Tax LawBeat: Your Daily Tax Law Newsletter

INCOME TAX CASES:

1. Navsari Oil Products Pvt Ltd Vs ITO [ITA No. 8665/Mum/2010 and ITA No. 6576/Mum/2012 and ITA No. 8553/Mum/2011] – February 09, 2021

Mumbai ITAT while partly answering in favour of taxpayer, held that though there are various allegations in the assessment order that the assessee group was indulging in colorable tax avoidance devices, however, the trading results shown by the assessee have ultimately been not disturbed by AO. What has been done is the fact that rental income from Buildings has been assessed as 'Income from House Property' whereas lease income from Plant & Machinery has been assessed as 'Income from Other Sources'.

Therefore, conversion of business income into income from house property cannot be made on the ground of colorable tax avoidance devices when AO has accepted the trading results shown by the assessee.  

2. DCIT Vs Modern School Society [ITA No. 1361 & 1362/JP/2018 and ITA No. 357/JP/2019] – January 18, 2021

Jaipur ITAT while answering in favour of taxpayer, held that the CIT (A) had deleted the additions so made by following the order of the Coordinate Bench of the Tribunal passed in assessee's own for the A.Y. 2011-12, which had attained finality wherein it was held that the salary paid to the persons by the assessee was reasonable as the qualification and experience of the persons who were managing the affairs of the society and also involved in the day to day affairs and teaching work is not denied then salaries and allowances or remuneration paid to these persons cannot be held as unreasonable or excessive and with regard to advances given by the society, there was no violation as assessee had proved the justification of advances which were for the purpose of the object of the society. Thus, there was no violation of Section 11(5) of the Act.

INDIRECT TAX CASES:

1. TMA International Pvt Ltd Vs UoI [WP (C) 2694/2019 & CM APPL. 26556/2020] – March 15, 2021

Delhi HC while listing the matter, observed that collective grievance of the Petitioners for filing the petition is the denial of IGST refund in accordance with Section 16(3) of the IGST Act, 2017, paid by them on goods exported during the transitional period after introduction of GST Regime i.e. from 01.07.2017 to 30.09.2017. High Court had in its order dated Nov 26, 2019 observed that if the petitioners have claimed and received only the customs duty portion of the drawback and element of IGST (earlier Central Excise Duty and Service Tax) was not included in the drawback rate, granting of IGST refund would not result in double neutralization of input taxes.  Nonetheless, since the Respondents had expressed their apprehension about double benefit of neutralization of taxes, Bench felt it appropriate that before issuing final directions, Respondents should verify the extent of the duty drawback availed by the Petitioners and also whether they have availed duty drawback / CENVAT credit of Central Excise and Service Tax component in respect of the exports made by them and submit a report accordingly. Respondent submits that although the additional-affidavit, as directed by this Court has not been filed, a part of the exercise has been completed.

Inasmuch as an email dated 11.03.2021 from the officer concerned has been received and which is indicative of the fact that duty drawback qua the Central Excise has not been availed of by the petitioners; that what is required to be examined by respondent no. 2, is only one aspect, which is, whether petitioners have availed duty drawback qua Service Tax.

2. NVK Mohammed Rowther And Sons Vs Joint Commissioner of GST & CE [WP(MD)No. 13129 of 2020 and WMP (MD)No. 11025 of 2020] – March 02, 2021

Madras HC (Madurai Bench) observed that Petitioner submits that the product manufactured by the petitioner is similar in all respects to products such as "Nizam Pakku" and "Crane Pakku" and which are being taxed at a lesser rate and they have not been classified under Chapter 21.

HC held that when the respondent has not passed any order, the petitioner apparently has prematurely approached the Court. However, there is considerable merit in the contention that the petitioner also deserves to be given a treatment of parity and not taxed at a higher rate, if the petitioner's product is comparable to Nizam Pakku and Crane Pakku. More than anything else, as per Article 141 of the Constitution of the India, the law declared by the Supreme Court is law of the land.

Further, merely because the petitioner had earlier opted to be classified under Chapter 21, the petitioner's past conduct cannot operate as estoppel. All that the petitioner wants is that the respondent should not predetermine the issue based on the petitioner's past conduct.

Writ petition is therefore disposed of giving liberty to the respondent to proceed against the petitioner with the demand but then, by not putting the petitioner's past conduct against him.

 

3. Mohitkumar Mahendrabhai Patel [ADMISSION ORDER NO. GUJ/GAAR/ADM/2020/119 (IN APPLICATION NO. Advance Ruling/SGST&CGST/2019/AR/31)] – December 30, 2021

Gujarat AAR held that Applicant has neither filed the application in the prescribed format of GST-ARA-01 nor paid the required fees of Rs.10,000/- as required as per the provisions of Section 97(1) of the CGST Act, 2017 as well as Rule 104 of the CGST Rules, 2017 - Therefore, the instant application is liable for rejection under Section 98(2) of the CGST Act, 2017.

4. Khaitan Chemicals And Fertilizers Ltd [ADMISSION ORDER NO. GUJ/GAAR/ADM/2020/118 (IN APPLICATION NO. Advance Ruling/SGST&CGST/2020/AR/28)] – December 30, 2020

Gujarat AAR held that on a combined reading of the provisions of the Section 97 and Rule 104 of both the CGST/GGST Acts and Rules, it is evident that the application for obtaining an Advance Ruling under sub-section(1) of Section 97 is to be submitted in FORM-GST ARA-01 and shall be accompanied by a fee of Ten thousand rupees (Five thousand rupees as per Rule 104 of the CGST Rules, 2017 + Five thousand rupees as per Rule 104 of the GGST Rules, 2017).

Further, Applicant has not paid the fees of Rs.10,000/- under the proper head i.e. 'CGST' and 'GGST' as required under the provisions of aforementioned Sections and Rules whereas they have paid fees of Rs.10,000/- under "IGST" head. Therefore, the instant application is liable for rejection under Section 98(2) of the CGST Act, 2017 for not paying the total fees of Rs.10000/- i.e. under each head CGST & GGST as required under the provisions of CGST Act and Rules and respective GGST Act & Rules.

 

5. Gujarat State Road Development Corporation Ltd [ADMISSION ORDER NO. GUJ/GAAR/ADM/2020/117 (IN APPLICATION NO. Advance Ruling/SGST&CGST/2020/AR/34)] – December 30, 2020

Gujarat AAR held that although the applicant has paid the stipulated fees of Rs.10,000/-, they have not filed the application in the prescribed format of GST-ARA-01 required as per the provisions of Section 97(1) of the CGST Act, 2017 read with Rule 104 of the CGST Rules, 2017 - Therefore, the instant application is liable for rejection under Section 98(2) of the CGST Act, 2017.