This weekly round-up analytically summarises the key tax judgements of the Supreme Court and all High Courts reported at Taxscan.in during the previous week from October 28 to November 03, 2023. No Requirement of Attachment of Bank Account on Deposit of Pre-Deposit, and after Numbering of Service Tax Appeals: Kerala HC CARMEL BUILDERS AND FIBROTECH INDUSTRIES PVT.LTD vs THE COMMISSIONER OF CENTRAL EXCISE CITATION: 2023 TAXSCAN (HC) 1611 The Kerala High Court observed that there is no requirement of attachment of bank account on deposit of pre-deposit, and after numbering of service tax appeals. A Single Judge Bench of Justice Dinesh Kumar Singh noted that “Since petitioner has made the pre-deposit, as also the appeals have been numbered, attachment/freezing of the bank accounts of the petitioner is no longer required, and therefore, the same are hereby lifted/de-frozen. However, the petitioner will provide list of its properties as demanded vide notice.
It is also directed that during the pendency of the appeals before the CESTAT, no coercive measure shall be taken against the petitioner.” AMP Expenses incurred not Amounts to International Transaction: Delhi HC upholds ITAT’s order PR. COMMISSIONER OF INCOME TAX -9 vs M/S WRIGLEY INDIA PVT. LTD. CITATION: 2023 TAXSCAN (HC) 1653 The Delhi High Court upheld the order of the Income Tax Appellate Tribunal (ITAT) wherein it was held that Advertising, Marketing and Promotion (“AMP”) expenses incurred did not amount to international transactions. Since there has been no change in the circumstances concerning the respondent/assessee (something which has been noted by the Tribunal), the division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia upheld the impugned order passed by the Tribunal.
Relief to Indus Towers, Delhi HC allows Loan Processing charges PR. COMMISSIONER OF INCOME TAX -4 vs INDUS TOWERS LTD. THROUGH ITS AUTHORIZED SIGNATORY MR. SANJAY WADHWA CITATION: 2023 TAXSCAN (HC) 1660 The Delhi High Court has granted relief to Indus Towers by allowing the loan processing charges. The revenue has filed an appeal against deletions of additions made on account of disallowance of interest on loan, disallowance of depreciation and disallowance of upfront loan processing fee against Indus Towers Ltd. The Division Bench of Justice Rajiv Shakdher and Justice Girish Kathpalia held that , “In view of the legal position discussed above, we have no hesitation to reiterate that it being undisputed that the loan in question was raised by the respondent/assessee only for the purposes of its business, merely because the loan processing charges though paid upfront but amortised over a period of five years, solely to be in consonance with the mercantile system of accounting, deduction of the entire charges in lump sum in the year in which the same were paid could not be denied to the respondent/assessee.” Work from Home Opportunity for Retired Judges:
Kerala HC invites Retired Judges to Translate Supreme Court Judgments from English to Malayalam The Kerala High Court has invited the retired judicial officers to translate Supreme Court judgments from English to Malayalam in work from home mode. This would be helpful for the judges who know malayalam. The engagement shall be purely on work performance basis. Mere submission of application shall not confer any vested right on an applicant to get selected for the work of translation of judgments. In this regard, the High Court reserves the right to accept or reject any or all the applications without assigning any reason. Further, the work of translation and criteria i.e. per page basis shall be supervised by the AI-Assisted Legal Translation Advisory Committee of this High Court and it would not be in the discretion of the officer or the person translating it. Import of Electric Scooters in Completely Knockdown Condition to claim Benefit of Customs Notification: Kerala HC directs Customs Dept to consider Appeal expeditiously M/S. DAWNGATE BUSINESS LINK PVT.LTD vs COMMISSIONER OF CUSTOMS CITATION: 2023 TAXSCAN (HC) 1654 The Kerala High Court directed the Customs Department to consider the appeal expeditiously as the import of electric scooters was made in completely knockdown condition to claim benefit of customs notification.
A Single Bench of Justice Dinesh Kumar Singh observed that “Considering the limited prayer of the petitioner, the present writ petition is disposed of, with a direction to the 1st respondent to consider and decide appeal in accordance with law, preferably within a period of four months from the date of receipt of a certified copy of the judgment.” Prolonged Incarceration of Accused Overrides Statutory Restriction Contained in Section 37(1)(b)(ii) of NDPS Act, rules against DRI: Delhi HC Grants Bail MANU KHOSLA vs DIRECTORATE OF REVENUE INTELLIGENCE CITATION: 2023 TAXSCAN (HC) 1659 The Delhi Bench of High Court has granted bail ruling against Directorate of Revenue Intelligence (DRI) holding that the prolonged incarceration of accused would override the statutory restriction contained in Section 37(1((b)(ii) of the the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS) Act. A Single Bench of Justice Amit Sharma observed that in the present case, admittedly, public witnesses cited by the prosecution had turned hostile with regard to the identification of the vehicle from which substantial recovery of contraband was made. The recovery from the office premises of the present applicant, recorded as per the punchnama reflected that apart from the present applicant there were five other people who were signatories to the said panchnama.
Out of the aforesaid persons only one person, i.e., Ashok Kumar (PW-6), i.e., seizing officer, had been partly examined by the prosecution and who was admittedly not been traceable for the last five years. Delhi HC quashes Time Barred Notice Issued U/s 142(1) of the Income Tax Act SMC COMTRADE LTD vs ASST. COMMISSIONER OF INCOME-TAX CITATION: 2023 TAXSCAN (HC) 1652 The Delhi High Court quashed the time-barred notice issued under section 142 (1) of the Income Tax Act, 1961. SMC Comtrade Ltd, the petitioner/assessee challenged the notice (“first notice”) issued under Section 143(2) and the notice issued under Section 142(1) of the Income-tax Act, 1961 [ “Act”] [“second notice”]. The petitioner’s/assessee’s principal submission, in support of the relief sought in the writ petition, is that the aforementioned impugned notices are barred by limitation. A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the financial year, in the case of the petitioner’s/assessee’s original return, would have ended on 31.03.2017. Six (6) months, as mandated by the proviso, would have ended on 30.09.2017. Undoubtedly, the notice issued under Section 143(2) of the Act is time-barred.
The Court quashed the notice under Section 142(1) of the Act. AO Triggered Reassessment without due Application of Mind: Delhi HC Quashes Notice Issued u/s 148 of Income Tax Act SHASHI MOHAN GARG vs INCOME TAX OFFICER CITATION: 2023 TAXSCAN (HC) 1647 The Delhi High Court quashed the Re assessment notice under section 148 of the Income Tax Act, 1961 triggered by the Assessing Officer (AO)without due application of mind. A division bench of Justice Rajiv Shakdher and Justice Girish Kathpalia observed that the reassessment proceedings were triggered against the petitioner/assessee without due application of mind by the AO about the information received by him from the Kolkata Division of the Investigation Directorate. The court quashed the impugned notice issued under Section 148 of the Act. Relief to Indus Towers: Delhi HC quashes Assessment Order under Income Tax Act on non compliance of Natural Justice INDUS TOWERS LIMITED vs ASSISTANT COMMISSIONER OF INCOME TAX & ANR CITATION: 2023 TAXSCAN (HC) 1644 In a major relief to Indus Towers, the Delhi High Court quashed assessment order under the Income Tax Act, 1961 on non compliance of natural justice.
The grievance of the petitioner is that contrary to the proposal, via the impugned order dated 01.09.2023, the respondents/revenue have adjusted demands not only for AY 2018-19, which was one of the proposals, but also for AY 2017-18. There are several other issues as well, which Mr Jain has raised before us, including the fact that the demand for AY 2022-23 has been stayed by this court vide order dated 21.08.2023 passed in W.P.(C) 11037/2023. Therefore, in our view, the best way forward would be to set aside the impugned order dated 01.09.2023, with liberty given to the concerned officer to take the next steps in the matter, albeit, as per law” the Court noted. Deposit of 10% of Demanded Tax amount: Orissa HC stays GST Demand on Non constitution of GSTAT Sanghamitra Nanda vs Central Board of Indirect Taxes and Customs (CBIC) Department of Revenue & Others CITATION: 2023 TAXSCAN (HC) 1645 The Orissa High Court stayed the GST demand on non constitution of the Goods and Service Tax Appellate Tribunal (GSTAT) as there was deposit of 10% of the demanded tax amount.
A Division Bench of Acting Chief Justice Dr BR Sarangi and Justice MS Raman observed that “Since the petitioner wants to avail the remedy under the provisions of law by approaching 2nd appellate tribunal, which has not yet been constituted, as an interim measure subject to the Petitioner depositing entire tax demand within a period of fifteen days from today, the rest of the demand shall remain stayed during the pendency of the writ petition.” Inclusion of Comparable, even if it Clears Filters: Delhi HC allows Income Tax Appeal PR. COMMISSIONER OF INCOME TAX vs GE INDIA BUSINESS SERVICES PVT. LTD CITATION: 2023 TAXSCAN (HC) 1643 The Delhi High Court allowed income tax appeal in the matter of inclusion of comparable even if it clears the filters. A Division Bench of Justices Rajiv Shakdher and Girish Kathpalia noted that “Although Sachit Jolly, counsel, who appeared on behalf of respondent/assessee, had sought to demonstrate that the issue raised in this appeal did not call for interference by the court de hors the judgment rendered in Rampgreen Solution,
he says that the appeal can be disposed of on the basis of statement made by Mr Meharchandani.” Recovery Proceedings on Arrears of Income Tax: Kerala HC directs NFAC to decide Appeal expeditiously SHAMEEM THARI vs INCOME TAX OFFICER CITATION: 2023 TAXSCAN (HC) 1642 The Kerala High Court directed the National Faceless Appeal Centre (NFAC) to decide appeal expeditiously in the matter of recovery proceedings on arrears of income tax. A Single Bench of Justice Dinesh Kumar Singh observed that “Considering the aforesaid facts, the present writ petition is disposed of, with a direction to the 2nd respondent to pass appropriate orders on series appeals.
However, if it is not possible to decide series appeals, at least series stay applications of the petitioner should be decided in accordance with the law, expeditiously.” Non co-operation for Concluding Proceedings before VAT Tribunal: Kerala HC dismisses Writ Petition being not maintainable PRAGATI GOLD PRIVATE LIMITED vs THE VALUE ADDED TAX APPELLATE TRIBUNAL CITATION: 2023 TAXSCAN (HC) 1636 The Kerala High Court dismissed writ petition being not maintainable on the ground of non- co-operation for concluding proceedings before the Value Added Tax Tribunal (VAT Tribunal). A Single Bench comprising Justice Dinesh Kumar Singh observed that “The petitioner thereafter approached the Division Bench in I.A. No.2 of 2023 for extension of time. This Court vide Order dated 13.10.2023, two weeks further period allowed for conclusion of the proceedings by the Tribunal. However, the petitioner again in this writ petition has sought for extension of time. This Court cannot modify the Order passed by the Division Bench.” Setback to BSNL: Kerala HC upholds Assessment Order passed by GST Commissioner M/S. BHARAT SANCHAR NIGAM LIMITED vs THE COMMISSIONER CITATION:
2023 TAXSCAN (HC) 1633 In a major setback to Bharat Sanchar Nigam Limited (BSNL), the Kerala High Court upheld the assessment order passed by the GST Commissioner. A Single Bench of Justice Dinesh Kumar Singh observed that “Therefore, without entering into the merits of the case, the present writ petition is dismissed with liberty to the petitioner to approach the appellate authority/Tribunal against the assessment order. If the appeal is filed, the appellate authority should proceed hearing of the appeal in accordance with law and dispose of the same expeditiously. Relinquishment of right to prove claim for ITC: Kerala HC dismisses writ petition NAHASSHUKOOR vs ASSISTANT COMMISSIONER SECOND CIRCLE CITATION: 2023 TAXSCAN (HC) 1632 The Kerala High Court dismissed the writ petition filed by the petitioner on relinquishment of right to prove claim of Input Tax Credit (ITC). A Single Bench of Justice Dinesh Kumar Singh observed that
“In the present case, the petitioner, despite show cause notice, chose not to provide any evidence in respect of his claim for the input tax credit, nor did he appear for a hearing on the date fixed. When the petitioner himself has given up his right to prove his claim for the input tax credit, this Court cannot help such an assessee by entertaining this writ petition. Therefore, I find no substance in the present writ petition, which is hereby rejected.” Relief to Oriental Bank of Commerce: Delhi HC allows Depreciation on Temporary Wooden Structures COMMISSIONER OF INCOME TAX vs ORIENTAL BANK OF COMMERCE LTD CITATION: 2023 TAXSCAN (HC) 1619 In a major relief to the Oriental Bank of Commerce the Delhi High Court allowed depreciation on temporary wooden structures. A Division Bench comprising Justices Rajiv Shakdher and Girish Kathpalia observed that “A perusal of the said decision would show that the appellant/revenue did not raise any ground in the appeal with regard to the allowance of depreciation on temporary wooden structures. Therefore, applying the principle of consistency, in the AYs in issue, the respondent/assessee should have been allowed depreciation on temporary structures.
In this regard, no interference is called for with the decision of the Tribunal.” No Requirement of Attachment of Bank Account on Deposit of Pre-Deposit, and after Numbering of Service Tax Appeals: Kerala HC CARMEL BUILDERS AND FIBROTECH INDUSTRIES PVT.LTD vs THE COMMISSIONER OF CENTRAL EXCISE CITATION: 2023 TAXSCAN (HC) 1611 The Kerala High Court observed that there is no requirement of attachment of bank account on deposit of pre-deposit, and after numbering of service tax appeals. A Single Judge Bench of Justice Dinesh Kumar Singh noted that “Since petitioner has made the pre-deposit, as also the appeals have been numbered, attachment/freezing of the bank accounts of the petitioner is no longer required, and therefore, the same are hereby lifted/de-frozen. However, the petitioner will provide list of its properties as demanded vide notice. It is also directed that during the pendency of the appeals before the CESTAT, no coercive measure shall be taken against the petitioner.”