Tax INFORM- September 2022

The twenty first 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:

• Situs of officer who assesses is relevant for deciding HC’s appellate jurisdiction, despite transfer of ‘case’ under Sec.127.
• Apex Court disallows bad debts deduction on advance given by real estate developer and financier for purchase of commercial property.
• Disallowance for TDS default is not sustainable for sum neither claimed as deduction in computing Business Income, nor debited to P&L Account.
• The Hon’ble High Court upholds reassessment proceedings for AY 2013-14 conducted through two Show Cause Notices over accommodation entry.
• High Court affirms discount on issue of ESOPs as a tax-deductible business expenditure.
• The Mumbai ITAT allows Sec.54F exemption wrongly claimed under Sec.54 by rejecting AO’s approach as hyper-pedantic.
• ITAT allows depreciation u/s 32 on cars purchased in the name of the company’s director.
• TDS credit sought through rectification application cannot be rejected on the ground of non-filing of revised return.

International Tax Rulings:

• ITAT holds that Web hosting charges paid to Amazon is not taxable as royalty and accordingly not liable for TDS.
• Dutch entity not liable to TDS on interest on tax-refund; Invokes MFN Clause to extend benefit under India-Italy DTAA.

Circulars and Notifications:

• Circular No 18 of 2022, F.No. 370142/27/2022-TPL.
• Notification No. 101/2022/F.No. 370142/37/2022-TPL.
• Notification No. 105/2022/F. No. 370142/38/2022-TPL-Part-I
• Notification No. 109/2022/F. No. 370142/ 44/2022-TPL.

Indirect Tax – 

Goods & Services Tax

Case Laws:

• AAR denies exemption to “online coaching” stating that it is not “education”.
• AAR held that printing of answer booklets and envelopes constitutes a supply of goods.
• AAR held that a tax rate of 12% is applicable for printing on boards supplied by customers.
• AAR denies ITC on goods procured for business promotion.

Circulars/Notification:

• Circular No.180/12/2022-GST.