GSTPAM News Bulletin April 2024

‌Modes of Payment:-

Guidance Cell Email ID for queries Members can send their queries at [email protected]

‌ORDER FORM FOR GSTPAM REFERENCER 2024-25

 

‌The payment for the above order of………………………………………………………………………………… (Rupees in words) is made herewith by Cash /Card /Cheque /Demand Draft No. ………….…………… dated ……….……………… drawn on……………………………………………… Bank………………………………….. Branch, Mumbai.

 

‌THE GOODS & SERVICES TAX PRACTITIONERS’ ASSOCIATION OF MAHARASHTRA

LATEST CASE LAWS ON GST Compiled by CA. Aloke R. Singh

2024 (4) TMI 291 – ALLAHABAD HIGH COURT

M/S ECO PLUS STEELS PVT. LTD. VERSUS STATE OF U.P. AND 3 OTHERS

Dated:- 3-4-2024

In: GST

Writ Tax No. – 916 of 2022, 1600 of 2022

Confiscation of goods – levy of penalty – burden of proof on Department – mere presence of additional stock – HELD THAT:- One is unable to understand that after the Appellate Authority had come to the above finding that the stock was not weighed or counted, specifically when the same could have very well been done in the premises of the petitioner, why did the Appellate Authority subsequently reduce the penalty by making a fresh assessment. The calculation of the stock by the Appellate Authority on the basis of an estimate is without any basis in law. When the Appellate Authority had come to the finding that the officers in the survey did not carry out the quantification of the stock in the correct manner, there was no reason for the Appellate Authority to uphold the confiscation and penalty.

There are no reason with regard to the delay in the confiscation and levy of penalty. In fact, the notice for confiscation was issued in August 2019, almost 10 months after the date of survey. This inordinate delay in issuing show cause notice goes to the root of the matter and is a factor to be considered – the delay leads to an inference that the authorities have acted in a callous manner.

It is trite law that the burden of proof for imposition of penalty and confiscation of goods is on the Department and the same cannot be done on estimates when it is clear that the Department could have carried out a physical verification based on counting and weighing of the goods. In light of the same, the entire finding with regard to excess stock, that is based on estimate, is liable to be rejected outrightly.

The impugned orders with regard to penalty and confiscation are quashed and set aside – As the said finding of excess stock is clearly without any basis in law and illegal, the initiation of proceedings under Section 74 of the Act cannot stand on any footing – impugned orders are set aside – petition allowed.

2024 (4) TMI 286 – DELHI HIGH COURT

M/S. A.B TRADERS VERSUS COMMISSIONER OF DELHI GOODS AND SERVICE TAX & ANR.

Dated:- 2-4-2024

In: GST

W.P.(C) 4739/2024 & CM APPL. 19450/2024

Violation of principles of natural justice – impugned order does not take consideration the reply submitted by the Petitioner in full consideration and has passed a cryptic order – under declaration of output tax – excess claim Input Tax Credit – ITC claimed from cancelled dealers – return defaulters – tax non-payers –

HELD THAT:- The impugned order, however, after recording the narration, records that the reply uploaded by the taxpayer is insufficient and unsatisfactory.

The matter is remitted to the Proper Officer to re-adjudicate the issues – impugned order set aside – petition allowed by way of remand.

2024 (3) TMI 1277 – BOMBAY HIGH COURT

SHANTANU SANJAY HUNDEKARI, VIKAS AGARWAL, YOGESH AGARWAL, MAMTA GUPTA VERSUS UNION OF INDIA, THROUGH SECRETARY, MINISTRY OF FINANCE, NEW DELHI., STATE OF MAHARASHTRA, JOINT DIRECTOR, DIRECTOR GENERAL OF GOODS AND SERVICE TAX INTELLIGENCE, GUJARAT. THE ADDITIONAL/JOINT COMMISSIONER, THANE COMMISSIONERATE,

Dated:– 28-3-2024

In: GST

WRIT PETITION (L) NO. 30198 OF 2023 WITH WRIT PETITION (L) NO. 30199 OF 2023,WRIT PETITION (L) NO. 30200 OF 2023, WRIT PETITION (L) NO. 30241 OF 2023

Jurisdiction to issue SCN – Levy of penalty equivalent to the tax – wrongful utilization of Input Tax Credit – Section 122(1A) and Section 137 of the CGST Act – whether the invocation of the provisions of Section 122 (1-A) of the CGST Act as also Section 137(1) and 137(2) would stand attracted in their applicability to the petitioner, so as to confer jurisdiction on respondent no. 3, to issue the impugned show cause notice against the petitioner, who is merely an employee of MLIPL and a power of attorney of Maersk? –

HELD THAT:- A plain reading of section 122 clearly implies that it provides for levy of penalty for “certain offences” by taxable person. Such taxable person would render himself liable for a penalty for acts provided in clauses (i) to (xxi) of sub-section (1). Insofar as sub-section (1-A) of Section 122 is concerned, it provides that any person (who would necessarily be a taxable person), retains the benefit of the transactions covered under clauses (i), (ii), (vii) or clause (ix) of sub-section (1), and at whose instance, such transaction is conducted, “shall be liable to a penalty of an amount equal to the tax evaded or input tax credit availed of or passed on”. This necessarily implies that sub-section (1-A) applies to a taxable person, as it specifically speaks about the applicability of the provisions of clauses (i), (ii), (vii) or clause (ix) of sub-section (1), with a further emphasis added by the words – This clearly depicts the intention of the legislature that a person who would fall within the purview of sub-section(1-A) of Section 122 is necessarily a taxable person as defined under section 2(107) of the CGST Act read with the provisions of section 2( 94) of the CGST Act and a person who retains the benefits of transactions covered under clauses (i), (ii), (vii) or clause (ix) of sub-section (1) of Section 122.

Section 122 (1-A) also cannot be attracted qua the person, in a situation when any person does not retain the benefit of a transaction covered under clauses (i), (ii), (vii) or clause (ix) of sub-section (1) and/or it is applicable at whose instance such transactions are conducted, could be the only person, who shall be liable to a penalty of an amount equivalent to the tax evaded or input tax credit, wrongly availed of or passed on.

There is no material to support that any of the ingredients as specified in sub-section (1-A) of Section 122 would stand attracted so as to confer jurisdiction on respondent no. 3 to adjudicate any allegations/charges as made under sub-section (1-A) of Section 122. This is abundantly clear from the bare contents of paragraphs 20 and 5.19.1 of the show cause notice.

It is highly unconscionable and disproportionate for the concerned officer of the Revenue to demand from the petitioner an amount of Rs. 3731 crores, which in fact is clearly alleged to be the liability of Maersk, as the contents of the show cause notice itself would demonstrate. The petitioner would not be incorrect in contending that the purpose of issuing the show cause notice to the petitioner who is merely an employee, was designed to threaten and pressurize the petitioner.

Petition allowed.

2024 (4) TMI 59 – BOMBAY HIGH COURT

COWTOWN SOFTWARE DESIGN PVT. LTD. AND MILIND KARNIK VERSUS UNION OF INDIA, THE STATE OF MAHARASHTRA, DEPUTY COMMISSIONER OF STATE TAX, LTU, MUMBAI, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS

Dated:– 26-3-2024

In: GST

WRIT PETITION (L) NO.31152 OF 2023

Violation of the principles of natural justice – No opportunity of personal hearing granted to the Petitioner – contrary to the provisions of Section 75(4) of the Central Goods and Service Tax Act, 2017 (“CGST Act”) – HELD THAT:- In the present case, by its reply dated 4th July 2023, Petitioner No. 1 specifically sought an opportunity of personal hearing. In these circumstances, Respondent No. 3 was bound to give a personal hearing to the Petitioner before passing the said Order dated 18th August 2023. Further, by the said Order dated 18th August 2023, a decision adverse to Petitioner No. 1 has been taken. Therefore, in these circumstances also, Respondent No. 3 was bound to given a personal hearing to Petitioner No. 1. However, no such personal hearing has been given by Respondent No. 3 to Petitioner No. 1 before passing the said Order dated 18th August 2023.

Since the said Order dated 18th August 2023 has been passed without giving any personal hearing to the Petitioner, the same is in violation of the principles of natural justice and exfacie contrary to the provisions of Section 75(4) of the CGST / MGST Act.

Thus, we dispose of this Writ Petition by the following Orders: – The impugned Order dated 18th August 2023 passed by Respondent No. 3 is hereby quashed and set aside.

2024 (4) TMI 58 – BOMBAY HIGH COURT

COWTOWN SOFTWARE DESIGN PVT. LTD. & ANR., MILIND KARNIK ASSOCIATE GENERAL MANAGER OF THE PETITIONER NO. 1 VERSUS UNION OF INDIA, THE STATE OF MAHARASHTRA, DEPUTY COMMISSIONER OF STATE TAX, MUMBAI-LTU, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS

Dated:- 26-3-2024

In: GST

Since the said Order dated 22nd August 2023 has been passed without giving any personal hearing to the Petitioner, the same is in violation of the principles of natural justice and ex-facie contrary to the provisions of Section 75(4) of the CGST / MGST Act.

Thus, we dispose of this Writ Petition by the following Orders: – The impugned Order dated 22nd August 2023 passed by Respondent No. 3 is hereby quashed and set aside.

2024 (3) TMI 1316 – BOMBAY HIGH COURT

NCDEX MARKETS LTD. VERSUS UNION OF INDIA & ORS.

Dated:- 26-3-2024

In: GST

WRIT PETITION NO. 8 OF 2024

Liability of Collect Tax at Source (TCS) – Exempt supplies – Section 52 of the Central Goods and Services Tax Act, 2017 (CGST Act) – It is contended that payment for the contract can either be settled through the Petitioner’s platform, or it can be settled directly between the buyer and seller. The Petitioner does not guarantee settlement of transactions by way of delivery of goods or payment. The Petitioner merely charges transaction fees for providing the platform to its members for the purpose of e-auction.

HELD THAT:- In the peculiar facts and circumstance of the case, when the Petitioner has raised an issue of the maintainability of the alleged demand on the ground that Section 52 of the CGST Act is not applicable, and more particularly considering the nature of the business and transaction involved, it would be appropriate that the adjudicating officer considers the same as preliminary issues and decide the same first in accordance with law.

This Petition is disposed off by permitting the Petitioner to raise such preliminary issues before the adjudicating officer and the same shall be taken into consideration and decided by him in accordance with law.

2024 (3) TMI 1268 – TRIPURA HIGH COURT

M/S SHEULI REBBER ESTATE VERSUS THE UNION OF INDIA & OTHERS

Dated:- 20-3-2024

In: GST

WP(C) No.227 of 2024

Reversal of ineligible ITC under Section 74 of CGST Act, 2017 – mismatch between GSTR-2A and GSTR- 3B submitted by the petitioner for the period 01.09.2023 till 13.09.2023 – HELD THAT:- Whether the transactions were bona fide or not and whether the selling dealer i.e. respondent No. 4 whose registration has been subsequently cancelled is responsible for non-deposit of tax leading to availment of ineligible ITC by the petitioner is not to be gone into by this Court at this stage. The scheme of the GST Act contemplates a pre- adjudication notice for which intimation under Section 74(5) of the Act of 2017 is issued in Form GST DRC-01‌01A read with Rule 142(1A) upon the assessee/taxpayer containing the communication of details of any tax, interest and penalty chargeable upon the person under sub-section (1) of Section 73 or sub-section (1) of Section 74. This intimation is in Part A of Form GST DRC-01A.

Petitioner has not enclosed any notice indicating initiation of proceedings under Section 74(1) for wrongful availment of ITC by the proper officer, if the petitioner has not paid or short paid or erroneously refunded or wrongly availed ITC or utilized it by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax – as per the scheme of Section 74(1), particularly provisions of Section 74(5) read with Rule 142 (1A) and 142 (2A), petitioner being the person referred to in the impugned notice is required to either make partial payment of the amount communicated to him or if he desires to file any submission or objection against the proposed liability, he may do so in Part B of Form GST DRC-01A.

This Court is of the considered view that petitioner may either make the necessary deposit or reverse the ineligible ITC along with interest and penalty or file his objection(s) in Part B of Form GST DRC-01A – Petition disposed off.

2024 (3) TMI 968 – ALLAHABAD HIGH COURT

DEEPANSHU SRIVASTAVA VERSUS UNION OF INDIA THRU. DEPTT. OF REVENUE DIRECTORATE GST INTELLIGENCE LKO. ZONAL UNIT

Dated:- 19-3-2024

In: GST

Criminal Misc. Bail Application No. – 2391 of 2024

Seeking grant of bail – fraudulent availment and passing of input tax credit of G.S.T, by preparing fake invoices without any actual supply of goods by several firms created, managed and run by the applicant – creation of a number of bogus firms for the purpose of issuing fake invoices – HELD THAT:- Perusal of the provisions contained under Section 73 and 74 of the CGST Act would reveal that a mechanism has been provided therein with regard to the determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilfull mis-statement or suppression of facts. Section 74 of the CGST Act provides for assessment of tax by the proper officer by issuing a notice to the assesee, however, sub-section 11 of Section 74 of the CGST Act would suggest that if the tax, which has been calculated along with the interest payable or the penalty is deposited, all proceedings in respect of the said notice shall be deemed to be concluded – it may be inferred that even if all the tax liability including penalty, etc. has been deposited, it would be only the ‘notice’ which would be discharged and the proceedings with regard to Section 132 of the CGST Act shall remain alive. Thus, there seems force in the submissions made by learned counsel for the Department that the process of prosecution and assessment may go on simultaneously.

The arrest of the applicant has not been done for his non cooperation in the investigation or for further investigation. Nowhere it is stated that the applicant while at liberty may hinder the smooth progress of investigation and in this order it has also not been mentioned as to why the applicant is being arrested, which was required to be stated.

The requirement under sub-section (1) of section 69 of CGST Act is reasons to believe that not only a person has committed any offence as specified but also as to why such person needs to be arrested. From a perusal of the reasons recorded by the Principal Additional Director General, it is reflected that no incident has been mentioned therein recording any act of the applicant or his conduct of threatening any witness or even of not co- operating with the investigation or of fleeing from investigation. It is true that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail, because such offences pose serious threat to the financial health of the country, but there has to be a sound reason or belief for curtailing the liberty of a person, specially in the offences punishable with up to seven years of imprisonment.

‌Keeping in view the fact that applicant has appeared before the department on 30, 31 January 2024 and on 01st February and his statements have been recorded on these days and he was arrested on 2nd February, 2024 and produced before the magistrate and no custody remand was sought by the department and it was after many days i.e. on 26.02.2024 the department has taken the permission from the Court concerned for interrogation of the applicant in jail and also that applicant has retracted his confessional statements and in the orders of arrest no reason has been mentioned as to why after recording of the statements of the applicant for many days his arrest is required and also keeping view that applicant is in jail in this case since 02.02.2024 and investigation appears to have reached an advanced stage and nothing has been shown before this Court which may justify the further detention of the applicant in prison and also considering that the alleged offence is punishable with up to 5 years maximum punishment and still no formal accusation in the form of FIR or complaint has been filed by the department and also keeping in view that in such circumstances continuing the detention of the petitioner may not at all be justified and it appears justified forfurther detention of the applicant when even custodial interrogation has not been claimed at all by the Department and considering the right of an accused to personal liberty, applicant may be released on bail, however subject to certain conditions.

Let the accused/applicant- Deepanshu Srivastava involved in above-mentioned case, be released on bail on his furnishing a personal bond with two sureties in the like amount to the satisfaction of the court concerned subject to fulfilment of conditions imposed – bail application allowed. this court to strike a fine balance between the need for further detention of the applicant when even custodial interrogation has not been claimed at all by the Department and considering the right of an accused to personal liberty, applicant may be released on bail, however subject to certain conditions.

Let the accused/applicant- Deepanshu Srivastava involved in above-mentioned case, be released on bail on his furnishing a personal bond with two sureties in the like amount to the satisfaction of the court concerned subject to fulfilment of conditions imposed – bail application allowed.

Good, better, best. Never let it rest. Try till your good is better and your better is best.

– St. Jerome

A good plan violently executed now is better than a perfect plan executed next week.

– George A. Patton

INCOME TAX UPDATES Compiled By By Adv. Ajay Talreja

SECTION 144C OF THE INCOME-TAX ACT, 1961 – TRANSFER PRICING – DISPUTE RESOLUTION PANEL

Passing assessment order : Where order was passed under section 144C(1) but word “draft assessment” is missing , since any order whatsoever in form, by referring Section 144 (C) (1) ,should be construed only as a draft assessment order, said order should be considered as a draft assessment order – Ramco Cements Ltd. v. Income Tax Officer, National Faceless Assessment Centre, Assessment Unit, Income Tax Department, Ministry of Finance – [2024] 159 Taxmann 572 (Madras)

SECTION 270A OF THE INCOME-TAX ACT, 1961 – PENALTY FOR UNDER-REPORTING AND MISREPORTING OF INCOME

Reply of assessee : Where Assessing Officer issued a show cause notice under section 270A for not reporting income received by assessee from a company and interest from bank and assessee filed a reply which was not accepted by Assessing Officer, since Assessing Officer had not recorded what reply was furnished by assessee against said notice and why it was not acceptable, impugned penalty levied under section 270A towards mis- reporting of income at 200 per cent of tax payable without any reason for levying penalty at such percentage could not survive – Chitra Ramanathan v. Income-tax Officer – [2023] 157 taxmann.com 823 (Chennai – Trib.)

Section 148 Notice cannot be issued to Partner for Transactions Among Partnership Firms

Bhagwan Laxman Rokde Vs ITO (ITAT Mumbai)

The case of Bhagwan Laxman Rokde Vs ITO, adjudicated by the Income Tax Appellate Tribunal (ITAT) Mumbai, revolves around the validity of reopening under section 147, taxation issues concerning undisclosed income, and transactions involving partnership firms. Let’s delve deeper into the intricacies of this case.

Background: On 14th June 2023, the National Faceless Assessment Centre (NFAC) Delhi issued an order concerning the quantum of assessment for the Assessment Year (A.Y.) 2011-12, under section 143(3) read with section 147 of the Income Tax Act, 1961. Challenges Raised by the Assessee: The appellant, Bhagwan Laxman Rokde, raised several grounds of appeal challenging the validity of the reopening under section 147, addition of income from business, and deposits made in the bank account. Validity of Reopening under Section 147: The Assessing Officer (AO) initiated the reopening based on information obtained through the Non Filers Monitoring System (NMS), alleging that the appellant entered into a transaction of sale of immovable property but failed to file the return of income for A.Y. 2011-12. However, the appellant objected, asserting that he had not sold or purchased any property individually. He contended that the transaction pertained to a partnership firm, M/s. Sai Developers, wherein he was a partner. Despite the appellant’s objections and submission of relevant documents, the AO proceeded with the reopening, leading to subsequent additions in the assessment.

Taxation Issues and Addition of Income: The AO treated the sale consideration of the property as income from business and profession, disregarding the partnership nature of the transaction. Additionally, the AO made further additions on account of undisclosed income, based on cash deposits in the appellant’s bank account.

The ITAT Mumbai, upon hearing both parties, concluded that the reopening was invalid. It emphasized that the transaction in question was between two partnership firms, not involving the appellant individually. The tribunal quashed the assessment order, ruling in favor of the appellant.

Conclusion:

The case of Bhagwan Laxman Rokde Vs ITO underscores the importance of meticulous scrutiny and adherence to legal provisions in tax assessments. It highlights the significance of establishing jurisdiction and factual accuracy before making additions in assessments, particularly concerning partnership firm transactions.

All about Form 10F and its Filing Procedure

Introduction :-

Section 90(4) specifies that any person who is non-resident can take the benefit of DTAA* with India if he obtains that Tax Resident Certificate (TRC)* from the tax authority of his residence country confirming his tax residency status in that country. The CBDT notified Rule 21B prescribing the additional information which is required to be furnished by non- residents along with TRC in prescribing Form-10F. If non-resident wants to avail the benefits of DTAA then he must file a self-declaration in Form 10F along with a TRC of their country of residence. For e.g.- If resident of USA is providing Royalty services to Indian resident and rate specified in Income Tax Act for royalty is 20.8% (after HEC) and the rate specified for royalty in DTAA between USA and India is 10%, then he can take the benefit of DTAA rate i.e. 10% if he files self-declaration in Form 10F along with TRC. If he does not file Form 10F then he can’t take the benefit of DTAA and resident payer will deduct TDS at the rate of 20.8% (specified in Income Tax Act). While the TRC obtained generally contain most of the information as required, Form 10F is furnished by the non-resident taxpayer for the balance information as matter of precaution. This form is digitally signed by non-resident and furnished along with TRC to resident payers for determining the TDS implication under section 195 of Income Tax Act.

Terms used above* DTAA- It stands for Double Taxation Avoidance Agreement. This is an agreement between India and other country that prevent double taxation on income earned on both the countries.

TRC- It stand for Tax Residency Certificate. It confirms the tax residency status of non-resident and it is mandatorily required to obtain from the Government if non-resident want to take the benefit of DTAA as mentioned above.

Documents Required for Filing Form 10F

PAN card (not mandatory now, discussed below)

Proof of residence address in your resident country i.e. TRC

Duration of residential status as stated in TRC

Taxpayer status (individual, firm company, trust, etc.)

Proof of nationality for individuals or registration for companies and firms Tax identification number or any other unique identification number in country of residence Digital signature certificate (DSC) to authenticate the information furnished in Form 10F

Notice under Section 133(6) of Income Tax Act 1961 to NRIs

Dear readers, in past Section 133(6) of Income Tax Act 1961 is used mainly in case of scrutiny to gather more and more information related to assessee, whose case is selected for scrutiny. But in last 2 years with the use of AI and AIS/ TIS reports this section becomes a goldmine for Income tax department. Income Tax department has used this section to gather more information/ clarification from assessee whose ITR data is not matching with AIS/ TIS reports. In the initial stage, this section is used to catch resident tax payers those has evaded taxes but in last few months now the Non residents are on the target list.

Section 133(6).

1. These transactions include but are not limited to: 1. High-Value Transactions: Any transaction involving significant sums of money, whether in the form of investments, share trading, mutual fund investments may attract scrutiny.
2. Property Transactions: NRIs engaging in property transactions, such as buying, selling, or renting property in India, are subject to scrutiny to ensure compliance with tax regulations.
3. Foreign Income and Domestic Income: Income earned by NRIs from foreign sources and domestic sources, including salaries, investments, must be accurately reported to avoid potential tax evasion issues.
4. Bank Transactions: Large deposits, withdrawals, or transfers in NRI bank accounts can raise red flags and lead to inquiries by the Income Tax Department.
5. Business Transactions: NRIs involved in business ventures in India or with Indian entities may face scrutiny regarding their financial transactions, profits, and tax liabilities.
6. High Value transactions in NRE and NRO Bank Accounts: If NRI person do high value transactions in NRE or NRO bank accounts or create high value FDRs then it may raise a question in income tax department mind to know the sources of these transactions/ investments etc. Above are illustrative lists of transactions which may invite notice U/s

133(6) of Income Tax department to Nonresident of India.

Now, we will discuss about a real case study of NRI whose has done high value transaction in his NRO/ NRE bank accounts and faced the heat of Section 133(6) of Income Tax Act, 1961 Mr. A is Citizen of India and staying in Britain from last 20 years and qualifies the criteria of becoming Non Resident of India as per Indian Income Tax Act, 1961. He is having NRE and NRO account in India and having no source of Income in India except Interest income received on NRE, NRO Bank account and rental income from his Indian Property. During the period under consideration, Mr. A has transferred funds from his foreign bank account to his NRE and NRO bank account and created FDR of Rs.1 Crore in India. Further, he is earning rental Income of Rs.2 Lakh per annum on his let out property in India. During the year, he has earned interest of Rs.6Lakh in his NRE bank account and FDR account and Rs.15000/- interest income in his NRO bank account. These transactions created red flag against his PAN number and department issued notice U/s 133(6) of Income Tax Act, 1961. Now, Mr. A has to provide the source of these investments and to prove that his income is not taxable in India and he is not liable to file his ITR in India. There are many Indians who are non residents of India and earning such kind of Income from Indian sources but not filing any ITR and paying taxes in these cases. Here, please note that, firstly you must respond to Section 133(6) notices within specified time period. In case of default, the case may be proceeded further and decided ex-party as per law. In Case of Mr. A, interest Income earned from NRE Bank account and FDR is not taxable in India but rental income and interest received on NRO bank account is taxable in India. If we club both incomes then it amount to Rs.155000/- (after giving standard deduction benefit of house property) which is taxable in India but he is not liable to file ITR in India because taxable amount is within the exemption limit as per Indian Income Tax Act, 1961. But to avoid such kind of notices in future, it is better to start filing ITR in India and to disclose all taxable and non taxable Income in ITR.
In this case Mr. A has to submit a strong reply with Income Tax Department with documentary evidences so that no further course of action will be taken in this case.

Is it the section 50C applicable in the case of Tenanted properties.

In the case of tenanted property, while the buyer of property pays the owner of property for ownership rights, he may also have to pay, when he wants to have possession of the property and to remove the fetters of tenancy rights on the property so purchased, the tenants towards their surrendering the tenancy rights. Merely because he pays the tenants, for their surrendering the tenancy rights, at the time of purchase of property, will not alter the character of receipt in the hands of the tenant receiving such payment. What is paid for the tenancy rights cannot, merely because of the timing of the payment, be treated as receipt for ownership rights in the hands of the assessee. This distinction between the receipt for ownership rights in respect of a property and receipt for tenancy rights in respect of a property, even though both these receipts are capital receipts leading to taxable capital gains, is very important for two reasons:

First, that the cost of acquisition for tenancy rights, under section 55(2)(a) of the Act, is, unless purchased from a previous owner, treated as ‘nil’, and, Second, since the provisions of section 50C of the Act can only be applied in respect of transfer by an assessee of a capital asset, being land or building or both’, the provisions of section 50C will apply on receipt of consideration on transfer of a property, being land or building or both, therefore, these provisions will not come into play in a case where only tenancy rights are transferred or surrendered.

The Hon’ble Income-tax Appellate Tribunal – Kolkata Bench in the case of DCIT v. Tejinder Singh [2012] 16 ITR(T) 45 (Kol) ( Trib) held that provisions of section 50C of the Act are not applicable in case of mere transfer of tenancy rights

ITO 32(2)(3) VS MAYUR R KAMDAR (ITAT Mumbai)

BOGUS PURCHASE: After considering rival contentions, we find no reason to interfere with the stand of Ld. CIT(A) since the assessee was engaged in trading activities and could not achieve the sales turnover without purchase of material. The turnover of the assessee has not been doubted by the revenue and the assessee is in possession of primary purchase documents & further, the payments are through banking channels. The assessee is able to reconcile the sale and purchase transactions. At the same time, the assessee could not produce any single party to confirm the transactions and notices issued u/s 133(6) were returned back unserved which cast a serious doubt on assessee’s claim. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit element earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against alleged bogus purchases, which Ld.CIT(A) has rightly done.

Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.

– Hellen Keller

GIST OF TRIBUNAL JUDGEMENTS (VAT) Compiled by CA Rupa Gami

1. M/s Poonam Enterprises in Restoration Application Nos. 09 and 10 of 2023 in Vat S.A. Nos. 397 and 398 of 2021 dated 02/05/2023TAlthough the appeals were attended initially in time, however, later on due to hospitalisation of the son of the applicant’s employee, the hearing dates were not communicated to the applicant’s CA and therefore the appeal remained unattended. The appeals were not old and looking to the grounds of appeal, the Tribunal held that one more opportunity need to be given to contest the appeal on merits and a liberal approach is to be taken. However, costs were imposed at Rs.5000/- for each application. (Petitioner represented by CA R.P. Mody)
2. M/s Scottish Chemical Industries in M.A. No. 20 of 2023 dated 08/05/2023There was delay in filing of appeal by 85 days and application was made for condonation of delay. The delay was caused due to the fact that the applicant’s Chartered Accountant forgot to take the necessary steps for filing of appeal due to his pre-occupation with filing of GST Annual Returns in the months of November and December 2022. The applicant cited the apex court decision in MST Katiji (66 STC 228) to contend that the application for condonation of delay is to be approached liberally. As there was no reason to disbelieve the applicant and there was no inordinate delay, the application was allowed at a cost of Rs.15000/-.(Petitioner represented by Adv. Sudhir Pawar)
3. M/s Indian Oil Corporation Ltd. in Vat S. A. No. 90-91 of 2020 dated 10/05/2023The appeal is preferred to challenge the wrong classification of goods and rate of tax on the product HFHSD (High Flash High Speed Diesel). The applicant contended that the HFHSD is nothing but “bunker oil” supplied to foreign going ships and falls under Schedule Entry C-107(7)(d) with rate of tax at 5%. However, the Assessing Officer rejected the argument and considered the product as HSD falling under Schedule Entry D-5. It was also contended that the supplier of “bunker oil” have to ensure that the product supplied as bunker has to adhere to the requirements of IMO Regulations -Annexure VI of MARPOL 73/78 and the standards set by the ISO 8217. The Merchant Shipping notice is an important document for deciding whether the bunker oil as per specifications is supplied to foreign going ships. The appellant is in possession of all documents. Further the controversy is already settled by the Tribunal in the appellant’s own case for the previous years in S.A. No. 226 of 2018 and S.A. No. 460 of 2019 decided on 09/12/2019. The Tribunal allowed the appeal considering the product as bunker oil falling under Schedule Entry C-107(7)(d). (Petitioner represented by CA Sujata Rangnekar)

1. ‌M/s Citicorp Finance (I) Ltd. in Vat S.A. No. 75 of 2020 decided on 12/05/2023Citicorp Finance India Limited (CFIL for short) is a limited company which transferred its Research and Analytical Division (‘KPO Undertaking’ for short) by entering into an agreement, to the other subsidiary Company Citicorp Services India Limited (CSIL for short) on a going concern basis against a lump sum consideration of Rs. 53.20 crores. The appellant contended that it was a slump sale and not leviable to vat. However, the Tribunal held that the immovable property and trademark were not transferred. It was an admitted fact by the appellant that the contract related to rented premises would be assigned to the transferor and not transferred so far, as per the agreement. Thus, the premises was in the control of the appellant. Also, the Trademark ‘Citicorp’ was not owned by the appellant and therefore it had no ability to transfer or assign the same.As per the ‘Taxation of Service’: an Education Guide’ published by the Central Board of Excise and Customs, para 7.11.15 defines the transfer of a going concern to mean “transfer of a running business which is capable of being carried on by the purchaser as an independent business, but shall not cover mere or predominant transfer of an activity comprising a service. Such sale of business as a whole will comprise comprehensive sale of immovable property, goods and transfer of unexecuted orders, employees, goodwill, etc.”The appellant has sold one of its units (KPO division). It was not a case of sale of an entire business or whole business. The appellant itself was not treating the KPO division as a separate business concern or entity as is reflected in the Balance Sheet in which the fixed assets are shown in a consolidated manner for the Company as a whole. The trademark and the rented premises have not been transferred and therefore, the buyer cannot be said to be capable of carrying on the business independently. Thus, the sale of KPO division cannot be considered as a ‘slump sale’. Tax has to be levied on the movable goods transferred to CSIL.

   (Petitioner represented by CA P. A. Mehta)

Quality is not an act, it is a habit.

– Aristotle

Start where you are. Use what you have. Do what you can.

– Arthur Ashe

DGFT & CUSTOMS UPDATE   By CA. Ashit K. Shah

1. 1. 1. 1. ‌Notifications issued under Customs Tariff:
            

            Notifications No	Remark	Date
            13/2024 – Customs	Reduction in the Basic Custom Duty to 5% on imports of meat and edible offal, of ducks, frozen, subject to the prescribed conditions by amending N. No. 50/2017 – Customs, dated 30-06-2017	06 -03- 2024
            16/2024 – Customs	Changes in the Basic Custom Duty rate on specified parts of medical X-ray machines – High Frequency X-Ray Generator (>25KHz) (9022 14 10);”. This Notification shall be come into force from 1st April, 2024 and onwards.	12 -03 -2024
            17/2024 – Customs	Modify the Basic Custom Duty on commonly known as smart watches and other mart wearable devices including smart rings, shoulder bands, neck bands or ankle bands;” shall be substituted by amending N. No. 57/2017 – Customs, dated 30-06-2017	14 -03 -2024
            19/2024 – Customs	Concessional Basic Custom Duty of 15% on import of electronic vehicles (EV) of a minimum value of USD 35,000, subject to certain conditions, announced under the EV policy. Currently, EV imports attract 100 % Customs duty by amending N. No. 50/2017 – Customs	15 -03 -2024
            20/2024 – Customs	Exempts Social Welfare Surcharge (SWS) on Electric Vehicles (EVs) imported under the Ministry of Heavy Industries’ scheme aimed at promoting the manufacturing of electric passenger cars in India.	15 -03 -2024
            03/2024 – Customs (ADD)	Anti Dumping Duty (ADD) on “Printed Circuit Boards (PCB)”, falling under tariff item 8534 0000, originating in, or exported from China PR & Hong Kong and imported into India, for a period of 5 years from the date of Notification, which will be payable in Indian Currency. However, certain PCB’s are excluded from the levy as specified in the notification.	14 -03 -2024
            04/2024 – Customs (ADD)	Anti Dumping Duty (ADD) on “Para-Tertiary Butyl Phenol (PTBP)”, falling under tariff item 2907 19 40, originating in, or exported from Korea RP, Singapore and the USA and imported into India, for a period of 5 years from the date of Notification, which will be payable in Indian Currency.	14 -03 -2024

             

            ‌Notifications No	Remark	Date
            05/2024 (ADD)	Import policy of used IT Assets viz. Anti Dumping Duty (ADD) on “Ethylene Vinyl Acetate (EVA) Sheet for Solar Module”, falling under tariff item 3920 10 11, 3920 10 19, 3920 10 99, 3920 61 90, 3920 62 90, 3920 99 19, 3920 99 39 or 3920 99 99, is continue to levy on imports originating in, or exported from China PR and imported into India, for a period of 5 years from the date of Notification, which will be payable in Indian Currency.	14 -03 -2024
            05/2024 (ADD)	Anti Dumping Duty (ADD) on “Self-Adhesive Vinyl (SAV)”, falling under tariff items 3919 90 90, 3919 10 00, 3919 90 10, 3919 90 20, 3920 99 19, 3920 69 29 or 3921 90 99, on imports originating in, or exported from China PR and imported into India, for a period of 3 years from the date of Notification, which will be payable in Indian Currency. Self-adhesive films like sticker, tape, label, pouch, PP, PET, TPU, inkjet media (less than 50 micron), profile, cloth, reflective, metalized, glow vinyl, HDPE, floor marking tape, acrylic, BOPP, automotive are not covered within the scope of PUC. Further, reflective films, sun control films and glass safety films and self-adhesive products made using other than PVC films such as PET, PU, BOPP, etc. outside the scope of the product under consideration	14 -03 -2024
            07/2024 (ADD)	Anti Dumping Duty (ADD) on “Cast Aluminum Alloy Wheels or Alloy Road Wheels (ARW) used in Motor Vehicles, whether or not attached with their accessories, of a size in diameters ranging from 12 inches to 24 inches” falling under tariff items 8708 70, on imports originating in, or exported from China PR and imported into India, for a period of 5 years from the date of Notification, which will be payable in Indian Currency. Cast Aluminium Alloy Wheels or Aluminium Alloy Road Wheels (ARWs) used in Motor Vehicles, whether or not attached with accessories, of a size in diameter ranging from 12 inches to 24 inches. ARWs other than 12 inches to 24 inches in diameter and ARWs meant for two-wheelers are out of this product scope	15 -03 -2024
            01/2024 (CVD)	Countervailing Duty (CVD) on imports of “New/Unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres), having nominal rim dia above 16″ used in buses and lorries/trucks”, originating in, or exported from China PR, for a period up to 23rd July, 2024, unless revoked, superseded or amended earlier.	11 -03 -2024

         2. ‌Notifications under DGFT:

      Notifications No	Remark	Date
      56/2023 65/2023 67/2023	Export Policy of Onions (under HSN 0703 10 19) – Central Government has given permission to export UAE with a quantity ceiling of 14,400 MT and a further ceiling of 3,600 MT quarterly; Bangladesh with a quantity ceiling of 50,000 MT; Bhutan with a quantity ceiling of 550 MT; Bahrain with a quantity ceiling of 3,000 MT; Mauritius with a quantity ceiling of 1,200 MT through National Cooperative Exports Limited (NCEL).	01 -03 -2024 06 -03 -2024
      64/2023	Export Policy of food commodities – Central Government has given permission to exports (i) Non-Basmati White Rice (HSN 1006 3090) to Tanzania with a quantity ceiling of 30,000 MT; and (ii) Broken Rice (HSN 1006 4000) to Djibouti & Guinea Bissau with a quantity ceiling of 30,000 & 50,000 MT respectively through National Cooperative Exports Limited (NCEL).	01 -03 -2024
      70/2023	Extending RoDTEP support for exports made by Advance Authorisation (AA) holders, Export Oriented Units (EOU), Special Economic Zones (SEZ) units – RoDTEP is being extended to AA holders (except Deemed Exports) & EOU units from 11.03.2024 till 30.09.2024 as per Appendix 4RE. Extension of RoDTEP to SEZ units as per Appendix 4RE will take place on IT integration of SEZs with Customs Automated System (ICEGATE) RoDTEP rate revisions in 25 HS Codes are also being made in Appendix 4R RoDTEP Scheme extended earlier in September 2023 till 30.06.2024, is being further extended for exports till 30.09.2024	08 -03 -2024
      71/2023	Enabling provisions for import of inputs that are subjected to mandatory Quality Control Orders (QCOs) by Advance Authorisation holders, EOU and SEZ. Accordingly, list of Ministries / Department [i.e. Ministry of Steel, Department for Promotion of Industry and Internal Trade (DPIIT) and Minister of Textiles] are notified in Appendix 2Y of FTP, 2023.	08 -03 -2024
      81/2023	Export prohibition on export of onions under HSN 0703 10 19 valid till 31st March, 2024 is extended further until further orders.	22- 03- 2024
      77/2023	Imposition of Minimum Import Price on Synthetic Knitted Fabrics covered under HSN 6006 3100, 6006 3200, 6006 3300, 6006 3400 and 6006 9000 of USD 3.50 per Kg is fixed for a period up to 15th September, 2024. The existing “Free Import Policy” as it stands prior to the issuance of this notification, shall be in effect starting from 16th September, 2024, unless expressly amended by subsequent notification.	16-03-2024

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– Eleanor Roosevelt

 

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Choudhary Akshay Shivram	26 – April
Deshmukh Nikhil Sunil	26 – April
Shah Harshad Ugarchand	26 – April
Pandey Deepak Premnath	27- April
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Patil Abhijeet Maruti	27 – April
Shah Vipin M.	28 – April
Gurav Manoj Mukund	28 – April
Rathod Manish Devji	28 – April
Hiro Amarsingh Dharamsingh	28 – April
Hole Manoj Nivrutti	28 – April
Agarwal Arunkumar M.	28 – April
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Shete Manoj Laxman	28 – April
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Mhaske Vinod K.	29 – April
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Popat Atul	30 – April
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Jain Arvind Mahavirchand	30 – April
Pingle Rohan Ramakant	30 – April
Mehta Viral Rohit	30 – April
Doshi Dinesh Kumar	01 – May
Bapat V. A.	01 – May
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Pathak Rajul Chittanranjan	01 – May
Bhise Bhausaheb Sitaram	01 – May
Joshi Dinkarrray Narmadashankar	02 – May
Ramana Venkata S V	02 – May
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Mudaliar Gunashekar Shanmugam	02 – May
Dalvi Sameer Shashikant	02 – May
Varaiya Chirag Vinodrai	02 – May
Parande Baliram Balaji	02 – May
Vavhal Anand Vasant	02 – May
Bhansali Satish A.	03 – May
Samant Girish Anand	03 – May
Biyani Ambesh Shioprasadji	03 – May
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Baldia K. T.	04 – May
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More Rajendra Babasaheb	04 – May
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Acharya Dinesh S	05 – May
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Karwa Vishnuprasad Babulaljil	05 – May
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