The Calcutta High Court directed the department to grant Input Tax Credit (ITC) as all purchases, and transactions in question were genuine, made before cancellation of GST Registration.
As many as 7 petitions were filed assailing the impugned notices issued by the respondents concerned for not allowing the petitioners, who are the purchasers of the goods in question and refusing to grant the benefit of input tax credit (ITC) on purchase from the suppliers and also asking the petitioners to pay penalty and interest under relevant provisions of GST Act.
The Petitioners have also challenged the constitutional validity of section 16(2)(c) of the CGST/WBGST Act, which, according to me, does not require consideration in these cases, since it appears on perusal of relevant record that the refusal to grant benefit of input tax credit (ITC) to the petitioners are not on the grounds of non-deposit of tax in the Government account by the suppliers which have been collected from the petitioners, under Section 16 (2) (c) of the CGST/WBGST Act.
In these cases, it is the case of the respondents-GST authorities that on inquiry, they came to know that the suppliers from whom the petitioners/buyers are claiming to have purchased the goods in question are all fake and non- existing and the bank accounts opened by those suppliers are on the basis of fake documents and petitioners’ claim of benefit of input tax credit are not supported by the relevant documents, and the case of the respondents is also that the petitioners have not verified the genuineness and identity of the aforesaid suppliers who are registered taxable persons (RTP) before entering into any transaction with those suppliers.
Further grounds of denying the input tax credit benefit to the petitioners by the respondents are that the registration of suppliers in question has already been cancelled with retrospective effect covering the transactions period in question.
The single bench of Justice Md. Nizamuddin held that all the purchases and transactions in question are genuine and supported by valid documents and transactions in question were made before the cancellation of registration of those suppliers and after taking into consideration the judgments of the Supreme Court and various High Courts which have been referred in this order and in that event the petitioners shall be given the benefit of input tax credit in question.
“These cases of the petitioners shall be disposed of by the respondents concerned in accordance with law and in the light of observation made above and by passing a reasoned and speaking order after giving effective opportunity of hearing to the petitioners and by dealing with the judgments petitioners want to rely at the time of hearing of the cases, within eight weeks from the date of communication of this order,” the court said.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Central Board of Indirect Taxes and Customs (CBIC) has requested for data for determination of Remission of Duties and Taxes on Exported Products (RODTEP) rates for Advance Authorization (AA)/ Export Oriented Unit (EoU) Special Economic Zone (SEZ) exports.
The Board has directed the Export Promotion Councils/ Commodity Boards/ Trade and Industry Associations/Chambers of Commerce to refer to Drawback Division’s letter dated 28.10.2021 vide which Export Promotion Councils/ Commodity Boards/ Trade and Industry Associations/ Chambers of Commerce were requested to provide data w.r.t. inputs used in the respective export Product.
The RoDTEP Committee has a desire that while submitting data (under S. No. 18 C), value should also be provided along with quantity of input used in the manufacture of per unit of export product.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
This weekly round-up analytically summarizes the key stories related to the Authority of Advance Ruling (AAR) reported at Taxscan.in during the previous week from December 13 to December 19, 2021.
The Delhi High Court while quashing the ruling given by Authority of advance Ruling (AAR) held that the payment received by EY located in the UK for providing access to computer software to Indian Member firms doesn’t amount to Royalty, liable to be taxed.
The division bench of Justice Navin Chawla and Justice Manmohan held that the payment received by EYGSL (UK) for providing access to computer software to its member firms of EY Network located in India, that is, EYGBS (India), does not amount to royalty liable to be taxed in India under the provisions of the Income Tax Act, 1961 and the India-UK DTAA.
M/s. Acharya Shree Mahashraman Chaturmas Vyvastha Samiti
The Telangana Authority of Advance Ruling (AAR) ruled that no GST payable for renting of space for stalls with the objective of advancement of religion for the Rent not above Rs.10,000. The coram of Raghu Kiran and S.V. Kasi Visweswara Rao ruled that the applicant is liable to tax only if the room rent per day is Rs.1,000/- or more as per Entry 13 of Notification 12/2017.
M/s Time Education Kolkata Private Limited
The Telangana Authority of Advance Ruling (AAR) ruled that Supply of artwork along with advertisement space amounts to supply of ‘Other advertisement space’ and 18% GST is payable. “The applicant is supplying (2) different services and each is attracting different tariffs under this notification. Therefore the question of deducing a composite supply from the combination of drafting a design and incorporating a space does not arise. Hence where only space for advertisement and print media is supplied (SAC 998362) the rate of tax applicable is 2.5% under CGST & SGST respectively and where they are supplying ornate space it shall be treated as other advertisement space falling under item (ii) of serial no. 21 and accordingly will attract tax @9% under CGST & SGST respectively,” the AAR observed.
M/s. Vijayaneha Polymers Pvt Ltd.
The Telangana Authority of Advance Ruling (AAR) ruled that ITC can be availed on GST charged by contractor supplying service of works contract to the extent of machine foundation.
The Telangana Authority of Advance Ruling (AAR) ruled that the 18% GST payable on the supply of pulpwood.
The Maharashtra Authority of Advance Ruling (AAR) ruled that 12% GST be charged by the sub-contractor to the main contractor on Work Contract Services on Construction of Roads.
M/s Mother Earth Environ Tech Pvt.
The Karnataka Appellate Authority of Advance Ruling (AAAR) while upholding the ruling of AAR held that the ‘Landfill-pit is a civil-structure, not plant and machinery’, no Input Tax Credit (ITC) is available.
The Maharashtra Authority of Advance Ruling (AAR) held that GST under reverse charge mechanism payable on procurement of renting of immovable property services from Special Economic Zones (SEZs).
The Gujarat Authority of Advance Ruling (AAR) ruled that 5% GST is leviable on Ammonium Sulphate supplied for direct use as fertilizers or used in manufacturing of complex fertilizers for agricultural use.
M/s. Adama India private limited
The Gujarat Authority of Advance Ruling (AAR) ruled that no Input Tax Credit (ITC) available for CSR activities was excluded from normal course of business.
The Gujarat Authority of Advance Ruling (AAR) ruled that Petronet’s activity of re-gasification of LNG owned by its GST registered customers amounts to rendering of service by Job Work and 12% GST payable.
The Gujarat Authority of Advance Ruling (AAR) ruled that 5% GST on services supplied in terms of passenger transportation.
M/s. Airport Authority of India
The Gujarat Authority of Advance Ruling (AAR) ruled that ‘Supply of Transfer of Going concern Service’ is exempt from GST.
M/s. Kababhai Popatbhai Savalia
The Gujarat Authority of Advance Ruling (AAR) ruled that 18% GST payable on services provided by subcontractors to main contractors pertaining to irrigation, construction, maintenance works to the irrigation department.
M/s. Gujarat State Road Development Corporation
The Gujarat Authority of Advance Ruling (AAR) ruled that no GST payable on constructs municipal roads/bridges or village roads/bridges, as GSRDC is a Government Authority.
Parker Hannifin India Pvt. Ltd
The Maharashtra Authority of Advance Ruling (AAR) held that 28% GST on manufacturing and supplying of CNG Dispenser.
The Karnataka Authority of Advance Ruling (AAR) ruled that 18% GST payable on supply of services relating to sale or purchase of rice.
Swastiks Masalas Pickles is a Private Limited
The Karnataka Authority of Advance Ruling (AAR) ruled that 18% GST payable on Rava Idli Dosa.
Healersark Resources Private Limited
The Karnataka Authority of Advance Ruling (AAR) ruled that no GST payable on accommodation service provided to Apollo Med Skills.
Integrated Decisions and Systems (India) Private Limited
The Maharashtra Authority of Advance Ruling (AAR) held that part recovery of ‘renting of motor vehicles services’ or ‘cab services’ from employees in respect of the transport facility provided to them is not ‘supply’.
M/s. Indiana Engineering Works (Bombay) P. Ltd.
The Maharashtra Authority of Advance Ruling (AAR) held that GST payable on Electricity charges and Water charges as per meter reading and collected from the recipients was actual on reimbursement basis.
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
This weekly round-up analytically summarizes the key stories related to the Supreme Court and High Court reported at Taxscan.in during the previous week from December 13 to December 19, 2021.
E S Krishnamurthy Vs. Bharath Hi Tech Builders
The Supreme Court held that the National Company Law Tribunal (NCLT) cannot compel a party to the proceedings before it to settle a dispute.
The Apex Court has upheld the decision of Bar Council of India’s (BCI’s) Decision of Cancellation of enrolment of advocate suppressing criminal Case against him during enrolment.
The Supreme Court has reversed the Gujarat High Court’s judgment wherein the High Court observed that GSTR-3B is not a return specified under section 39 of the Central and State Goods and Services Acts.
The Supreme Court has struck down twin conditions for granting Bail under the Prevention of Money Laundering Act. The Bench said, “the parties state that they will…work out some fine-tuning required to give meaning to the intent of our order dated 7.10.2021. At this stage, it suffices to say that by referring to Category C Section 45 of PMLA has been mentioned, which has been struck down by this Court. Ld ASG states that an amendment was made which is a pending challenge…and is a matter to be considered by that Bench. We are putting a caution that merely by categorising certain offences as economic offences which may be non-cognizable it does not mean a different meaning is to be given to our order….Our intention was to ease the process of bail…”
Rakesh Hanuman Prasad Vs. State of Haryana
The Punjab and Haryana High Court granted the interim bail to the person accused of wrongfully availing Input Tax Credit (ITC).
EY Global Services Ltd. Vs. ACIT
The Delhi High Court while quashing the ruling given by Authority of advance Ruling (AAR) held that the payment received by EY located in the UK for providing access to computer software to Indian Member firms doesn’t amount to Royalty, liable to be taxed.
Tvl.PANINDIA Tubes Private Limited Vs. Deputy State Tax Officer
The Madras High Court directed the GST Authority to release vehicles subject to payment of the applicable GST.
Skoda Auto Volkswagen Vs. ACIT
In a major relief to the Skoda Auto Volkswagen, the Bombay High Court quashed the reassessment notice on account of change of opinion of AO.
In a major relief to the Coca Cola India, the Bombay High Court quashed the notice for reopening of assessment as it was beyond 4 years from the end of Assessment Year.
CIT Vs. Maharashtra Hybrid Seed
The Bombay High Court allowed the deduction on interest paid on the amount borrowed for the purpose of machinery even if machinery is not actually used in business.
Rich Feel Health and Beauty Private Limited Vs. ITO
The Bombay High Court quashed the Notice for Reopening of assessment as it cannot be done merely on the basis of change of opinion.
The Delhi High Court while allowing as many as 1346 writ petitions, quashed old law Reassessment notices issued after April 1st, 2021. “This Court is of the view that the Executive/Respondents/Revenue cannot use the administrative power to issue Notifications under Section 3(1) of the Relaxation Act, 2020 to undermine the expression of Parliamentary supremacy in the form of an Act of Parliament, namely, the Finance Act, 2021. This Court is also of the opinion that the Executive/Respondents/Revenue cannot frustrate the purpose of substituted statutory provisions, like Sections 147 to 151 of Income Tax Act, 1961 in the present instance, by emptying it of content or impeding or postponing their effectual operation,” the order read.
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The government has tabled the Chartered Accountants, the Cost and Works Accountants and the Company Secretaries (Amendment) Act, 2021 wherein the norms of the Disciplinary Mechanism for Chartered Accountant (CA), Cost and Works Accountants (CMA) and Company Secretary (CS) has been tightened.
Any firm aggrieved by the decision for refusal of registration may apply for review before the Council within one month from the date of such refusal. The Council may, after considering the review application, confirm or set aside the decision so taken or pass such orders as it may consider appropriate.
The Council shall, by notification, establish a Disciplinary Directorate consisting of a Director (Discipline), at least two Joint Directors (Discipline) not below the rank of Deputy Secretary of the Institute and such other employees appointed under section 16, for making investigations either suo motu, or on receipt of an 10 information or a complaint, in such form, along with such fees as may be specified. Within thirty days of receipt of an information or a complaint, the Director (Discipline) shall decide in such manner as may be specified, whether a complaint or information is actionable or is liable to be closed as non-actionable.
Clause 62 of the Bill seeks to amend section 22E of the Act to make consequential amendments for inclusion of firms of the cost accountants under the purview of disciplinary mechanism, define member and firm for the purpose of disciplinary actions and to provide for scope of actions against the members or firms registered with the Institute under any other law.
Clause 58 of the Bill seeks to substitute section 21B of the Act to empower the Central Government to establish one or more Disciplinary Committees, each comprising of a Presiding Officer to be nominated by the Central Government and four members of which two shall be nominated by the Central Government and two members to be nominated by the Council. It further seeks to fix a timeframe for completion of inquiry by Disciplinary Committees and to empower the Central Government to make rules for procedures to be followed by it, modify penalty provisions for misconduct by members of the Institute and to provide for inclusion of firms of cost accountants under the purview of disciplinary mechanism. It also seeks to empower the Council to remove names from the Register on non-payment of penalties imposed under the Bill.
Any person who, not being a member of the Institute, represents that he is a member of the Institute; or uses the designation “Company Secretary”; or uses the letters “A.C.S.” or “F.C.S.” after his name; or being a member of the Institute, but not having a certificate of practice, represents that he is in practice or practises as a Company Secretary, shall be punishable on first conviction with fine which may extend to one thousand rupees, and on any subsequent conviction with imprisonment which may extend to six months, or with fine which may extend to five thousand rupees, or with both.
Clause 63 of the Bill seeks to amend section 24 of the Act to enhance penalties for falsely claiming to be a member of the Institute, etc.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Amazon has invited applications for the posts of Financial Analyst.
Responsibilities:
Qualifications:
Location: Hyderabad, India
For more details and to apply, click here:
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The government has presented a bill in Parliament aimed at strengthening the disciplinary mechanisms of accountants, management expense accountants and company secretaries.
The 2021 bill on accountants, cost and work accountants and company secretaries (amendment) aims to reform and accelerate the disciplinary system of institutes.
Three bills dealing with these professions, the law on chartered accountants, the law on cost and labor accountants and the law on company secretaries will be amended and the settlement of cases within a limited time frame with deadlines for swift resolution of cases will be ensured by the members of the institute.
The bills aim to deal with the conflict of interest between the administrative and disciplinary arms of the institutes. Firms will now have to be registered separately with the respective institutes and will come under purview of disciplinary mechanisms.
The councils will have the autonomy to fix various fees and their accounts will be audited and approved by the Comptroller and Auditor General of India.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Gujarat Authority of Advance Ruling (AAR) ruled that no GST payable on constructs municipal roads/bridges or village roads/bridges, as GSRDC is a Government Authority.
The applicant, M/s. Gujarat State Road Development Corporation (GSRDC) is wholly owned Government of Gujarat Company (i.e. 100% equity ownership and control held by Govt. of Gujarat) established under the Companies Act, 1956 represented by its Managing Director, hereinafter called as GSRDC. The main object of the GSRDC is to act as an independent and autonomous body for the construction and development of the roads (state highways) and bridges as a part of the activities of the Roads and Buildings Department of Government of Gujarat under the BT, BOTT or BOLT projects. GSRDC is also required to facilitate, regulate and control the use of roads, bridges and flyovers etc. and to advice the R&B Department of Govt. of Gujarat on all the issues relating to roads and assist in formulation of policies in this regard. GSRDC intends to develop 8 roads project under Public Private Partnership. GSRD seeks participation from private operators for the said projects to provide superior quality roads infrastructure at competitive prices.
The applicant has sought the advance ruling on the issue whether the service of construction and development of state highway roads provided by GSRDC would qualify as an activity in relation to function entrusted to Panchayat or Municipality under Article 243G or 243 W respectively, of the constitution of India. Whether applicants would fall under the definition of Governmental authority or Government Entity.
The coram of Sanjay Saxena and Arun Richard held that GSRDC is a Government Entity. In addition to being a Government Entity, GSRDC shall also be a Government Authority, in such cases when it constructs Municipal Roads/ bridges; and Village Roads/bridges.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Gujarat Authority of Advance Ruling (AAR) ruled that 18% GST payable on services provided by subcontractors to main contractors pertaining to irrigation, construction, maintenance works to the irrigation department.
The applicant, M/s. Kababhai Popatbhai Savalia submits that JSIW Infrastructure pvt.ltd. has received the original contract from the irrigation department (State of Gujarat) for the construction of a pumping station at 161.03 km. near Jalansar and supplying and laying MS pipeline of 2650 mm. Diameter to 600 mm dia from Ch.146.383(UND-III) to 216.053 km with branches for moh and sorathi with all allied work (total pipeline length 104.165 km.) etc. and maintenance of the commissioned project for 10 years. Copy of the contract is submitted. The applicant further submits that JSIW Infrastructure has executed the same contract with Radhe Construction and M/s. Radhe Construction has further executed the agreement with the present applicant qua to the original work.
The applicant has sought the advance ruling on the issue at what rate of tax the liability should be determined on services provided by us (sub-contractors) to the main contractor pertaining to the irrigation, construction and maintenance works to the irrigation department, State of Gujarat. Under which head we should classify our services to execute irrigation, construction and maintenance work supplied to the irrigation department, State of Gujarat. Whether to charge a tax rate of 12% GST or 18% GST.
The coram of Sanjay Saxena and Arun Richard held that GST rate on subject supply is 18% for services supplied by the sub- sub-contractor to sub-contractor M/s Radhe and supply merits entry at Heading 9954, Entry No 3(ii) of Notification No.11/2017- CT(R) dated 28-6-17.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Gujarat Authority of Advance Ruling (AAR) ruled that Petronet’s activity of re-gasification of LNG owned by its GST registered customers amounts to rendering of service by Job Work and 12% GST payable.
The applicant, M/s. Petronet LNG Ltd. (PLL), submitted that it provides re- gasification services to its customers on the LNG owned by the customers, referred to as ‘Tolling’. In the ‘Tolling Model’, the Applicant receives the LNG belonging to the customers at its plant, stores it, regasifies it and supplies RLNG to the customers. The Appellant enters into Re-gasification Agreements (RAs) with the customers.
The applicant has sought the advance ruling on the issue Whether the applicant’s activity of providing service of regasification of LNG owned by its customers to convert to RLNG, from its Plant at Dahej, Gujarat would amount to rendering of service by way of Job Work within the meaning of Section 2(68) of the CGST, 2017 and the GGST Act, 2017. If yes, then whether the said service of re-gasification by way of job work be classifiable under entry (id) of Heading No. 9988 at Sl. No. 26 of Notification No. 11/2017-CT (rate) dated 28.06.2017, as amended vide Notification No. 20/2019-CT (Rate) dated 30-09-2019 w.e.f. 01.12.2019 and be chargeable to CGST at the rate of 6%.
The coram of Sanjay Saxena and Arun Richard held that Petronet’s activity of re-gasification of LNG owned by its GST registered customers amounts to rendering of service by way of Job Work and merits to be covered at entry ‘id’ of Heading 9988 at Sl. No. 26 of Notification No. 11/2017-CT (rate) dated 28.06.2017, as amended, liable to CGST at 6% .
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Gujarat Authority of Advance Ruling (AAR) ruled that no Input Tax Credit (ITC) available for CSR activities was excluded from normal course of business. The applicant, M/s. Adama India private limited, supplies insecticides, fungicides and herbicides. The applicant submits that as per Section 135 of the Companies Act, 2013, it has been spending the…
A formal Memorandum of Understanding (MoU) was signed today between the Ministry of Corporate Affairs (MCA) and Financial Intelligence Unit-India, Ministry of Finance for data exchange between the two organizations. The MoU was signed by Shri Manoj Pandey, Joint Secretary, MCA and Shri Manoj Kaushik, Additional Director FIU-India in the presence of Secretary, MCA, and Director (FIU-India).
The MoU is in line with the vision of MCA and FIU-INDIA to harness data capabilities to ensure effective enforcement. The data sharing arrangement gains significance in light of development of MCA21 Version 3 and FINNET 2.0 which will utilize state of the art technology for improving their regulatory and facilitating functions. MCA is in process of rollout of MCA21 Version 3 in phases. FIU-India is in the process of upgrading existing FINnet 1.0 to FINnet 2.0.
FINnet 2.0 project is of national importance and assists FIU-IND by leveraging technology to collect, analyze and disseminate financial information for combating money laundering and related crimes with many improved and additional features to inculcate the latest technologies like AI/ML and advanced data analytics to streamline the IT processes with improved strategic data analysis capabilities and other aspects.
The MoU will facilitate the sharing of data and information between MCA and FIU-INDIA on an automatic and regular basis. It will enable sharing of specific information such as information relating to suspicious transactions, KYC related details and consolidated financial statements of companies registered in the country. The MoU will ensure that both MCA and FIU-INDIA have seamless linkage for regulatory purposes. In addition to regular exchange of data, MCA and FIU-INDIA will also exchange with each other, on request, any information available in their respective databases, for the purpose of carrying out scrutiny, inspection, investigation and prosecution.
Technology and data will play a critical role going forward in fulfilling the Government’s vision of minimum government, maximum governance and both MCA and FIU-INDIA are well placed to fulfill this vision.
The MoU comes into force from the date it was signed and is an ongoing initiative of MCA and FIU-INDIA, both of which are already collaborating through various existing mechanisms. A Data Exchange Steering Group also has been constituted for the initiative, which will meet periodically to review the data exchange status and take steps to further improve the effectiveness of the data sharing mechanism.
The MoU marks the beginning of a new era of cooperation and synergy between the two organisations.
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The officers of CGST, Thane (Rural) Commissionerate have arrested a Chartered Accountant who had generated fake input tax credit to the tune of Rs. 92 crores involving fake invoice of more than Rs. 500 crores without actual receipt of goods. The investigation has revealed that the fraudulent had used the identity of a housewife to create a firm namely M/s. Shraddha Electrical located at Ambernath (Thane).
Investigation has also revealed that a group of persons including arrested Chartered Accountant were engaged in a racket of generation of fake ITC and had passed on the same downstream without any movement of goods. After detailed interrogation and admission by the Chartered Accountant that he had generated fake ITC and passed on the same without any movement of goods and had violated the provisions of Section 132 of CGST Act, the officers arrested him under Section 69 of the CGST Act in the afternoon of 14th December, 2021. He was produced before the Additional Chief Metropolitan Magistrate, Mumbai. The Hon’ble court has remanded him to judicial custody for 14 days. Further investigation is in progress.
This case of detection of fake ITC is a part of special Anti-Evasion drive launched by CGST, Mumbai Zone which involve intensive data mining and data analytics using various IT tools. The motive behind this drive is to help the honest and compliant taxpayers, to kill the unfair competition generated by the fake ITC, and thus help the honest and compliant taxpayers with the intent to mop up maximum revenue in the service of nation.
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Delhi High Court while allowing as many as 1346 writ petitions, quashed old law Reassessment notices issued after April 1st, 2021. Various issues arise for consideration in the present batch of 1346 writ petitions, yet in essence, the questions of law that arise for consideration are whether the Government/Executive can make or change law…
The Bombay High Court quashed the Notice for Reopening of assessment as it cannot be done merely on the basis of change of opinion.
The Petitioner, Rich Feel Health and Beauty Private Limited has been engaged in the business of selling hair care products, providing consultancy services, treatment in the hair care and beauty sector.
The respondent issued a notice under Section 148 of the said Act stating that he had reason to believe that Petitioner’s income chargeable to tax for the Assessment year 2013- 2014 had escaped assessment. Petitioner, in response to the said notice, filed its return of income. Petitioner, thereafter, filed a reply dated 22/4/2019 seeking reasons for reopening of assessment to enable Petitioner to file its objections. Respondent provided reasons to Petitioner, wherein the principal reason was that advertising and marketing expenditure incurred by Petitioner was not deductible in view of provisions of Section 37 of the said Act, as Petitioner was prohibited from advertising under the provisions of the Indian Medical Council Act, 1956 read with Indian Medical Council (Professional Conduct, Etiquette and Ethics) Regulations, 2002 (the Regulations, for the sake of brevity). On 25/9/2019, respondent passed an order rejecting the objections of Petitioner. Section 37 (1) of the Act provides any expenditure incurred for a purpose which is an offence or which is prohibited by law shall not be allowed.
The division bench of Justice Amit B.Borkar and Justice K.R.Shriram held that the Assessing Officer could not have reopened the assessment merely on the basis of change of opinion and could not have issued a notice of reopening of assessment to Petitioner.
“In view of notice dated 14/8/2014 and order sheet entry dated 4/10/2014, it is clear that the Assessing Officer in the original assessment was aware of the issue of expenses incurred on advertisement and marketing by the Petitioner. Once the Assessing Officer had applied his mind in the regular assessment proceedings of Petitioner having incurred advertising and marketing expenditure, it is not open for the Assessing Officer to reopen the assessment,” the court said.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Bank of America has invited applications for the post of Assistant Manager.
Responsibilities:
Qualifications:
Location: Mumbai
For more details and to apply, click here:
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The UnitedHealth Group has invited applications for the post of Senior Accountant.
Responsibilities:
Qualifications:
Location: Noida
For more details and to apply, click here:
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
In a major relief to the Skoda Auto Volkswagen, the Bombay High Court quashed the reassessment notice on account of change of opinion of AO.
The Petitioner had received a notice under Section 148 of the Income Tax Act, 1961 informing petitioner that the Revenue had reasons to believe that petitioner’s income in respect of which it was chargeable to tax for Assessment Year 2004-2005 has escaped assessment within the meaning of Section 147 of the said Act. The Petitioner responded to the notice with its objections. Before the objections were disposed of, various further notices were issued. All these notices were impugned in this petition as originally filed. By an order dated 7th March 2013 ad-interim relief in terms of prayer clause – (d) was granted by this Court with a caution to the parties that the petition may be heard and finally disposed of at the admission stage itself. As the order dated 7th March 2013 mentioned that the ad-interim relief shall remain in operation till the next date of hearing and on the next date of hearing, the matter either did not get called out or the stay did not get extended because petitioner failed to request the Court to extend the stay, respondents proceeded to complete the assessment and passed an assessment order dated 28th March 2013. Petitioner has also impugned an order dated 23rd January 2013 passed by the Transfer Pricing Officer to whom a reference was made under Section 92CA (1) of the said Act.
The respondent authority contended that income chargeable to tax has escaped assessment by reason of the failure on the part of petitioner to disclose fully and truly all material facts necessary for its assessment. As reasons do not indicate which are those material facts that petitioner has failed to truly and fully disclose.
The division bench of Justice Amit B. Borkar and Justice K.R.Shriram held that Petitioner has not only filed its account books and other evidence but those have been considered by the Transfer Pricing Officer whose order also has been considered by the Assessing Officer while passing the original assessment order.
“We are satisfied that the notice dated 23rd March 2011 issued under Section 148 of the said Act has been issued after illegally assuming jurisdiction under Section 148 of the said Act,” the court said.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Central Bureau of Investigation (CBI) has arrested a Superintendent of CGST, Amaravati Division, Vijayawada while demanding & accepting bribe of Rs. 8,000/- from a complainant.
A case was registered against the accused on the allegations of demanding bribe from a Complainant. The Complainant alleged that he intended to get his shop registered with GST and applied for registration of his shop with GST Department, Vijayawada. The Superintendent, GST demanded bribe of Rs.10,000/- for giving Registration Certificate for his shop. During negotiations, the accused reduced the bribe to Rs.8000/-.
CBI laid a trap and caught the accused while demanding & accepting bribe of Rs. 8,000/- from the complainant.Searches were conducted at the office & residential premises of accused at Vijayawada which led to recovery of certain incriminating documents.
The arrested accused was produced before the Competent Court and remanded to Judicial Custody.
Support our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Telangana Authority of Advance Ruling (AAR) ruled that Supply of artwork along with advertisement space amounts to supply of ‘Other advertisement space’ and 18% GST is payable.
The applicant, M/s Time Education Kolkata Private Limited is in the business of purchase and supply of advertisement space to the prospective customers. In the course of supply of advertisement space they are also supplying artwork to adorn the space. They are desirous of ascertaining whether supply of artwork along with the space amounts to supply of advertisement space or other service.
The applicant has sought the advance ruling on the issue whether the services supplied by the applicant can be termed as the supply of space for advertisement in print media, If yes, 5% GST can be charged on the invoices raised to the customers.
The coram of Raghu Kiran and S.V. Kasi Visweswara Rao ruled that the selling of space for advertisement in print media (SAC 998362) is taxable at the rate of 2.5% under CGST & SGST respectively. As against this the service for ‘Sale of other advertising space or time’ is enumerated as 998366 in the SAC given in the annexure to the notification. This is not specifically mentioned in the serial no. 21 of the above notification. Clearly this service will fall under item (ii) of serial no. 21 i.e., other professional, technical & business services taxable at the rate of 9% under CGST & SGST respectively.
“The applicant is supplying (2) different services and each is attracting different tariffs under this notification. Therefore the question of deducing a composite supply from the combination of drafting a design and incorporating a space does not arise. Hence where only space for advertisement and print media is supplied (SAC 998362) the rate of tax applicable is 2.5% under CGST & SGST respectively and where they are supplying ornate space it shall be treated as other advertisement space falling under item (ii) of serial no. 21 and accordingly will attract tax @9% under CGST & SGST respectively,” the AAR observed.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
The Telangana Authority of Advance Ruling (AAR) ruled that no GST payable for renting of space for stalls with the objective of advancement of religion for the Rent not above Rs.10,000.
The applicant, M/s. Acharya Shree Mahashraman Chaturmas Vyvastha Samiti is a charitable religious institution which is providing space for rent on temporary basis during chaturmas. As they are not truly doing this activity with a profit motive they are desirous of clarification regarding exigibility of their supplies to tax.
The applicant has sought the advance ruling on the issue whether Applicant is liable to pay tax on renting of temporary residential rooms for consideration to the devotees and renting of space for shops and stalls for the purpose of religious programmers where the predominant object is not to do business but for advancement of religion.
The applicant is a religious institution and is temporarily renting residential rooms for consideration and similarly they are also renting space for stalls for consideration. The understanding of the applicant is based on the pronouncement of Hon’ble Apex Court of India in the case of Commissioner of sales tax Vs Sai publication fund (2002) Appeal (civil) 9445 of 1996 [2002]126 STC 288 (SC) wherein it was held that, where the main activity is not business, then any incidental or ancillary transaction, unless established by the revenue department to be an independent business transaction, will also be considered as charitable only and not business. Further it was also held that, where the main and dominant activity of the assessee trust in that case was to spread the message of Sai baba, then bringing out publications and sale thereof by the assessee trust to its devotees at cost price did not amount to business.
The coram of Raghu Kiran and S.V. Kasi Visweswara Rao ruled that the applicant is liable to tax only if the room rent per day is Rs.1,000/- or more as per Entry 13 of Notification 12/2017.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
