No Interest liability for reversal of wrongful claim of ITC met out of credit ledger
Karnataka High Court in Maansrovar Motors Private Limited on 29-09-2020 decided a batch of cases on this issue, where several writ petitions were filed challenging action taken by CGST authorities levying interest on tax paid by reversal of ITC. [Para 13]
Karnataka High Court quoted Supreme Court decision in Eicher Motors* to hold that *available credit is as good as tax paid. Court further held that by ignoring the available credit and providing to levy interest upon that component of tax which the assessee seeks to remit by adjustment of credit, the Department is enriching itself doubly – on the one hand, holding in its coffers the available credit and on the other, seeking the payment of interest upon the same sum.[Para 17]
Karnataka High Court further quoted Supreme Court in Anjum MH Ghaswala to hold that interest is intended to compensate the revenue for loss of capital. . In the present case, there is no loss in so far as the revenue is in possession of the credit ‘which is good as cash’ as held by the Supreme Court in the case of Eicher Motors and cannot thus be said to be prejudiced in any way[Para 23].
Karnataka High Court also quoted its own bench decision in (2017) 346 ELT 80, where differential duty was paid out of credit available. Court held that ‘when credit was available to the account of the assessee, the Department cannot act like Shylock demanding a pound of flesh
Karnataka High Court ordered to re compute liability of interest on cash remittances and refund the balance interest recovered on credit component.[Para 30]
Now, *Madras High Court in F1 Auto Components (P.) Ltd on 09-07-2021* relying upon the above decision, has placed on record that Counsel for revenue has also concurred on this position that in the light of the aforesaid decision, the levy to this extent (Interest on credit component) is to be set aside. [Para 4 oft his judgment]
Further Madras High court has held that *the provisions of Section 42 can only be invoked in a situation where the mismatch is on account of the error in the database of the revenue* or a mistake that has been occasioned at the end of the revenue. In a case where the claim of ITC by an assessee is erroneous, as in this case, then the question of Section 42 does not arise at all, since it is not the case of mismatch, one of wrongful claim of ITC [Para 7 of Madras High Court Judgment]
Note: The observations in Para 7 of Madras High Court Judgment shall also help in cases where revenue is demanding Interest @ 24% instead of 18% u/s 50(3).
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⚫The Nifty50 index closed above the 16,000 mark for the first time, ending the session at 16,123 with a gain of 1.55%.
⚫With the markets at record highs amid economic challenges because of the Covid pandemic, FM said the Govt, the RBI, and the SEBI are regularly monitoring the behaviour of the financial markets.
⚫The CBDT has extended the due dates for electronic filing of various forms under the Income-tax Act, 1961 considering the difficulties reported by the taxpayers in the electronic filing of certain Forms.
⚫Tax mop up shines through fragile recovery. Direct-tax-to-GDP ratio in the Q1 of 2021-22 increased to 5.14%, compared with 3.29% over the last two years.
⚫Union Road Transport and Highways Minister emphasised on the roll out of flex-fuel vehicles in the Indian auto market within a year.Gadkari also appealed to vehicle manufacturers to compulsorily provide a minimum of six airbags across all variants and segments of a vehicle.
⚫With more than 51.51 lakh Covid vaccines administered on Tuesday, the total vaccination count in India has crossed the 48 crore.
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✅CBDT has issued Circular No. 15/2021 dated 3rd August 2021 for extension of timelines for electronic filing of various Forms under the Income-tax Act, 1961
✅ Details of ITC for Goods or Services received in previous FY but ITC availed in GST Returns filed for April to Sep 2021 to be declared in Table 4(A) of GSTR-3B: CBIC
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👉Exposure Draft on Initial Application of IFRS 17 and IFRS 9 - Comparative Information Proposed amendment to IFRS 17 - (03-08-2021)
https://www.icai.org/post/ed-on-initial-application-of-ifrs-17-and-ifrs-9
👉Result of the online Examination of the Certificate Course on Derivatives held on 24th July,2021. - (03-08-2021)
https://resource.cdn.icai.org/65892ccmip030821.pdf
👉Framework for Outsourcing of Payment and Settlement-related Activities by Payment System Operators
https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12136&Mode=0
👉The world could be about to wake up to the next big thing in banking
https://economictimes.indiatimes.com/industry/banking/finance/banking/the-world-could-be-about-to-wake-up-to-the-next-big-thing-in-banking/articleshow/85027448.cms
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Exemption under Section 54F of IT Act under certain Circumstances
Benefit of exemption under Section 54F of the IT Act cannot be denied to the Respondent merely on the ground that conveyance deed has not yet been got registered particularly when the Respondent is proved to be in possession of the property in question out of which the Respondent was already owner in possession of 1/3rd share since 2008 after making a complete payment of the sale consideration to the vendors and has duly proved possession over the property by way of electricity and water charges bills.
ITO vs. Smt. Swati Oberoi [ITA No. 4150/Del./2018 decided 30.07.2021]
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👉🏻PM Modi launches new digital payment system e-RUPI
(India was proving to the world that “we are second to none in adopting technology and adapting to it” through innovations and use of technology in service delivery)
👇🏻 👇🏻 👇🏻
https://bit.ly/3C9aXGG
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ICAI's Biggest Event of the Year : Election 2021
✏ Institute's 25th Council & 24th Regional Councils are scheduled to be held on 3rd and 4th Dec 2021.👆
✏ We request Entire CA Fraternity to Participate actively in this Democratic Process to Elect the Leader for the Profession. 🙏
✏ Change in Pooling Booth in Certain Cities - Exercise this option by giving your _Full Name, Membership Number and Address of the Polling Booth_ by E- mail - optionpb2021@icai.in or any other mode on or before 16th August, 2021 📧
🖥️ Visit Election Tab for more details:
https://www.icai.org/post/election-2021
To Your Success.
#ICAI #Election2021 #Awareness #Appeal #Right #Duty
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SC: Overturns Cal HC ruling, upholds order cancelling Trust's exemption over bogus donation, accommodation entries
SC overturns Calcutta HC ruling, upholds ITAT’s order cancelling registration of Trust u/s 12AA and 80G for receiving bogus donations and facilitating accommodation entries, finds error on HC's part in deciding the appeal; Assessee-Trust was registered u/s 12AA and was also approved u/s 80G; In a survey conducted on another entity, it was observed that Assessee was not carrying out its activities in accordance with its objects, and thus, was served with a SCN with a questionnaire in response to which the Managing Trustee of Assessee admitted to have received non-genuine donations, and admitted that most donations were in the nature of accommodation entries received to inflate the amount of reserves and facilitate procurement of loans from Banks; CIT(E) cancelled Assessee's registration for exemption and *held it to be acting in violation of its objects and engaged in money laundering activities;
ITAT upheld the order of CIT(E)cancelling the registration against which HC admitted two substantial questions of law:
(i) on validity of cancellation of registration and
(ii) on evidentiary or probative value of a statement recorded during survey.:SC
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🗳️Election 2021 – Consent for inclusion of E-mail address in the List of Voters.
As you may be aware, the next Elections to the Council and Regional Councils are scheduled to be held on 3rd and 4th December 2021 in cities qualifying for two days’ polling and on 4th December, 2021 in other cities/towns having 25 members in the city concerned or within a distance of 50 kms.* The List of Voters as on 1.4.2021 is under preparation. As per Rule 6 read with sub-clause (iv) of clause (2) of Schedule 2 of the Chartered Accountants (Election to the Council) Rules, 2006, the List of Voters is also required to contain the details of e-mail address as furnished by a voter to the Institute, provided an express consent is given by the voter for its inclusion in the list of voters.
In compliance with the provision of sub-clause (iv) of clause (2), we *hereby seek your express consent* for inclusion of your e-mail id available in the Institute records in the List of Voters – 2021. For the purpose of seeking consent of the members a special
Link : https://appforms.icai.org/elections/2021.html
has been provided in the website of the Institute. We request you to kindly visit the above mentioned link and confirm your consent latest by *10th August 2021.
In case your response does not reach to us by 10th August 2021, it shall be presumed that you have not expressed your consent for inclusion of your e-mail address and accordingly, the same shall not be included.
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