Tax Weekly Round-Up: July 28 - August 03, 2025
LIVELAW NEWS NETWORK
4 Aug 2025 6:00 PM IST
HIGH COURTSAllahabad HCBurden To Prove That Best Assessment By Income Tax Authorities Is Perverse Is On Assesee: Allahabad High CourtCase Title: M/S Rai Wines Ras Bahar Colony v. The Commisssioner Of Income TaxCase no.: INCOME TAX APPEAL No. - 395 of 2007The Allahabad High Court has held that the burden to prove that the findings of best assessment done by the authorities is perverse is on...
HIGH COURTS
Allahabad HC
Case Title: M/S Rai Wines Ras Bahar Colony v. The Commisssioner Of Income Tax
Case no.: INCOME TAX APPEAL No. - 395 of 2007
The Allahabad High Court has held that the burden to prove that the findings of best assessment done by the authorities is perverse is on the assesee.
The bench of Justice Shekhar B. Saraf and Justice Praveen Kumar Giri held that “when a best assessment is done, it is for the assessee to bring on record the facts that may reveal that the findings are perverse in nature.”
Bombay HC
Case Title: Krishnagopal B. Nangpal v. Dy. Commissioner of Income Tax Special Range – 3, Pune
Case Number: INCOME TAX APPEAL NO. 569 OF 2003
The Bombay High Court held that sale proceeds of one residential house, used for purchase of multiple residential houses, would qualify for exemption under Section 54(1) of the Income Tax Act.
The issue before the bench was whether Section 54(1) of the Income Tax Act allows the Assessee to set off the purchase cost of more than one residential units against the capital gains earned from sale of a single residential house.
Calcutta HC
Case Title: Principal Commissioner of Income Tax - 2, Kolkata v. Minto Park Estates Private Limited
Case Number: ITAT/4/2025 (IA NO: GA/2/2025)
The Calcutta High Court held that mere incorporation of investing companies under the Companies Act is not enough to prove the genuineness of share transactions.
The bench opined that, admittedly, the shares were by way of a private placement. Though the investing companies might have been incorporated under the provisions of the Company's Act, that by itself will not validate the transaction.
Case Title: Principal Commissioner of Income Tax Central - 2, Kolkata v. M/s. Zulu Merchandise Private Limited
Case Number: ITAT/88/2025 (IA NO: GA/2/2025)
The Calcutta High Court held that stock exchange and banking channels cannot mask sham transactions carried out through bogus capital loss claim companies.
Justices T.S. Sivagnanam and Chaitali Chatterjee (Das) observed that “the entire information contained in the investigation report was apprised to the assessee by the assessing officer and thereafter the show cause notices was issued for which the assessee' submitted their reply and in the reply they did not raise any issue that they were unaware about the investigation report but made a vague and unsubstantiated statement stating that the transaction was in the normal course of business.”
Delhi HC
Case title: Puneet Batra v. Union of India
Case no.: W.P.(C) 11021/2025
The Delhi High Court has pulled up the GST Department for harassing a tax lawyer, by raiding his offices and seizing his files and electronic gadgets, in connection with alleged GST evasion by one of his clients.
A division bench of Justices Prathiba M. Singh and Shail Jain observed that unless the Department has some material to indicate the lawyer's involvement in alleged tax evasion, it cannot take such steps against him.
Jammu & Kashmir & Ladakh HC
Case-Title: Commissioner State Taxes and anr. Vs M/s Reliance Jio Infocomm Limited, 2025
The Jammu & Kashmir and Ladakh High Court has ruled that the penalty under the Central Sales Tax Act cannot be imposed by invoking provisions of the State Act in the absence of an express charging section. The Court held that the Central Act is a “self-contained code” and provides its own framework for imposition of penalties, which cannot be supplemented by state laws.
A bench headed by Justice Sanjeev Kumar, Justice Sanjay Parihar dismissed the petition challenging the absence of a penalty under Section 6 of the J&K Entry Tax Act, 2000, and underscored the constitutional mandate under Article 265 of the Constitution, which provides that no tax shall be levied or collected except by authority of law.
Kerala HC
Case Title: S.P. Faizal v. State of Kerala
Case Number: ICR (OT.REV) NO. 3 OF 2025
The Kerala High Court, overruling its earlier decision in C.P. Rasheed v. State of Kerala, has held that input tax credit can be availed under the Kerala Value Added Tax Act, 2003 if the purchaser has genuine tax invoices even if the seller fails to remit tax.
The bench opined that “the input tax credit can be legitimately availed by the purchasing dealer under the Kerala Value Added Tax Act, 2003, even in cases where the selling dealer failed to remit the tax due to the government, provided that the purchasing dealer has strictly complied with all statutory requirements including possession of genuine tax invoices as required under the statute.”
TRIBUNALS
Case Title: M/s. Raipur Development Authority v. Commissioner of Customs, Central Excise and Service Tax, Raipur
Case Number: Service Tax Appeal No. 53203 of 2015
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that leasing out land for 90 years against one-time payment constitutes transfer of immovable property, exempt from service tax.
Dr. Rachna Gupta (Judicial) and P.V. Subba Rao (Technical Member) were addressing the issue of whether the act of transferring the land on lease for a period of 90 years against the one-time premium giving all rights of use, possession and even sale to the developer amounts to fall under the definition of service or under the definition of renting of immovable property.
Goods Used As Implants Or Rehabilitation Aids Are Eligible For Customs Duty Exemption: CESTAT
Case Title: Smith & Nephew Healthcare Private Limited v. Commissioner of Customs (Import)
Case Number: CUSTOMS APPEAL No. 87524 of 2024
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that goods used as implants or rehabilitation aids are eligible for Customs Duty exemption.
S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) observed that “since, the implants such as repair of knee, hip and other joints, shoulder and various other parts of the body; repair of soft tissue injuries and degenerative conditions of the shoulder etc., are in the nature of instruments/implants described in item (B)(1), the impugned goods are also specifically covered under the List-30 and List-3 of the notifications No. 50/2017-Customs and No.01/2017-Integrated Tax (Rate).”
No Excise Duty On Manufacture Of Drip Irrigation System And Its Component Parts: CESTAT
Case Title: Jain Irrigation Systems Limited v. Commissioner of Central Excise & Customs
Case Number: EXCISE APPEAL No. 137 of 2007
The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that no excise duty on manufacture of drip irrigation system and its component parts.
S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) observed that the impugned goods viz., polytubes, microtubes, HDPE pipes were used for Drip irrigation systems, the appropriate classification in terms of the CBEC circular dated 16.03.1998 would be under sub-heading no. 8424.91, and not under chapter heading no. 39.17
Service Tax Not Leviable On Repairs Of School Building Run By Military Engineering Services: CESTAT
Case Title: M/s Chaitanya Constructions v. Commissioner of Central Excise & Service Tax, Visakhapatnam - I
Case Number: Service Tax Appeal No. 3572 of 2012
The Hyderabad Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that service tax not leviable on repairs of school building run by military engineering services.
Angad Prasad (Judicial Member) and A.K. Jyotishi (Technical Member) opined that the services rendered to Military Engineering Services (MES) was in relation to Sainik School run by them and such building cannot be used for commerce and hence repairs of such building are beyond the scope of service tax.
Service Tax Not Leviable On Cricket Association Clubs's Services To Its Members: CESTAT
Case Title: M/s. Karnataka State Cricket Association v. Commissioner of Service Tax, Bangalore North
Case Number: Service Tax Appeal No. 25437 of 2013
The Bangalore Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) stated that service tax is not leviable on cricket association club services to its members, and further allowed Cenvat Credit on the LED score board.
Dr. D.M. Misra (Judicial Member) and R Bhagya Devi (Technical Member) stated that the Commissioner's finding that the said LED score board has no nexus with the taxable service provided viz. Mandap Keeper service and other services is also devoid of merit. Therefore, denial of cenvat credit on LED score board cannot be sustained.
Case Title: M/s Play House Motion Pictures Private Limited v. The Commissioner of Central Excise, Customs and Service Tax
Case Number: Service Tax Appeal No. 20876 of 2016
The Bangalore Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that service tax can't be levied on transfer or assignment of copyright of film produced under copyright service.
P.A. Augustian (Judicial Member) and R. Bhagya Devi (Technical Member) were addressing the issue of whether service tax can be levied on exhibition of films under the category of Business Auxiliary Service (BAS) or demand can be confirmed against transfer or assignment of copyright of the film produced by assessee under Copyright Service.
Case Title: M/s. Onmobile Global Ltd. v. The Commissioner of Central Excise and Central Tax
Case Number: Service Tax Appeal No. 20430 of 2021
The New Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has stated that mobile value-added services to telephone service providers classified as online information database access and retrieval services (OIDAR), service tax applicable.
Dr. D.M. Misra (Judicial Member) and R. Bhagya Devi (Technical Member) were addressing the issue of whether the Mobile Value-Added Services rendered by the assessee can be classified as 'Online Information Database Access and Retrieval Services' (OIDAR) as claimed by the Revenue or are they classifiable as 'Information Technology Software Services' (ITSS) as claimed by the assessee.