Tax INFORM- May 2023

The twenty ninth issue of our monthly tax newsletter – Tax Inform, is out. Through these newsletters, we provide a compilation of key tax-related case laws, circulars, notifications, etc. issued by the authorities in the previous month, impacting entities and individuals operating in India.

The highlights of the current issue are:

Direct Tax – 

Domestic Tax Rulings:

• Supreme Court opines that it is not permissible for an assessee involved in an unlawful business to seek deductions for expenses or losses incurred during the course of such business.
• Supreme Court holds that co-operative Credit Societies are not ‘banks’ under Banking Regulation Act and consequently, are entitled to deduction under section 80P of the Income-tax Act.
• Supreme Court holds that addition for unaccounted purchases cannot be deleted merely based on affidavits of a typist and a chartered accountant admitting a typographical error.

Indirect Tax – 

Goods & Services Tax

Case Laws:

• Telangana AAR states that Input Tax Credit cannot be claimed for the construction of a warehouse as it is immovable property.
• Telangana AAR provides clarity on tax rates for works contract services to Government Authority Pre and Post 2022.
• Gujarat AAR holds that income derived out of accommodation provided by a charitable trust to pilgrims is not eligible for 12AA exemption and is liable to GST if the property is located outside the religious precinct.