Service Tax - 2008 - TMI - 30274 - CESTAT, NEW DELHI
Appeal dismissed by commissioner as time barred - contention of the appellants is that the adjudication order was received by them on 15.12.2005 and appeal was filed within the normal period of limitation - Contention of the Revenue is that the adjudication order was passed on 23.2.2005 and Order-in-Original was received by the appellants prior to 15.12.2005 - appeal has been filed after the period of limitation condonable by the Commissioner (Appeals), so it is time barred

Service Tax - 2008 - TMI - 30273 - CESTAT, NEW DELHI
Courier service - quantification of demand – appellants plea that unrelied documents/hard disc (seized by the Revenue) have not been returned to them, so they could not defend their case - appellants have already paid the amount of service tax as per adjudication order - matter requires reconsideration in respect of pleas of the appellants regarding deposits made in the bank which are not related to service provided by them – dept is directed to return unrelied documents – case is remanded

Service Tax - 2008 - TMI - 30272 - CESTAT MUMBAI
Appellant discharged Service Tax liability on the services received from goods transport agency for the period January 2005 to February 2006 through Cenvat credit account instead of paying it by TR 6 challan – as per Explanation to Rule 2(p) of CCR, impugned services are deemed to be output services – hence as per Rule 3(4), payment of tax by way of credit is correct – demand not sustainable – impugned order is set aside - appeal is allowed

Service Tax - 2008 - TMI - 30271 - CESTAT AHMEDABAD
Notification no. 5/2006 - Use of input services for manufacturing the goods for export – unutilized credit - whether refund (of input service credit) in cash has to be allowed in terms of Rule 5 or not - whether manufacturers were eligible for refund prior to 14.3.2006 or not – Held, yes - matter remanded to the original Adjudicating Authority to take a decision in terms of the notification after examining all aspects

Service Tax - 2008 - TMI - 30248 - CESTAT, NEW DELHI
Demand of service tax on the appellant in the capacity of service receiver in respect of services rendered by Goods Transport Operator (GTOs) during the period 16.11.1997 to 01.06.1998 – impugned demand is covered in the scope of validating provisions of Finance Act, 2000 and the Finance Act, 2003 and section 71A of the Act so it is not maintainable - penalties imposed will not survive in absence of demand – subsequently there is no question of any interest under Section 75

Service Tax - 2008 - TMI - 30247 - CESTAT, NEW DELHI
Demand - cable operator - appellants admitted that they have started MSO (Multi System operator) operation in December, 2004. Therefore, inclusion of amount (received during the year 2004-05) in question in the assessable value is rightly made - As turn-over of the appellants for the year in dispute, is more than 4 lac the benefit of not. 6/2005 is rightly denied - appellants have not paid service tax on due date, therefore, penalty is rightly imposed

Service Tax - 2008 - TMI - 30246 - CESTAT MUMBAI
Jetty’ facilities, barges, floating cranes and tugging facilities for transporting, loading, unloading and movement of goods at jetty - income received as rent charges by the appellant, by hiring out the barges, floating cranes and tugging facilities, would not get covered under the category of the “port services”

Service Tax - 2008 - TMI - 30244 - SUPREME COURT
Effect of retrospective validation of service tax on GTA services for the period prior to 1-6-1998 - the amended Section 73 covers the case of assesses who are liable to file return under Section 70. In respect of GTA, the liability to file return was cast on the appellant’s u/s 71A. The class of persons who come under Section 71A is not brought under the net of Section 73. Therefore, the show cause notices issued u/s 73 are not maintainable - Revenue appeal dismissed

Service Tax - 2008 - TMI - 30216 - CESTAT NEW DELHI
Availability of credit of manufacturing activity for utilization towards payment of Service Tax on Goods Transport Agency service - GTA Service so received by the appellants would have been covered under definition of “input service” u/r 2(p) CCR, so it shall be deemed to be “output service” - therefore, they were entitled to utilize credit of the tax paid on the input GTA service (availed by them in connection with receipt of inputs into their factory), for payment of tax on such service

Service Tax - 2008 - TMI - 30215 - CESTAT, NEW DELHI
Demand & penalty - Man Power Recruitment Agency Services - appellant is not a commercial concern but an individual and only providing labour - appellant comes under the scope of Service Tax only w.e.f. 16.6.05 when the “person” has been substituted in stead of commercial concern, therefore, there is no question of late filing of returns prior to this date - issue of late filing of returns for the period prior to this date requires reconsideration, so matter is remanded

Service Tax - 2008 - TMI - 30214 - CESTAT, NEW DELHI
Commissioner (Appeals) rejected the portion of refund claim of Service Tax paid prior to 1.4.05, as time-barred as the last payment of Service Tax has been made in July 2005 - refund claim was filed on 18.9.06 in respect of the tax paid prior to July 2005 - no merit in assessee’s appeal, the same is dismissed – refund is time barred

Service Tax - 2008 - TMI - 30213 - SUPREME COURT
Levy of tax on sale of DEPB licence - REP licences – appellant contention that DEPB is different from REP, so even if sale of REP is taxable, we can’t say that sale of DEPB is also taxable, is not acceptable - held that DEPB has an intrinsic value that makes it a market commodity - Therefore, DEPB, like REP licence qualifies as `goods' and its sale is eligible to tax - lottery tickets are included in definition of ‘goods’ and, hence, the sale of lottery tickets are subject to sales tax

Service Tax - 2008 - TMI - 30212 - CESTAT BANGLORE
Security Services - Demand confirmed by invoking larger period on the allegation of suppression of facts - appellants had assessed the service tax on their own and voluntarily paid the same from January 2005 onwards - assessee did not have any intention to evade payment of tax as they have followed the procedure laid down in the Income Tax returns – SCN dated 17.02.2006 for the period from 1.4.1999 to 31.03.2003 – Demand is time barred – impugned order is set aside

Service Tax - 2008 - TMI - 30211 - CESTAT MUMBAI
Repairs of empty containers - SCN issued on ground that sub-contractors are not required to pay any service tax and accordingly the credit taken by them (contractor) was incorrect - once the service tax has been paid by the supplier, the availability of credit at the receiver’s end cannot be questioned as long as payment of service tax is established and accordingly the credit also cannot be denied – appeal of assessee is allowed

Service Tax - 2008 - TMI - 30186 - CESTAT, CHENNAI
Goods Transport Operators Service (GTO service) availed during the period from 16.11.1997 to 1.6.1998 – demand u/s 73 & penalty for nonpayment of tax - held that a person receiving taxable service from GTO/C&F Agent was not covered by provisions of Sec. 70 & 73 - class of persons who come under Section 71A is not brought under the net of Section 73 - SCN issued to the appellants invoking Section 73 are not maintainable

Service Tax - 2008 - TMI - 30185 - CESTAT CHENNAI
Adjournment of case - More than 3 adjournments have already been taken by appellants - No further adjournment is permissible in law – appellants plea is that a connected case is pending before the Hon’ble High Court - However, he has not been able to give specific particulars of any High Court case having connection with the present case, nor has he given satisfactory answer to queries from the Bench in this regard - appeal is dismissed

Service Tax - 2008 - TMI - 30184 - CESTAT, CHENNAI
In terms of Not.43/97-ST, the appellants were not required to pay service tax for the GTO service availed during 16.11.97 to 1.6.98 - appellants had paid the impugned tax under protest - In such a case, limitation of one year did not apply to the refund due - amount was paid under protest can’t be treated as tax as the same was collected without the authority of law - appeal is allowed - amount of tax collected from the appellants during the periods 1998-99 and 1999-2000 shall be refunded

Service Tax - 2008 - TMI - 30183 - CESTAT, BANGALORE
Applicability of Service Tax on service of valuer of moveable and immoveable property under the category of Consulting Engineer - assessee had declared about this activity from 2000 onwards - department had called for details in 2002, which was furnished but the department kept quite and did not issue demand notice till 21.4.2005 for the period 1.10.1999 to 31.3.2003 – willful suppression not proved - Commissioner (A) was justified in setting aside the demands as barred by time

Service Tax - 2008 - TMI - 30182 - CESTAT, BANGALORE
Show cause notice proceeded to demand Service Tax under the category of “Tour Operators” while the Commissioner (A) has remanded for re-quantification to duty under the category of “Rent-a-Cab” services - directions given by the Commissioner (A) for consideration under this heading is not correct - plea of demands being hit by limitation has not been considered - appeal is allowed by remand to the Original Authority

Service Tax - 2008 - TMI - 30181 - CESTAT, NEW DELHI
Appellants are appointed as distributors for the marketing of “spice post paid products” & receive commission for the same - As soon as the authorities informed them about the service tax liability, they immediately took out registration & paid the duty & interest – appellants are not much educate & they were not aware of the provisions of Service Tax laws - original authority has rightly taken a lenient view in terms of sec. 80, and imposed token penalty

Income Tax - 2008 - TMI - 30270 - ALLAHABAD HIGH COURT
Assessee owned a bottling plant & manufactured soft drinks – assessee is an industrial establishment already set up but had launched a new product - assessee is entitled to deduction u/s 37(3D) in respect of the expenditure on advertisement and publicity incurred on launch of its new product - held that the settle (bottles) and crates in the assessee’s case do not constitute its stock-in-trade and should be treated as ‘plant’ – hence bottles & crates are entitled to depreciation as plant

Income Tax - 2008 - TMI - 30269 - BOMBAY HIGH COURT
Reopening of assessment on ground that assessee not disclosed profits from scrap –all material facts disclosed truly– tribunal has accepted the manner in which the scrap generated was disposed of & accepted the material of accounts when the scrap was finally sold – when AO made assessment u/s 143(3), it was already in knowledge of him that stock register of scrap was not maintained – hence there is no reason warranting the reopening of concluded assessment

Income Tax - 2008 - TMI - 30268 - BOMBAY HIGH COURT
Reassessment notice u/s 148 - petitioner is in the business of manufacturing of ball pens and refills as also ink - Assessing Officer has merely proceeded on surmises and conjectures - has not taken into consideration that out of the raw materials ink had been produced and also has not taken into consideration the waste in production of ink as also in filling of the refills – hence reopening of assessment mere on basis of estimation (based on statement u/s 132(4)) is not justified

Income Tax - 2008 - TMI - 30267 - HIGH COURT DELHI
Provision for diminution in value of stock - assessee submit that sum debited to P/L account was on account of obsolete stock which he was unable to sell – AO rejected the contention on ground that such a provision can be allowed only when the material is actually sold – held that, on obsolete stock burden of excise would be higher than the value it would realize on sale – tribunal was justified in allowing the loss claimed by the assessee on account of diminution in the value of obsolete stock

Income Tax - 2008 - TMI - 30250 - MADHYA PRADESH HIGH COURT
CIT invoked his jurisdiction conferred upon him u/s 263 and denied deduction to assessee u/s 80HHA & 80I, by holding that AO committed an error of law in granting the deduction – hence, commissioner set aside the order of assessing officer – since no appeal regarding these deduction was filed to commissioner (Appeals), assessee’s contention that order of commissioner has merged with order of AO, is not acceptable – revisionery order of CIT is justified

Income Tax - 2008 - TMI - 30249 - UTTARAKHAND HIGH COURT
Assessee, non-resident rendered services to ONGC –assessee contention that amount received by them on account of reimbursement of freight and transportation charges were actually incurred in respect of equipment was not includible while computing its income u/s 44BB, is not acceptable –Assessing Officer was justified in adding the said amount which was received by the non-resident company as per provisions of Section 44BB and imposing the income tax thereon

Income Tax - 2008 - TMI - 30245 - SUPREME COURT
Whether the penalty under Section 271 (1) (c) of the Income Tax Act, 1961 (in short the `Act') can be levied if the returned income is a loss – held that Explanation 4 to Section 271(1)(c) is clarificatory and not substantive – though penalty can be levied even if returned income is a loss the same can not be levied with retrospective effect - Decision of division bench of apex court Virtual Soft Systems Ltd. V. CIT overruled

Income Tax - 2008 - TMI - 30210 - DELHI HIGH COURT
Notice under section 143(2) – service of notice - period of limitation - Assessee had failed to discharge the burden which shifted to him immediately on his assertion that he had received the notice on a particular date – therefore notice is not barred by limitation – order of tribunal that AO had not proved that the notice had been served within the time, is set aside

Income Tax - 2008 - TMI - 30209 - MADRAS HIGH COURT
Challenge to order of settlement commission – reopening of assessment of assessee on basis of observation of settlement commission (in settlement proceedings relating to party with whom assessee had transactions) – observations by settlement commission were adverse to assessee in those proceedings – assessee is not allowed to challenge those settlement proceedings – but those observations would not automatically bind the assessee because those observations are not conclusive proof

Income Tax - 2008 - TMI - 30208 - DELHI HIGH COURT
Reassessment notice u/s 148 - unless the return of income already filed is disposed of, notice for reassessment cannot be issued, i.e., no reassessment proceedings can be initiated so long as assessment proceedings pending on the basis of return already filed are not terminated - no substantial question of law that arises for our consideration – revenue appeal dismissed – reassessment notice is not valid

Income Tax - 2008 - TMI - 30207 - ALLAHABAD HIGH COURT
Perquisite to employee cannot be disallowed in hands of employer in terms of rule 3 - unilateral entry on part of assessee to write back the amount on ground of limitation does not amount to cessation of liability, so not chargeable u/s 41 - Additions towards cessation/remission of liability are not justified - even if there was change of accounting system from cash to mercantile, payment of bonus to employees are allowed to deduction in A.Y. in question – revenue’s appeal dismissed

Income Tax - 2008 - TMI - 30190 - MADRAS HIGH COURT
Manufacture & export - AO found that the assessee's claim u/s 80HHC including receipts relating to job work charges, had no direct nexus with the export activities - income from job work earned by assessee is by utilisation of the entire resources or business apparatus - Tribunal also found that the job work is linked to the manufacturing – hence Tribunal is right in holding that 90% of the job work charges should not have been excluded from business profits while computing deduction u/s 80HHC

Income Tax - 2008 - TMI - 30189 - MADHYA PRADESH HIGH COURT
Claim of appellant-trust for registration u/s 12A denied on ground that object of trust is to establish a “dharamshala” only for the members of Dhakad Samaj which is not a backward class - Merely because the accommodation created is in a religious place, it cannot be said that providing dharamshala is for religious purposes - Tribunal was justified in holding that the appellant-trust is not entitled to claim the registration u/s 12A, thereby not entering into claim for exemption u/s 11

Income Tax - 2008 - TMI - 30188 - DELHI HIGH COURT
Sale of shares by assessee to sister concern – disallowance of loss on the sale of shares - only a part of the sale price was received by Assessee - even though the sale of shares took place in Feb. 1996 & physical delivery given, the entries in the books were made only on 31 March, 1996 - Assessing Officer is justified in concluding that the sales didn’t represent genuine transactions & that they were manipulated by the Assessee with its sister concerns with a view to reduce its tax liability

Income Tax - 2008 - TMI - 30187 - MADRAS HIGH COURT
Benefit u/s 54F - assessee established that the assessee had invested the entire capital gain in purchase of land within the stipulated period purchase/construction is to be completed within stipulated time is not mandatory for claiming exemption - Tribunal was right in law in holding that the assessees are entitled for exemption under Section 54F – revenue appeals fail and the same are dismissed

Income Tax - 2008 - TMI - 30175 - BOMBAY HIGH COURT
Assessee is a club not having object of earning - even if there be temporary or honorary members who are not entitled to vote, the assessee would not cease to be governed by the principles of mutuality - Once the assessee is governed by the principles of mutuality, its income earned would not be assessable - Tribunal was right in holding that the entrance fees received by assessee & subscription for the life members is capital receipt not chargeable to tax as the principle of mutuality applies

Income Tax - 2008 - TMI - 30174 - MADRAS HIGH COURT
Order of reopening of assessment – Dept. stated that information received from Enforcement Directorate related to A.Y. 2000-01 & previsions sanction of commissioner was also obtained - Enforcement Directorate shows possible inflation of purchases on certain items - court is only required to see whether there was any prima facie material available to reopen the file - In view of the counter affidavit and the impugned notice, this Court cannot reject reassessment notice

Income Tax - 2008 - TMI - 30157 - UTTARAKHAND HIGH COURT
Order passed under revisional jurisdiction of commissioner u/s 263 could not be said to be without jurisdiction mere for the fact that Commissioner accepted application under Kar Vivad Samadhan Scheme (KVSS)

Income Tax - 2008 - TMI - 30156 - PUNJAB AND HARYANA HIGH COURT
Assessee was awarded compensation in lieu of his acquired land - Whether the amount of enhanced compensation and interest was assessable on receipt basis, was a highly debatable issue - making of such claim that it was not assessable was bona fide on the basis of a possible view therefore it could not be treated as concealment of its income – it can’t be treated as furnishing of inaccurate particulars of such income so penalty could not be levied

Income Tax - 2008 - TMI - 30155 - PUNJAB AND HARYANA HIGH COURT
Addition on account of unexplained cash & on account of unexplained payments made for purchases made outside the books – once the net profit rate is applied on contract receipts of an assessee (for estimating his income from contract work), no further additions can be made in respect of purchases & unexplained cash – No substantial question of law arises - revenue appeal dismissed