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Dear Reader,
Greetings for the day!!!
We are pleased to share the recent Tax notification and circulars.
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Direct Tax
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SLP dismissed, upholding 6% disallowance on alleged bogus purchases obtained through
non-genuine bills & holding only embedded profit element taxable (PCIT1 v. Prathana Gems)
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SC upheld, assessee failed to disclose material terms of AOP arrangement & survey findings
justified escaped income. 35% share of gross sales(fixed contractual business receipt)
taxable as income, not exempt as share profit (Sanand Properties (P.) Ltd. v. JCIT)
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SLP dismissed, upholding deletion of additions of unaccounted sales (based on estimated
production yield) as rejection of books without adverse material held invalid (DCIT v.
Mahamaya Steel Industries Ltd)
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SLP dismissed, upholding that no TCS u/s 206C(1C) on compounding fees/fines(excluded from
royalty) recovered from illegal miners & transporters of minerals, as no legislative mandate
to do so (DCIT(TDS) v. District Mining Officer Dantewada)
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SLP dismissed, upholding deletion of addition u/s 68 as LTCG exemption u/s 10(38) could not be denied merely on allegations of bogus penny stock transactions when complete evidence furnished & no adverse evidence (PCIT v. Sanjaykumar Damjibhai Gangani)
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Goods And Services Tax
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E-Way Bill Threshold Reduced in West Bengal
The Government of West Bengal, through the Directorate of Commercial Taxes, has issued Notification No. 02/2026-C.T./GST dated 22 May 2026, introducing a mandatory e-Way Bill requirement for the intra-state movement of goods except Job work within West Bengal where the consignment value exceeds ₹50,000. Issued under Rule 138(14) of the West Bengal Goods and Services Tax Rules, 2017, the notification supersedes Notification
No. 03/2023-C.T./GST dated 18 December 2023. The requirement applies to goods originating and terminating within the state, except for intra-state movements related to job work as defined under Section 2(68) of the CGST/WBGST Act, 2017. The notification will come into force on 1 June 2026, and businesses operating in West Bengal are advised to review and align their transportation and GST compliance procedures to ensure adherence to the revised e-Way Bill provisions.
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Supreme Court Upholds Constitutional Validity of GST on Online Gaming and Skill-Based Games Played for Stakes
The Hon’ble Supreme Court, in Directorate General of GST Intelligence Headquarters v. Gameskraft Technologies Private Limited (judgment dated 28 May 2026), upheld the constitutional validity of levying GST on organised online gaming activities involving monetary stakes. The Court held that for GST purposes, the decisive factor is the presence of money stakes on uncertain future outcomes rather than whether the underlying game is one of skill or chance. Accordingly, online skill-based games such as rummy, poker and fantasy sports, when played for stakes, fall within the scope of “betting and gambling” and give rise to actionable claims constituting taxable supplies under the CGST Act. The Court further affirmed that gaming operators are suppliers of such actionable claims and that amounts staked by players form part of the taxable consideration. Upholding the statutory framework and valuation mechanism, the judgment validates the GST regime applicable to online gaming and is expected to have significant implications for pending disputes and the taxation of the online gaming industry.
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