31st May, 2019

Union Budget to be presented on July 5, 2019
Press Release, dated 31-05-2019

The Union Budget for the Financial Year 2019-20 will be presented in the Lok Sabha on Friday, July 05, 2019 at 11.00 am. The Union Cabinet, chaired by the Prime Minister Narendra Modi, in its first meeting, has approved the summoning of the 17th Lok Sabha on Monday, June 17, 2019 and subject to the exigencies of Government Business, the Session will conclude on Friday, the 26th of July, 2019.

Kerala Flood Cess levy deferred to 1st July, 2019

On May 31, 2019, Kerala Government through notification G.O. (P) No. 82/2019/TAXES, has announced postponement of the date of levy and collection of Kerala Flood Cess from June 1, 2019 to July 1, 2019, therefore, Kerala Flood Cess (Amendment) Rules, 2019 shall be applicable from July 1, 2019.
Real Time Gross Settlement (Rtgs) System – Extension Of Timings For Customer Transation 
The Reserve Bank of India (RBI) has decided to extend the timings for customer’s transaction (initial cut-off) in Real Time Gross Settlement (RTGS) from 4:30 P.M. to 6:00 P.M. Accordingly, the RTGS time window will be effective from June 01, 2019

30th May, 2019

Delhi HC grants stay on recovery of Interest demanded on gross GST liability

High Court of Delhi, Landmark Lifestyle v. Union of India – [2019] 105 taxmann.com 354 (Delhi)

The interest liability was imposed on the petitioner on the delayed payment of GST wherein interest was calculated on the amount constituting the input tax credit which, in fact, was to be adjusted against the tax liability. The petitioner had paid interest on the actual tax liability.

The Delhi High Court accepted the contention of petitioner and ordered no forceful action to be imposed on the petitioner for the recovery of interest amount.

Therefore, Delhi High Court granted stay on recovery of interest amount on gross GST liability where there was delay in filing of GST return.

28th May, 2019

SECTION 54F OF THE INCOME-TAX ACT, 1961 – CAPITAL GAIN – EXEMPTION OF, IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE

Joint ownership : Where Assessing Officer rejected assessee’s claim for deduction under section 54F on ground that at time of sale of capital asset, assessee was owner of more than one residential house properties, in view of fact that one residential property was co-jointly owned in name of assessee and his wife and he could not be treated as ‘absolute owner’ of said property, deduction under section 54F could not be denied to him – Ashok G. Chauhan v. Assistant Commissioner of Income-tax, Mumbai – [2019] 105 taxmann.com 204 (Mumbai – Trib.)

25th May, 2019

ITAT disallowed deduction of unrecovered advances written off as assessee couldn’t substantiate his claim

Bhagwati Gases Ltd. v. DCIT – [2019] 105 taxmann.com 183 (Kolkata – Trib.)

The assessee was in the business of manufacture and sale of industrial gas. It had claimed debit balance written off of Rs. 79.45 lakhs pertaining to amounts given by it to the suppliers for purchase of raw material over a long period of time in the ordinary course of business as the material was not supplied and the amount was lying in the name of the respective parties. Assessing Officer (AO) disallowed writing off of said amount. The Commissioner (Appeals) also upheld the order passed by the AO.
The Tribunal held that in order to successfully claim the trade advance which was written off as irrecoverable and so to be treated as a business loss, the assessee had to first prove that the advances were paid during the ordinary course of business. Secondly, if it succeeded in proving the same, then the assessee had to prove that he took all steps to recover the advanced amount and since it failed to recover the amount then only assessee would be eligible to claim the amount as business loss.
In the instant case, the assessee neither during the assessment proceedings nor before the first appellate authority could prove the nature of the advances given to the parties. Since the assessee could not produce any evidence to prove the nature of the advances given to the parties by producing some materials either by way of purchase order or a money receipt it failed to pass the first stage as discussed above. So, the view taken by the Commissioner (Appeals) couldn’t be held to be erroneous. Therefore, the order of Commissioner (Appeals) was to be confirmed.

24th May, 2019

Claim of Cenvat credit was bogus where raw material purchased by the assessee did not reach factory premises

Supreme Court of India, Exide Industries Ltd. v. Commissioner of Central Goods and Services Tax, Raigad – [2019] 105 taxmann.com 192 (SC)

The Assessee received a show cause notice from GST Authorities on claiming bogus CENVAT credit on purchase of goods. The Assessee contended that the raw material was consumed during manufacturing process. The Adjudicating Authority rejected the contention of the assessee and ordered him to deposit the bogus Cenvat credit claimed by him along with penalty.

The Assessee filed an appeal to Tribunal. The Tribunal observed that the assesse had wrongly contested that there were reasons for discrepancy in the vehicle numbers which had transported the goods from Jammu & Kashmir to the assessee’s factory with those mentioned in the invoices. The Tribunal held that the explanation offered by assessee was incorrect and, therefore, assessee’s claim of raw material consumption was not genuine.

The High Court upheld the Tribunal’s order and concluded that the raw material purchased by the assessee never reached the factory premises of the assessee and, thus, CENVAT credit claimed was bogus.

The Supreme Court upheld the order of the High Court and dismissed the SLP filed by the assessee.

Unlisted public cos. need to file e-form PAS-6 to registrar for reconciliation of share capital audit report

The Ministry of Corporate Affairs (MCA) has amended the Companies (Prospectus and Allotment of securities) Rules, 2014 wherein rule 9A has been amended. The Amendment has focused on unlisted public companies governed by the Companies (Prospectus and Allotment of securities) Rules, 2014 wherein old clause has been substituted with new one, which says that the unlisted public companies are required to submit e-form PAS 6 for reconciliation of share capital audit report within 60 days at the end of each half year duly certified by the Company Secretary in Practice or Chartered Accountant in practice.

18th May, 2019

Director’s DIN to be marked as ‘Director of ACTIVE non-compliant co.’ on his failure to file Co.’s KYC

NOTIFICATION NO. [F. No. 1/22/2013-CL-V], DATED 16.05.2019
The Ministry of Corporate Affairs (MCA) has amended the Companies (Appointment and Qualification of Directors) Rule, 2014 wherein new rule 12 B has been inserted. The amendment emphasis is on filing the ACTIVE e-form by the companies or its directors. If a company fails to file the e-form ACTIVE within period specified therein, the Director Identification Number (DIN) allotted to existing directors, shall be marked as ‘Director of ACTIVE non-compliant company’. Where the DIN of a director has been marked as ‘Director of ACTIVE non-compliant company’, such director shall take necessary steps to ensure that all companies where such director has been so appointed, file e – form ACTIVE

17th May, 2019

Now home buyer can ask for refund if possession is delayed beyond one year
NEWS, DATED 17.05.2019

National Consumer Disputes Redressal Commission (NCDRC) has held that buyers can seek refund if possession is delayed by one year beyond the date promised by the builder.

Judicial forums, including Supreme Court and Consumer Court have repeatedly held that home buyers cannot be kept waiting for indefinite period of time. However, neither the time period nor the refund of deposit on account of the delay in project was clarified in any judicial pronouncement.

Delay in possession is one of the most common problems faced by the home buyers. There are scenarios where the home buyer had to pay both pre-EMI on home loan and rent due to inordinate delay in possession of property. This was very harsh for any one depending on the salary income.

Now, the NCDRC has held that buyers can seek refund if possession is delayed by one year beyond the date promised by the builder. Now the allottees shall have right to demand refund if possession is delayed beyond a year. After RERA and Insolvency and Bankruptcy Code, The Consumer Protection Act comes to the rescue of the innocent buyers who were helpless lots and had no option but to wait for inordinate period to get possession of the flats.

15th May, 2019

No denial of sec. 54 exemption if delay in getting possession of flat was on account of builder

Bal Kishan Atal v. ACIT – [2019] 104 taxmann.com 432 (Delhi – Trib.)

The assessee had sold a property and invested the capital gains in a new residential flat. He claim the long-term capital gain exemption under section 54. Assessing Officer (AO) disallowed the claim of deduction on account that neither the assessee had taken possession of said residential flat nor the purchase deed was executed in favour of him within the period of three years from the date of transfer of original asset. CIT(A) also confirmed the action of the AO.
The Delhi ITAT held that delay in obtaining possession or getting purchase deed executed, was on account of the developer. Assessee had made payment for purchase of flat to developer within stipulated period. However, he could not obtain possession and got purchase deed executed within period of three years as there was a complaint filed against developer with National Consumer Dispute Redressal Commission which had put stay on developer. Since the delay in obtaining possession of flat was by reason beyond control of assessee, exemption under section 54 could not be denied.

10th May, 2019

ITC can be claimed on inward supplies by the recipient when consideration is paid through book adjustment

Senco Gold Ltd., In re – [2019] 105 taxmann.com 143 (AAR – WEST BENGAL)

The Applicant is engaged in manufacturing and retailing of Jewellery and articles made of gold, silver and other precious stones under the brand name ‘Senco Gold & Diamonds’ and also maintains a network of franchisee-operated stores. The Applicant grants a franchisee right and license to operate a showroom. The Franchisee raised a tax invoice on the applicant for supply of old gold, silver received from customers.

The Applicant intends to settle the mutual debts through book adjustments. It has sought advance ruling on whether the input tax credit is admissible on inward supplies by the recipient when consideration is paid through book adjustment?

The Authority for Advance Ruling, West Bengal observed that no input tax credit is admissible unless the recipient pays the supplier the consideration for the supply received. As per the CGST Act, 2017, the term consideration includes, in relation to supply of goods or services, any payment made or to be made, whether in money terms or otherwise. Therefore, the reduction in debt liability is a valid form of payment and is to be regarded as valid consideration.

The Authority for Advance Ruling, West Bengal held that the applicant can pay consideration for inward supplies by way of setting off book debt on which input tax credit can be claimed by the assessee.

CAPITAL GAINS – PROFIT ON SALE OF PROPERTY USED FOR RESIDENCE

Purchase : Where assessee sold a residential property and invested sale consideration in new residential flat and made payment to developer within prescribed time, merely because assessee could not obtain possession and got purchase deed executed within period of three years as Consumer Redressal Commission had put stay on developer, assessee’s claim for exemption under section 54 could not be denied – Bal Kishan Atal v. Assistant Commissioner of Income-tax, Circle 20(1), New Delhi – [2019] 104 taxmann.com 432 (Delhi – Trib.)

Notice issued in name of deceased person isn’t binding on legal heirs: ITAT

Aemala Venkateswara Rao v. ITO – [2019] 105 taxmann.com 14 (Visakhapatnam – Trib.)

Assessing Officer (AO) issued notice under section 148 in the name of a dead person and the notice was received by the legal heir/wife of the assessee.The legal heir replied to the AO stating that her husband had expired and did not furnish the return of income.
Assessing Officer completed the assessment under section 144, read with section 147, in the name of the legal heir stating that there was no compliance of the notice under Sec 148. Commissioner (Appeals) confirmed order of the AO.
The Tribunal held that notice issued on a dead person was invalid and unenforceable in law. The notice issued on the dead person could not make the legal heirs binding on compliance unless a proper notice was issued on the legal heirs.The requirement of issuing a notice in the name of correct person is the fundamental requirement to acquire jurisdiction to reopen the assessment.
Therefore, the notice issued under section 148 on the dead person was invalid & liable to be quashed. Also the assessments made under section 144, read with section 147, were to be annulled.

MCA amends norms for removal of Cos.’s name from register of Cos.

Notification No. [F.No.1/28/2013-CL-V (Part)], Dated 08.05.2019

The Ministry of Corporate Affairs (MCA) has amended the Companies (removal of Names of Companies from the Register of Companies) Rules, 2016 wherein the fee for filing an application for removal of name from register of companies has been increased from INR 5000 to INR 10,000. Along with that, it has been specified that the company must file all the pending/belated returns before filing the application for striking off its name from the register to the MCA.

8th May, 2019

UNEXPLAINED EXPENDITURE

Purchases : Where in order to establish genuineness of purchase transactions, assessee brought on record name and address of parties, their PAN, TDS deducted, date of bills, details of cheques issued, etc., in such a case, he could not be held responsible for parties not appearing in person and, thus, impugned addition made under section 69C deserved to be deleted

Principal Commissioner of Income-tax, Mumbai v. Chawla Interbild Construction Co. (P.) Ltd. – [2019] 104 taxmann.com 402 (Bombay)

6th May, 2019

GST: B2B invoices will have to be generated on govt portal by Sept

All invoices for business-to-business sales by entities beyond a specified turnover threshold will be generated on a centralised government portal by September, a move aimed at curbing the menace of fake invoices and evasion of GST, officials said.

The revenue secretary is monitoring the progress of implementation of electronic or e-invoice project for which an officers’ committee has already been set up, they added.

“E-invoice for B2B transactions will be rolled out in next three-four months in a phased manner. The entire invoice would have to be generated on a government portal,” an official told PTI.

The move will help in curbing Goods and Services Tax (GST) evasion through the issue of fake invoices. Besides, it would make the returns filing process simpler for businesses as invoice data would already be captured by a centralised portal.

“Once rolled out, the e-invoice project will allow businesses to simultaneously generate e-way bill if needed,” the official added. E-way bill is required for moving goods exceeding Rs 50,000.

Depending on the success of the project in the B2B segment, the revenue department would be looking at extending it to business-to-consumer (B2C) sales, especially in sectors where the probability of tax evasion is high.

Businesses beyond the specified turnover threshold, to be decided later, would be provided software which will be linked to the GST Network (GSTN) or a government portal for generating e-invoice. The threshold can also be fixed on the basis of the value of the invoice.

The e-invoice generation method will be similar to the one being followed for an e-way bill on the ‘ewaybill.nic.in’ portal or payment of GST on the GSTN portal.

A 13-member officers’ committee, comprising central and state tax officials as well as the GST Network Chief Executive, has been set up to look into the feasibility of introducing e-invoice system to streamline the generation of invoices and easing the compliance burden. The committee will finalize its interim report this month.

The proposed ‘e-invoice’ is part of the exercise to check GST evasion. With almost two years into GST implementation, the government is now focussing on anti-evasion measures to shore up revenue and increase compliance.

There are over 1.21 crore registered businesses under the GST, of which 20 lakh are under the composition scheme.

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