The Uttarakhand High Court has ordered to release a vehicle seized by the GST department due to expiry of the E-way bill. The petitioners were allowed to release the vehicle by furnishing a simple bond.
The vehicle was intercepted and seized by the department on the technical ground that the validity of e-way bill had expired on 03.02.2019. the department imposed a penalty of Rs.5,03,125/- equal to the IGST (the tax amount).
The counsel appeared for the petitioners contended that the Company had generated a fresh e-way bill on 06.02.2019 which was valid up to 12.02.2019 in continuation of the previously generated e-way bill, which stood expired on 03.02.2019, still impugned order of imposing the penalty as well as the seizure of vehicle has been passed.
Justice Lok Pal Singh permitted release of goods and held that “Having considered the submissions of learned counsel for the parties, as an interim measure, it is directed that the vehicle of the petitioner shall be released forthwith provided the petitioner furnishes a security before the authority concerned as per the provisions contained under clause (c) sub-section (1) of Section 129 of The Central Goods and Services Tax Act, 2017.”
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal ( ITAT ), Chennai bench has held that mere execution of a Power of Attorney would not amount to transfer of property for determining the capital gain tax liability.
The Assessing Officer made an addition in respect of long-term capital gains arising from transaction of property based on a presumption that the property was sold on the date on which the power of attorney was executed.
The assessee claimed that the possession of the property was handed over to the power of attorney agent for negotiating the sale and it was not handed over to the purchaser. It was contended that no consideration was received from power of attorney agent also, therefore, there was no sale during the year under consideration.
Before the Tribunal, the assessee argued that the execution of power of attorney in favour of third party for negotiating the sale cannot be considered to be sale of property within the meaning of Section 2(14) of the Income Tax Act.
The Tribunal observed that the Power of attorney agent is only to manage or negotiating the property for sale. The power of attorney executed by the assessees does not confer or transfer any right over the property on any person.
“At the best, the power of attorney agent may act on behalf of the assessee. Therefore, this Tribunal is of the considered opinion that mere execution of power of attorney agent cannot be considered to be transfer of property. For transfer of property, the assessee has to enter into an agreement for sale either by himself or through power of attorney agent and also hand over the physical possession of the property as contemplated under Section 53A of Transfer of Property Act. Moreover, in case there was agreement between the assessee and purchaser, by which the purchaser was allowed to continue to enjoy the property, then also there may be transfer within the meaning of 2(14) of the Act. In the case before us, it not the case of the Revenue that the assessees entered into an agreement for sale or arrangement allowing the purchaser to continue to enjoy the property. In those circumstances, this Tribunal is of the considered opinion that the execution of sale deed and handing over possession pursuant to sale deed would be the date of sale. Therefore, the Assessing Officer shall verify the sale deed and find out when actually the possession of the property was handed over,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Institute of Company Secretaries of India ( ICSI ) has issued important guidelines pertaining to examination enrollment for June, 2019 which must be followed by the students appearing Examinations.
The Students are advised to select the Examination Centre, Combination of Module(s), Medium of Examination (English OR Hindi), etc. carefully.
Further, the Students are advised to verify the parameters selected by them meticulously since for all changes in enrollment status, even if allowed upto certain stipulated dates, additional fee as decided from time to time will be levied.
Also, the Students are advised to retain a copy of the receipt for the examination fee remitted by them during the examination enrollment process. The Fee Receipt is automatically generated by the system for all successful transactions.
It is said that all examination applications without a valid fee receipt shall be rejected without notice. In case the amount is deducted from the bank / debit/ credit card account but the acknowledgement is not automatically generated by the system, students should verify the status of payment from their banker. In case of payment of examination fee through Canara Bank Challan, the Date Of Deposit Of Cash with the branches of Canara Bank will be treated as the eligibility date. Students will have to wait for atleast 3-4 days from the date of deposit of cash for reconciliation & transfer of the amount into the Institute’s Bank Account. They shall be able to generate formal payment receipt / acknowledgement only after realisation of the amount in the Institute’s bank account. In case the payment does not get reconciled within 3-4 days, students are advised to send a copy of the Challan at http://support.icsi.edu for verification of receipt of payment.
According to the statement, the Students generating the Challan upto 25th March,2019 have to deposit the cash on or before 25th March,2019 to avoid applicability of Late Fee failing which they will have to re-generate the Challan and deposit the cash inclusive of the late fee. Similarly, Students generating Challan during the period from 26th March, 2019 to 9th April,2019 will have to deposit the cash with the bank on or before 9th April,2019. The examination enrollment applications in respect of students who deposit the cash with bank after 9th April,2019 will be rejected without further notice. Please ascertain bank holidays, if any, to ensure that the cash is deposited well in advance to avoid rejection of application.
Subscribe Taxscan Premium to view the JudgmentIn a significant ruling, the Authority for Advance Ruling (AAR), Maharashtra has held that the supply under annual maintenance contracts (AMCs) are a “composite supply” and classified them as service.
The applicant, Cummins India, approached the authority asking for a clarification on applicability GST on the AMCs for diesel and natural gas engines sold by it.
The ruling will help get clarity on the tax rate for goods that may be supplied under the contract.
Under GST law, multiple supplies qualify as a composite supply, as only one price is being recovered and tax rate of the “principal supply” should be applied. In this case, the AAR said that “principal supply” was a service. “It is submitted that the main object of the contract is to supply services and making available of parts/ components is ancillary to the same. Consequently, the principal supply of the transaction is ‘service’,” it said.
The authority found that the principal supply in the transaction before us is supply of service, then the place of supply is required to be determine. The place of supply would be determined in terms of the default Section 12(2) of the IGST Act which states that the location of the recipient would be the place of supply.
“Since the supply of maintenance service in the present case is for a single price with supply of spare parts/goods as and when required, the supply of both, goods and services are made in conjunction with each other in the ordinary course of business and therefore considering the provisions of the GST Laws we find that supply of services/goods in the present case is naturally bundled, with the supply of goods being incidental to the supply of services and therefore such contract are to be considered as a composite supply of service where the principal supply is service and the supply of goods is incidental to such supply of service,” the authority said.
Subscribe Taxscan Premium to view the JudgmentThe Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) has upheld an addition made against an agriculturalist for the reason that the land was non-agricultural during the time of sale.
The assessee was an agriculturist, had not filed her return of income for assessment year under consideration. The department re-opened the case was under section 147 by issuing a notice under section 148 of the Act.
In response to the notice, the assessee claimed that the land sold was agricultural land. On first appeal, the Commissioner of Income Tax (Appeals) granted relief to the assessee.
The Tribunal noticed that assessing officer has mentioned in his order that assessee has sold an immovable property (non-agricultural land).
“However, we find that the ld. CIT(A) has held that assessee has sold an agricultural which is not a capital asset. In the light of the above facts, we are of the view that it will be appropriate to restore this issue to the file of ld. CIT(A) to adjudicate the veracity of the fact reported by the A.O. in the assessment order that the sold land was non-agricultural land. In the result, appeal of the revenue of the assessee is allowed for statistical purposes,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Goods and Services Tax Network ( GSTN ) has updated a new feature in the GST portal in connection with the filing of an application for ITC accumulated due to Inverted Tax Structure.
“While filing refund application of input tax credit (ITC) accumulated due to Inverted Tax Structure, the taxpayer can now enter his own GSTN in the inward supply detail statement on the portal,” GSTN said in a statement.
Recently, the GSTN enabled GSTR-9 on GSTN Portal for filing Annual Return. For Filing GSTR-9, an option of ‘Annual Return Tab’ has been enabled by the GSTN (Goods and Services Tax Network) which can be seen in the portal. The due date for furnishing the annual returns in FORM GSTR-9, FORM GSTR-9A and reconciliation statement in FORM GSTR-9C for the Financial Year 2017 – 2018 has been extended till 30.06.2019.
In January, the portal had updated two new features in the official website including System Generated Acknowledgement of Application of Appeal and the Population of Data from EWB System into Form GSTR-1. At the time of generating E-Way Bill for outward supply, taxpayers enter the details of outward supplies such as invoice number, Date, Value Tax etc. With the new functionality added in the portal, the taxpayers can now easily import these details of outward supply invoices, as indicated in the e-way bill at the time of preparation of Form GSTR-1, by clicking the import ‘EWB Data’ button on the GST Portal in following tiles, (i) B2B Invoices (ii) B2C Large Invoices (iii) HSN-wise summary of Outward supplies.
The Income Tax Department has conducted searches at five locations in the J&K region on Friday. According to statement issued by the department, it seized Rs 1.44 crore in undisclosed cash and Rs 2.48 crore worth unaccounted jewellery in searches conducted in five locations in Kashmir in connection with terror funding activities.
“The actions are part of Department’s continued drive against use of black money by disruptive elements in the State also send msg of deterrence 2 those intending 2 vitiate democratic process of free and fair election,” it said.
The search actions were part of the department’s continued drive against use of black money by disruptive elements in the J-K state
“Undisclosed cash of Rs.1.44 crore & unaccounted jewellery of Rs. 2.48 crore has been seized. Documentary evidence collected shows undeclared property transactions of more than Rs. 41 crore, primarily in the Kashmir valley and concealed financial transactions of nearly Rs.17 crore,” the department tweeted.
The recent searches demonstrate the Department’s resolve to continue to hit at terror financing in the J&K region.
Number of hard disks have also been seized that prima facie corroborate the evidence found in seized documents. Their analysis is likely to lead to 3rd parties that have indulged in property & financial transactions that have been deliberately concealed from the tax authorities.
The GST department has arrested one Rajesh Goyal, 42, a resident of New Panchwati Colony in Ghaziabad, for issuing fake invoices of more than Rs 400 crore through 50 shell companies.
The office of Director General of GST Intelligence (DGGI) was arrested for attempting illegally avail of or utilize input tax credit to the tune of Rs 90 crore.
A few weeks ago, a 27-year-old Chartered Accountant was arrested for running a similar racket encashing input tax credit of Rs 50 crores illegally.
According to the Senior Intelligence Officer Arpit Saxena, Goyal was operating since 2017 and over time created 50 shell firms. Investigations are on and more names will crop up soon.”
Explaining the modus operandi, Manish Goel, additional director general (ADG) of DGGI, Meerut zone unit, said, “The accused through these bogus companies registered with GST issued tax invoices despite the fact none of these companies dealt with or supplied any goods and services. These fake invoices were sold to clients. This led to wrongful availment or utilization of input tax credit.”
On Friday, a special chief judicial magistrate, economic offenses court, sent Goel to jail. On February 20, sleuths of Directorate General of GST Intelligence (DGGI), Meerut Zonal Unit conducted searches at multiple locations in Delhi, Mumbai, Raipur, Varanasi and Moradabad and unearthed a major scam of fake invoices without an actual supply of goods by a group of people to defraud the government.
The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that the addition made merely on the basis of loose sheets scribbling is unlawful.
The assessee is engaged in the business of construction and development of Real Estate. In consequent to a search made on the premises of “Thakkar Group” where the assessee-firm is a part, seized some documents containing the details of various items of cost and total expenses on the project have been worked out.
Before the authorities, the assessee submitted that the scribbling in the loose sheet is only a rough noting of the estimates. According to the assessee, there is no other evidence supporting the said scribbling. It was also submitted that de hors any corroborative evidence, these scribbling on rough notes cannot be the sole basis for addition for undisclosed income. Further, no defect whatsoever has been found in the books of accounts of the assessee and the preceding and the succeeding year, the profit offered has been accepted. Hence, the assessee claimed that the entire addition on the basis of the said loose sheet scribbling is unjustified.
The Tribunal accepted the submissions of the assessee that loose sheet scribbling are merely estimates and de hors any corroborative evidence, the additions solely based on these loose sheets scribbling cannot be made.
“We find that this submission of the ld. Counsel of the assessee has considerable cogency. The said loose sheet was found from the residence of one of the partners. It does not mention the name of the assessee firm directly or indirectly. Moreover, the said notings are also not claimed to be recorded in the handwriting of Shri Shankarlal Virji Thakkar or any other partners of the assessee firm. In this regard, we place reliance upon the Hon’ble Apex Court decision in the case of CIT vs. P. V. Kalyanasundaram [2007] 294 ITR 49 (S.C.), the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentAs part of taking measures to make the tax proceedings easier and hassle-free for assessees with the help of modern technology, the income tax department has proposed to launch e-assessment and verification of returns. In connection with this, the Central Board of Direct Taxes (CBDT) has notified the designated officer for e-verification.
On Wednesday, the finance ministry issued a notification to set up a Central Vigilance Commission (CVC) to carry out e-verification of the ‘red-flagged’ cases of income tax returns. Under the new facility, tax returns of individuals, as well as companies, will be verified.
Under a notification issued on Wednesday, the Commissioner of Income Tax (e-verification) has been appointed (i) for the purpose of centralised issuance of notice and for collection and processing of information or documents and making available the outcome of the collection and processing under sub-sections (1) and (2) of Section 133C of the Income Tax Act, 1961; (ii) to specify the format and manner of response expected from the assessee and to call for information under section 133 of the Income-tax Act, 1961 and corresponding provisions of Chapter XXI (Penalties imposable), Chapter-XXII (Offences and Prosecution) and other provisions incidental thereto of the said Act; and (iii) under section 285BA of the Income-tax Act, 1961 and corresponding provisions of Chapter XXI (Penalties imposable), Chapter-XXII (Offences and Prosecution) and other provisions incidental thereto of the said Act;
Subscribe Taxscan Premium to view the JudgmentSub-section (4) of Section 286 of the Income Tax Act, 1961 requires that a constituent entity of an international group, resident in India, other than a parent entity or an alternate reporting entity of an international group, resident in India, shall furnish the Country-by-Country (CbC) Report in respect of the said international Group for a reporting accounting year within the period as may be prescribed, if the parent entity of the said International Group is resident of a country or territory,—
Ø where the parent entity is not obligated to file the CbC Report;
Ø with which India does not have an agreement providing for exchange of the CbC Report; or
Ø, where there has been a systemic failure of the country or territory and the said failure, has been intimated by the prescribed authority to such constituent entity.
Vide Notification in GSR 1217 (E) dated 18th December, 2018 with effect from 18th December, 2018, amendments to the Income-tax Rules. 1962 (the “Rules”) have been carried out to provide that the period for furnishing of the CbC report (local filing) shall be twelve months from the end of the reporting accounting year.
Further, vide Circular No.9/2018, dated 26th December, 2018, CBDT as a one-time measure, in exercise of powers conferred under section 119 of the Act, extended the period for furnishing of the CbC Report (local filing) in respect of reporting accounting years ending on or before 28th February, 2018 up to 31st March, 2019.
The absence of an Agreement between India and USA till now entailed a possibility of local filing of CbC Reports in India. However, a Bilateral Competent Authority Arrangement, along with an underlying Inter-Governmental Agreement, for exchange of CbC Reports between India and the USA has now been finalized and will be signed on or before 31st March, 2019. This would enable both the countries to exchange CbC Reports filed by the ultimate parent entities of International Groups in the respective jurisdictions, pertaining to the financial years commencing on or after 1st January, 2016. As a result, Indian constituent entities of international groups headquartered in USA, who have already filed CbC Reports in the USA, would not be required to do local filing of the CbC Reports of their international groups in India.
The Anti-Corruption Bureau has arrested an income tax officer in a bribery case on Thursday. The officer was caught red-handed while demanding and accepting a bribe of Rs 25,000 from a complainant at Anantapur.
Sources said that the accused is A Raja Sekhar, an office superintendent at Ward 3 office, Anantapur. According to reports, one Niranjan Babu, an auditor based in Anantapur, filed a complaint with the ACB claiming that Rajasekhar had demanded Rs 25,000 as a bribe for processing his request to refund 20 percent Income Tax refund already deposited by his client.
The auditor’s client had received a notice from the income tax department to pay income tax on capital gains shown in the Income Tax returns for the assessment year 2012-13. The income tax officer of Ward 3 passed orders on December 4, 2017, asking Veeranjaneyulu to pay income tax of Rs 10,45,230 lakh on capital gains.
Then, Veeranjaneyulu approached Niranjan who made an appeal to the commissioner of income tax (appeals), Kurnool, on behalf of him and deposited 20 percent of the demanded tax Rs 2,09,046 to the IT department as per rules. On November 26, the appellate authority passed orders favorable towards Veeranjaneyulu and stated that there was no need to pay the disputed income tax of Rs 10,45,230.
Based on the orders, Niranjan on behalf of his client sought the reimbursement of Rs 2.09 lakh deposited to the IT department for which Rajasekhar demanded the amount. The accused officer was arrested and produced before ACB Court, Kurnool, officials added.
This is the second time that the ACB officials trapped a Central government employee after general consent was withdrawn to the CBI by the State government.
The Goods and Services Tax ( GST ) department, Maharashtra has notified the revised procedure for filing Advance Rulings applications and connected appeals.
The notification prescribes the detailed procedure to file applications online by paying a fee of Rs. 10,000/-.
The notification stated that the application for Advance Ruling shall not be admitted as per section 98(2) in cases where the question raised in the application is already pending or decided in any proceedings in the case of an applicant under any of the provisions of CGST/MGST Act.
If the application is rejected, it should be only after an opportunity of being heard is provided to the applicant and by way of a speaking Order giving the reasons for rejection, it said.
Orders passed by AAR can be viewed at www.mahagst.gov.in. Orders passed by AAR can also be viewed on the portal of Goods and Services Tax Council www.gstcouncil.gov.in/advance-rulings. MIS Report of the Orders passed by various AAR is available on the portal of Goods and Services Tax Council www.gstcouncil.gov.in/advance-rulings.
With regard to appeal, the notification said that the Appellate Authority must pass an order after hearing the parties to the appeal within a period of ninety days of the filing of an appeal. If members of AAAR differ on any point referred to in appeal, it shall be deemed that no Advance Ruling is issued in respect of the question under appeal.
Subscribe Taxscan Premium to view the JudgmentThe TDS wing of the Income Tax Department has detected a large-scale scam in the tax deduction at source in government and private sectors during surveys conducted in February.
It was found that Rs. 51 crore had been collected as TDS but not remitted to the government, and that TDS to the tune of Rs. 508 crore that was to have been deducted before payments, was not.
In a press release, the income tax department has said that the surveys were conducted on February 19 and 26, covering 76 cases in government and private sectors. The statement also said that non-deduction of taxes on expenditure to the tune of Rs. 508 crore was detected on transactions such as Internet payments, payment gateway charges, commission payments, contract payments, year-end provisions, and payments for cloud-based services.
Adding that the department is contemplating undertaking similar actions in the future in the light of the scam, it said that the tax deductors should remit TDS collections before the end of the financial year. Any default in such cases could lead to arrest, detention and long-term sentences, it said.
Another scam involving Rs. 3,200 crores relating to tax deduction at source has been unearthed by the income tax department. In relation with this, proceedings have been initiated by the TDS wing of the income tax department against some entities and individuals in Mumbai. The warrant has been issued in some cases.
The Income Tax Appellate Tribunal ( ITAT ), Pune bench has held that the partners cannot be taxed for transaction made by the Firms.
The assessees are partners of a Firm. The assessees were aggrieved by the order of the Assessing Officer wherein they were assessed for the sale consideration received by the Firm.
The Assessing Officer took a view that Rs.7,88,63,213 was the cash component received by M/s. B.U. Bhandari Real Estate Development Group towards the sale of land situated at Wakad, Plot No.143R from M/s. Cornetstene Estate Pvt. Ltd. of M/s. Pooja Export Group. He was of the opinion that since Shri C.U Bhandari (HUF) is the partner in M/s. B.U. Bhandari Real Estate Coporation and along with 8 others as per agreement dated 29.11.2007 received the cash of Rs.7,88,63,213/- and not shown his share of cash receipt in his return of income and therefore, re-opened the assessment.
The assessees claimed that when sale consideration is received by partnership firm and the same is reflected in the books of account of the partnership firm and has been offered to tax. It was contended that the same amount cannot be assessed in the hands of the individual partners for the purpose of taxation.
After hearing the facts and in the light of judicial pronouncements, the Tribunal observed that the cash payment was made by the M/s. Pooja Export and credited to the firm M/s. B.U. Bhandari Real Estate Corporation.
“Transaction of the amount was assessed in the hands of the M/s. B.U. Bhandari Real Estate Corporation. In such scenario, terming the assessee as ultimate beneficiary is not appropriate as evident through the facts on record. That the Hon’ble Supreme Court in the case of ITO Vs. Ch. Atchaiah (supra.) has clearly held that assessment has to be done in the right hands. Therefore, in the present case, when sale of land transaction has been done by the partnership firm, addition cannot be made in the hands of the individual assessee even though he is a partner of the firm,” the Tribunal said.
Subscribe Taxscan Premium to view the JudgmentThe Goods and Services Tax ( GST ) portal has mandated that the taxpayers should opt for composition scheme till 31st March 2019. The portal has also reminded that such taxpayers shall file the stock declaration in ITC-03 before 30-09-19.
“Taxpayers should fill CMP-02 before 31-03-19 to opt-in for Composition for FY 2019-20. Thereafter, the stock declaration in ITC-03 should be filed before 30-09-19,” the GSTN said in a statement.
Presently, the GST Composition Scheme can be availed by businesses with a turnover of Rs 1.5 crore, against the earlier Rs 1 crore, with effect from April 1. The effective date for availing higher turnover cap of Rs 1.5 crore for availing composition scheme by traders has also been fixed as April 1.
The service providers and suppliers of both goods and services with a turnover of up to Rs 50 lakh would be eligible to opt for the GST composition scheme and pay a tax of 6 percent from the beginning of next fiscal.
Earlier, the GST Council had recommended that the Composition Scheme, under which small traders and businesses pay a 1 percent tax based on turnover, can be availed by businesses with a turnover of Rs 1.5 crores.
The notifications in this effect had been issued by the Central Board of Indirect taxes and Customs (CBIC) last week.
The GST Council meeting scheduled to 19th March, Tuesday to form realty rules gets approval from the Election Commission. As the date for Lok Sabha elections has been declared, there were reports that the meeting would violate the Code of Conduct rules.
The GST Council, last month, suggested reducing the levy on under-construction residential projects to 5 percent without an input tax credit from the current 12 percent. In the same meeting on February 24, the Council had decided to lower the GST on the under-construction houses from 12% to 5% and for affordable housing from 8% to 1% without input tax credit (ITC) benefit.
However, on the important issue of transition of the existing under-construction projects, the Council had asked its fitment and the law committee to draft the rules and guidelines for a transition.
The next meeting through video conference on Tuesday is expected to finalize the rules and regulations for the ongoing under-construction residential projects.
In the meeting, the council is likely to limit the usage of tax credits collected by builders and allow a concessional rate for up to 10 percent of commercial property such as shops in residential areas, expecting realtors to reduce prices.
In February, the GST collections has been dropped to Rs. 97,247 crore from Rs. 1.02 lakh crore in the previous month. Out of this, the Central GST was Rs. 17,626 crore, State GST (SGST) stood at Rs. 24,192 crore, Integrated GST Rs. 46,953 crore and cess was Rs. 8,476 crore.
GST collections in the current fiscal till February totalled Rs. 10.70 lakh crore.
The Ministry of Finance has notified the Creation of the National Bench of the Goods and Services Tax Appellate Tribunal ( GSTAT ) at New Delhi with effect from 14th March 2019.
Earlier, GST Council has approved the setting up of GST Appellate Tribunal ( GSTAT ) to provide a higher judicial forum for businesses to redress their tax disputes under the newly implemented Goods and Services Tax (GST) law. Initially, the Tribunal will be constituted with a national bench in Delhi and three regional benches in Chennai, Kolkata, and Mumbai.
With the implementation of the GSTAT, the Central Excise and Services Tax Appellate Tribunal (CESTAT) will be replaced.
The new indirect tax law, Goods and Services Tax law, implemented on 1st July 2017, provides for an appeal and review mechanism for dispute resolution under the framework, which was rolled out on July 1 last year. The tribunal is the second level of appeal where pleas can be filed against orders from appellate or revisional authorities.
The move to constitute the Appellate Tribunal will bring about more consistency on issues in the concept of the GST laws.
Subscribe Taxscan Premium to view the JudgmentAs the CA exams have been rescheduled to 27th May 2019 to 12th June 2019, the Institute of Chartered Accountants of India ( ICAI ) has enabled the facility to make corrections and changes in the application forms.
The CA exams earlier scheduled in May 2019 have been rescheduled in terms of the announcement dated 11th March 2019, hosted on www.icai.org. CA May 2019 exams will now be held from 27th May 2019 to 12th June 2019.
Accordingly, the last date for submission of exam application forms for May 2019 CA exams without late fee, was also extended to 16th March 2019. So also, the last date for submission of exam application forms for May 2019 CA exams, with a late fee, stands extended to 23rd March 2019.
an announcement of the ICAI said that “queries are being received from candidates who have already applied for a single Group of May 2019 exams, as to whether they can apply for both Groups of May 2019 exams now.”
“It is hereby clarified that such candidates who had already applied for appearing in a single Group and are desirous of applying for appearing in both Groups, may do so by applying online at http://icaiexam.icai.org through the Correction Window I, during the period from 27th March 2019 to 2nd April 2019,” ICAI said.
In this regard, the ICAI has asked the candidates to refer to Point No I (5) & II (4) in the announcement dated 2nd February 2015 on the subject, hosted on www.icai.org.
A two-judge bench of the Bombay High Court has held that the non-competent fee received by the assessee from the sale of the business assets was not assessable as profits of business under Section 29(va), but the same is taxable as long-term capital gain.
The assessee sold its business of manufacturing wheat herbicides for a sale consideration of Rs.30.13 Crores under an agreement. This included a sum of Rs.2 Crores towards non-compete fee. The Assessing Officer held that this amount was Assessee’s income and taxed it accordingly.
On second appeal, the Tribunal granted relief to the assessee by holding that the receipt was capital and it gave rise to long term capital gain. Thereupon, the Revenue has filed this Appeal.
According to the Tribunal, the Non-Compete Agreement was part of the agreement for the sale of the business. Under this Agreement, the Assessee could be seen to have transferred the right to manufacture the product in question. The Tribunal, therefore, was of the opinion that such receipt would not be covered by Section 28(va) of the Income Tax Act. The Tribunal further held that the Assessee was in the business since the year 1997 and that, therefore, the transfer of the capital asset would give rise to long term capital gain.
The division bench comprising Justice Sarang V. Kotwal and Justice Akil Kureshi upheld the view of the Tribunal and held that “In our opinion, the Tribunal was right on both counts. The Non-Compete Agreement was part and parcel of the sale of the business and cannot be seen in isolation. Further, the Assessee was in the business of producing and selling wheat herbicides since the year 1997 and therefore, while selling the business, the Assessee also executed a Non-Compete Agreement, which was part of the sale of assets held by the Assessee in excess of 36 months.”
Subscribe Taxscan Premium to view the JudgmentThe Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that when the quantum addition is deleted by the appellate authorities, the penalty levied under Section 271(1)(c) of the Income Tax Act, 1961 for the said quantum addition cannot be survived.
The Assessing Officer made an addition of Rs. 3,75,13,010/- under Percentage Completion Method , by applying Accounting Standard – 7 which was later confirmed by the first appellate authority. Thereafter, the Assessing Officer also levied a penalty under section 271(1)(c) of the Income Tax Act, 1961. The penalty was, however, deleted by the first appellate authority by considering the fact that the appellant is consistently following the principles AS-9, there cannot be a standalone year where principles AS-7 could be applied.
Subsequently, the Tribunal deleted the addition. The assessee approached the Tribunal for deletion of the penalty.
The Tribunal was of the view that the “penalty U/s 271(1)(c) I.T. Act of Rs. 1,27,50,670/- levied by AO, and already deleted by the Ld. CIT(A); has no legs to stand when the corresponding additions made by the AO have already been deleted by ITAT vide its aforesaid order dated 27.09.2016. When the quantum addition does not survive, the penalty levied U/s 271(1)(c) of I.T. Act on the corresponding quantum addition also cannot survive. We take support from judicial precedent in the case of K.C. Builders vs. ACIT 135 Taxman 461 (SC), in which the Hon’ble Apex Court held that where the additions made in the Assessment Order, on the basis of which penalty for concealment was levied, are deleted, there remains no basis at all for levying the penalty for concealment, and therefore, in such a case, no such penalty can survive and the same is liable to be cancelled. In view of the foregoing, appeal filed by Revenue is hereby dismissed.”
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