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05.06.2017 - Voice of CA presents - Updates
Monday, June 5, 2017

  I. Headlines Today:   

  1. Goods and Services Tax Rules, 2017 - Copy of GST Return Formats  (Click for detail)
  2. Goods and Services Tax Rules, 2017 - Copy of GST Practitioner Formats  (Click for detail)
  3. Exemptions/ concessions from IGST under GST  (Click for detail)
  4. No IGST on Imports Under Export Promotion Schemes  (Click for detail)
  5. Gold tax rate under GST fixed at 3 per cent; new tax rates for metals much more complex  (Click for detail)
  6. Centre drops phone-makers’ GST call  (Click for detail)

II. A Useful Presentation:

1.  An Updated Overview of Income Computation & Disclosure Standards (ICDS) and its Impact

(Please click here)

(Contribution by CA. Sanjay K. Agarwal, Founder - Voice of CA; and contributor is available at Email-id: )

  III. Direct Taxes Case Laws: 

1.  Ameeta Mehra Vs. ADIT (Inv.), W.P.(C) 1471/2013 Date of Judgement: 16.05.2017, High Court of Delhi

Whether search warrant issued u/s 132 of the Income Tax Act, 1961 is valid, in the absence of any credible information with the department that could lead to the reasonable belief that the person is in possession of undisclosed income/ assets?

Held: No

Brief facts:
The petitioner is an individual engaged in the business of horse breeding. Search u/s 132 of the Act was undertaken on the residential and business premises of Mr. Suresh Nanda, maternal uncle of the Petitioner. During the search on Mr. Suresh Nanda, keys of locker No.4979 with Delhi Safe Deposit Co. Limited, New Delhi were found. This locker was initially in the joint names of late Mrs. Sumitra Nanda and late Mr. S.M. Nanda, parents of Mr. Suresh Nanda. Mrs. Sumitra Nanda, the Petitioner's maternal grandmother, added the petitioner's name in 2003 to help her in operating the said locker No. 4979. However, the keys of the locker used to be with Mrs. Sumitra Nanda and After the demise of Mrs. Sumitra Nanda, the key remained with Mr. Suresh Nanda. A search warrant was issued to the petitioner to search the said locker and on search of the locker nothing was found. After that, a notice under Section 153A of the Act was issued requiring the Petitioner to furnish returns of total income and undisclosed income for AYs 2006-07 to 2011-12 in the prescribed format. The petitioner objected to the issuance of the above notice. However, no reply was given by the department. In these circumstances, she filed the petition before the Hon’ble High Court.

The Hon’ble High Court held that before a search under Section 132 (1) of the Act can be authorised following facts should be established that (i) the authority issuing the authorisation is in possession of some credible information, other than surmises and conjectures (ii) the authority has reason to believe that the conditions stipulated in clauses (a), (b) and (c) of Section 132 (1) qua the person searched exist; and (iii) the said information has nexus to such belief. However, in the instant case, there is nothing in the Satisfaction Note to indicate that there was any credible information available with the Department that the petitioner is in possession of any money, jewellery or valuable representing her income which has not been or would not be disclosed by her.

The mere fact that the key to the locker which she was operating was found during the search of her uncle Mr Suresh Nanda would not constitute 'information' leading to the reasonable belief that the locker would contain jewellery, or other valuable articles which she would not have disclosed in her returns. Therefore, the jurisdictional pre-condition justifying the invocation of the power of search under Section 132 (1) of the Act against the Petitioner, was not fulfilled in the present case.
Therefore, the writ petition is allowed.

(Please click here for judgment)


2.  Col. Jaspal Singh Vs. ITO, I.T.A. No. 6321/Del/2016, Date of Judgement: 15.03.2017, ITAT - Delhi

Whether Mesne Profits (i.e. compensation payable to the owner of the property for unlawful possession of others property) received on account of damages for deprivation of use and occupation of property should be treated as Capital Receipt?

Held: Yes

Brief facts:
The assessee had leased his flat to NTPC ltd. However. NTPC Ltd. did not vacate the premises even after expiry of the lease. Suit for eviction was filed by the Appellant and the trial court awarded Mesne profits @Rs.40/- per sq. ft. to the assesse which was received by him in AY 2012-13. The assessee filed return declaring income of Rs.3,28,260/-. However, the Mesne profits of Rs. 10,75.365/- received towards wrongful possession of property by NTPC Ltd. was treated as non-taxable and hence, not offered to tax. The Ld. AO has assessed Mesne Profits to tax by treating the same as Revenue Receipt. The CIT(A) upheld the assessment order and confirm the addition. Being aggrieved, the assessee preferred appeal before the Hon’ble ITAT.

The Hon’ble ITAT held that after the termination of lease, NTPC was occupying and using the property unauthorizedly and thus the assessee was deprived of the use and occupation of the property and therefore, the mesne profits received by the assessee under the consent decree awarded by the Court was on account of damages for deprivation of use and occupation of the profits and therefore, the sum so received was capital in nature not chargeable to tax.
Therefore, the appeal of the assessee was allowed.

(Please click here for judgment)  

IV. A Useful Article:

GST Council finalises tax rates for remaining items, States agree to July 1 rollout

(Please click here)

(Contribution by CA. Bimal Jain and contributor is available at eMail-id: )


Golden Rules:

  "Changing the Face" can change nothing.
But "Facing the Change" can change everything


Thanks & Regards


Voice of CA 

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