assessee during the Financial Year 2013-14.

The Assessing Officer treated the alleged cash deposit in assessee’s savings account maintained with M/s. Vijaya Bank and State Bank of Hyderabad to the tune of Rs.97,70,700 and Rs.93,86,720; totaling respectively to Rs.1,91,57,420 as unexplained. However, the CIT(Appeals) lower appellate order has deleted the impugned addition.

The revenue contended that the assessee had claimed the source of the cash and time deposits out of advances received for sale of the agricultural lands in the relevant previous year. He has produced the so-called agreement(s) of sale on a plain paper involving 6 farmers or vendors from Eeeturu village, Thirumalagiri Mandal, Nalgonda District.

The revenue further said that as per the assessment order itself two farmers that Sri Moola Prasad and Chillara Chandramouli only got recorded their statements and thereafter, the assessee also submitted affidavit(s) with aadhar card(s) and confirmations. The Assessing Officer observed in the light of each and every party, agricultural land holding, annual income and amount of advance claimed that the same lacked genuineness / credit worthiness and therefore he proceeded to make 68 additions which stands deleted in the CIT(Appeals) order.

The coram of A.Mohan Alankamony and S.S.Godara said that ong back that any explanation under the provisions of the Act has to be appreciated in light of human probability after removing all blinkers.

The Tribunal ruled that it is very much apparent that even a single penny has not come via banking channel followed by the grossly disproportionate source(s) of the so called vendees who have not even bothered to get six corresponding sale deeds registered even after a time period of almost a decade.

Therefore, the ITAT while restoring the matter opined that the CIT(Appeals) had erred in law & on facts in deleting the impugned addition of Rs.1,81,57,440 income from undisclosed sources.

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7 Chartered Accountant vacancies in Nagindas Khandwala College

The Nagindas Khandwala College of Commerce, Arts and Management Studies has invited applications for the post of Assistant Professor in Finance & Accountancy, for the academic Year 2021-2022.

The Nagindas Khandwala College of Commerce, Arts and Management Studies has Awarded Best College (2012) by University of Mumbai, and [RE-ACCREDITED (3RD CYCLE) BY NAAC WITH ‘A’ GRADE] ISO 9001:2015 Certified.

Qualifications:

Applications with full details should reach to the principal, on the email address i.e. hr@nkc.ac.in within 10 days from the date of publication of this advertisement.

Location: Mumbai.

For more details and to apply, click here:

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Time Limit for filing Refund Claim of SAD paid by Importer: CESTAT Larger Bench to consider Relief to Importer If Goods are not sold within One Year

The Customs, Excise, Service Tax Appellate Tribunal (CESTAT), Chandigarh Bench referred the issue of time limit prescribed for filing refund claim of SAD paid by the importer to the larger bench so as to consider relief to importer if goods are not sold within one year.

The appellant, M/s.Ambey Sales is engaged in the business of importing and selling plastic materials such as PVC resins during 2015-16 and paid the SAD in terms of section 3 (5) of Customs Act, 1962. They filed a refund claim under Notification No.102/2007- Cus dated September 14, 2007 of SAD. The said refund claims were rejected being time barred in terms of Notification No.93/2008-Cus dated August 1, 2008.

The appellant submitted that merely because two refund claims have been filed in the same month, the same cannot be rejected based on the Circulars issued by the Board.

The sole issue involved in this case was whether Notification No.102/2007-Cus dated September 14, 2007 as amended by Notification No.93/2008-Cus dated August 1, 2008, the time limit prescribed for filing refund claim is one year from the date of payment of SAD or not.

Notification No.93/2008-Cus prescribes that exemption from special CVD in specific is not available without VAT/Sales tax is paid by the importer. Further mandates notification is that SAD which has been levied on the importer is to safeguard the VAT/Sales tax is to be paid by the importer/trader at the time of sale of the goods.

Therefore, if the importer sells the goods and make payment of VAT/Sales tax then the importer is entitled to claim refund of SAD paid by them at the time of import of the goods. If the goods are not sold by the importer, the importer is not entitled for refund of SAD paid by him. The importer shall claim refund of such additional duty of customs paid on the imported goods with the jurisdictional Customs officer before expiry of one year from the date of payment of additional duty. Further, the importer shall pay proper Sales tax at the time of sale of imported goods.

The importer, while issuing the invoice for sale of the said goods, shall specifically indicate in the invoice that in respect of the goods covered therein, no credit of the additional duty of customs levied under sub-section (5) of section 3 of the Customs Tariff Act, 1975 shall be admissible.

The coram of Ashok Jindal noted that when the said notification is beneficial to the assessee by exercising of power under section 25(1) of Customs Act, 1962, the whole purpose of the exemption granted under Sec. 25 (1) of the Act shall be defeated. In case, the imported goods could not be sold by the importer within one year of the payment of SAD on payment of VAT/service tax, the importer is deprived to claim the refund of SAD. The cause of action to claim refund of SAD does not arise as per Notification No.102/07-Cus dated September 14, 2007 and Notification No.93/08-Cus dated August 1, 2008.

The Tribunal further added that if the SAD and VAT/Sales tax paid on the imported goods, it will amount to double taxation on the said imported goods as condition 2(c) of the said notification bars the importer to file refund after clearance of goods after one year of the SAD. Once the intent of the Legislature is to refund the SAD on payment of VAT/Sales-Tax, the condition 2(c) of the Notification is against the intent of the Legislature. Asit is not the intent of legislature to tax double on the imported goods, the importer shall not compete Indian market.

The CESTAT while giving the example, if importer imported goods in March, 2020, after lockdown due to the Pandemic Covid 19 in all over country, second wave of Pandemic and various parts of India is under locked down, if the importer failed to sell the imported goods, the importer shall be put on another burden of SAD which is otherwise entitled of refund on payment of VAT/Sales tax. Further, unless and until the goods are sold on payment of VAT/Sales tax, cause of action for refund of SAD does not arise, the said issue has not been addressed by the Division of this Tribunal.

“In that circumstance, as there are contrary views of this Tribunal, then it would be in the interest of justice, the matter needs to be referred to the Larger Bench of this Tribunal,” the court said while directing the Registry to place the records before the President for the constitution of Larger Bench.

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GST: Delhi HC directs Release of Bank Accounts as No Evidence showing link between Taxable Person and purported Fake Invoices

The Delhi High Court while directing the release of bank accounts noted that there was no evidence showing a link between a taxable person and purported fake invoices.

The petitioner, Roshni Sana Jaiswal was acting as a director on the Board of Directors of a company, going by the name of Milkfood Ltd., between 2006 and 2008. The petitioner is also a shareholder in the said company, and owns approximately 14.33 % equity shares. The petitioner drew a salary of Rs.1.50 crores per annum qua the financial year 2019-2020.

The respondent, based on the information received, that Milkfood Ltd. was availing ITC against fake/ineligible invoices, commenced investigation, under Section 67 of the Central Goods and Services Tax Act, 2017, against Milkfood Ltd.

The respondent claims that, the statement of the persons, who controlled entities, which enabled Milkfood Ltd. to claim ITC, were recorded in the course of the investigation. It is in this connection, the respondent claims, that “the voluntary statement” of the petitioner was recorded.

The petitioner, as per the respondent, in her statement made to the concerned officer, inter alia, admitted to the fact that she had acted as a director of the company, i.e., Milkfood Ltd., between 2006 and 2008, and since then, she has been working in the company in the capacity of a mentor/advisor.

The petitioner is also said to have stated that, it is in her capacity as the mentor/advisor to Milkfood Ltd., that she received Rs.1.50 crores in the concerned FY i.e. 2019-2020, from Milkfood Ltd. According to the petitioner, this money was given as she had been providing “strategic guidance” to Milkfood Ltd.

On the other hand, Mr. Harsh Sethi, who appears on behalf of the petitioner, submitted that. the proceeding initiated against the petitioner. under Section 83 of the Act. is without jurisdiction, as the petitioner does not fall within the ambit of the definition of a „taxable person‟; the taxable person being Milkfood Ltd and not the petitioner. Therefore, the impugned orders cannot be sustained, as this crucial jurisdictional ingredient is missing.

The division bench of Justices Rajiv Shakdher and Talwant Singh noted that the petitioner claimed, in her voluntary statement, that she was paid Rs.1.50 crores in the FY 2019-2020 for rendering services in her capacity as a mentor/advisor to Milkfood Ltd.

“Therefore, even if we assume, for the moment, that, since investigations are on against the taxable person, and therefore, proceedings are pending under Section 67 of the Act, there is nothing placed on record to show that there was material available with the respondent, linking the petitioner to purported fake invoices,” the Bench said.

The court held that in the absence of such material, the impugned action concerning provisional attachment of the petitioner‟s bank accounts, which is otherwise a “draconian” step, was unsustainable. In the zeal to protect the interest of the revenue, the respondent cannot attach any and every property, including bank accounts of persons, other than the taxable person.

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Webinar series on Principles of Statutory Interpretation and Legal Maxims [Register Now]

Dr. Avinash Poddar is conducting another webinar series on Principles of Statutory Interpretation and Legal Maxims. Supported by Taxscan, the series will contain detailed discussion on Rules of Interpretation such as Harmonious Interpretation, Constructive Interpretation, Interpretation via General Clause Act, etc. Inferences will also be drawn from Cases for better comprehension

And important Legal Maxims and idioms will also be discussed.

Sessions will start from May 15th from 5:30 PM to 7:30 PM. There will be sessions every alternate Saturday.

The registration fees for new registrants is ₹ 5,500/-. New registrants will also receive complimentary Taxscan AdFree premium subscription for one year.

For existing registrants of Dr. Avinash Poddar’s GST Act Series, the registration fee will be ₹ 4,500/-.

Taxscan AdFree members can avail an additional discount of 10% on the registration fees. This offer is available for both new registrants and existing registrants of the webinar on GST Act Series.

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NB: While registering, AdFree Members who are also registrants of GST Act Series need make payment of ₹ 4050/- . Make sure that touse the same email ID used for Taxscan AdFree and click on “persons who are registered for GST Act Series”while registering for this Webinar Series.

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No Single Bench Sitting for Last Week: CESTAT, Chandigarh Bench

In the light of the current pandemic situation and the lockdown, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh bench has adjourned all the matters listed from Monday to Friday before the Single bench. However, the reason for adjournment is not mentioned in the circular issued on Wednesday last week.

“All the concerned are hereby informed that the matters listed before Hon’ble Single Member Bench from 17-05-2021 to 21-05-2021 are stand adjourned as per the Head Quarters Office order in File No. 01(05)/Circular/CESTAT/2021 dated 12-05-2021. The next day of hearing will be informed to the respective parties accordingly,” the circular said.

In August last year, the Tribunal, in order to address the issues relating to delay in disposing the litigations due to the lockdown in the light of covid-19 outbreak, started attending hearings through video conferencing platforms.

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The Wait is Over: GST Council to meet on May 28th

After a long gap of seven months, the GST Council is finally scheduled on 28th May 2021, confirmed by Finance Minister Nirmala Sitharaman’s office today. Reportedly, the Union Minister will chair the meeting via video conference on 28th May at 11 a.m.

This is in light of a number of states have sought GST rate cuts on essential Covid supplies, and have been seeking a Council meeting to discuss the matter.

Minister of State Anurag Thakur besides Finance Ministers of States & Union Territories and senior officers from Union Government & States will be attending the meeting, tweeted by the FM’s office from its official account.

There were reports that the meeting would be conducted in mid May amid mounting pressure from the states to exempt or reduce rates on products like oxygen cylinders, ventilators, concentrators, and life-saving drugs like Remdesivir.

Finance Ministers of Punjab, Chhattisgarh, Delhi and West Bengal have already written to the Finance Minister asking for exemptions on key Covid supplies and medical devices, and three of them have asked for a GST Council meeting.

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Supply of Goods & Services by way of Catering to Students of Govt. Industrial Training Institute as per Govt. Scheme is exempted from GST: AAR [Read Order]

The Kerala Authority of Advance Ruling (AAR) ruled that the Supply of goods & services by way of catering to students of Govt. Industrial Training Institute as per Govt. Scheme is exempted from GST.

The Principal, Government Industrial Training Institute, Kalamassery awarded a contract to the applicant, Hazrath Valiyaparambil Azeez for the supply of Boiled milk without sugar, Banana fresh, Bread, Cooked egg with shell to the students as per the Government scheme.

The applicant has sought advance ruling in respect of the issue whether supply of goods and services by way of catering to students of Govt. Industrial Training Institute, Kalamassery as per the Govt. Scheme for Rs. 12.40/- per student per day attracts GST.

The coram of Sivaprasad S. and B.S.Thayagarajababu ruled that the activity of the applicant of supply of the above items by way of catering to students of Industrial Training Institute under the scheme sponsored by the State Government is classifiable as a service falling under Service Classification Code – 9963 -996337 – Other contract food services and qualifies for exemption from GST under SI No. 66 of the Notification No.12/2017-Central Tax (Rate) dated June 28, 2017as the institution is providing service by way of education up to higher secondary school or equivalent.

The other issue raised was whether GST registration is required for supply of goods and services of above items.

The AAR held that As per Section 22 of the CGST/SGST Act, 2017; every supplier shall be liable to be registered under this Act in the State from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees. Section 23 (1) of the CGST Act, 2017 stipulates that any person engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax shall not be liable to registration. In view of the provisions of Section 23 of the CGST Act, 2017, the applicant is not liable to registration if the applicant is exclusively engaged in the supply of goods or services of providing Boiled milk without sugar, Banana fresh, Bread, Cooked egg with shell to the students as per the Government scheme.

The applicant further asked whether refund of GST is eligible in the case of TDS deducted and paid under Section 51 of the GST Act.

The Authority held that the amount deducted as TDS will be credited to the Electronic Cash Ledger of the applicant on filing of TDS returns by the Deductor as the applicant is registered. Since the supply made by the applicant is exempted from GST, the applicant can claim refund of the excess balance in the Electronic Cash Ledger as per provisions of Section 54 of the CGST Act, 2017.

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AO to provide Assessee an opportunity of Cross-examination, If Material collected behind the back of Assessee: ITAT

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench ruled that Assessing Officer has to confront the assessee with the material collected behind the back of the assessee, if he chooses to use the material against the assessee and that he should provide the assessee an opportunity of cross- examination.

The assessee, Anita Singhania submitted that the search and seizure operation under section 132(1) of the Act was conducted on the assessee. He submitted that during the courses of search and seizure no incriminating material was found or seized. It was submitted that seized material is not incriminating material, as all the documents, information are forming part of official documents and regular books of accounts. He contended that none of this material that was found/seized during the course of search operation can be termed as incriminating material.

He referred to the statement recorded by the Assessing Officer from Shri Anil Kumar Khemka and submitted that the statement was recorded after the closure of search and seizure operation and that such post search action cannot form material found during search.

The Assessing Officer has not furnished to the assessee, copies of the statement recorded from various persons including Anil Kumar Khemka and hence this material cannot be used against the assessee as it is a material collected behind back to the assessee. He further submitted that no opportunity to cross-examine the person cited as witness by the Revenue was allowed and these statements of these persons were illegally used by the AO against the assessee.

The Assessing Officer has not made any independent enquiries or conducted any investigations, either with the seller of the shares or with the stock exchange. He submitted that the conclusions of the Assessing Officer are based on a borrowed investigation report of the investigation wing of the Department which was not confronted to the assessee.

The assessee submitted that the most important function of the AO of enquiry and investigation cannot be outsourced and that the report given by the Investigation Wing to them, at best is information and material based on which the AO has to make necessary and reasonable enquiries and collect evidence to support his conclusions.

The departmental representative, Mr. John Vincent Donkuper Langstieh, on the other hand opposed the contentions of the assessee. He submitted that the Assessing Officer has referred to the seized documents and argued that these are incriminating material. He submitted that even otherwise there is no requirement for the Assessing Officer to have incriminating material found and seized during the course of search, to enable him to make additions in an assessment which is not abated under section 153A of the Act.

The division bench of A.T. Varkey and J. Sudhakar Reddy held that it is well settled that the Assessing Officer has to confront the assessee with the material collected behind the back of the assessee, if he chooses to use the material against the assessee and that he should provide the assessee an opportunity of cross- examination. Not having done so makes the evidence in question bad in law.

The ITAT ruled that the assessee has furnished all the bills evidencing the purchase of shares, copies of contract notes of the brokers, copies of the bank accounts disclosing the transaction etc. The transactions that they have taken place through banking channels. Demat statements demonstrate that the transactions had taken place on the platform of NSE. STT has been paid on these transactions. This proves the genuineness of its transactions. The Assessing Officer has no evidence or adverse material to disprove these transactions. Additions cannot be made based on inferences.

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CA Students Scholarship: ICAI invites Applications

The Institute of Chartered Accountants of India (ICAI) has invited the applications for the award of Scholarships to the selected candidates under four categories.

Firstly, the category of Economically Weaker Intermediate Students wherein the scholarship amount is 1500/- per month for those students who are registered for Intermediate Course either through Foundation Route or through Direct Entry Route. Income of Parents should not be more than Rs. 3,00,000/- per annum.

The Scholarship will be granted for 9 months commencing from the following month of registration for Intermediate Course. Additional 3 months if the Student has completed the Orientation Course and IT within the first 9 months of registration for Intermediate Course. Additional 3 months if the Student has passed any one Group in Intermediate Examination within 12 months of registration for Intermediate Course.

Secondly, the category of Economically Weaker Final Students wherein the scholarship amount is 1500/- per month for those students who are registered for final Course and the  Income of Parents should not be more than Rs. 3,00,000/- per annum. 

The Scholarship will be granted for 30 Months or remaining period of Articleship, whichever is less.

Thirdly, the category of Merit-Cum-Need based scholarship wherein the scholarship amount is 2000/- per month for the rank holders of Intermediate Examinations other than those covered under Merit Scholarship. Students must register for the Final Course before making an application. Income of Parents should not be more than Rs. 3,00,000/- per annum.

The Scholarship will be granted for 30 Months or remaining period of Articleship, whichever is less.

Fourthly, the category of Merit Scholarship wherein the scholarship amount is 2500/- per month Rank holders of Intermediate Examinations, whose names appear at Sl. No. 1 to 10 and in case the rank at Sl. No. 10 continues to further ranks i.e. to Sl. No. 11 or to Sl. No. 12 or so on, then all such Rank holders. The students must register for the Final Course before making an application.

The Scholarship will be granted for 30 Months or remaining period of Articleship, whichever is less.

The students may apply online for the scholarship by login at Self Service Portal (SSP).

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Assessee eligible to Claim Exemption on LTCG only If Investment in eligible Bonds is made within 6 months from Transfer of Asset: ITAT

The Income Tax Appellate Tribunal (ITAT), Kolkata Bench while dismissing the appeal of the assessee ruled that the assessee is eligible to claim exemption on Long Term Capital Gains (LTCG) only if investment in eligible bonds is made within 6 months from transfer of asset.

The assessee, Pradip Kumar Basu is an individual, who filed his return of income for the year under consideration declaring total income of Rs.5,96,040/-. In the said return, long-term capital gain arising for sale of residential property amounting to Rs.6,14,674/- was declared by the assessee and the same was adjusted against the loss of Rs.8,64,542/- arising from the commodity share transaction.

Since the loss from commodity share transaction was not eligible for adjustment against the long-term capital gain arising from the sale of residential property, the Assessing Officer disallowed the claim of the assessee for such adjustment and made an addition of Rs.6,14,674/- to the total income of the assessee on account of long-term capital gain in the assessment completed under section 143(3) vide an order.

Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the CIT(Appeals). During the course of appellate proceedings before the CIT(Appeals), a new claim was made by the assessee seeking exemption of long-term capital gain on account of investment made in long-term capital gain bond by virtue of section 54EC of the Act.

The CIT(Appeals), however, found that the said investment was made by the assessee after a period of six months stipulated in the relevant provision and the assessee, therefore, was not entitled for exemption under section 54EC of the Act on account of long-term capital gain. He, therefore, disallowed the claim of the assessee and confirmed the addition made by the Assessing Officer on account of long-term capital gain.

The assessee has submitted that the assessee wanted to invest the long-term capital gain in purchase of another residential property and unable to find the suitable property, he finally invested the amount in long-term capital gain bonds on January 21, 2020.

The coram headed by the Vice President, P.M. Jagtap noted that the long-term capital gain of Rs.6,14,674/- had arisen to the assessee as a result of residential property sold on June 12, 2013 and in order to claim exemption on account of long-term capital gain under section 54EC of the Act, the assessee was required to make investment in the eligible bonds within six months from the date of transfer of the long-term capital asset i.e. December 12, 2013.

The ITAT while upholding the order passed by CIT(A) ruled that the investment in eligible bonds is required to be made by the assessee within a period of six months from the date of transfer of the long-term capital asset in order to claim the exemption on account of long-term capital gain.

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Govt notifies Special Courts in Tripura to deal with Income Tax and Black Money Cases [Read Notification]

The Central Government has notified the constitution of special courts under section 280A(1) of the Income Tax Act, 1961 and section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

A notification issued by the Government designated the Court of the Additional Chief Judicial Magistrate, West Tripura as the Special Court for the State of Tripura for the purposes of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.

A notification issued by the Central Government on Monday stated that “In exercise of the powers conferred by sub-section (1) of section 280A of the Income-tax Act, 1961 (43 of 1961) and section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (22 of 2015), the Central Government, in consultation with the Chief Justice of the High Court of Tripura, hereby designates the Court of the Additional Chief Judicial Magistrate, West Tripura as the Special Court for the State of Tripura for the purposes of section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015.”

As per section 84 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015, certain provisions of the Income-tax Act shall apply with necessary modifications as if the said provisions refer to undisclosed foreign income and asset instead of to income-tax.

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