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Welcome to Taxmann.com | Newsletter – Reporting the Facts with Taxmann’s Analysis. Today’s Edition Brings to You with a Section-wise Digest of Statutes | Judgments?| Opinions.
INCOME TAX
SECTION 4 OF THE INCOME-TAX ACT, 1961 - INCOME - CAPITAL OR REVENUE RECEIPTS
Where subsidies received by assessee-company from industrial projects was clearly linked to establishment of new units same would be treated as capital expenditure - Principal Commissioner of Income-tax v. Pepisco India Holding (P.) Ltd. - [2024] 163 taxmann.com 412 (Delhi)
SECTION 13 OF THE INCOME-TAX ACT, 1961 - CHARITABLE OR RELIGIOUS TRUST - DENIAL OF EXEMPTION
Sub-section (2): Where difference between rent received by assessee from ‘specified persons’ covered under section 13(3) and rental value adopted by Assessing Officer was less than 10 per cent, rent received by assessee could not said as inadequate under section 13(2)(b), so as to deny exemption under section 11 to assessee - Deputy Commissioner of Income-tax (Exemption) v. Indian Grameen Services - [2024] 163 taxmann.com 409 (Delhi - Trib.)
SECTION 92C OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - COMPUTATION OF ARMS LENGTH PRICE
Comparability factors - Internal comparable: Size of internal comparable does matter in entity level comparison because scale of operations substantially vary and so does underlying profitability factor, but in a transaction level comparison within same entity, mere difference in size of uncontrolled transactions does not render transaction incomparable - Commissioner of Income-tax (International Taxation) v. Lummus Technology Heat Transfer BV - [2024] 163 taxmann.com 411 (Delhi)
SECTION 92CA OF THE INCOME-TAX ACT, 1961 - TRANSFER PRICING - REFERENCE TO TPO
Instruction and risk parameters: Where assessee challenged reference made by Assessing Officer to Transfer Pricing Officer under section 92CA on ground that Assessing Officer had failed to bear in mind Instruction No. 3/2016, there was no justification for continuing with writ petition, particularly when assessee had efficacious and adequate remedies under Act - Infonox Software (P.) Ltd. v. Deputy Commissioner of Income-tax - [2024] 163 taxmann.com 410 (Delhi)
SECTION 119 OF THE INCOME TAX ACT, 1961 - CENTRAL BOARD OF DIRECT TAXES – INSTRUCTIONS TO SUBORDINATE AUTHORITIES
Condonation of delay: Where assessee could not file its return of income under section 139(1) for reason that accountant of assessee fell ill and subsequently on account of such illness had to resign due to which books of accounts could not be finalized which resulted in delayed filing of return, delay did not appear to be on account of any negligence or malafide of assessee as illness and subsequent resignation of accountant was an entirely unforeseen event which amounted to genuine hardship, therefore, delay in filing of return was to be condoned in terms of section 119(2)(b) - Anmol Feeds (P.) Ltd. v. Union of India - [2024] 163 taxmann.com 407 (Calcutta)
SECTION 148 OF THE INCOME-TAX ACT, 1961 - INCOME ESCAPING ASSESSMENT - ISSUE OF NOTICE FOR
General: Where on date of issuance of notice under section 148, Assessing Officer does not have any information, material or evidence in his possession so as to form a reason to believe that any income of assessee for year under consideration has escaped assessment, reassessment proceedings initiated by Assessing Officer are erroneous - Santosh Khunteta v. Income-tax Officer - [2024] 163 taxmann.com 416 (Delhi - Trib.)
GOODS AND SERVICES TAX LAWS
SECTION 2(45) OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - ELECTRONIC COMMERCE OPERATOR
Where assessee/applicant sought advance ruling on its status as e-commerce operator under Section 9(5) of CGST Act, 2017, Authority held that applicant qualifies as e-commerce operator and is liable to pay GST on app usage charges and transaction value paid by users for notified services under Section 9(5) - Balat Enterprises (P.) Ltd., In re - [2024] 163 taxmann.com 424 (AAR - TAMILNADU)
SECTION 17 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - INPUT TAX CREDIT - CREDIT AND BLOCKED CREDITS, APPORTIONMENT OF
Where assessee contended that input tax credit (ITC) on air conditioning, cooling, and ventilation systems should be allowed as plant and machinery, Appellate Authority upheld ruling denying ITC, classifying these as blocked under Section 17(5)(c) of CGST Act, 2017 - Wago (P.) Ltd., In re - [2024] 163 taxmann.com 395 (AAAR-GUJARAT)
Where assessee/applicant sought advance ruling on admissibility of input tax credit on goods/services received for construction of airport runway and passenger terminal building, Authority ruled that entire input tax credit is blocked under Section 17(5)(c) of CGST Act as supplies were for construction of immovable property under composite works contract - Kannur International Airport Ltd., In re - [2024] 163 taxmann.com 430 (AAR - KERALA)
SECTION 54 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - REFUND - TAX, REFUND OF
Where assessee sought refund of unutilized ITC and respondent denied it by issuing deficiency memos requiring CA certificate, High Court quashed memos, allowed refund with interest, and held certificate was unnecessary per Rule 89(2) proviso - Svera Agro Ltd. v. Commissioner of Central Tax and GST, GST Delhi North Commissionerate - [2024] 163 taxmann.com 420 (Delhi)
SECTION 73 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY - TAX OR INPUT TAX CREDIT DUE NOT INVOLVING FRAUD MISSTATEMENT OR SUPPRESSION
Where assessee/petitioner contended that detailed reply with documents was ignored by proper officer, High Court set aside the cryptic order and remitted matter for re adjudication, allowing further reply and fresh consideration - Sethia Enterprises v. Commissioner, Delhi Goods and Service Tax - [2024] 163 taxmann.com 381 (Delhi)
领英推荐
Where assessee paid tax and interest as per its show cause notice reply, but assessment order demanded incorrect tax and imposed penalty without hearing, High Court quashed order and remanded for reconsideration with reasonable opportunity - Tvl. Vikram Corporation v. Assistant Commissioner (ST) - [2024] 163 taxmann.com 422 (Madras)
Where assessee/petitioner contended that amount towards alleged stock variation and wrongful input tax credit was recovered during search operation without statutory demand, High Court held deposit involuntary and directed refund towards alleged stock variation with interest and towards alleged wrongful input tax credit without interest - Sushil Kumar v. Delhi State GST Govt. NCT of Delhi - [2024] 163 taxmann.com 419 (Delhi)
SECTION 75 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 - DEMANDS AND RECOVERY - GENERAL
Where demand created on account of claim of ITC from cancelled dealer, detailed reply furnished by assessee giving full disclosures under each of heads, impugned order recorded reply not satisfactory and vague, non application of mind by proper officer to reply, impugned order was to be set aside - Sri Radha Krishna International v. Union of India - [2024] 163 taxmann.com 418 (Delhi)
COMPANY AND SEBI LAWS
CIRCULAR NO. SEBI/HO/MRD/MRD-POD-3/P/CIR/2024/82, DATED 14-06-2024
SEBI revises ‘Offer for Sale’ framework, mandates employees to place bids on T+1 at T day’s cut-off price
Editorial Note: SEBI has revised the framework for the ‘offer for sale’ of shares to the employees via the stock exchange mechanism. SEBI now mandates that employees must place bids on T+1 day at the cut-off price of T day. Further, all Market Infrastructure Institutions (MIIs) are advised to take the necessary steps to implement the circular. The circular shall be effective from the 30th day of its issuance, i.e., July 14, 2024.
SECTION 213 OF THE COMPANIES ACT, 2013 - INVESTIGATION - INTO COMPANY'S AFFAIRS IN OTHER CASES
Investigation under section 213 of 2013 Act is possible in respect of company which is undergoing process of liquidation - Tahera Iqbal v. Vikram Structures (P.) Ltd. - [2024] 163 taxmann.com 431 (NCLT-Beng.) (SB)
SECTION 230 OF THE COMPANIES ACT, 2013 - COMPROMISE AND ARRANGEMENT
Where appellant - copyright society objected to amalgamation scheme of respondent company, claiming that it was an unsecured creditor of respondent due to royalty owed by respondent and NCLT dismissed said objection, observing that appellant had no locus to object as its name was neither listed in audited balance sheets of respondent nor in its unsecured creditor's list, if claimant was not reflected as a creditor in audited financial statements, it was disentitled to object to amalgamation scheme and, therefore, such observation of NCLT was free from any legal infirmity - Indian Performing Right Society Ltd. v. Novi Digital Entertainment (P.) Ltd. - [2024] 163 taxmann.com 429 (NCLAT- New Delhi)
INSOLVENCY AND BANKRUPTCY CODE
SECTION 5(21) OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 - CORPORATE INSOLVENCY RESOLUTION PROCESS - OPERATIONAL DEBT
Where there was a pre-existing dispute between parties with respect to existence of amount due and payable and quality of goods and services supplied by operational creditor to corporate debtor and, therefore, NCLT did not commit any error in rejecting section 9 application filed by appellant on ground of pre-existing dispute - East India Udyog Ltd. v. SPML Infra Ltd. - [2024] 163 taxmann.com 426 (NCLAT- New Delhi)
ACCOUNTS AND AUDIT
Checklist for clause 12 of Form 3CD in Tax Audit under Income Tax Act, 1961
Editorial Note: Clause 12 requires the tax auditor to report whether the profit and loss account includes any profits and gains assessable on a presumptive basis. If yes, the tax auditor is required to indicate the amount and the relevant sections i.e. (44AD, 44AE, 44AF, 44B, 44BB, 44BBA, 44BBB, Chapter XII-G, First Schedule or any other relevant section). This document provides a detailed audit checklist to help tax auditors effectively report under Clauses 12 of Form 3CD.
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