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SamācāraSEPTEMBER 2018

S P C M & ASSOCIATES

Chartered Accountants

SPCM & ASSOCIATES

S | 01amācāra SEPTEMBER 2018 AUDIT INCOME TAX COMPANY LAW RERA GST | | | |

INDEX

Sr. No. Particulars Author Page Number

1 Editorial CA. Suhas P. Bora 02

2 Due Dates Samacara Team 04

3 Samacara Team 05Events & Contributions

4 Updates 08

Income Tax Miss. Deepali R. Shah 08

GST Adv. Abhay H. Bora 09

Customs Adv. Sanket S. Bora 10

Insolvency And Bankruptcy Code CA. Chetan R. Parakh 11

Maharera Circulars & Orders Adv. Sanket S. Bora 12

5 Taxation of Amount Received on Maturity / CA. Suhas P. Bora 13

Surrender Value on The Fixed Maturity Plan

of Insurance Co. Under Income Tax ACT, 1961

6 Input Tax Credit Under GST CA. Chetan R. Parakh 14

7 Every Director's KYC Compliance| CA. Manoj R. Jain 18

DIR-3-KYC CS. Aditi S. Joshi

8 Serving of Notice Under Various Tax Laws Adv. Sanket S. Bora 19

9 Case Laws Miss. Deepali R. Shah 25

Dear All,

Of late from past few years it is observed that time for

filing of returns is extended on one pretext or other. It has

become a routine that has spoilt the habit of tax

consultants and taxpayers alike.

We all are normally in habit of doing the work at last

moment only. It is seen that as soon as the time was

extended, the taxpayer's line for filing the returns

vanished and we also became relaxed. The question that

comes to my mind is how long this practice will continue

and how to get out of this syndrome of extension of time

for filing the return.

For reducing the litigation, Govt. has taken appreciative

steps by issuing Circular No. 3 of 2018, dt. 11th July, 2018

(2018) 405 ITR 29 (St) by the CBDT. Further, there has been

a revision of monetary limits for filing of appeals by the

Department before Income-tax Appellate Tribunals, High

Courts and SLPs/appeals before the Supreme Court for

withdrawal of appeals where the tax effect is less than

prescribed limits.

On effect of demonetization, Hon'ble Finance Minister

Shri Arun Jaitleyji has commented as "The Reserve Bank has

released its reports twice stating that the demonetised Notes of

`500 and ̀ 1000 have been substantially deposited in the Banks.

A widely stated comment has been that just because most of the

currency came back into the Banks, the object of demonetisation

has not succeeded. Was the invalidation of the Non-deposited

currency the only object of demonetisation? Certainly Not. The

larger purpose of demonetisation was to move INDIA from a

Tax Non-compliant society to a compliant society. This

necessarily involved the formalisation of the Economy and a

blow to the black money.

WHEN cash is deposited in the Banks, the anonymity about the

owner of the cash disappears. The deposited cash is now

identified with its owner giving rise to an inquiry, whether the

amount deposited is in consonance with the depositor's income.

Accordingly, post demonetisation about 1.8 million depositors

have been identified for this enquiry. Many of them are being

fastened with Tax and Penalties. Mere deposit of cash in a bank

does not lead to a presumption that it is Tax paid Money.

In March 2014, the number of Income Tax returns filed was 3.8

crores. In 2017-18, this figure has grown to 6.86 crores. In the

last two years, when the impact of demonetisation and other

steps is analyzed, the Income Tax returns have increased by

19% and 25%. This is a phenomenal increase.

The number of new returns filed post demonetisation increased

in the past two years by 85.51 Lakhs and 1.07 crores.

For 2018-19, advance tax in the first quarter has increased for

personal Income Tax Assesses by 44.1% and in the Corporate

Tax category by 17.4%.

The Income Tax collections have increased from the 2013-14

figure of `6.38 Lakh crores to the 2017-18 figure of `10.02 Lakh

crores.

The growth of Income Tax collections in the pre-demonetisation

two years was 6.6% and 9%. post-demonetisation, the

collections increased by 15% and 18% in the next two years. The

same trend is visible in the third year.

The GST was implemented from 1st July, 2017 i.e. post

demonetisation. In the very first year, the number of registered

assesses has increased by 72.5%. The original 66.17 Lakh

assesses has increased to 114.17 Lakhs.

This is the positive impact of the demonetisation. More

formalisation of the Economy, More Money in the System,

Higher Tax Revenue, Higher Expenditure, Higher Growth after

the first two quarters."

The time will only prove that, whether demonetization

EDITORIAL

SPCM & ASSOCIATES


and its impact on tax collection and formalization of

economy as claimed by FM is reality or a myth.

In the GST front GST Council had proposed many

important changes to the Act, from which maximum

changes recommended, have received the Consent. These

major amendments have been notified in the Official

Gazette published on 30th August, 2018 which includes

amendments relating to Definition of supply, Input Tax

credit, Refund, Registration, Issuance of debit/credit

note, Cross utilization of credit, also amendments to

schedules under CGST Act.

At SPCM, attending the national conference at Shegaon

by the entire team has strengthen the bonding amongst

the partners and associates.

The month of September will be celebrations of various

festivals such as Gokulastami, Paryushan and Ganesh

Charturthi along with the busy time period of completion

of Corporate as well as Tax Audits, RERA Form 5, GST

Annual Return, etc.

I would like to conclude by wishing good luck to all for the

forthcoming Audit Season and by sharing my favorite

quotes on motivation and inspiration: -

"There are no secrets to success. It is the result of

preparation, hard work, and learning from failure" -

Colin Powell

"The best preparation for tomorrow is doing your best

today." - H. Jackson Brown, Jr.

“Success is about creating benefit for all and enjoying

the process. If you focus on this and adopt this

definition, success is yours."- Kelly Kim

Senior Partner

Editor - Samacara

SPCM & ASSOCIATES

CA. Suhas P. Bora


SPCM & ASSOCIATES

DUE DATES

MONTHLY DUE DATES REGISTER FOR AUGUST 2018


ACT Particulars Due Date

GST GSTR-1 for the month of August, 2018 10th Sept, 2018

GST Due date for GST payment for the month of August, 2018 20th Sept, 2018

GST GSTR 3B for the month of August, 2018 20th Sept, 2018

INCOME TAX TDS/TCS Payment for the month of August, 2018 07th Sept, 2018

INCOME TAX Due date for filing of Tax Audit for A.Y. 2018-19 30th Sept, 2018

INCOME TAX Due date for furnishing of challan-cum-statement in 30th Sept, 2018 respect of tax deducted under Section 194-IA in the month of August, 2018

INCOME TAX Due Date for Payment of 15% of Advance Tax 15th Sept, 2018 (For Assesse other than those covered u/s 44AD) for A.Y 2019-20

PF Provident Fund Payment for the month of August, 2018 15th Sept, 2018

ESI Employee State Insurance Corporation Payment for 15th Sept, 2018 the month of August, 2018

PROFESSION TAX E-Payment of Monthly Tax for August, 2018 30th Sept, 2018

MCA Due Date for filing of DIR-3 KYC (Revised from 31st 15th Sept, 2018 August, 2018)

Team SPCM at the CA National Conference held at Shegaon

EVENTS & CONTRIBUTIONS

SPCM & ASSOCIATES


Team SPCM with ICAI Vice-President, CA. Praful P. Chajjed

SPCM & ASSOCIATES


CA. Suhas P. Bora with ICAI Vice-President, CA. Praful P. Chajjed

SPCM & ASSOCIATES


CA. Suhas P. Bora with ICAI Vice-President, CA. Praful P. Chajjed

Team SPCM with Regional Council Member, CA. Sarvesh Joshi

UPDATES

NOTIFICATIONS

1. Notification No. 30/F.No. 503/05/1996-FTD-I, dated

5th July, 2018

The Central Government, in Consultation with the CJ of

the Guahati HC, designates the Court of Munsiff No. 3 as

the Special Court u/s 280A for the North Eastern Region.

2. Notification No. 38 /2018/F. No. 300196/42/2017-ITA-

I, dated 10th August, 2018

The Central Government notifies the 'Insolvency and

Bankruptcy Board of India', New Delhi u/s 10(46) of the

Income Tax Act, 1961.

3. Notification No. 39/2018 /F. No. 300196/31/2017-ITA-

I, dated 10th August, 2018

The Central Government notifies the 'Madhya Pradesh

Real Estate Regulatory Authority' u/s 10(46) of the

Income Tax Act, 1961.

4. Notification No. 40/2018/ F.No.203/1712017/IT A-II,

dated 27th August, 2018

The Central Government notifies M/s C.B.C.I. Society for

Medical Education, Bengaluru (PAN: AAATC0773E) u/s

35(1)(i)/35(1)(ii) read with Rules 5c and 5E from A.Y.

2018-19 onwards in the category of 'University, College or

other institution', engaged in research activities, subject to

certain conditions.

5. Notification No. 41/2018 (F.No.165/4/2017-ITA-I),


The Central Government notifies “The Press Trust of

India Limited, New Delhi” as a news agency set up in

India solely for collection and distribution of news, u/s

10(22B) for A.Y. 2019-20 to 2021-22 subject to certain

conditions.

6. Notification No. 42/2018/F. No. 370142/05/2018-TPL,


The Central Government notifies the Income-tax (9th

Amendment), Rules, 2018, which shall come into force

from the 1st day of April, 2019 and shall apply in relation

to A.Y. 2019-20 and subsequent years

1. Circular No. 4/2018/ F. No. 279/Misc./140/2015/ITJ,


The Central Board of Direct Taxes clarified various issues

pertaining to Computation of admissible deduction u/s

10A of the Income Tax Act, 1961.

2. Circular No. 5/2018/ F. No. 370149/155/2018-TPL,


The Central Board of Direct Taxes, clarified on issues

apropos immunity provided u/s 270AA of the Income-

tax Act, 1961.

3. Circular No. 6/2018/ F. No. 370142/9/2018-TPL, dated

17th August, 2018

The Central Board of Direct Taxes, decided that the

reporting under the proposed clause 30C and proposed

clause 44 of the Tax Audit Report in Form 3CD shall be

kept in abeyance till 31st March, 2019.

4. Amendment to Circular No. 3 F No 279/Misc.

142/2007-ITJ (Pt), dated 20th

August, 2018

The Central Board of Direct

Taxes, amends the Circular No.3

of 2018 dated 11.07.2018 which

shall come into force from

20/08/2018.

INCOME TAX

SPCM & ASSOCIATES

Deepali R. Shah

CIRCULARS


SPCM & ASSOCIATES

1. Notification No. 31/2018 - Central Tax, dated 6th

August, 2018.

The Central Government on the recommendation of the

Council, gives an opportunity to the persons who did not

file the complete FORM GST REG-26 to complete the GST

Registration.

2. Notification No. 32/2018 - Central Tax, dated 10th

August, 2018.


Council, extends the time limit for furnishing FORM

GSTR-1 of persons having aggregate turnover of over 1.5

Crores in the preceding F.Y. or the current F.Y. for the

months July 2018 to March 2019 till 11th day of the

succeeding month.

3. Notification No. 33/2018 – Central Tax, dated 10th

August, 2018.


Council, notifies the time limit for furnishing the FORM

GSTR-1 of persons having aggregate turnover under 1.5

Crores in the preceding F.Y. or the current F.Y.


August, 2018.


Council, notifies the time limit for furnishing the FORM

GSTR-3B for the months July 2018 to March 2019 till 20th

day of the succeeding month.

5. Notification No. 35/2018 – Central Tax, dated 21st

August, 2018.


Council, extends the time limit for furnishing the FORM

GSTR-3B for the months July 2018 till 24th August, 2018


August, 2018.



GSTR-3B for the months July 2018 and August 2018 to 5th

and 10th October, respectively for the persons registered

in ood hit regions of India.


August, 2018.



GSTR-1 of persons having aggregate turnover of over 1.5


months July 2018 and August 2018 to 5th and 10th

October, respectively for the persons registered in ood

hit regions of India.


August, 2018.



GSTR-1 of persons having aggregate turnover under 1.5


months July 2018 to September 2018 to 15th November

2018, respectively for the persons registered in ood hit

regions of India.

CENTRAL TAX RATE NOTIFICATIONS

1. Notification No. 22/2018 – Central Tax (Rate), dated

6th August, 2018.


Council extend the exemption from RCM u/s 9(4) of the

CGST Act, 2017 i.e. Intra-State Inward Supply from

Unregistered Dealers to 30th September 2019.

INTEGRATED TAX RATE NOTIFICATIONS

1. Notification No. 23/2018 – Integrated Tax (Rate),



Council extend the exemption from RCM u/s 5(4) of the

IGST Act, 2017 i.e. Inter-State Inward Supply from

Unregistered Dealers to 30th September 2019.

CGST CIRCULARS

1. Circular No.52/26/2018-GST, dated 9th August, 2018

The TRU clarifies regarding applicability of GST on

various goods and services such as Fortified Toned Milk,

Disk Brake Pad, Drinking Water, etc.

2. Circular No.53/27/2018-GST, dated, 9th August, 2018

The TRU clarifies regarding applicability of GST on the

petroleum gases retained for the manufacture of

petrochemical and chemical products.

3. Circular No. 54/28/2018-GST, dated, 9th August, 2018

The TRU clarifies regarding the classification of fertilizers

GOODS AND SERVICE TAXCENTRAL TAX NOTIFICATIONS


supplied for use in the manufacture of other fertilizers to

be at 5% GST rate.

4. Circular No. 55/29/2018-GST, dated, 10th August,

2018

The CBITC clarifies on the issue of taxability of services

provided by Industrial Training Institutes (ITI)

5. Circular No. 56/30/2018-GST, dated, 24th August,

2018

The TRU clarifies regarding removal of restriction of

refund of accumulated ITC on fabrics.

Adv. Abhay H. Bora

TARIFF NOTIFICATIONS

1. Notification No. 56/2018-Customs, dated 3rd August,

2018

The Central Government amended the Notification No.

50/2017-Customs, dated the 30th June, 2017.

2. Notification No.57/2018-Customs, dated 7th August,

2018


50/2017-Customs, dated the 30th June, 2017.

3. Notification No. 58/2018-Customs, dated 7th August,

2018


82/2017, dated the 27th of October, 2017.

(Amended by Corrigendum, dated 13th August, 2018)

4. Notification No. 59/2018 – Customs, dated 21st

August, 2018

The Central Government exempts all goods falling under

the First Schedule to the Customs Tariff Act, 1975 (51 of

1975) when imported into India and intended for

donation for the relief and rehabilitation of the people

affected by the recent oods in the State of Kerala from the

levy of Customs Duty and IGST.

NON-TARIFF NOTIFICATIONS

1. Notification No.67/2018 - Customs (N.T.), dated 2nd

August, 2018

The Central Board of Indirect Taxes and Customs

prescribed rate of exchange of conversion of each of the

foreign currencies into Indian currency or vice versa with

effect from 3rd August, 2018 for the purpose of import and

export of goods.

2. Notification No. 68/2018-Customs (N.T.), dated 3rd

August, 2018

The Central Board of Indirect Taxes and Customs made

amended the Courier ports and Exports (Clearance)

Regulations, 1998, which may be called as Courier

Imports and Exports (Clearance) Amendment

Regulations, 2018.

3. Notification No. 69/2018-Customs (N.T.), dated 3rd

August, 2018


amended the Courier Imports and Exports (Electronic

Declaration and Processing) Regulations, 2010, which

may be called as Courier Imports and Exports (Electronic

Declaration and Processing) Amendment Regulations,

2018.

4. Notification No. 70 /2018-Customs (NT), dated 3rd

August, 2018


appointed officers to function as Commissioner of

Customs (Appeals).

5. Notification No. 71/2018-CUSTOMS (N.T.), dated

14th August, 2018

The Central Board of Indirect Taxes & Customs amended

the Notification No. 36/2001-Customs (N.T.), dated the

3rd August, 2001.

CUSTOMS

SPCM & ASSOCIATES


6. Notification No.72/2018 - Customs (N.T.), dated 14th

August, 2018


amended the Notification No. 67/2018-CUSTOMS (N.T.),

dated 2nd August 2018 with effect from 15th August, 2018

7. Notification No.73/2018-Customs(N.T.), dated 14th

August, 2018


the regulations to be called the Customs (Finalisation of

Provisional Assessment) Regulations, 2018.

8. Notification No.74/2018 - Customs (N.T.), dated 16th

August, 2018


prescribed rate of exchange of conversion of each of the

foreign currencies into Indian currency or vice versa with

effect from 17th August, 2018 for the purpose of import

and export of goods.

9. Notification No. 75/2018-Customs (N.T.), dated 21st

August, 2018


amended the Notification No. 82/2017-Customs (N.T.),

dated the 24th August, 2017.

10. Notification No. 76/2018-CUSTOMS (N.T.), dated

31st August, 2018

The Central Board of Indirect Taxes & Customs amended

the Notification No. 36/2001-Customs (N.T.), dated the

3rd August, 2001.

ANTI-DUMPING DUTY NOTIFICATIONS

1. Notification No.38/2018-Customs (ADD), dated 2nd

August, 2018


24/2014-Customs (ADD), dated the 21st May, 2014

extending the levy of Anti-Dumping Duty on imports of

'Methylene Chloride' originating in or exported from

European Union and United States of America unless

revoked, suspended or amended earlier, up to and

inclusive of the 20th October 2019.

2. Notification No.39/2018-Customs (ADD), dated 20th

August, 2018


26/2013-Customs (ADD), dated the 28 October, 2013

extending the levy of Anti-Dumping Duty on imports of

'Paracetamol” originating in or exported from China PR

unless revoked, suspended or amended earlier, up to and

inclusive of the 26th April, 2019.


August, 2018

The Central Government ordered that pending the

outcome of the said review by the designated authority on

imports of 'Jute Products' originating in or exported from

Bangladesh by M/s. Natore Jute Mills, Bangladesh

(Producer) and M/s PNP Jute Trading LLC,USA

(Exporter/ Trader) shall be subjected to provisional

assessment till the review is completed.


August, 2018

The Central Government ordered that pending the

outcome of the said review by the designated authority on

imports of 'Jute Products' originating in or exported from

M/s Aziz Fibres Limited, Bangladesh (Producer/

Exporter) shall be subjected to provisional assessment till

the review is completed.

CIRCULARS

1. Circular No. 25/2018-Customs, dated 8th August,

2018


elaborated on Standard operating procedures for

discharge of bonds executed by nominated agencies/

banks under Notification no. 57/2000-Customs dated

08.05.2000.


2018

The Central Board of Indirect Taxes and Customs brought

changes in AEO-T1 Application for its simpler and

rationalized processing.


2018

The Central Board of Indirect Taxes and Customs issued

Clarification regarding bank guarantee requirement for

bond executed by EOUs.

4. Circular No. 28 /2018-Customs, dated 30th August

2018


clarification for forwarding Samples to outside

laboratories after ensuring with their respective

SPCM & ASSOCIATES


SPCM & ASSOCIATES

laboratories that the testing facilities for any particular

items listed in the said Circulars are not available with

them.


2018


clarification on Pilot Implementation of Paperless

processing under SWIFT-uploading of supporting

documents (eSANCHI) in Exports.


2018


clarification on the setting up of the Office of

Commissioner (Investigation-Customs) created under

CBIC.

INSTRUCTIONS

1. Instruction No. 12/2018-Customs, dated 13th August,

2018

The Central Board of Indirect Taxes and Customs advised

the Officers not to collect Safeguard Duty on import of

Solar Cells, as required as per the Notification No. 1/2018-

Customg (SG), dated 30th July, 2018, till further direction

comes.

2. Instruction No. 13/2018-Customs, dated 29th August,

2018

The Central Board of Indirect Taxes and Customs stressed

upon sharing of cases booked by Customs Field

Formations under the Information Sharing Protocol with

CEIB in four stages of:

a. Seizure/Detention

b. Show cause Notice

c. Order-in-original

d. Prosecution


CIRCULARS

1. Circular No. IBBI/CIRP/016/2018, dated 10th August,

2018

Insolvency and Bankruptcy Board of India clarifies the

procedure to be followed by the Committee of Creditors

in the meetings for speedy disposal of CIR Process.

2. Circular No. IBBI/CIRP/015/2018 dated 13th July,

2018

Insolvency and Bankruptcy Board of India directs an

Insolvency Professional Entity

to inform the Board when the IP

ceases to be a director/partner

or joins as a director/partner.

INSOLVENCY AND

BANKRUPTCY CODE

CA. Chetan R. Parakh

1. MahaRERA Circular No. 19/2018/ No. MahaRERA/

Secy/ File No. 27/764/2018, dated 14th August, 2018

The Maharashtra Real Estate Regulatory Authority have

provided the bank details to make the payment for

lodging complaints about unregistered projects, as per the

direction of the Bombay High Court.

MAHARERA

CIRCULARS & ORDERS

Adv. Sanket S. Bora

Adv. Sanket S. Bora

Taxation of Amount Received on Maturity / Surrender Value on The Fixed Maturity Plan of Insurance Co. Under Income Tax ACT, 1961

SPCM & ASSOCIATES

1. HEAD OF INCOME

The definition of income with respect to Insurance,

specifically includes only proceeds of Keyman Insurance

Policies. The heads of income “salaries”, “income from

business or profession” and “income from other sources”

specifically have provisions to tax proceeds of Keyman

Insurance Policies. No provision relating to any head of

income specifically refers to other Insurance Policies. The

only reference to taxability of such amounts is in the

exception to the exemption provision for proceeds of Life

Insurance Policies, which again does not refer to the

manner in which such proceeds will be taxed.

2. WHETHER AN INSURANCE POLICY IS A

CAPITAL ASSET OR NOT?

An insurance policy that provides for a return of money is

certainly similar to an investment, which is a capital asset.

A policyholder has certain rights to receive some amounts

under the policy on the happening of certain events or on

certain specified dates. A life insurance policy can also be

assigned. Therefore, a life insurance policy can certainly

be regarded as a capital asset.

3. WHETHER THERE IS A TRANSFER OF A

CAPITAL ASSET WHEN PROCEEDS OF A POLICY

ARE RECEIVED?

The definition of the term “transfer” includes

extinguishment, and when a part of the policy matures

and proceeds are paid to the policyholder, there is a

partial extinguishment of the policy. Similarly, when the

assessee surrender the policy before maturity and

received the surrender value from Insurance co. is also

means extinguishment of right of the policy. There is,

therefore, a transfer of a full/ part of the capital asset.

4. WHETHER SHORT TERM OR LONG TERM?

The policy would be a long-term capital asset, if more than

three years have elapsed since the commencement of the

policy. The initial premium paid would be the cost of

acquisition, and subsequent premiums paid would be the

cost of improvement of the policy. Indexation of cost

would accordingly be worked out year-wise depending

upon the year of payment of the respective premiums.

That being the position, the income arising on receipt of

amounts under a life insurance policy would be

computed as capital gains. In computing capital gains,

cost of acquisition as well as cost of improvement is

deductible. These can be indexed by using the notified

cost index if the capital gains are long-term capital gains.

5. CASE LAW

The ACIT, Ahemdabad V/s Girish Haribhai Trivedi

(AY 2008-09)

The Revenue filed an appeal before Ahemdabad

Tribunal.

The assessee had invested in ICICI ULIP policy on

31.7.2003 by paying Rs.18,00,000/- within 2 years from

purchase of policy and received Rs. 32,74,493/- on

22.08.2007 as the surrender amount.

the assessee treated this amount as Long Term Capital

Gain and the paid the tax thereon taking Rs.18,00,000/-

as cost and maturity proceeds of Rs.32,74,493/- as sale

proceeds while the differential of Rs. 14,72,493/- as

Long Term Capital Gain.

The same was rejected by the Assessing Officer since

the A.O was of the opinion that the fund is controlled

by ICICI Pru Life Insurance Company.

The amount received on that account would be treated


as 'surrender value' of the policy and the entire amount

of Rs.32,74,493/- will be taxable, due to which the

assessee filed an appeal.

The Tribunal looking at facts and circumstances of the

case arrived at the conclusion that the assessee will be

allowed to treat the proceeds as capital gain and the

A.O was directed to take the sale consideration of units

as amount received on maturity of the policy and the

cost of investment as amount invested by assessee

during the span of 2-3 years i.e. Rs.18,00,000/- and

accordingly work out the long term capital gain and

tax payable thereon, if any.

SPCM & ASSOCIATES


INPUT TAX CREDIT UNDER GST

AN IMPORTANT SELF REVIEW PROCESS

It's been almost one year, since when the GST is being

implemented. One of the most important area in the entire

GST process is "INPUT TAX CREDIT" ("ITC"). Every

Dealer / supplier is eligible to claim Input Tax Credit on

all the Inputs and Input services availed by them for

making taxable outward supply, subject to certain terms

and conditions attached to it. ITC being the backbone of

GST and a major matter of concern for the registered

persons, conditions for eligibility to ITC and eligible ITC

have been prescribed which is more or less in line with

pre- GST regime. Conditions to Claim ITC are one of the

most critical activity for every business to settle their tax

liability.

Now since, the first financial year under the GST Regime

is already over (2017-2018) and you might have already

filed your GST Returns for the said period, there may be

cases, where ITC has remained to be claimed for one or

more reason.

So, there are doubts in the mind of the registered dealer

that, whether such unclaimed ITC can be claimed now

after end of the year 2017-2018? The answer to this

question is - YES.

Any registered assessee can claim the 'unclaimed ITC'

for the period July, 2017 to March, 2018 within the

following time frame:

(i) The due date of filing GST Return for September

of next financial year i.e. 2018-2019

OR

(ii) Date of filing the Annual Returns relevant for that

financial year i.e. 2017-2018.

WHICHEVER IS EARLIER.

For example: Mr. ABC, a registered dealer has a Purchase

Invoice, which was dated 10th November, 2017 (FY 2017-

18), ITC on which was remained to be claimed by the said

Buyer and now he wants to claim the GST paid on that

purchase. As per the criteria laid down above, the ITC on

CA. Suhas P. Bora

SPCM & ASSOCIATES


such invoices can still be claimed on or before the

following time limit.

The Due date of filing GST return for September 2018 (FY

2018-19) is 20th October, 2018 and the Date of filing GST

Annual Return for F.Y. 2017-18 is 31st December 2018,

whichever is earlier will be the time period within which

Mr. ABC has to claim ITC. Therefore, the last date will be

20th October 2018 to claim such 'unclaimed ITC'.

The Assessee may claim such unclaimed ITC in any of the

months between July, 2017 to September 2018, for which

returns have not yet been filed, however not later the

above time frame.

Note: For Debit Notes, above condition must be

considered with respect to Original Invoice Date.

Cross checking of ITC with your supplier's data: (VERY

IMPORTANT)

It is paramount requirement under the GST, that you will

get the ITC on your Inward supplies only when your

supplier pays the taxes collected from you to the

Government. In other wards your 'purchases' from any

supplier, must be reported as 'Sale' by that supplier with

your GSTN in his GSTR-1 returns. If the other person

(your supplier) has not filed his GST Return, you will not

get ITC of the same, inspite of you are holding taxable

invoice and you have made payment to him. Since the

GST is based on matching principle and thus your claim of

ITC must be confirmed by your vendor by filing his GSTR-

1 return, wherein sales made to you are reported by him

with your GSTN.

Now how you will come to know, whether your supplier

has reported your purchases in his GST Returns? The

answer to this is - Cross verification with Form GSTR-

2A.

GSTR 2A is a system generated 'draft' Statement of Inward

Supplies for a Receiver Taxpayer. It is auto-populated

from the GSTR 1 to 5 returns and GSTR 6 (ISD) of all the

Supplier/Counter party Taxpayers from whom goods

and/or services have been procured or supplied to in a

given tax period.

It is created for a recipient assessee, when the Form GSTR-

1 to 6, as applicable, is filed, submitted or uploaded by the

supplier taxpayer. The details become available to the

recipient assessee for view and the details are updated

incrementally as and when supplier taxpayer upload or

change details in their respective Form GSTR, for the

given tax period. Form GSTR-2A of a tax period is

available for view only.

You don't have to file the GSTR 2A. It is a read-only

document provided to you so that you have a record of all

the invoices received from various supplier taxpayers in a

given tax period. You cannot make any changes to the

GSTR 2A as it is a read-only document. Further there is no

intimation from the Department regarding updation in

GSTR-2A form, the taxpayer can check same in post-login

mode on the GST portal at any time and recurring basis.

At the cost of repetition, we are once again providing

here below the basics of Input tax Credit :-

INPUT TAX CREDIT- CONDITIONS TO CLAIM :-

A registered person will be eligible to claim Input Tax

Credit (ITC) on the fulfillment of the following

conditions:

1. Possession of a tax invoice or debit note or document

evidencing payment. Tax Invoice must possess all the

details as prescribed in the GST Rules for Tax Invoices.

Mentioned of your GSTN on every purchase invoice is

utmost important.

2. Receipt of goods and/or services

3. Goods delivered by supplier to other person on the

direction of a registered person against a document of

transfer of title of goods

4. Furnishing of a return (Important Condition)

5. Where goods are received in lots or installments ITC

will be allowed to be availed when the last lot or

installment is received.

6. Failure of payment to the supplier towards supply of

goods and/or services within 180 days from the date

of invoice, ITC already claimed by recipient will be

added to output tax liability and interest to paid on

such tax involved. On payment to supplier, ITC will be

again allowed to be claimed. (Important Condition)

7. No ITC will be allowed if depreciation has been

claimed on tax component of a capital good.

8. Time limit to claim ITC against an Invoice or Debit

Note is earlier of below dates: (Important Condition)

(i) The due date of filing GST Return for September

of next Financial year OR

SPCM & ASSOCIATES


(ii) Date of filing the Annual Returns relevant for that

Financial year.

9. Proportionate reversal of Common credit of ITC used

commonly for

Effecting exempt and taxable supplies

Business and non-business activity

Items on which ITC is disallowed :-

(a) Motor vehicles and conveyances except when they are

used :-

(i) for making the following taxable supplies, namely,

(A) for making further supply of such

vehicles or conveyances i.e. further sale ;

or

(B) Transport of passengers; or

(C) Used for imparting training on driving, ying,

navigating such vehicle or conveyances ;

(ii) for Transportation of goods;

(b) food and beverages, outdoor catering, beauty

treatment, health services, cosmetic and plastic surgery

except where such goods and/or services are taken to

deliver the same category of outward services or as a part

of a composite supply.

(c) membership of a club, health and fitness centre.

(d) rent-a-cab, health insurance and life insurance

except where :-

(A) Government makes it obligatory for employers to

provide it to its employees

(B) goods and/or services are taken to deliver the

same category of Outward services or as a part of

a composite supply

(e) travel benefits extended to employees on vacation

such as leave or home travel concession.

(f) Works contract service for construction of an

immovable property (except plant & machinery or for

providing further supply of works contract service).

In other words, ITC on construction of your own

office or factory building is not allowed, although

you are going to use for the purpose of your

business.

(g) Goods and/or services for construction of an

immovable property whether to be used for personal

or business use.

(h) Goods and/or services where tax have been paid

under composition scheme.

(i) Goods and/or services used for personal use.

(j) Goods or services or both received by a non-resident

taxable person except for any of the goods imported

by him.

(k) Goods lost, stolen, destroyed, written off or disposed

of or distributed by way of gift or free samples.

(i) ITC will not be available in the case of any tax paid due

to non payment or short tax payment, excessive

refund or ITC utilized or availed by the reason of fraud

or willful misstatements or suppression of facts or

confiscation and seizure of goods.

IMMEDIATE COURSE OF ACTION :-

Since the time limit for correction in your ITC claim is very

short, you need to take immediate course of action for the

same. Some of important actions, you need to take are as

under :-

1) Download the Form GSTR-2A from the GST portal and

reconcile the ITC claimed by you and reported by your

supplier on your GSTN.

2) If there is any variance in both these figures, cross check

the same with the Tax Invoice available with you and then

report the difference to your supplier and ask him to

correct details in his GSTR-1 Form.

3) If no ITC of either of your purchases is appearing in

your GSTR-2A, then contact with the supplier, he might

not have filed his GSTR Returns or not updated sale to you

in the said returns.

4) Prepare a Reconciliation of ITC at your end. Prepare

separate sheets for unclaimed ITC and report the same to

in the next GST return to be filed for the month of August,

2018 or Sept, 2018, but not later than this date, since after

that, you will loose your option to claim the same.

5) Check whether necessary entries have been correctly

passed in your books of accounts and prepare

reconciliation of ITC available in the books as reported in

Electronic Credit Ledger on GST Portal.

6) Reverse the Input tax credit, if you have not made

payment to Vendors within 180 days from the date of

invoice. The said amount will have to be added to your

SPCM & ASSOCIATES


output tax liability and you will have to make payment

with interest. You may however restore the ITC in the

month, in which you make payments to your suppliers.

7) No depreciation is to be charged on GST portion on

inward supply of capital goods / services used for capital

assets, which is being claimed as ITC.

8) Proportionate ITC in respect of exempted supplies

made by the Taxpayer should be reversed as per

prescribed rules under GST.

9) Specially for Builders - If you have made any after

completion sales (Exempted Sales) during the period,

proportionate amount of ITC claimed earlier will have to

be reversed. If ITC is not available at the period ended 31st

March,2018, proportionate amount of ITC reversed will

be paid in cash.

10) If you have sold any capital, ITC claimed earlier on the

said asset should be reversed proportionally by

considering the life of asset as 60 months i.e. 5% of ITC per

month of life of asset will be eligible till the date of sale &

excess amount will have to be reversed.

11) Reversal of ITC should be done when goods are lost,

stolen, damages or distributed as free sample, used for

personal purpose, etc.

12) If you have taken ITC claim of either of the Blocked

Credit items, you will have to reverse the same and pay

the GST with interest.

In addition to the above actions as regards to ITC claim,

you must also check your outwards supply transactions,

recorded in the books of accounts and reported in GSTR-

3B return as well as GSTR-1 returns and make

reconciliation of the same, variance if any may also be

reported in the next GST Return or Annual Return as the

case may be.

CA. Chetan R. Parakh

SPCM & ASSOCIATES


EVERY DIRECTOR'S KYC COMPLIANCE | DIR-3-KYC

NOTIFICATION

MCA (Ministry of Corporate Affairs) vide Notification

dated 5thJuly, 2018 has amended Companies

(Appointment and Qualification of Directors) Rules, 2014

by inserting Rule 12A and made Directors KYC

mandatory which is effective from 10th July 2018.

WHO TO FILE

Every Director who has allotted DIN on or before 31st

March, 2018

DIN Status - Approved /Disqualified

LIST OF DETAILS /DOCUMENTS REQUIRED

1. Unique Mobile Number (OTP will be generated for

verification)

2. Unique Email Id (OTP will be generated for

verification)

3. Passport (Self Certified)

4. PAN Card copy of the concerned director (Self

Certified)

5. Aadhar Card copy (Self Certified)

6. Utility Bill (Self Certified)

7. Digital Signature of the concerned proposed director

CONSEQUENCES OF NON-FILING BEFORE

September 15, 2018

Attract penalty of Rs. 5,000/- after due date

DIN will be deactivated if not filed by reason stating

as" Non-filing of DIR-3 KYC”

COMMON CONCERNS

Even a person is not holding directorship in any

Company, such person also required to file DIR-3 KYC

every financial year on or before 30th April.

DIGITAL SIGNATURE CERTIFICATE

It is mandatory to affix DSC of Director on his e-form DIR-

3 KYC.

CS. Aditi S. JoshiCA. Manoj R. Jain

SPCM & ASSOCIATES


SERVING OF NOTICE UNDER VARIOUS TAX LAWS

In the recent landmark judgement by the Hon'ble Bombay

High Court, in the case of SBI Cards & Payments Services

Pvt. Ltd. v. Rohidas Jadhav.

Facts of the Case:

1. The respondent had been evading service of the

Notice under Order XXI Rule 22 of the Code of the

Civil Procedure, 1908.

2. He was served by an authorized officer of the

Claimant, by sending a PDF and a message to his

mobile number as a Whatsapp Message.

Judgement:

1. It was held by the Hon'ble Bombay High Court that

since the whatsapp indicators showed that not only the

message along with the attachment was delivered, but the

same were opened by the Respondent, the same would be

valid under Order XXI Rule 22, of the Civil Procedure

Code, 1908.

In light of the above Judgement of the Bombay High Court

apropos serving of the notice under CPC, following are

the various provisions under various tax laws apropos

serving of notice:

Provision

Section 282. Service of notice generally

(1) The service of a notice or summon or

requisition or order or any other

communication under this Act (hereafter in

this section referred

to as "communication") may be made by

delivering or transmitting a copy thereof,

to the person therein named,-

(a) by post or by such courier services as may

be approved by the Board; or

(b) in such manner as provided under the Code

of Civil Procedure, 1908 (5 of 1908) for the

purposes of service of summons; or

© in the form of any electronic record as

provided in Chapter IV of the Information

Technology Act, 2000 (21 of 2000); or

(d) by any other means of transmission of

documents as provided by rules made

by the Board in this behalf.

Whether Whatsapp Notice is

Eligible Mean of Serving of Notice

Following is the relevant extract of the

Section 12 of the Information

Technology Act, 2000:

“2(t) "electronic record" means data,

record or data generated, image or sound

stored, received or sent in an electronic

form or micro film or computer generated

micro fiche;”

“12. Acknowledgment of receipt.

(1) Where the originator has not agreed

with the addressee that the

acknowledgment of receipt of

electronic record be given in a

particular form or by a particular

method, an acknowledgment may

be given by—

(a) any communication by the addressee,

automated or otherwise; or

Statute

The Income

Tax Act, 1961

SR

No

1

SPCM & ASSOCIATES


Provision

(2) The Board may make rules70 providing for

the addresses (including the address for

electronic mail or electronic mail message)

to which the communication referred to in

sub-section (1) may be delivered or

transmitted to the person therein named.

Explanation - For the purposes of this section,

the expressions "electronic mail" and

"electronic mail message" shall have the

meanings as assigned to them in Explanation

to section 66A of the Information Technology

Act, 2000 (21 of 2000).



(b) any conduct of the addressee,

sufficient to indicate to the

originator that the electronic record

has been received.

(2) Where the originator has stipulated that

the electronic record shall be binding

only on receipt of an acknowledgment

of such electronic record by him, then

unless acknowledgment has been so

received, the electronic record shall be

deemed to have been never sent by the

originator.

(3) Where the originator has not

stipulated that the electronic record

shall be binding only on receipt of

such acknowledgment, and the

acknowledgment has not been

received by the originator within

the time specified or agreed or, if no

time has been specified or agreed to

within a reasonable time, then the

originator may give notice to the

addressee stating that no

acknowledgment has been received

by him and specifying a reasonable

time by which the acknowledgment

must be received by him and if no

acknowledgment is received within

the aforesaid time limit he may after

giving notice to the addressee, treat

the electronic record as though it

has never been sent.”

Section 2(t) and Section 12(1)(b) of the

Information Technology Act, 2000

makes it clear that notice or summons

served by means of Whatsapp under

Section 282 of the Income Tax Act, 1961

shall be valid.

StatuteSR

No

SPCM & ASSOCIATES


Provision

Section 153. Modes for service of notice, order,

etc.

(1) An order, decision, summons, notice or any

other communication under this Act or the rules

made thereunder may be served in any of the

following modes, namely :—

(a) by giving or tendering it directly to the

addressee or importer or exporter or his

customs broker or his authorised

representative including employee, advocate

or any other person or to any adult member

of his family residing with him;

(b) by a registered post or speed post or courier

with acknowledgement due, delivered to the

person for whom it is issued or to his

authorised representative, if any, at his last

known place of business or residence;

(c) by sending it to the e-mail address as

provided by the person to whom it is issued,

or to the e-mail address available in any

official correspondence of such person;

(d) by publishing it in a newspaper widely

circulated in the locality in which the person

to whom it is issued is last known to have

resided or carried on business; or

(e) by affixing it in some conspicuous place at

the last known place of business or residence

of the person to whom it is issued and if such

mode is not practicable for any reason, then,

by affixing a copy thereof on the notice board

of the office or uploading on the official

website, if any.

(2) Every order, decision, summons, notice or

any communication shall be deemed to have

been served on the date on which it is

tendered or published or a copy thereof is

affixed or uploaded in the manner provided

in sub-section (1).

(3) When such order, decision, summons, notice

or any communication is sent by registered

post or speed post, it shall be deemed to have

been received by the addressee at the expiry

of the period normally taken by such post in

transit unless the contrary is proved.



Since, Section 153(1) is limited to

e-mail apropos serving of notice vide

electronic means, serving of notice

vide Whatsapp shall not be a valid

mode of service of notice.

Statute

The Customs

Act, 1962

SR

No

2

SPCM & ASSOCIATES


Provision

Section 37C. Serving of decisions, orders,

summons, etc.

(1) Any decision or order passed or any summons

or notices issued under this Act or the rules made

thereunder, shall be served, -

(a) by tendering the decision, order, summons or

notice, or sending it by registered post with

acknowledgment due [or by speed post with

proof of delivery or by courier approved by the

Central Board of Excise and Customs constituted

under the Central Boards of Revenue Act, 1963

(54 of 1963)] to the person for whom it is

intended or his authorised agent, if any;

(b) if the decision, order, summons or notice

cannot be served in the manner provided in

clause (a), by affixing a copy thereof to some

conspicuous part of the factory or warehouse

or other place of business or usual place of

residence of the person for whom such

decision, order, summons or notice, as the

case may be, is intended;

(c) if the decision, order, summons or notice

cannot be served in the manner provided in

clauses (a) and (b), by affixing a copy thereof

on the notice board of the officer or authority

who or which passed such decision or order

or issued such summons or notice.

(2) Every decision or order passed or any

summons or notice issued under this Act or the

rules made thereunder, shall be deemed to have

been served on the date on which the decision,

order, summons or notice is tendered or

delivered by post [or courier referred to in sub-

section (1)] or a copy thereof is affixed in the

manner provided in sub-section (1).]

Section 37C of the Central Excise Act, 1944 vide

Section 83 of the Finance Act, 1994.



Since, Section 37C(1) of the Central

Excise Act, 1944 does not include

serving of notice vide electronic means;

service of notice vide Whatsapp shall

not be valid mode of service of notice.

Since, service of notice vide Whatsapp

is not a valid mode of service of notice

under Section 37C of the Central Excise

Act, 1944, the same shall be invalid for

issues apropos Service Tax.

Statute

The Central

Excise Act,

1944

Service Tax

SR

No

3

4

SPCM & ASSOCIATES


Provision

NA

Section 169. Service of notice in certain

circumstances

(1) Any decision, order, summons, notice or other

communication under this Act or the rules

made thereunder shall be served by any one

of the following methods, namely:—

(a) by giving or tendering it directly or by a

messenger including a courier to the

addressee or the taxable person or to his

manager or authorised representative or an

advocate or a tax practitioner holding

authority to appear in the proceedings on

behalf of the taxable person or to a person

regularly employed by him in connection

with the business, or to any adult member of

family residing with the taxable person; or

(b) by registered post or speed post or courier

with acknowledgment due, to the person for

whom it is intended or his authorised

representative, if any, at his last known place

of business or residence; or

(c) by sending a communication to his e-mail

address provided at the time of registration or

as amended from time to time; or

(d) by making it available on the common portal;

or

(e) by publication in a newspaper circulating in

the locality in which the taxable person or the

person to whom it is issued is last known to

have resided, carried on business or

personally worked for gain; or

(f) if none of the modes aforesaid is practicable,

by affixing it in some conspicuous place at his

last known place of business or residence and

if such mode is not practicable

for any reason, then by affixing a copy thereof on

the notice board of the office of the concerned

officer or authority who or which passed such

decision or order or issued such summons or

notice.



There is no provision apropos service

of notice in the Maharashtra Value

Added Tax Act, 2002

Since, Section 169 is limited to e-mail

apropos serving of notice vide

electronic means, serving of notice vide

Whatsapp shall not be a valid mode of

service of notice.

Statute

The

Maharashtra

Value Added

Tax Act, 2002

The Central

Goods and

Services Tax

Act, 2017

SR

No

5

6

SPCM & ASSOCIATES


Provision

(2) Every decision, order, summons, notice or any

communication shall be deemed to have been

served on the date on which it is tendered or

published or a copy thereof is affixed in the

manner provided in sub-section (1).

(3) When such decision, order, summons, notice

or any communication is sent by registered

post or speed post, it shall be deemed to have

been received by the addressee at the expiry

of the period normally taken by such post in

transit unless the contrary is proved.

Section 169 of the Central Goods and Services Tax

Act, 2017 vide Section 20 of the Integrated Goods

and Services Tax Act, 2017



Since, service of notice vide Whatsapp

is not a valid mode of service of notice

under Section 169 of the Central

Goods and Services Tax Act, 2017, the

same shall be invalid for issues

apropos IGST

Statute

The Integrated

Goods and

Services Tax

Act, 2017

SR

No

7

On perusal and analysis of the provisions under various

statutes apropos service of notice, it is observed that only

the Income Tax Act, 1961 shall have whatsapp as a valid

mode of service of notice. It is pertinent to note that service

of notice vide e-mails was included in the Customs Act,

1962 vide the Budget amendments for F.Y. 2018-19.

Further the recently enacted Goods and Service Tax Law

also restricts the use of electronic

means to e-mail as valid mode of

service.

Adv. Sanket S. Bora

SPCM & ASSOCIATES


1. S.28(iv): Profits chargeable to tax - preference share

capital received, could not be treated as income of

assessee under section 28(iv)

The assessee is a private limited company, engaged in the

business of trading in shares and securities, leasing out

property held as investment, etc. A search and seizure

action was carried out u/s. 132 of the Act, 1961 in JSW

group of cases on 16-03-2011. During the course of search,

the assessee gave declaration of income in a group of cases

as per which, an amount of � 8.75 crore towards write back

of preference shares has been offered as undisclosed

income in assessee's case. However, the assessee has not

offered the same, while filing return of income. In

assessment, assessee filed detail submissions, as per

which the assessee stated that the company has received

loan from M/s. South India House Investments Ltd.,

during the period 19-5-2003 to 30-5-2003 as subscription

money towards preference shares. The company has

allotted 87,50,000 2.5% redeemable non cumulative

preference shares of � 10 paid up each to the said

applicant. The said shares were alive and outstanding in

the books of VSPL on 16-03-2011 and compulsorily

redeemable prior to 1-6-2003. Owing to search action, to

buy peace and avoid litigation, the assessee has agreed for

disclosure of undisclosed income of � 8.75 crore by writing

off redeemable non cumulative preference shares in its

books of account. But facts remain that, such redeemable

preference shares cannot be redeemed before the specified

period, as per provisions of section 80 of Companies' Act,

1956. The assessee also stated that the said admission

during the course of search is of mistaken understanding

of facts, therefore, without any further evidence found

during the course of search, only on the basis of admission

of the assessee, a receipt in the nature of capital receipt

cannot be taxed u/s. 28(iv) of the Income-tax Act, 1961.

The AO observed that in principle, the assessee has

admitted sum of � 8.75 crores is no longer payable to M/s.

South India House Investments Ltd. There has been no

retraction by the assessee on this issue till date. Since the

amount is no longer payable, it was held that it is a benefit

directly arising out of business activity of the assessee and,

therefore, chargeable to tax u/s. 28(iv) of the Income-tax

Act, 1961.

The Ld.CIT(A), after considering relevant submissions of

the assessee and also relying upon the decision of Hon'ble

Bombay High Court in the case of Vodafone India

Services Ltd (WP) No. 871 of 2014 held that preference

share capital received in financial year 2003-04 is capital in

nature and cannot be taxed u/s. 28(iv) of the Income-tax

Act, 1961.

The Tribunal found that there is no mention in the entire

statement whether the statement was being given by Shri

Rao on behalf of the assessee company also. It has

nowhere been admitted that the aforesaid amount

represents undisclosed income of the assessee. In this

case, facts are identical to the case already considered by

the co-ordinate bench in the case of Nalwa Chrome Pvt

Ltd ITAT, H-Bench. The share capital receipt cannot be

taxed either u/s. 28(iv) or 41(1) of the Act. In the result,

appeal filed by the revenue was dismissed.

Dy. CIT vs. Vrindavan Services Pvt. Ltd., ITA No.

235/M/2015 dt.18/07/2018, AY 2011-12 (ITAT Mumbai)

2. S. 68 : Cash credits – Sale of shares–DMAT account

and contract note showed the credit details – facts,

CASE LAWS

SPCM & ASSOCIATES


transactions in shares were to be genuine

The assessee declared long term capital gains of � 42.22

lakhs arising on sale of 2,50,000 shares of M/s. Prraneta

Industries Ltd., and claimed the same as exempt u/s.

10(38) of the Act. The return of income was initially

accepted but later on the Assessing Officer reopened the

assessment by issuing notice u/s. 148 of the Act on 30-7-

2009 in order to verify the correctness of the claim of long

term capital gains referred above.

The AO noticed that the assessee had sold scrips of Kotak

Mahindra, NIIT Ltd. and Steel Authority of India Ltd. on

27-4-2004 through M/s. DPS Shares and Securities P. Ltd.

and the same has resulted in net gain of � 47,133/-. On 29-

4-2004, the assessee purchased � 25,000 shares of M/s.

Prraneta Industries Ltd. for an amount of � 47,040/-,

which was adjusted against the profit earned by the

assessee. The 25,000 shares were converted into 2,50,000

shares of � 1.00 each. The assessee sold all the shares and

earned long term capital gain of � 42.22 lakhs. The AO

conducted, enquiries in this regard. The inquiry made by

the Assessing Officer with Bombay Stock Exchange

revealed that sale of shares of Kotak Mahindra, NIIT Ltd.

on 27-4-2004 was genuine, but the BSE informed that there

was no trading on 29-4-2004 in the shares of M/s. Prraneta

Industries Limited. The Assessing Officer summoned the

assessee and also authorised representative of M/s. DPS

Shares and Securities P. Limited. A person named Mr.

Rajkumar Masalia, Senior Accountant of M/s. DPS Shares

and Securities P. Ltd., appeared before the Assessing

Officer and confessed that the bills for purchase and sale

of shares of M/s. Prraneta Industries Ltd. were not

genuine and further submitted that they were given to the

assessee for the purpose of providing accommodation

entry. However, the assessee maintained his stand that

the capital gains earned by him were genuine. The A.O.

accordingly, rejected the claim of long term capital gains

and assessed the same as income of the assessee. The

learned CIT(A) also confirmed the same.

When the matter reached the Tribunal, the assessee filed

an affidavit of Shri Pratik C. Shah, who was director of

M/s. DPS Shares and Securities P. Limited, the share

broker of the assessee. In the affidavit, the above said

director confirmed the genuineness of the transactions

entered by the assessee in the shares of M/s. Prraneta

Industries Limited. Hence, the ITAT restored the matter to

the file of the Assessing Officer for examining the claim of

the assessee afresh by duly considering the additional

evidences furnished by the assessee. In the set aside

proceedings, the Assessing Officer confirmed the addition

as same. The learned CIT(A) also confirmed the same.

In the second round the ITAT found that the assessee has

furnished copies of contract notes in support of the

purchase and sale of shares. He has also furnished copies

of demat account which shows entry and exit of shares.

The assessee has also received payment towards sale of

shares though it was received from two other persons on

behalf of DPS Shares and Securities P. Limited. The

assessee has proved the genuineness of purchase and sale

of shares of M/s. Prraneta Industries Ltd., and hence long

term capital gains arising on sale of above said shares

cannot be doubted with. The AO did not make inquiries

with regard to demat account furnished by the assessee

and also could not disprove the affidavit filed and

statement given by DPS Shares and Securities P. Limited.

Hence, decision rendered by Hon'ble Bombay High Court

in the case of Shyam R. Pawar ((2015) 229 Taxman 256,)

fully supports the case of the assessee. Accordingly, the

claim of long term capital gains of � 42.22 lakhs and allow

exemption u/s. 10(38) of the Act claimed by the assessee.

In the result, appeal filed by the assessee is allowed.

Jaymin Kiritbhai Sanghvi vs. ITO 18(1)(5), ITA No.

6070/M/2016 dated 18-07-2018, (ITAT Mumbai)

3. S. 43B : Deductions on actual payment - Claim not

made in the return [Ss. 139, 154]

The assessee is a company engaged in the business of

clearing and forwarding agent. The assessee filed return

of income on 20-09-2008 declaring total income of �

4,57,01,174/- and claimed credit for payment of aggregate

taxes to the tune of � 1,55,37,327/- out of which, inter-alia,

claim of credit of TDS was � 89,44,765/-. The AO issued

intimation u/s. 143(1) wherein the AO, inter-alia, granted

TDS credit of � 79,05,771/- as against claim of TDS credit

of � 89,44,765/- filed by the assessee in the return of

income filed with the Revenue.

Aggrieved by the grant of the short TDS credits allowed

by the AO in the intimation issued u/s. 143(1), the

assessee filed rectification application vide letter dated 24-

05-2013 u/s. 154 filed with the AO, inter-alia, for

correcting mistake w.r.t. short credit of grant of TDS

SPCM & ASSOCIATES


wherein credit allowed stood at � 79,05,771/- as against

the claim for TDS credit of � 89,44,765/- filed by the

assessee in its return of income. During the course of

aforesaid proceedings conducted by the AO u/s. 154, the

assessee vide one letter dated 2-7-2013 filed with the AO

filed additional claim for grant of TDS credit of �

9,93,555/- for the first time which was not earlier claimed

by the assessee in the return of income filed with the

Revenue.

The assessee, however, submitted that the assessee

offered corresponding income for taxation to the said TDS

of � 9,93,555/- in the return of income filed with the

Revenue but the income-tax deducted at source on the

said income by the persons responsible for making

payments deposited the said income-tax late to the credit

of Central Government and consequentially the TDS

certificates were also issued late by the said deductors to

the assessee which is the main reason for the non claim of

the credit of TDS earlier by the assessee in the return of

income filed with Revenue and the assessee cannot be

held responsible for such delay in filing of the claim as no

fault lies with assessee and hence the assessee cannot be

penalised for the same.

The Tribunal found that the assessee has raised this claim

in the proceedings which were conducted by the AO u/s.

154 otherwise than by filing revised return of income u/s

139(5). If the AO could not have taken cognisance of the

fresh claim filed by the assessee which was not filed by

filing revised return of income u/s. 139(5), the learned

CIT(A) being appellate authority could have always

admitted the said fresh claim and thereafter adjudicated

the same on merits. Hon'ble Bombay High Court decision

in the case of CIT vs. Pruthvi Brokers & Shareholders

reported in (2012) 349 ITR 336(Bom) is relevant and

binding being jurisdictional High Court. Thus, the

assessee could not be denied the said claim of credit of

TDS to the tune of � 9,93,555/- but however for limited

purposes for verification of contentions raised by the

assessee, matter was restored to the file of the AO for

necessary verification of the TDS certificates filed by the

assessee purported to be received from Elecon

Engineering Co. P. Ltd. and Prayas Engineering Ltd. as to

the credit of taxes to Central Government and also for

verification of offering of the corresponding income by the

assessee to taxation in the return of income filed u/s.

139(1) on 20-09-2008, before allowing credit for said TDS

amount of � 9,93,555/-. Accordingly appeal of the assessee

is allowed.

Express Global Logistics Pvt. Ltd. vs. ACIT, ITA No.

1194/M/2017 dated 11/07/2018, AY 2008-09 (ITAT

Mumbai)

Deepali R. Shah

SPCM & ASSOCIATES


NOTES

CTS NO. 6616, Plot No 491, 5th Floor, Center Point, Mitra Mandal Chowk

Next to Balasaheb Thackrey Hospital, Parvati, Pune – 411 009

Landline No – 020 67447171 www.spcm.in [email protected]| |

THANK YOU

Team in Samācāra

Suhas Bora, Pradip Katariya, Sanket Bora, Kunal Bora, Shivani Kumari

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Samācāra › wp-content › uploads › 2018 › 09 › SPCM-Samāc... · 2018-09-17 · personal Income Tax Assesses by 44.1% and in the Corporate Tax category by 17.4%. The Income