In view of the heavy rains/floods and disruption of normal life in Kerala and the consequent hardships caused to students, the Institute of Chartered Accountants of India ( ICAI ) has extended the last date for submission of exam application forms for appearing in the CA exams to be held in the month of November 2018 for candidates residing in the state of Kerala.
As per a new announcement made by ICAI, the last date for submission of exam forms by candidates residing in Kerala will be 8th September 2018.
Accordingly, candidates residing in Kerala can submit their exam applications forms for November 2018 CA exams, online at http://icaiexam.icai.org and also pay the exam fee online, up to 8th September 2018 without payment of any late fee.
The ICAI has clarified that this extension of time for submission of exam forms in respect of November 2018 CA exams is applicable only to the candidates residing in Kerala and is not applicable to other candidates.
“For all other candidates, the last date for submission of exam forms in respect of November 2018 CA exams, shall remain unchanged, as already announced, i.e. 27th August 2018 without late fee and 4th September 2018 with the late fee,” the ICAI said.
Candidates whose address on the records of the Institute is in the state of Kerala will be treated as those residing in Kerala, for the purpose of this extension, it added.
The Union Minister, Shri Arun Jaitley today resumed the charge of the Ministries of Finance and Corporate Affairs after a gap of more than three months.
After resuming the charge, the Finance Minister Shri Jaitley held his First Meeting with the Finance Secretary, Dr.Hasmukh Adhia, Secretary (Expenditure), Shri A.N. Jha,Secretary (Financial Services) , Shri Rajiv Kumar, Secretary (Corporate Affairs), Shri Injeti Srinivas,Chairman CBDT, Shri Sushil Chandra and Chairman CBIC, Shri S. Ramesh among others.
Earlier, the President of India, as advised by the Prime Minister, has directed to assign the portfolios of the Minister of Finance and Minister of Corporate Affairs to Shri Arun Jaitley.
The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the agency commission received by the Canara Bank on behalf of the Reserve Bank of India (RBI) cannot be subject to Service Tax.
In the instant case, the department demanded Service Tax from the appellants, M/s Canara Bank by holding that they were acting as the agents for the Reserve Bank of India and were receiving agency commission at the rates notified by RBI, on per transaction basis, in respect of receipts or payments made, on behalf of the Government of India. It was alleged that the services provided by the appellant to the RBI amounted to providing a taxable service under the Banking and other Financial Services which was taxable from 10.09.2004.
On appeal, the Bank contended that such cannot be classified as “operation of bank accounts” under the category of “Banking and Other Financial Services”. According to them, there is no customer/client relationship between the bank and the Government and the services rendered by the bank are statutory function carried out on behalf of the Government therefore not liable to Service Tax.
The Tribunal bench relied on the Notification No.22/2006-ST dated 31.5.2006 and held that the exemption given under the said Notification is applicable to RBI.
“In terms of Section 65(7) of the Finance Act, 1994, “Assessee means a person liable to pay the service tax and includes his agent” as this was also held by the Larger Bench. We find that under Section 45 of the RBI Act, it provides that RBI can nominate other banks as its agent at all places or at any place in India for such purpose as the Bank may specify. Therefore, reading the Notification and Section 65(7) of Finance Act, 1994 and the powers vested with RBI to appoint their agents, we have no hesitation in concluding that the exemption available to RBI in discharge of its functions should be available to the appellant working as the Agents of RBI in terms of the Agreement,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT), Cochin bench has held that mere production of the confirmation letter by the partners of the Firm is not sufficient to prove the genuineness of cash credits for the purpose of Section 68 of the Income Tax Act, 1961.
In the instant case, the department, on verification of the books of accounts, found that the assessee had made various cash credits into its books in the names of its partners. As the assessee failed to take any efforts to substantiate the sources of cash credits into its accounts, even after giving ample opportunities and time, the AO considered that the assessee had no valid source and hence, the total cash credits amounting to Rs.58,33,000/- was treated as assessee’s income under section 68 of the Income Tax Act.
The assessee- Firm contended that there cannot be any tax liability on the part of it as the above amount was contributed by the partners who were assessed to income tax with the same AO and all the partners confirmed the introduction of capital by them through confirmation letters.
The department, on the other hand, submitted that even it is considered that the assessee has discharged its onus to prove the identity of the partners, the genuineness of the transaction cannot be verifiable and the creditworthiness of the partners cannot be established. It is not known whether the capital has been introduced by the partners or someone else.
Rejecting the contentions of the Assessee-Firm, the Tribunal noted that it is the primary duty of the assessee to establish the identity of the parties, the capacity of the lenders and the genuineness of the transactions.
“If the assessee files only confirmation letters and offers no explanation regarding nature and source thereof, the explanation offered by the assessee cannot be considered as satisfactorily explained before the AO. Then the sum so credited is to be treated as unexplained credits. In the present case, though the amount was contributed by the partners as their capital introduction, only confirmation letters from the partners cannot prove all the ingredients of section 68 of the Act and it will only prove the identity of the lenders. In our opinion, the assessee has to place necessary evidence regarding the nature and source of credit by filing corresponding financial statements along with the income tax returns of the concerned partners before the AO,” the bench said.
Subscribe Taxscan Premium to view the JudgmentThe Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the one-time non-refundable upfront charges paid for the acquisition of the leasehold rights are not ‘rent’ for the purpose of TDS under Section 194I of the Income Tax Act, 1961.
The assessee had purchased land from UPSIDC which was a lease hold land taken for 99 years from farmers. Assessee has paid one-time lease premium to UPSIDC and 1% of the cost of the land purchased by UPSIDC was treated as lease rent. Entire purchase of land has treated as stock-in-trade and it was contended by the assessee that same should not be treated as rent. However, the Assessing Officer treated the assessee as ‘Assessee-in-Default’ for not deducting TDS from the above said amount.
On second appeal, the Tribunal noted that the UPSIDC had submitted its account where it has duly confirmed that the amount paid by the assessee has been credited in the statement of P&L account and income tax has been paid thereon on the taxable profit.
“The entire account has been credited to the head ‘Lease Rent Received Account’. Once that is so, then in view of the proviso to Section 201 which came into effect from 01.07.2012, then assessee cannot be held as ‘assessee-in-default’,” the Tribunal said.
The Tribunal further noted that the CBDT Circular No.35 of 2016 said that one-time non-refundable upfront charges paid by the assessee for acquisition of leasehold rights over an immovable property cannot be constituted as rental income and assessee is not obliged to deduct tax at source under section 194I.
“Thus, on this ground alone assessee cannot be treated as ‘assessee-in-default’ u/s. 201(1),” the Tribunal said.
Relying on the CBDT circular, the Tribunal held that “From the aforesaid circular, it is absolutely clear from the CBDT circular that such a one-time non-refundable upfront charge paid by the assessee for acquisition of leasehold right or lump sum payment of lease premium for acquisition of over an immovable property for 99 years, no TDS is required to be deducted u/s.194-I. Thus, in view of the CBDT Circular and also the fact that the deductee has shown the amount paid as income and also paid taxes thereon, therefore, the assessee cannot be treated as ‘assessee-in-default’ and consequently, no interest u/s.201(1A) can be charged. Accordingly, Revenue’s appeal is dismissed.”
Subscribe Taxscan Premium to view the JudgmentThe Ministry of Corporate Affairs (MCA) has extended the due date for filing DIR -3 KYC without any filing fees to 15th September 2018.
The Ministry is conducting KYC of all Directors of all companies annually through a new eform viz. DIR-3 KYC. As part of this, every director who has been allotted DIN on or before 31-03-2018 and whose DIN is in ‘Approved’ status, would be mandatorily required to file form DIR-3 KYC on or before 31-08-2018, using his/her own Class – II DSC and the form would be required to be digitally certified by a practicing professional (CS/CA/CMA) using Class-II DSC. Filing of Form would be mandatory for Disqualified Directors also. The due date has now been extended to 15-9-2018.
After the due date of filing DIR-3 KYC in respect of such deactivated DINs shall be allowed upon payment of a specified fee only, without prejudice to any other action that may be taken.
Subscribe Taxscan Premium to view the JudgmentThe Bangalore bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee is entitled for capital gain exemption under section 54F of the Income Tax Act in respect of the properties acquired outside India.
In the instant case, the Revenue approached the Tribunal contending that for granting benefit of section 54/ 54F of the Income Tax Act, the residential house purchased/constructed must be in India and not outside India.
The Tribunal cited a few decisions of ITAT wherein it was held that the words “in India” cannot be inserted in section 54F of the Act and as per plain of section 54F of the Act, the sale proceeds of capital asset shall be invested in residential house or outside India.
While upholding the findings of the first appellate authority, the Tribunal bench found that the assessment year in this appeal is 2014-15 and the provision in section 54F comes w.e.f. 01.04.2015 according to which it was clarified that the residential house is to be acquired only in India meaning thereby before this amendment it was not clear as to whether the benefit of section 54F can be given to residential house acquired in India or abroad.
“This issue was examined by the Tribunal in the case of ACIT Vs. Iqbal Jafar which was authored by one of the members of this Bench and it was held by the Tribunal that before the amendments, the benefit can also be given to the residential house acquired in abroad,” the bench said.
Subscribe Taxscan Premium to view the JudgmentThe Kerala High Court has recently held that the contribution made to the Fishermen’s Welfare Fund is eligible for income tax deduction though the same has been held as unconstitutional by the Supreme Court in Koluthara Exports Ltd. v. State of Kerala and Others.
The question before the division bench comprising Justice K Vinod Chandran and Justice Ashok Menon was that whether the assessee is entitled to the deduction on contributions paid towards Fishermen’s Welfare Fund, which Fund was declared unconstitutional by the judgment of the Supreme Court in Koluthara Exports Ltd. v. State of Kerala and Others.
The Tribunal concluded the issue in favour of the assessee by holding that deduction is available on the contribution made to the Fishermen’s Welfare Fund.
Dismissing the departmental appeal, the bench noted that the Fund itself was declared unconstitutional by a decision of the Honourable Supreme Court.
“We find that the Honourable Supreme Court while declaring the Fund to be unconstitutional also directed that the amount of contributions already paid will not be liable to be refunded to the contributors. In such circumstances, there is no question of a refund to the assessee and as found by the Tribunal, when the contributions were made, there was a valid fund created. The contribution so made to the Fishermen’s Welfare Fund Board having not been refunded as specifically interdicted by the Honourable Supreme Court, the same would also be employed for the welfare of the fishermen,” the bench said.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT), Cochin bench has held that the sale of hotel premises would amount to a slump sale which is liable to the taxed under Section 50B of the Income Tax Act.
`Slump sale’ is a sale of an undertaking as a going concern.
The assessee, in the instant case, had sold land and building for a total consideration of Rs.20 crore. It was contended on behalf of the assessee that it is not a slump sale going by the definition of section 2(42C) of the Act for the reason that there is no liability transferred to the purchaser as on the date of sale.
Rejecting the claim of the assessee, the Tribunal bench noted that as per the sale deed, the assets of the assessee, including the license for boarding, lodging, bar etc. were also transferred to the purchaser along with land and building as a going concern.
“The entire business was sold for a total consideration of Rs.20 crore consisting of land and building which includes furniture, equipment, kitchen equipment, telephone instruments, television, computer, etc. The building and other amenities are valued as a whole, without assigning the value to any item of the assets. As mentioned earlier, consequent to the sale of the hotel premises, the business of assessee was closed down. Therefore, it is clear from the sale deed executed, the intention of the parties was to sell the hotel business as a going concern and the same is nothing but a slump sale,” the bench said.
Diving deeply into the facts of the case, the Tribunal held that “the business of the assessee of the running of the hotel has been sold as such by selling the hotel premises to a private limited company, who is also in the business of running of the hotel. Therefore, we have no hesitation to hold that the provisions of section 50B of the I.T. Act have application to the facts of the case.”
Subscribe Taxscan Premium to view the JudgmentWhile upholding an order by the Disciplinary Committee of the Institute of Company Secretaries of India (ICSI), the Appellate Authority held that professional misconduct can be alleged against a Company Secretary for negligence in filing Form-32.
The Appellant was practicing as a Company Secretary for M/s. Khosla Steel Industries Private Ltd. the allegation against the appellant was that in a Form-32, signed by Mr. Kishor Khosla, a Director of the Company and verified by the Appellant, wherein, the appointment of one Mr. Bishendra Singh was shown as a Director under the category of ‘Promoter’ and not as Additional Director. A complaint was lodged against the appellant on the ground that while working as Company Secretary for the company, he did not exercise due diligence in verifying and certifying Form-32 on certain occasions.
After enquiry, the Disciplinary Committee found that the appellant has committed professional misconduct as he was guilty of negligence.
The Appellate Authority noted that the Disciplinary Committee after the remand of the matter has gone through the entire controversy in detail, given cogent reasons in holding that the Appellant was Guilty of Professional Misconduct under item (7) of Part-I of the Second Schedule of the Act in as much as he did not exercise due diligence while certifying the two Forms-32 on both the occasions and as such he was grossly negligent in the conduct of his professional duties.
Diving deeply into the facts of the case, the AA found that in the present case, it has been clearly held that the Appellant was negligent in filing Form-32 on both the occasions and failed to exercise diligence required on his part.
The Appellate Authority was of the view that it is not a case where the professional i.e. the Appellant was expected to act as an investigator. “What was required for him was to only see the contents of the resolution passed and relied upon in support of Form-32 himself and in case, it was shown to him in minute books, than he should have been very categorical as to who was in possession of minute books shown to him containing the resolutions in question. However, in this regard, no assistance has been provided to us,” the AA said.
“As stated above, we are of the considered view that in the present case, the Disciplinary Committee after the remand of the matter has gone through the entire controversy in detail, given cogent reasons in holding that the Appellant was Guilty of Professional Misconduct under item (7) of Part-I of the Second Schedule of the Act in as much as he did not exercise due diligence while certifying the two Forms-32 on both the occasions and as such he was grossly negligent in the conduct of his professional duties. We accordingly dismiss the appeal while maintaining the order of sentence as awarded by the Disciplinary Committee in this case, which according to us is not excessive in any manner.”
**This story has been earlier published with a Title that “Company Secretary cannot be punished for Misconduct for Mere Negligence in filing Form-32: AA”. Editorial Team apologizes for the error.
Subscribe Taxscan Premium to view the JudgmentA three-judge bench of the Supreme Court has clarified that the retirement age of the Members of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) would be 62 years.
Earlier, a same bench of Chief Justice Dipak Misra and Justices AM Khanwilkar and DY Chandrachud, while hearing a petition by Kudrat Sandhu clarified that the retirement age of the person appointed as the President will continue till the age of 65 years and the persons selected as the Members will continue till the age of 62 years.
Now, an application filed through AoR Rahul Jain, Mr. Singh sought for a clarification with regard to the Supreme Court’s observation in Kudrat Sandhu v. Union of India.
The bench said that “A member of the judicial service would have ordinarily continued until the date of superannuation in the state judicial service, subject to the service rules. It would be manifestly inappropriate to adopt an interpretation as a result of which, upon assuming office as Member (Judicial) in CESTAT the officer will have a tenure which will expire after five years, if it falls prior to attaining the age of 62 years. We, accordingly, are of the view that the clarification issued for the ITAT in the order dated 20 March 2018 needs to be reiterated in the case of the members of the CESTAT, which we do. We clarify that a person selected as Member of the CESTAT will continue until the age of 62 years while a person holding the post of President shall continue until the age of 65 years.”
Subscribe Taxscan Premium to view the JudgmentIn a recent ruling, the Income Tax Appellate Tribunal (ITAT), Delhi bench has granted tax relief to retired professional shooter, Abhinav Bindra. The Tribunal bench has held that the former World and Olympic champion is not liable to pay income tax on the rewards received by him from the Centre and the State Governments.
While completing assessment, the Assessing Officer noted that the awards received by the assessee have to be added back to the income of the assessee and the same is taxable as Other Income under section 56 of the Act.
On appeal, the assessee claimed that the said awards are not taxable in the hands of the assessee in the light of CBDT Circular No. 447 dated 22.01.1986.
The department, on the other hand, contended that there is nothing on record to show that the Central Government has approved such awards and tax exemption has been granted to the assessee in respect of awards or rewards covered by such approval.
The first appellate authority relied on the CBDT Circular No. 447 dated 22.01.1986 deleted the addition.
The Revenue approached the Tribunal by contending that the circular is not in existence w.e.f 01.04.2005 as per clarification on Taxability of Awards for Sportmen (Circular No. 2/2014 [F. No. 199/01/2014-ITA-1]).
Dismissing the departmental appeal, the Tribunal held that “the awards received by the assessee are all from Central Government or the State Government. Therefore, subsequent clarification mentioned hereinabove squarely applies on the facts of the case in hand. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A).”
Subscribe Taxscan Premium to view the JudgmentIn view of the disruption caused due to severe floods in Kerala, Mahe (Puducherry) and Kodagu (Karnataka), the Central Government has extended the due dates for filing of the following GST returns by taxpayers registered in these areas:
| Sl. No. | Return | Class of taxpayers registered in Kerala, Mahe (Puducherry) and Kodagu (Karnataka) | Extended due date |
| 1 | FORM GSTR-3B for the month of July, 2018 | All taxpayers | 5thOctober, 2018 |
| 2 | FORM GSTR-3B for the month of August, 2018 | All taxpayers | 10thOctober, 2018 |
| 3 | FORM GSTR-1 for the quarter July to September, 2018 | Taxpayers having turnover upto Rs. 1.5 crore | 15thNovember, 2018 |
| 4 | FORM GSTR-1 for the month of July, 2018 | Taxpayers having turnover above Rs. 1.5 crores | 5thOctober, 2018 |
| 5 | FORM GSTR-1 for the month of August, 2018 | Taxpayers having turnover above Rs. 1.5 crores | 10thOctober, 2018 |
The relevant Notifications for the same shall be issued shortly.
The Builders Association of Navi Mumbai has approached the Supreme Court through a special leave petition challenging the order of the Bombay High Court favoring levy of GST on one-time premium.
While admitting the Special Leave Petition, Justice A.K Sikri and Justice Ashok Bhushan has issued notice to the Central Government.
On April this year, Justice S.C Dharmadhikari and Justice Prakash D. Naik had upheld the Goods and Services Tax (GST) levied by the Central Industrial and Development Corporation of Maharashtra Limited (CIDCO) on one-time lease premium charged for letting out plots of land on lease basis.
The petitioners challenged an order levying/collecting the Goods and Service Tax (GST) on the one-time lease premium charged by City Industrial and Development Corporation ( CIDCO ) while letting plots of land on the lease basis. The petitioners have obtained plots in the above areas, but what they are questioning is that when the allotment letter was issued, the allottee was called upon to pay, on the one-time lease premium amount, the GST separately by a Demand Draft drawn in the name of the fourth respondent payable at Mumbai/Navi Mumbai.
The Special Leave Petition filed before the Court stated that the GST has not replaced or substituted stamp duty which is chargeable on a transaction of transfer or conveyance of immovable property , and which continues to be chargeable even after the introduction of GST.
“This is a clear and unequivocal indication that a transaction of transfer of immovable property which attracts stamp duty cannot possibly be considered to also attract GST. This is especially so because the basic object of introduction of GST is itself to put an end to the highly undesirable consequences and cascading effect of multiple levies of taxation on the very same subject-matter,” it said.
“This basic object of the levy of GST will itself be completely frustrated and defeated if the impugned Judgment of the Bombay High Court which upholds the double levy of stamp duty as well as GST on a transfer of immovable property. The High Court has completely failed to appreciate that the provisions of the GST Act necessarily have to be so construed as to avoid such a double levy of both stamp duty as well as GST,” the petition reads.
Subscribe Taxscan Premium to view the JudgmentThe Kerala High Court has held that the omission to fill Part-B of the E-Way Bill due to technical glitches in the GST portal cannot be treated as a valid ground for avoiding penalty and detention under the Goods and Services Tax (GST) law.
The petitioner, Garuda Timber Traders contented before the High Court that it could not upload part B of the e-way bill. But Garuda took a printout of the e-way bill and began its transportation. The petitioner also pleaded the Court to declare “the provisions empowering the GST officials” to demand tax and penalty and to detain goods and vehicles, as unconstitutional “till the smooth, efficient and glitches free functioning of the GST network system is guaranteed to assessees.”
Justice Dama Sesadri Naidu rejected the plea of the petitioners to interfere and observed that the language and the legislative intent clear. “Courts, in the name of discretion, cannot do violence to the statutory mandate. Discretion smooths the edges, but does not cut corners. Here, I see no interpretative ambiguity or legislative crevasses to be filled in,” he said.
Citing a catena of decisions including the Allahabad High Court decision in Gati Kintetsu Express, the Court held that the petitioners can have the provisional release of the goods, pending further adjudication under Section 129(1) of the Act, only if it complies with the statutory mandate. If it provides a bank guarantee for the tax and the penalty, besides executing a bond for the value of goods, as directed under Rule 140 of the KSGST Rules, the authorities will provisionally release the goods.
Subscribe Taxscan Premium to view the JudgmentThe Central Government today extended the due date for filing GSTR-3B for the month of July to 24th August 2018.
“The last date of filing GSTR-3B for the month of July 2018 has been extended to 24th August 2018.” a statement appeared in the GST Portal said. However, no notification or order has been issued by the Central Board of Indirect Taxes ( CBIC ) in this regard. GSTR-3B is a monthly return.
All regular taxpayers need to file this return till June 2018. Taxpayers can file their return on GST Portal. Taxpayers have to file this return by 20th of the subsequent month.
The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the benefit of capital gain exemption under Section 54 of the Income Tax Act, 1961 cannot be denied to a joint owner who made the total investment in the purchase of the property.
The assessee, an NRI made investment in the property. He added the name of his father in the sale deed as a joint-owner to safe guard his interest. The sole grievance of the assessee was that the Assessing Officer disallowed 50% claim of the assessee and gave exemption u/s.54 of the Act of Rs.32,26,145/- towards the share of the assessee in the residential house.
Before the Tribunal, the assessee contended that the benefit of the provision must be granted to the person who made investment in the property and not to the person whose name has been added in the sale deed to safe guard the interest of the non-resident appellant. The contention of the non-resident appellant is also corroborated by Transfer of Property Act 1882.
The Tribunal bench relied on the decision of the Gujarat High Court in CIT vs. Ravinder Kumar Arora wherein a similar claim was decided in favour of the assessee.
Following the above decision, the bench held that “the assessee is entitled to the benefit of deduction of Rs.64,52,290/- under section 54 of the Act towards capital gain on the premise that the entire amount towards consideration of purchase of flat at Nandnavan Housing Co-operative Society has been paid by the assessee and merely because his father’s name has been inducted as joint owner, the said claim cannot be denied.”
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Direct Taxes ( CBDT ), Thursday clarified that when an assessee prefers to make an application under Section 270AA of the Income Tax Act to seek immunity from penalty proceedings in case of under-reporting of income, the Assessing Officer shall not take an adverse view in penalty proceedings under section 271(1)(c) in earlier Assessment Years merely because assessee has agreed on the issue in later AY by preferring an immunity under section 270AA.
A clarification issued by the Board had pointed out that apprehensions have been raised that when such an application has been made and in the earlier year(s) penalty under section 271(1)(c) of the Act has been initiated on the same issue, the Income-tax Authority may contend that the assessee has acquiesced on the issue in such earlier year (s), by seeking immunity under section 270AA of the Act and therefore, take an adverse view in the proceedings for penalty under section 271(1)(c) of the Act.
In this regard, the CBDT missive clarified that “where an assessee makes an application seeking immunity under section 270AA of the Act, it shall not preclude such assessee from contesting the same issue in any earlier assessment year. Further, the Income-tax Authority, shall not take an adverse view in the proceedings for penalty under section 271(1)(c) of the Act in earlier assessment years merely on the ground that the assessee has acquiesced on the issue in any later assessment year by preferring an immunity on such issue under section 270AA of the Act.”
Subscribe Taxscan Premium to view the JudgmentNational Highways Authority of India ( NHAI ) has waived off user fee at three toll plazas in Kerala in view of the unprecedented flood situation in the state. The waiver has been made on the toll plazas at Paliekkara in Thrissur district, Pampampallam in Palakkad district and Kumbalam in Cochin. It came into effect last week and will continue till the end of this week, that is the 26th of August.
Many highways in the state are flooded, including the stretches of NH-544 close to Aluva due to the unprecedented rains/opening of dams in several districts in the state.
The Delhi High Court has recently allowed Interest on the refund of the pre-deposit paid as a statutory requirement for filing appeal.
A two-judge bench comprising Justices Ravindra Bhatt and A K Chawla was hearing a writ petition filed by MRF Ltd.
The petitioner, had succeeded partly in an appeal, which resulted in its claim for exclusion of certain amounts in its taxable turnover. The sole grievance of the petitioner was that , the respondent GST authorities did not permit any interest on pre-deposit remitted during the filing of appeal.
Before the High Court, the petitioner argued that the amounts paid during the interregnum period, i.e. rejection of the turnover discount claimed by the original assessment order resulting in pre-deposit of the amounts before the appellate authority did not amount to payment of tax as it did not bear such character. It was emphasized that the refund ought to have carried interest.
Citing a plethora of judicial decisions, the bench allowed the contentions of the assessee and held that pre-deposit sums which the assessee is compelled to pay to seek recourse to an appellate remedy, do not necessarily bear the stamp or character of tax, especially when it succeeds on the particular plea.
“That being the case, the insistence upon a procedural step, i.e. filing of a form which is purely for the purpose of administrative convenience cannot in any manner fix the period or periods of limitation when the amounts became due on the question of interest. The fact that the amounts were due and payable from the date the appeal was allowed is not in dispute. In these circumstances, the postponement of the period from when interest became calculable is incomprehensive and illogical. For these reasons, the petitioner is entitled to interest calculable from the date when its appeal was allowed by this Court by order dated 14.05.2015. The respondents shall ensure that the amounts are processed and credited to the petitioner’s account within four weeks,” the bench said.
Subscribe Taxscan Premium to view the JudgmentThe Mumbai bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the income earned from the web hosting services cannot be treated as fee within the meaning of Article 12 of the Double Taxation Avoidance Agreement (DTAA) between India and US.
In the instant case, the assessee, M/s. Savvis Communications Corporation rendered hosting services to Malayala Manorama Co Ltd and Cybermedia India Online Ltd. while filing the income tax returns for the relevant period, the assessee claimed that the services rendered by it do not make available technical knowledge, experience, skill, know how or processes to its customers and consequently these do not constitute fee for included services within the meaning of Article 12 of India US DTAA. It claimed that the amount represented business income of the assessee and since it did not have any permanent establishment (PE) in India under Article 5 of the treaty, the income was not liable to tax under Article 7(1) of the DTAA.
However, the Assessing Officer rejected the claim and noted that apart from the use of telecommunication equipment, the customers also used various know-how, technology and software provided by the assessee which was either owned by the assessee or were available to the assessee under the license agreement with the third party. According to him, the use of such know-how, technology and software were found to be covered by the provisions of section 9(l)(vi) of the Act as well as Article 12 of India-US DTAA.
The Tribunal noted that in an earlier case of the assessee, a similar issue had been concluded in favour of the assessee. In that case, the Tribunal held that a payment cannot be said to be the consideration for use of scientific equipment when the person making the payment does not have an independent right to use such an equipment and physical access to it.
“In the present case also, what the assessee is providing is essentially web hosting service, though with the help of sophisticated scientific equipment, in the virtual world. The scientific equipment used by the assessee enable rendition of such a service, and such a use, which is not even by the Indian entity, is not an end in itself. In this view of the matter, even though the services rendered by the assessee to the Indian entities may involve use of certain scientific equipment, the receipts by the assessee cannot be treated as “consideration for the use of, or right to use of, scientific equipment” which is a sine qua non for taxability under section 9(l)(vi) read with Explanation 2 (iva),” the bench said.
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