TDS u/s 194N on Cash withdrawals by societies member; GSTR-3B and FORM 26AS – Comparing Apples with Oranges & “Judicial forward & backward reference" and ....lots more!
We are glad to present to you the 219th edition of ‘Taxsutra Database Bulletin’, with a new feature “Judicial forward & backward reference”. This new feature aims to update readers about the judicial impact of a ruling in terms of the other rulings where it has been relied on, followed, distinguished etc. Every issue of the Database Bulletin will contain 10 rulings with judicial forward & backward references along with updates of current trends in the tax arena!
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Judicial forward & backward reference
1) Shambhu investment private limited vs CIT (2003) 263 ITR 143 (SC) distinguished in [TS-6344-ITAT-2020(DELHI)-O] on Income from letting of property.
2) Hewlett Packard Global Soft Ltd (2017) 159 DTR 89 (Karnataka) followed in [TS-5340-HC-2020(MADRAS)-O] on Sec 10A / 10B tax-holiday eligibility on interest income.
4) Ghanshyam (HUF) [2009] 315 ITR 1 (SC) distinguished in [TS-5298-HC-2020(PUNJAB & HARYANA)-O] on interest on enhanced compensation treated as "income from other sources".
5) Piyoosh Kumar Goyal [2020] 426 ITR 546 (Delhi) distinguished in [TS-5018-HC-2020(Delhi)-O] on Abetment in tax evasion, directs authorities to recall look out circular in name of petitioner.
6) R T Industries (2018) 170 DTR 281 (DELHI) followed in [TS-5174-HC-2020(Madras)-O] on distinction between cause of action jurisdiction and doctrine of forum conveniens.
7) Swabhimani Souharda Credit Co-operative Ltd [2020] 421 ITR 670 (Karn) applied in [TS-5166-HC-2020(KARNATAKA)-O] on Souharda Co-operative entitled to claim Sec.80P benefit.
8) CIT v. Calcutta Export Co. [2018] 404 ITR 654 (SC) distinguished & explained in [TS-5097-SC-2020-O] on Sec. 40(a)(ia) disallowance.
9) CIT v. R. S. Bajaj Society [2014] 222 Taxman 111 (All) approved in [TS-5037-SC-2020-O] on provisions of Sec.12AA and scope of powers of PCIT/CIT to grant registration
10) Shreyas S. Morakhia [2012] 342 ITR 285 (Bom) applied in [TS-5205-HC-2020(BOMBAY)-O] on bad debts on account of inter corporate debt and advances in contravention of Section 36(1)(vii) r.w.s 36(2)
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Key Takeaways from Handpicked Rulings
1) SC: Limitation Act stricto sensu does not apply to the writ jurisdiction; Sets aside HC order dismissing petitioner’s writ petition on grounds of delay - SC holds that it is “not a mandatory requirement that every delayed petition must be dismissed on the ground of delay”; States that there is no doubt that the High Court in its discretionary jurisdiction may decline to exercise the discretionary writ jurisdiction on ground of delay in approaching the court; Explain that however, “it is only a rule of discretion by exercise of self restraint evolved by the court in exercise of the discretionary equitable jurisdiction and not a mandatory requirement that every delayed petition must be dismissed on the ground of delay”; Opines accordingly, that “The discretion vested in the court ..........Click here to read and download SC Judgment
2) HC : Cash withdrawals by member societies of District Co-operative Bank not income in their hands, thus not subject to TDS u/s. 194N - HC holds assessee (a District Co-operative Bank) not liable to deduct tax u/s. 194N (TDS on cash payments), follows Co-ordinate Bench ruling rendered under similar circumstances and remands the matter back to AO for fresh consideration; Notes that the Co-ordinate Bench held that the sums withdrawn by the member society would not constitute ''income'' at the hands of the society and quashed proceedings u/s 201 against District Co-op. Banks' for alleged TDS default u/s 194N.............Click here to read and download HC judgment
3) HC: CBDT Circular has to be read and construed in consonance with the provisions of the IT Act – HC sets aside ITAT order, holds that no liability to deduct tax at source u/s 194C where C & F agents raises separate bills towards reimbursement of freight charges / transportation components alongwith supporting bill invoices, receipts etc; Notes that the Tribunal in its impugned order appears to have misread the bills issued by Jet Air Freighters and proceeded to incorrectly style “Jet Air Freighters” as “carriers” and not as the C & F agents; Infers that these bills as well as other material on record very clearly establishes that Jet Air Freighters were indeed the C & F agents and it is “Jet Airways” which was the carrier in these cases; Opines thus that the reasoning of the...........Click here to read and download HC Judgment
4) HC: Omission to provide details of number of workmen working in Units in Form No.10CCB doesn’t disentitle assessee from deduction u/s 80IB - HC holds that although it is true that there was an omission on the part of the assessee whilst filling in the Form 10CCB to the extent of details of workmen, it is not as if the omission was not rectifiable as to merit the penalty of disallowance of deduction u/s 80IB / 80IC; HC with respect to disallowance of deduction u/s 80IC, confirms ITAT order that mismatch between the production and the profits at the various Units as determined by rate of consumption of electricity at such units, cannot be the sole ground for concluding that there has been some unreasonable inflation of profits..........Click here to read and download HC Judgment
5) HC admits Revenue's appeal challenging ITAT’s order allowing entire expenditure claimed by the assessee for betterment of title of the land sold, while computing the capital gain tax in the hands of the assessee; Revenue also claims that ITAT ignored Revenue's contention that the genuineness of such payments had not been established.....Click here to read and download HC order
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Expert Column
Pursuant to a M.O.U. between the CBIC and the Income Tax Department, information contained in GST Return has, recently, been made part of Annual Information Report in Form 26AS.
In this backdrop, Chartered Accountants Dindayal Dhandaria and Naveen Kumar Dhandaria discuss the purpose which is intended to be served by incorporating such information and state that if the Income Tax Department wishes to match the Turnover as per an Assessee’s accounts and records with that furnished in GSTR 3B, it would be comparing apples with oranges. The authors believe that it is a futile exercise, inter alia, for the basic reason that whereas in GST, inter-state branch transfers of goods/services are treated as supply and forms part of turnover, it is not so considered in financial statements prepared under Generally Accepted Accounting Principles (GAAP) which stipulate that a person cannot sell goods or render services to himself. The authors opine that “If an Assessee is required to reconcile the amount of turnover reported in Form GSTR 3B with that in his Income Tax Return and is subjected to scrutiny for such mismatch, there would be serious miscarriage of justice and unnecessary harassment to him.”
Click here to read their insightful article titled – GSTR-3B AND FORM 26AS – Comparing Apples with Oranges
“Taxsutra Database”, a true Income-tax research tool, is an archive of over109530+ Income Tax Rulings reported across ITR, CTR, Taxman, DTR, ITD, TTJ, and ITR (Trib) and also includes recent ‘unreported handpicked rulings of SC, HC & ITAT’. It is a completely integrated service with the following features:
· Comprehensive coverage of all latest cases powered by an advanced search engine to provide a seamless user experience;
· Effective search results supported by active filters around Court Level, Location, Case Numbers and Citation;
· Enhanced search feature, using the Unique Bulls Eye Application, by including "Exact words", "Any of these", "none of these" options.
· Judicial “forward & backward reference”
The Taxsutra Database comes at a very special Annual Subscription price of 4200+ GST AND includes an annual license to the Taxsutra Library.
In this backdrop, Chartered Accountants Dindayal Dhandaria and Naveen Kumar Dhandaria discuss the purpose which is intended to be served by incorporating such information and state that if the Income Tax Department wishes to match the Turnover as per an Assessee’s accounts and records with that furnished in GSTR 3B, it would be comparing apples with oranges. The authors believe that it is a futile exercise, inter alia, for the basic reason that whereas in GST, inter-state branch transfers of goods/services are treated as supply and forms part of turnover, it is not so considered in financial statements prepared under Generally Accepted Accounting Principles (GAAP) which stipulate that a person cannot sell goods or render services to himself. The authors opine that “If an Assessee is required to reconcile the amount of turnover reported in Form GSTR 3B with that in his Income Tax Return and is subjected to scrutiny for such mismatch, there would be serious miscarriage of justice and unnecessary harassment to him.”
