Accumulated VAT Liability Ledger Accounting
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Penalty u/s. 270A - under reporting of income by not reducing the insurance claim received by the assessee from the block of assets which has in fact resulted in excess claim of depreciation- ITAT MUMBAI, DCIT-15 (3) (2) , MUMBAI VERSUS M/S. SASAN POWER LTD. AND (VICE-VERSA)-No.- ITA No. 1923/Mum/2023 And CO No. 95/Mum/2023 (Arising out of ITA No. 1923/Mum/2023) Dated.- December 22, 2023 FACTS -The assessee while computing the income from business had reduced the amount of profit on disposal of assets of Rs. 4,62,00,000/- as being fixed asset and while computing the depreciation it had erroneously not reduced the amount of insurance claim received from the block of assets, thereby claiming higher depreciation on fixed assets. It is observed that the company had then filed revised working of deprecation during the assessment proceeding after duly reducing the claim of insurance from the block of assets where the reduced claim of depreciation was worked out at Rs. 3,17,94,645/-. The ld. A.O. disallowed the excess claim of depreciation on fixed assets amounting to Rs. 3,17,94,645/- and determined the total income at Rs. (- )1252,37,71,789/- and book profit u/s. 115JB at Rs. (-)95,37,05,064/- and added the same to the total income of the assessee. The ld. A.O. also initiated penalty proceedings u/s. 270A of the Act for under reporting of income. The ld. A.O. then passed the penalty order dated 10.01.2022 u/s. 270A of the Act determining the penalty amount to be Rs. 52,56,132/- being 50% of the amount of tax on the under reported income amounting to Rs. 3,17,94,645/-.Aggrieved the assessee was in appeal before the ld. CIT(A) who vide order dated 31.03.2023 deleted the impugned penalty for the reason that the assessee’s claim of excess depreciation was a bona fide mistake and that there was no mens rea on the part of the assessee to suppress any material fact for the purpose of avoiding tax. The ld. CIT(A) relied on the decision of the Hon'ble Apex Court in the case of CIT vs. Reliance Petro Product Ltd. 322 ITR 158 (SC). HELD-The assessee has relied on various other decisions which have reiterated the proposition that the claim of higher depreciation would not amount to concealment of income. It is also observed that the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Somany Evergreen Knits Ltd. [2013] 35 taxmann.com 529 (Bom) has held that excess claim of depreciation was a bona fide mistake on the part of the assessee which attracts no levy of penalty. 13. By respectfully following the above said decision, we deem it fit to hold that there is no infirmity in the order of the ld. CIT(A) in deleting the penalty levied by the ld. A.O.
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I have found that HMRC have increasingly been issuing personal liability notices for VAT penalties ✉. This power causes the individual to face joint and several liability for a penalty attributable to the company where: 👉 A company officer has intentionally failed to declare the correct amount of VAT; and 👉 The company goes into liquidation, or it can be found that the officer attempted to gain personally from the action. As a whole I believe it is a power for good as it prevents individuals from simply liquidating the company and never being held accountable for the errors. However, the legislation does incentivise HMRC to look for fraudulent behaviour where there may actually be none. I have found that directors in some instances can find themselves stuck in stressful and frustrating enquiries, where their company goes into liquidation due to the unexpected VAT liability, and then to add further pain, their house and all their personal possessions are being put on the line. In one such enquiry I worked on, HMRC had not even asked why the errors occurred but had become so entrenched in their position that, despite this, they raised deliberate penalties and personal liability notices! I have found the key in respect of HMRC VAT enquiries is to get an experienced tax disputes specialist onboard as early as possible into the investigation to manage the correspondence and avoid falling into similar issues. 💡 If you or your clients are facing similar issues and would like to have a chat about strategy or how our team at Grant Thornton could help, please do not hesitate to get in touch.📞 💻 #VATPenalties #PersonalLiabilityNotices #TaxCompliance #TaxServices #TaxProfessionals #TaxLaw #TaxRegulations #Taxpayer #HMRC #TaxLiabilities #TaxPayersRights #TaxPayersObligations #TaxAdvisor #TaxConsultant #GrantThornton
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Excellent piece from David regarding personal liability notices for VAT penalties. Please don't hesitate to get in touch with David, one of the team or I if you or your client is impacted. #taxdisputes #VAT #personalliabilitynotices #hmrc
I have found that HMRC have increasingly been issuing personal liability notices for VAT penalties ✉. This power causes the individual to face joint and several liability for a penalty attributable to the company where: 👉 A company officer has intentionally failed to declare the correct amount of VAT; and 👉 The company goes into liquidation, or it can be found that the officer attempted to gain personally from the action. As a whole I believe it is a power for good as it prevents individuals from simply liquidating the company and never being held accountable for the errors. However, the legislation does incentivise HMRC to look for fraudulent behaviour where there may actually be none. I have found that directors in some instances can find themselves stuck in stressful and frustrating enquiries, where their company goes into liquidation due to the unexpected VAT liability, and then to add further pain, their house and all their personal possessions are being put on the line. In one such enquiry I worked on, HMRC had not even asked why the errors occurred but had become so entrenched in their position that, despite this, they raised deliberate penalties and personal liability notices! I have found the key in respect of HMRC VAT enquiries is to get an experienced tax disputes specialist onboard as early as possible into the investigation to manage the correspondence and avoid falling into similar issues. 💡 If you or your clients are facing similar issues and would like to have a chat about strategy or how our team at Grant Thornton could help, please do not hesitate to get in touch.📞 💻 #VATPenalties #PersonalLiabilityNotices #TaxCompliance #TaxServices #TaxProfessionals #TaxLaw #TaxRegulations #Taxpayer #HMRC #TaxLiabilities #TaxPayersRights #TaxPayersObligations #TaxAdvisor #TaxConsultant #GrantThornton
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Given the substantial increase in the ATO issuing them, I have done a few presentations on ATO Director Penalty Notices (#DNP) over the last few months (at the #ARITA National Conference in April and with Paul McQuade KC and Scott Guthrie on 12 June). A good summary of how the director penalty regime works is set out in an article I wrote a few years back and recently updated - https://lnkd.in/dDs65WUP. The DPNs the ATO are issuing are mainly for old Superannuation Guarantee Charge (#SGC) debts, often going back many years. I am acting for a number of directors who have received these old SGC related DPNs. Receipt of the DPN is often the first time that the director became aware that they allegedly had such a penalty, even though their company was placed into administration or liquidation many years ago, and the directors have moved on with their lives. A very concerning issue I have seen on two such DPNs is that the due date for lodgement of a SGC statement and payment of the SGC by the company is after the company was placed into administration or liquidation. That means no director penalty can arise in relation to the unpaid SGC. So the DPNs are being issued for penalties that do not exist. The ATO is not checking before issuing these DPNs to see when, and if, the company was placed into administration or liquidation (despite the ATO being a creditor who proved in the administration or liquidation). Directors are being subject to unnecessary distress when they receive these incorrect DPNs. Directors are also forced to foot the legal bill to get advice on their validity, something they should not have to do. #insolvency #directorpenalty
Liability of directors and associates for company tax obligations
https://hallandwilcox.com.au
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Founder of Brain Tax Consultancy Pvt. Ltd. II GST Consultant II Practicing Chartered Accountant II JAIPUR II DAUSA II MUMBAI II MEHSANA II MOHALI II SAWAIMADHOPUR ll DM-8619575031
*Following Circulars issued on Dated 26 June 2024* 207/01/2024-GST- *Reduction of Government Litigation – fixing monetary limits for filing appeals or applications by the Department before GSTAT, High Courts and Supreme Court* 208/02/2024-GST- *Clarifications on various issues pertaining to special procedure for the manufacturers of the specified commodities.* 209/03/2024-GST- *Clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 relating to place of supply* 210/04/2024-GST- *Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit.* 211/05/2024-GST- *Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies received from unregistered persons.* 212/06/2024-GST- *Clarification on mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers* 213/07/2024-GST- *Seeking clarity on taxability of re-imbursement of securities/shares as SOP/ESPP/RSU provided by a company to its employees.* 214/08/2024-GST- *Clarification on the requirement of reversal of input tax credit in respect of the portion of the premium for life insurance policies which is not included in taxable value* 215/09/2024-GST- *Clarification on taxability of wreck and salvage values in motor insurance claims.* 216/10/2024-GST- *Clarification in respect of GST liability and input tax credit (ITC) availability in cases involving Warranty/ Extended Warranty, in furtherance to Circular No. 195/07/2023-GST dated 17.07.2023* 217/11/2024-GST- *Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor vehicles in case of reimbursement mode of insurance claim settlement.* 218/12/2024-GST- *Clarification regarding taxability of the transaction of providing loan by an overseas affiliate to its Indian affiliate or by a person to a related person.* 219/13/2024-GST- *Clarification on availability of input tax credit on ducts and manholes used in network of optical fiber cables (OFCs) in terms of section 17(5) of the CGST Act, 2017* 220/14/2024-GST- *Clarification on place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors* 221/15/2024-GST- *Time of supply on Annuity Payments under HAM Projects* 222/16/2024-GST- *Time of supply in respect of supply of allotment of Spectrum to Telecom companies in cases where an option is given to the Telecom Companies for payment of licence fee and Spectrum usage charges in instalments in addition to an option of upfront payment.*
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DID YOU KNOW? 📣 If you are about to be appointed as a Director of an established company, you could be liable for historical company debts owing to the ATO, including the unpaid and unreported PAYG, GST and SGC. A newly appointed Director who realises their company has historical debts to the ATO must, within 30 days of their appointment, ensure that the company either: pays the relevant debts; appoints an administrator or small business restructuring practitioner; or commences a winding up process. If the above actions are not taken, the company can face Director Penalty Notices and lockdown liability. So, if you are thinking about accepting appointment as a director of an established company, you should consider the company's lodgement history and ensure the company has actively dealt with its tax debts. For individual advice, please get in touch with our Aintree Group Legal team. Learn more here: https://lnkd.in/gDsziZ-R
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New Post: Introduction of RCM Liability/ITC Statement - To assist taxpayers in correctly reporting Reverse Charge Mechanism (RCM) transactions, a new statement called "RCM Liability/ITC Statement" has been introduced on the GST Portal. Read more: https://lnkd.in/gqs3UtQx Taxontips
Introduction of RCM Liability/ITC Statement
https://www.taxontips.com
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Hi everyone, Hope you're doing well 😊. Following Circulars issued on Dated 26 June 2024 207/01/2024-GST- Reduction of Government Litigation – fixing monetary limits for filing appeals or applications by the Department before GSTAT, High Courts and Supreme Court 208/02/2024-GST- Clarifications on various issues pertaining to special procedure for the manufacturers of the specified commodities. 209/03/2024-GST- Clarification on the provisions of clause (ca) of Section 10(1) of the Integrated Goods and Service Tax Act, 2017 relating to place of supply 210/04/2024-GST- Clarification on valuation of supply of import of services by a related person where recipient is eligible to full input tax credit. 211/05/2024-GST- Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies received from unregistered persons. 212/06/2024-GST- Clarification on mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the CGST Act, 2017 by the suppliers 213/07/2024-GST- Seeking clarity on taxability of re-imbursement of securities/shares as SOP/ESPP/RSU provided by a company to its employees. 214/08/2024-GST- Clarification on the requirement of reversal of input tax credit in respect of the portion of the premium for life insurance policies which is not included in taxable value 215/09/2024-GST- Clarification on taxability of wreck and salvage values in motor insurance claims. 216/10/2024-GST- Clarification in respect of GST liability and input tax credit (ITC) availability in cases involving Warranty/ Extended Warranty, in furtherance to Circular No. 195/07/2023-GST dated 17.07.2023 217/11/2024-GST- Entitlement of ITC by the insurance companies on the expenses incurred for repair of motor vehicles in case of reimbursement mode of insurance claim settlement. 218/12/2024-GST- Clarification regarding taxability of the transaction of providing loan by an overseas affiliate to its Indian affiliate or by a person to a related person. 219/13/2024-GST- Clarification on availability of input tax credit on ducts and manholes used in network of optical fiber cables (OFCs) in terms of section 17(5) of the CGST Act, 2017 220/14/2024-GST- Clarification on place of supply applicable for custodial services provided by banks to Foreign Portfolio Investors 221/15/2024-GST- Time of supply on Annuity Payments under HAM Projects 222/16/2024-GST- Time of supply in respect of supply of allotment of Spectrum to Telecom companies in cases where an option is given to the Telecom Companies for payment of licence fee and Spectrum usage charges in instalments in addition to an option of upfront payment. #gst #gstknowledge #gstupdates #gstnews #professional
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