Monday, 15 January 2018

Benefit of exemption u/s 54F is not limited to investments made on claimants' name only: HC

THE issue is - Whether Section 54F places a restriction that the investment should be in the name of assessee only, for purpose of seeking benefit of exemption under the said provision. NO IS THE VERDICT.

Facts of the case:
The Assessee, an individual, had filed its return declaring total income of Rs.2,18,610/- which includes income from long term capital gain on sale of agricultural land at Rs.31,500/-. The assessment was completed u/s 143(3) at total income of Rs.3,87,830/- by assessing the income from long term capital gain at Rs.2,00,219/-. For enhancing the income under the head long term capital gain, the AO observed that (i) sales consideration of the land as per the provision of section 50C was Rs.55,13,599/- as against Rs.55.00 lacs claimed by the assessee (ii) the assessee had claimed brokerage expenses of Rs.1 lacs but had failed to prove the source of it (iii) the assessee has claimed deduction u/s 54B at Rs.43,50,000/- which included Rs.11 lacs incurred on construction of boring & pipe, rooms, boundary walls and stamp duty but had proved the source of Rs.10,44,880/- only. The AO finally assessed total income at Rs. 3,87,330/- which included salary income of Rs. 2,12,340, capital gain of Rs. 2,00,219/- and income from other sources at Rs.47,817/-. In the meanwhile, the CIT had examined the assessment and found that the order of AO was erroneous and prejudicial to the interest of Revenue.
High Court held that,
++ it is to be noted that in view of the decision of Malabar Industrial company Ltd., Sec.263 provisions are taken only on the ground of prejudicial and interest loss of the revenue to the Government. Merely change of opinion will not give any right u/s 263 hence, the issue regarding Sec. 263 is required to be answered in favour of the assessee and against the department;
++ on the ground of investment made by the assessee in the name of his wife, in view of the decision of Delhi High Court in Sunbeam Auto Ltd. and other judgments of different High Courts, the word used is assessee has to invest, but it is not specified that it is to be in the name of assessee. It is true that the contentions which have been raised by the department is that the investment is made by the assessee in his own name but the legislature while using language has not used specific language with precision and the second reason is that view has also been taken by the Delhi High Court that it can be in the name of wife. In that view of the matter, the contention raised by the assessee is required to be accepted with regard to Section 54B regarding investment in tubewell and others. In the considered opinion of this court, for the purpose of carrying on the agricultural activity, tubewell and other expenses are for betterment of land and therefore, it will be considered a part of investment in the land and same is required to be accepted.

A Fiction- Trouble on transporters due to E-Way bill

Arjuna (Fictional Character): Krishna, There was Festival of Makar Sankrant yesterday. The Government also has given the Til-Gul of E-Way bill to the taxpayers. But now due to E-Way bills on whom the ‘Sankrant’ will come i.e. Trouble?
Krishna (Fictional Character): Arjuna, E-way bill is an electronic document generated on the GST portal evidencing movement of goods. The nationwide e-way Bill system will be ready to be rolled out on a trial basis latest by 16th January, 2018 i.e, from tomorrow and from the 1st February the implementation of nationwide e-way Bill system for interstate supply will be done on a compulsory basis. Therefore, the Sankrant will come on Consignor, Consignee and transporter.
Arjuna: Krishna, what is the importance of E-way bill for Consignor?
Krishna: Arjuna, Consignor means supplier. Every registered person who causes movement of goods of consignment value more than Rs. 50000/- is required to furnish E-way bill. In that the details of GSTIN of recipient, place of delivery (PIN Code), invoice or challan number and date, value of goods, HSN code, transport document number etc are to be given. On the basis of this information, the GSTR 1 of the supplier will be generated on the portal. That’s why it is important for the Consignor.
Arjuna: Krishna, what is the importance of E-way bill for Consignee?
Krishna: Arjuna, Consignee means receiver. The e-way bill is very much important for the consignee. All the details of consignment received can be cross checked by E-way bill. Whether the supply is as per our requirement?, its value, HSN Codes, etc can be verified through E-way bill. ITC allowance may be affected due to this on the proof of receipt of goods. As, ITC is available on receipt of goods only.
Arjuna: Krishna, Is there any relation between transporter and E-way bill?

Krishna: Arjuna, Transporter is an important link between consignor and consignee. If either the consignor or consignee do not generate the e-way bill and the value of goods is more than Rs.50,000/- then responsibility of the generating e-way bill will be of the transporter. Transporter should check whether the consignment is sent to right person, or received from correct supplier, Vehicle no., etc. Where a vehicle has been intercepted and detained, the transporter may upload the said information in FORM GST EWB-04 on the common portal. A taxable person who transports any taxable goods without the cover of e-way bill shall be liable to a penalty of Rs. 10,000/- or tax sought to be evaded whichever is greater.
Arjuna: Krishna, what is the importance of E-way bill for Tax officer?
Krishna: Arjuna, E-way bill and tax officer will come face to face at two times. First, they will check the consignment on the roads at the time of transportation and second, at the time of assessment, the tax officer will check the documents i.e, e-way bill. Where any contravention found, the said goods and documents relating to such goods and conveyance shall be liable to detention or seizure. Unlawful acts of Consignor, consignee, transporter or tax officer may lead to corruption on the road.
Arjuna: Krishna, what lesson the taxpayer should take from this?
Krishna: Arjuna, The E-way bill is starting from 1st February. The Sankrant will come on transporter. Transporter is an important link between consignor, consignee and transportation. If the transporter make any wrong things, then the consignor and consignee will be found in difficulty. Therefore, the transporter should  transport the  goods compliancing with the GST provisions

A financial transaction within the family members is not covered by provisions of Sec 269SS: ITAT

The issue is - Whether a financial transaction within the family members is covered by the provisions of Sec 269SS. NO is the answer.   

ITAT : Imposes stay conditions similar to Google, directs Vodafone to pay further Rs. 5 cr

Bengaluru ITAT directs Vodafone Mobile Services Ltd. (‘assessee’) to pay Rs. 5 Cr on or before January 31, 2018 and retain balance of another 20% (rounded off to Rs. 10 cr.) as balance in its bank account while granting stay for 3 months for balance amount; Firstly, ITAT holds that there is no ‘prima facie’ case in favour of the assessee as the issue involved in appeal (i.e. TDS applicability on interconnect charges payment to foreign carriers) is covered against the assessee by earlier year order in assessee’s own case; Next, ITAT relies on jurisdictional HC ruling in Google India Private Ltd. wherein it was held that for granting stay, payment of 55% of disputed demand and retaining balance of another 20% of disputed demand in assessee’s bank account is just & proper condition; Further, ITAT rejects giving much importance to the rectification application filed by assessee (which according to assessee would reduce the total demand for subject AY  to Rs.34.66 cr.) as such application was filed by assessee just a day prior to filing stay application and therefore, could not be considered by AO, moreover, ITAT observes that assessee did not demonstrate any ‘financial hardship’,  cites SC ruling in Dunlop India Ltd.; Noting that on payment of Rs.5 cr., the total payment against the outstanding demand comes to 42.5% of the total disputed demand of Rs.47.05 Cr (and about 57.7% if rectification application is allowed), ITAT directs Revenue not to enforce recovery of the demand subject to assessee meeting the aforesaid twin conditions:ITAT 

HC : Upholds Joint Commissioner's revisional powers under UP Trade Tax, no separate authorization required

HC holds that Joint Commissioner (Executive) (JC) is empowered to exercise revisional powers comprised under Section 10­B of U.P. Trade Tax Act 1948; Rejects assessee’s plea that no notification has been issued by State Government conferring such authority, acts and decisions of JC cannot be validated or saved by application of “de facto” doctrine, hence exercise of power by JC was invalid, liable to be viewed as a mere usurper of office; Observes, a careful reading of Section 10B clearly establish that initially the provision empowered the Commissioner or such other officer not below the rank of Deputy Commissioner to exercise powers of revision and later words “Deputy Commissioner” was substituted by words “Joint Commissioner”; States, fact that Commissioner did not require separate authorisation by State Government or a notification/authorization is evident from a plain construct of Section 10­B and once Section 2(b) mandates recognition and inclusion of Joint Commissioner in expression “Commissioner”, there is, no requirement of separate authorisation/notification of conferment of such authority; Remarks,  “The classification or the description of different categories in the Rules framed under the 1948 Act clearly can neither control nor be determinative of the authority which may exercise powers under Section 10­B”, accordingly, dismisses assessee’s revision petitions : Allahabad HC

CBEC answers questions for Transport & Logistic sector; Clarifies road transport, air journeys taxability

CBEC releases FAQs for transport & logistics sector, says that while transportation of goods by road is exempt vide Notification No. 12/2017-Central Tax (Rate), person receiving commission from truck owners towards fixing of hire with GTA shall be liable to registration if the aggregate amount thereof exceeds Rs. 20 lakhs in an FY; A transporter is required to maintain records of consigner, consignee, goods transported, delivered and those stored in transit in terms of Section 35(2) of CGST Act r/w Rule 56 of CGST Rules; Further clarifies that any intermediary and ancillary service provided in relation to transportation of goods by road where charges thereof are included in invoice issued by GTA, would form part of composite GTA service and hence be taxable, however, incidental services provided as separate services and charged separately, whether in same invoice or not, would be treated as separate supplies; GTA providing service in relation to transportation of goods by road under reverse charge mechanism can avail the benefit of exemption from registration under Notification No. 5/2017-Central Tax, but sale or disposal of old vehicles, old tyres and scrap material by truck owner for a consideration would attract GST regardless of whether ITC has been availed or not; In relation to passenger transportation services by air, CBEC clarifies that a multi-leg international journey shall be treated as ‘continuous supply’ even if there is a stopover, however, in case of return journey, its place of supply being outside India, would be liable to tax if the location of supplier is in India