Service Tax - 2009 - TMI - 32005 - CESTAT CHENNAI
Service tax for the period 16-11-1997 to 1-6-1998 on GTO services - in view of SC decision in case of L.H. Sugar Factories Ltd. held that amended section 73 takes in only the case of assessee who is liable to file return u/s 70. Admittedly, the liability to file return is cast on the appellants only u/s 71A. The class of persons who are u/s 71A is not brought under the net of section 73 - SCN issued to the appellants invoking section 73 are not maintainable.

Service Tax - 2009 - TMI - 32004 - CESTAT, BANGALORE
Appellant, ICFAI contend that they are awarding Degrees/Diplomas recognized by law for educational purposes without any profit motive, so they are not rendering any service under the category of ‘Commercial Coaching and Training’ – assessee is registered under Societies Registration Act, and degrees conferred by them have recognition of Bar Council of India, Universities and various government bodies – therefore, assessee is excluded from purview of Commercial training/coaching centre

Service Tax - 2009 - TMI - 32003 - CESTAT BANGLORE
Penalty - bona fide belief by assessee with regard to the category under which they were required to pay the service tax - reasonable and bona fide belief in not depositing the tax - service tax was paid before the issue of SCN along with interest - in terms of section 80, no penalty is imposable in such cases – in view of decision of tribunal in the case of Majestic Mobikes (P.) Ltd., imposition of penalties in the Review Order and OIO is set aside – appeal by assessee is allowed

Service Tax - 2009 - TMI - 32002 - CESTAT, BANGALORE
Penalty - bona fide belief held by the assessee with regard to the category under which they were required to pay the service tax - reasonable and bona fide belief in not depositing the tax - service tax was paid before the issue of show-cause notice along with interest - in terms of section 80 of the Finance Act, 1994 no penalty is imposable on the assessee - imposition of penalties in the Review Order and order-in-Original is set aside – appeal by assessee is allowed

Service Tax - 2009 - TMI - 31987 - CESTAT, CHENNAI
Appellant (L & T) received technical assistance in consideration of royalty & technical know-how fees - Commissioner (A) was right in holding that L & T was not liable to pay tax towards Engineering Consultancy for technical know-how and technical assistance received from its foreign collaborators - Transfer of technical know-how for a consideration is sale of intellectual property. These cannot be held as provision of service by the collaborators of the L & T – revenue’s appeal dismissed

Service Tax - 2009 - TMI - 31986 - CESTAT, CHENNAI
Whether service tax was leviable on transfer of technology, trademark etc., by the respondents to M/s. BMF Beltings Ltd. for manufacture and sale, by the latter, of certain goods, under the head ‘Consulting engineer’s service’ during the period from 1 -4-1997 to 31-3-2002 - that transfer of technical know-how would not fall under the category of ‘consulting engineer’s service’ for the purpose of levy of service tax - issue is no longer res integra & the same stands settled against the revenue

Service Tax - 2009 - TMI - 31985 - CESTAT, NEW DELHI
Comm.(A) dismissed appeal for non-compliance to section 35F - appellants plea is that there are three cable operators, operating from the same premises and demand is made from the applicant by treating all the three as one service provider - partner of the appellant disclosed the payment received from cable operators on account of M.S.O. service and revenue is demanding service tax on the amount disclosed by appellant – not a fit case for total waiver - Appeal is disposed of by way of remand

Service Tax - 2009 - TMI - 31946 - CESTAT, CHENNAI
Clearing and Forwarding Agents – from the agreement made by appellants with their principles it is clear that assessee was only a “commission agent” and not “C/F Agent” – services of commission agent were brought under tax net only w.e.f. 1/7/2003, which shows that Parliament has treated Commission agent separately from C/F Agent - in the light of the Larger Bench decision in Larsen & Toubro Ltd. case, respondents can only be held to be Commission Agents – therefore demand was rightly set aside

Service Tax - 2009 - TMI - 31945 - CESTAT, NEW DELHI
Revenue filed appeal against the revised order of the Commissioner in which he dropped the review proceedings – revenue’s submission is that there is a delay in payment of tax and, therefore, penalty is imposable - since demand of interest was paid by the respondent before issue of the SCN and both the authorities below have given detailed finding for non-imposition of penalty, there is no any reason to interfere the order of the Commissioner. The appeal filed by the revenue is rejected.

Service Tax - 2009 - TMI - 31944 - CESTAT, NEW DELHI
Purchase & sales of SIM cards/rechargeable coupons of M/s. Aircel Ltd. – assessee paid tax under head ‘Business Auxiliary Service’ under protest and took credit of tax paid by M/s. Aircel Ltd. - Commissioner (Appeals) while confirming demand has not chosen to decide the issue of liability to service tax, but has dealt with only one issue i.e. whether the service tax credit availed and utilised by them is legal - since the issue is at the root of the dispute, appeal is allowed by way of remand

Service Tax - 2009 - TMI - 31943 - CESTAT, BANGALORE
Inputs used in the photographic services - Revisionary Authority held that assessee is not entitled for the benefit of Exemption Notification No. 12/2003-ST, dated 20-6-2003 in respect of the inputs used – issue has already been decided in assessee’s favour in various decisions – said ratio would apply to this case also - hence, impugned order is set aside and appeal allowed with consequential relief

Service Tax - 2009 - TMI - 31942 - CESTAT, NEW DELHI
C/F Agent – assessee’s contention is that as per the agreement, the appellants were only procuring order on commission basis and as per the decision of the Larger Bench of the Tribunal in the case of Larsen & Toubro Ltd v, CCE and affirmed by Hon’ble Punjab & Haryana High Court in the case of CCE v. United Plastomers held that mere procuring of orders on commission basis not amounted to C&F Agent service – assessee’s plea is acceptable - therefore, demand is set aside

Service Tax - 2009 - TMI - 31941 - CESTAT CHENNAI
Appeal was filed against order of adjudication with the Commissioner (Appeals) with a delay of 607 days, which was beyond the period condonable by the appellate authority - held that a Commissioner (Appeals) had no power to condone any delay of appeal beyond the condonable period of delay under Section 35 - appeal of the assessee was rightly dismissed by Commissioner, as time-barred - order of Commissioner does not call for interference

Service Tax - 2009 - TMI - 31940 - CESTAT CHENNAI
In view of definition of ‘input service’ given u/r 2 of CCR, 2004, held that CENVAT credit of the service tax paid on telephone service received by a manufacturer of excisable goods or provider of output service was available to them as credit - telephone service received on the mobile phones of the respondents, which were operated by their staff in connection with the business of the company, was ‘input service’ and accordingly the service tax paid thereon was available as credit

Service Tax - 2008 - TMI - 31925 - CESTAT CHENNAI
Demand of service tax under the head “Business Auxiliary Service” on the amount collected by the appellants from their own refinery towards the cost of additives (extra-mile diesel) used - held that no service tax was payable in respect of any service rendered by one unit of the company to another - the so-called service is one rendered by the appellants to themselves, such service cannot be subjected to levy of service tax under any category

Service Tax - 2008 - TMI - 31924 - CESTAT BANGLORE
Issue relates to grant of abatement of reimbursed expenses from the gross value of remuneration received against the services of C/F Agent – appellant’s submission that reimbursement expenses beyond maximum ceiling of 1% of the net sales are borne by them, is correct – hence their claim is restricted to maximum ceiling of 1% only and that cannot be denied - Since the appellant’s agreement itself shows reimbursement to a maximum limit of 1%, therefore, it has to be restricted to that extent only

Service Tax - 2008 - TMI - 31923 - CESTAT BANGLORE
Once the penalty under Section 78 has been imposed, there is no justification for imposition of penalty under Section 76 - Tribunal in the case of Opus Media Entertainment Vs CCE, Jaipur has already held that imposition of penalties under Section 78 and 76 amounts to double jeopardy - said case-law is clearly applicable to the facts of the present case, hence, assessee’s appeal is allowed

Service Tax - 2008 - TMI - 31922 - CESTAT NEW DELHI
Air Travel Agent - there is no dispute that the Respondent had refunded the amounts to their customers on cancellation of their tickets Thus, it is established that the Respondent had not passed the incidence of tax to any other person. Commissioner (Appeals) rightly set aside the demand of duty - doctrine of principle of unjust enrichment is not attracted

Service Tax - 2008 - TMI - 31921 - CESTAT KOLKATA
Transportation of gas through pipeline is an activity which has been newly brought under the Service Tax net after 15.6.05. - case of the Department to bring the appellants under the Service Tax net for the pervious period is not convincing - bringing the appellant’s transportation activity under the category of Business Auxiliary service for the period prior to 15.6.05 is not warranted under the law in force at the material time - Hence demand & penalty are not sustainable

Service Tax - 2008 - TMI - 31918 - CESTAT, NEW DELHI
Assessee paid part of deposit as ordered by Commissioner and sought further time for making pre-deposit – but Commissioner dismissed the appeal without going in to merits of the case – plea of financial hardship as the Proprietor has met with an accident - Commissioner (Appeals) shall decide the appeal on merits and without insisting for further pre-deposit - appellant is directed to deposit a certain sum of & report compliance before the Commissioner (A) - appeal is allowed by way of remand

Income Tax - 2009 - TMI - 32012 - HIGH COURT DELHI
Reassessment – sole and entire basis of re-opening the assessment is the additions made in A.Y. 1998-99 and 2001-02, no other reason given by AO - Since the tribunal has already deleted the additions in respect of the A.Y. 1998-99 and 2001-02, the very basis for continuing any further with the re-assessment proceedings does not survive any more - no specific allegation with regard to the A.Y 1999-2000 regarding suppression of sale figures – proceedings u/s 147 and notice u/s 148 are quashed

Income Tax - 2009 - TMI - 32010 - HIGH COURT ALLAHABAD
Partition of a HUF - revenue contention that business of smaller HUF cannot be treated to be that of bigger HUF only on the basis of family arrangement, is acceptable - Tribunal was not correct in holding that the business income pertaining to the sales and manufacture of rice and other grain etc. was assessable in the hands of the bigger HUF and not in the hands of the smaller HUF

Income Tax - 2009 - TMI - 32009 - HIGH COURT ALLAHABAD
Penalty u/s 271(1)(c) - explanation of assessee was not found to be false & therefore, it was not a case covered by Explanation I(A) of Section 271(1) of the Act as it stood in 1977-78 - Revenue could not show as to what relevant material was not disclosed by the assessee which it ought to have disclosed and how and in what manner it could say that the explanation offered by the assessee was not bona fide – therefore, tribunal was justified in holding that no penalty u/s 271(1)(c) was leviable

Income Tax - 2009 - TMI - 32008 - HIGH COURT ALLAHABAD
Whether Tribunal was justified in law in holding that in the case of cash credits in the assessee's books in the names of close relatives, the burden of proof is on the assessee u/s 68 to establish the nature and source of the amount – held that in such cases, the assessee under section 68 has to prove three conditions, viz. (1) the identity of the creditor, (2) the "capacity" of such creditor to advance the amount, and (3) the genuineness of the transaction - reference is answered, as above

Income Tax - 2009 - TMI - 32007 - HIGH COURT ALLAHABAD
ITAT annulled the assessment - transfer of jurisdiction from Income Tax Officer, Ward-I (2) to Ward-I (3) - assessee had not challenged the jurisdiction of the subsequent assessing officer within one month of the receipt of notice u/s 143(2)/142(1) as required u/s 124(3) – Tribunal was not justified in annulling the assessment mere on the ground that the assessing officer completing the assessment did not had the jurisdiction over the case- Revenues’ appeal is allowed by way of remand

Income Tax - 2009 - TMI - 32006 - ALLAHABAD HIGH COURT
In view of amendment in Section 143 (1A) amended retrospectively, proceeding u/s 154 initiated to demand additional tax - Appellant submits that no additional tax can be levied where the assessed income is at loss and therefore, by subsequent amendment, the liability cannot be fixed - law has been clarified by the Parliament by making a retrospective amendment in the statute – held that appellant cannot take benefit of the ratio laid down by SC in Hindustan Electro Graphites Ltd.

Income Tax - 2009 - TMI - 31984 - HIGH PUNJAB AND HARYANA COURT
Whether Tribunal was correct in law in upholding the order of CIT(A) canceling the interest charged u/s 215 - Tribunal set aside the levy of interest only on the ground that opportunity of hearing was not given to the assessee. It is not disputed that the said provision is mandatory and interest is in the nature of compensation and is leviable if advance tax paid was less than 75% of the assessed tax – therefore, question is answered in favour of revenue and against the assessee.

Income Tax - 2009 - TMI - 31983 - PUNJAB AND HARYANA HIGH COURT
Assessee claimed deduction in respect of income from duty drawback u/s 80IB, on sale of replenishment licence and currency fluctuation - claim was disallowed by ITAT on the ground that the said income was not income derived from business undertaking - similar claim for deduction u/s 80 HHC was also disallowed - view taken by the Tribunal is justified and it is in accordance with the view already taken by SC in CIT v. Sterling Foods. and judgment of this Court in Liberty India v. CIT

Income Tax - 2009 - TMI - 31982 - HIGH COURT PUNJAB AND HARYANA
Assessee is a Government undertaking - AO created a demand, on the allegation that the assessee failed to make deductions at source in respect of payments made towards transportation and other charges - Tribunal rightly set aside the same on the ground that the payments made were not on behalf of the assessee but were part of cost of procurement of wheat and thus, provision for deduction at source was not applicable – no substantial question of law arises – revenue’s appeal is dismissed

Income Tax - 2009 - TMI - 31981 - PUNJAB AND HARYANA HIGH COURT
Violation of provisions of section 44AB - assessee filed his return as proprietor of two concerns but audit report was filed in respect of one concern. The Assessing Officer levied penalty under Section 271B - finding recorded by the Tribunal that non-filing of audit report was for bona fide reasons being pure finding of fact, we are unable to hold that any substantial question of law arises - appeal by revenue is dismissed - ITAT has not erred in deleting the penalty

Income Tax - 2009 - TMI - 31980 - PUNJAB AND HARYANA HIGH COURT
Revised return was rejected by AO on ground that assessee has changed the method of accounting - revised return was within the prescribed time - assessee has only made correction by bringing closing stock in consonance with the principle, on which opening stock was valued, so that the income can be correctly arrived at - CIT (A) &ITAT were right in directing AO to re-compute the income by adopting value of closing stock at cost or market price whichever is lower – revenue’s appeal dismissed

Income Tax - 2009 - TMI - 31979 - PUNJAB AND HARYANA HIGH COURT
Penalty u/s 271E - repayment of cash loan in violation of Section 269T - assessee did not act deliberately in defiance of law and his conduct was not dishonest, neither he acted in conscious disregard of its obligation, since the transactions were genuine and entered due to business exigency - this breach was a venial breach and flows from a bonafide belief. Therefore, the assessee was not liable to the penalties

Income Tax - 2009 - TMI - 31978 - PUNJAB AND HARYANA.HIGH COURT
Search and seizure – assessee claimed sale of jewellery as source of income, which was alleged to be un-disclosed income - AO did not accept the explanation of the assessee - I.T.A.T. holding that assessee had discharged his onus of explaining genuineness of the sale of jewellery to M/s RKE - finding of the Tribunal is a finding of fact based on appreciation of evidence and material on record – revenue’s appeal is dismissed

Income Tax - 2009 - TMI - 31949 - GUJARAT HIGH COURT
Addition made on account of Modvat Credit - assessee had not utilized the credit for payment of excise duty or adjusted the amount against the purchase - merely because Modvat credit is an irreversible credit available to the manufacturers upon purchase of duty paid raw material, it would not amount to income which is liable to be taxed under the Income Tax Act – tribunal was right in deleting the additions made on above ground

Income Tax - 2009 - TMI - 31948 - DELHI HIGH COURT
Block assessment - search – documents recovered showing certain payments made by assessee to M and some jewellery found – dismissing the appeal of revenue, held that there was no doubt that M was closed down several years ago and the documents could not e attributed to the block period – Tribunal rightly accepted the fact that assessee received gifts from friends and relatives - no substantial question of law arises for consideration

Income Tax - 2009 - TMI - 31947 - PUNJAB AND HARYANA HIGH COURT
Assessee claimed deduction towards commission and Export Market Development allowance. The Assessing Officer disallowed the same under section 37(3A) – Tribunal is right in law in holding that the expenses on account of commission and Export Market Development Allowance are not to be taken into account for the purpose of dis-allowance under sections 37(3A) - question referred is answered against the revenue and in favour of the assessee

Income Tax - 2009 - TMI - 31936 - HIGH COURT OF BOMBAY
Foreign law firms, even though working as solicitors for multinational corporations with operations in India, will pay tax only in those countries where they give legal advice and not in India - Services which are to be taxed must be both "rendered in India'' and "utilized in India'' for them to fall under the income tax bracket.

Income Tax - 2008 - TMI - 31920 - PUNJAB AND HARYANA HIGH COURT
Books of account maintained by the assessee did not correctly reflect the transactions of business and were inconsistent with the note book and diary seized - Having regard to the transactions found out side the books of account, the assessment was made on the basis of estimate - In such a situation some amount of guess work could not be ruled out – therefore, ITAT was justified in confirming/upholding the additions made by CIT (A)

Income Tax - 2008 - TMI - 31919 - PUNJAB AND HARYANA HIGH COURT
During assessment proceedings it was noticed that gross turnover of assessee exceeded Rs. 40 lakhs, but assessee has not get its accounts audited - Tribunal has recorded a finding of fact that, the assessee under a bona fide belief did not get its accounts audited from the chartered accountant or from the inspector of co-operative societies because the sales turnover of the assessee were less than Rs. 40 lakhs – hence penalty was rightly cancelled by ITAT

Income Tax - 2008 - TMI - 31913 - DELHI HIGH COURT
Share application money - existence of the applicants - genuineness of the transaction – additions - Held that additional burden was on the Revenue to show that even if the share applicant did not have the means to make the investment, the investment made by them (share applicant) actually emanated from the coffers of the Assessee so as to enable it to be treated as the undisclosed income of the Assessee – hence revenue’s appeal is dismissed