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Showing 141 to 160 of 1051 Records
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2013 (1) TMI 923
Issues involved: Assessment of income based on profit rate, challenge to profit rate applied by Assessing Officer, past history of the assessee, comparison with earlier years, application of legal precedents.
Summary:
The Appellate Tribunal ITAT Agra heard cross appeals against the order of the ld. CIT(A), Gwalior for the assessment year 2009-10. The assessee declared contractual receipts and net profit, but the Assessing Officer (AO) doubted the accuracy of the book results due to lack of complete vouchers for expenses. The AO applied a profit rate of 12.5% based on an ITAT Hyderabad Bench decision, resulting in an income determination of &8377; 1,27,98,840/-. The ld. CIT(A) reduced the profit rate to 6% after considering the past history of the assessee, leading to an estimated profit of &8377; 72,33,532/-. The assessee appealed against the 6% profit rate, while the Revenue appealed against the reduction from 12.5% to 6%.
The ld. Counsel for the assessee argued for further reduction in profit rate based on past history and legal precedents, citing cases from Hon'ble M.P. High Court, Punjab & Haryana High Court, and Rajasthan High Court. The ld. DR supported the AO's order.
After considering the submissions, the Tribunal found in favor of the assessee, noting that the issue was covered by previous orders in favor of the assessee for the same business. The Tribunal observed that the assessee's profit rate of 4.16% in the current assessment year was higher than in preceding years, where rates were around 2%. Referring to the history of the assessee and previous Tribunal orders, the Tribunal decided to maintain an addition of &8377; 2,50,000/- instead of applying a 6% profit rate. The departmental appeal was dismissed, and the assessee's appeal was partly allowed.
In conclusion, the Tribunal upheld the decision to maintain an addition of &8377; 2,50,000/- instead of applying a 6% profit rate, based on the assessee's past performance and legal precedents.
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2013 (1) TMI 922
Issues Involved:
1. Eligibility for deduction u/s 36(1)(viia) for rural branches.
2. Depreciation on wooden partitions.
3. Depreciation on UPS and batteries.
4. Disallowance u/s 14A.
5. Classification of swift charges as revenue or capital expenditure.
6. Allowability of scholarship/education aid as business expenditure.
7. Allowability of prior period expenses.
Summary:
1. Eligibility for Deduction u/s 36(1)(viia) for Rural Branches:
The Revenue's appeal against the CIT(A)'s decision to treat eight rural branches as eligible for deduction u/s 36(1)(viia) was dismissed. The ITAT upheld the CIT(A)'s decision, which was based on previous ITAT orders in the assessee's own case, confirming that the branches qualified as rural branches despite the population exceeding ten thousand.
2. Depreciation on Wooden Partitions:
The AO's decision to allow only 10% depreciation on wooden partitions, instead of the 100% claimed by the assessee, was overturned. The CIT(A) allowed the claim based on the fact that the partitions were on leased/rented accommodation, following the precedent set in the assessee's own case for the assessment year 2002-03. The ITAT found no infirmity in this decision and dismissed the Revenue's appeal.
3. Depreciation on UPS and Batteries:
The AO had allowed depreciation at 25% on UPS and batteries, whereas the assessee claimed 60%. The CIT(A) allowed 60% depreciation, following the ITAT's decision in the assessee's own case for earlier years. The ITAT upheld this decision, dismissing the Revenue's appeal.
4. Disallowance u/s 14A:
The AO disallowed a substantial amount u/s 14A for expenses incurred in earning tax-free income. The CIT(A) restricted the disallowance to Rs. 10,45,220/-, applying a pro-rata basis based on the cost inflation index. The ITAT found that the issue was covered by its own decision in the assessee's case for the assessment year 2002-03 and dismissed the Revenue's appeal while allowing the assessee's cross-objection.
5. Classification of Swift Charges as Revenue or Capital Expenditure:
The AO treated swift charges as capital expenditure, allowing depreciation at 30%. The CIT(A) classified these as revenue expenditure, considering them recurring expenses for treasury operations. The ITAT upheld the CIT(A)'s decision, dismissing the Revenue's appeal.
6. Allowability of Scholarship/Education Aid as Business Expenditure:
The AO disallowed the expenditure on scholarship/education aid, treating it as charity. The CIT(A) allowed the claim, recognizing the expenses as part of the assessee's social responsibility and beneficial for business goodwill, under section 37(1). The ITAT upheld this view, dismissing the Revenue's appeal.
7. Allowability of Prior Period Expenses:
The AO disallowed prior period expenses due to lack of supporting bills/vouchers. The CIT(A) allowed these expenses, noting that they were crystallized during the year and related to arrears of rent/enhanced rent. The ITAT agreed with the CIT(A), dismissing the Revenue's appeal.
Conclusion:
All the appeals of the Revenue in ITA Nos. 43, 53, 85, 86 & 418(Asr)2012 were dismissed, and the Cross Objections Nos. 04, 05, 06 & 33(Asr)/2012 of the assessee were allowed.
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2013 (1) TMI 921
Whether the order passed u/s 144C is valid - Held that - the assessee could have filed the objections there against before the DRP within 30 days of the receipt of the said order - while the assessee filed the objections before the DRP with delay of 13 days and that there was no liberty with the DRP to condone such delay - DRP has also not given any direction to pass the order as per the draft assessment order - instant appeal is not covered by the provisions of section 253(1)(d) of the Act - Decided against the assessee
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2013 (1) TMI 920
The petitioner requested the court to hold proceedings at a specific location due to the large quantity of seized goods. The court directed the magistrate to conduct the proceedings at the Central Warehouse Corporation Godown in Delhi as requested. The petition was disposed of.
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2013 (1) TMI 919
Issues involved:
The appeal concerns the deletion of an addition of Long term capital gain by the ld. CIT(A) based on the total cost of acquisition determined by a registered valuer.
Details of the judgment:
Issue 1: Cost of acquisition determination
The assessee derived income from Long term capital gain from the sale of a property inherited in 2001. The AO determined the cost of acquisition at a lower value compared to the assessee's claim. The ld. CIT(A) accepted the fair market value estimated by a registered valuer as on 01-04-1981, directing the AO to consider this value for calculating capital gain. The ld. CIT(A) invoked Section 55(2)(b)(ii) of the Act, allowing the assessee to choose between the cost of acquisition to the previous owner or the fair market value. The Tribunal upheld the ld. CIT(A)'s decision, emphasizing the importance of fair market value determination for computing capital gains accurately.
Issue 2: Legal precedents and interpretation
The ld. AR cited legal precedents and highlighted the assessee's right to determine the cost of acquisition based on fair market value as on 01-04-1981. The Tribunal referred to a similar case where the assessee's choice to adopt fair market value was upheld. The Tribunal emphasized the assessee's right to choose the value as per the provisions of the Act, especially when modifying capital gains working based on different sale values. The Tribunal directed the AO to accept the fair market value determined by the registered valuer for calculating capital gains, in line with legal provisions and precedents.
Conclusion:
The Tribunal dismissed the Department's appeal, affirming the ld. CIT(A)'s decision to consider fair market value for cost of acquisition and compute Long term capital gain accordingly. The Tribunal upheld the importance of accurate valuation in determining capital gains and tax liability, in line with legal provisions and precedents.
This judgment highlights the significance of fair market value determination and the assessee's right to choose the cost of acquisition method for accurate computation of Long term capital gains.
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2013 (1) TMI 918
Addition u/s 68 - Held that:- Since an addition under section 68 or for that purpose cannot be taken as income under any specific heads of income, it cannot also be treated as ‘business income’. In this view of the matter, we hold that the CIT(A) has erred in holding that the addition under section 68 of the Act in assessee’s case is liable to be treated as assessee’s ‘business income’. Therefore, we allow the instant appeal and restore the findings of the Assessing Officer. Revenue’s appeal stands accepted.
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2013 (1) TMI 917
Issues involved: Disallowance of expenditure claimed for allotment of equity shares to employees under ESOP.
Summary:
Issue 1: Disallowance of expenditure claimed for allotment of equity shares under ESOP
The assessee, a private limited company engaged in manufacturing electronic equipment, filed an appeal against the order of CIT (A)-V, Hyderabad disallowing expenditure of Rs. 3,90,000 towards allotment of equity shares to employees under ESOP for the assessment year 2007-08. The Assessing Officer disallowed the expenditure as contingent and notional. The CIT (A) upheld the disallowance, considering the expenditure as notional. The assessee argued for allowing the expenditure based on previous tribunal decisions and SEBI guidelines. The Departmental Representative supported the lower authorities' orders. The Tribunal noted previous decisions against the assessee and held that the expenditure claimed for allotment of shares under ESOP is not allowable u/s 37(1) of the Act, following earlier tribunal decisions. The decision of the Hon'ble Madras High Court and other tribunal decisions cited by the assessee were found factually distinguishable. The Tribunal confirmed the CIT (A)'s order, dismissing the grounds raised by the assessee.
Decision:
The appeal filed by the assessee was dismissed, and the order was pronounced on 31-01-2013.
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2013 (1) TMI 916
Issues involved: Appeal against CIT (A)'s order allowing deduction u/s 80IB(10) for construction project.
Ground 1: CIT (A) allowed deduction u/s 80IB(10) despite project not completed on time.
Ground 2: CIT (A) allowed deduction on proportionate basis for partially completed project.
Ground 3: CIT (A) allowed deduction despite plot area being less than 1 acre.
Ground 4: CIT (A) allowed deduction even though some units exceeded 1500 sq.ft.
Details:
- Assessee claimed deduction u/s 80IB(10) for project "Anant Regency Phase-II."
- AO disallowed claim due to plot area < 1 acre, units > 1500 sq.ft, and incomplete project by 31.03.2008.
- CIT (A) allowed deduction based on earlier year's decision and ITAT Mumbai's order.
- Revenue challenged CIT (A)'s decision on above grounds.
- Assessee argued that issues were addressed in previous year's order.
- CIT (A) upheld deduction citing previous year's decision and ITAT's ruling.
- ITAT considered Revenue's objections from previous year's order.
- ITAT referred to previous case law regarding plot area calculation and unit size criteria.
- ITAT concluded that deduction should be allowed proportionately for completed area.
- ITAT rejected Revenue's appeal based on previous year's decision.
- Appeal by Revenue dismissed, CIT (A)'s decision upheld.
Judges: B. Ramakotaiah (Accountant Member) and Vivek Varma (Judicial Member)
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2013 (1) TMI 915
Issues involved: Chargeability of receipt from the developer to tax as a capital gain.
Issue 1: Chargeability of receipt as capital gain
The assessee received compensation for transfer of development right and claimed it does not amount to transfer of capital asset. However, the AO taxed the entire sum as capital gains. The Ld. CIT(A) upheld the AO's decision, stating the sum was rightly taxed as long term capital gain. The assessee appealed, arguing that transfer of development rights are not liable for capital gain tax, supported by judicial decisions. The Tribunal examined the agreement and relevant judicial decisions. It noted that the assessee had transferred development rights, as per the agreement. Referring to the case of Deepak S. Shah Vs ITO, the Tribunal concluded that the assessee did not hold any capital asset and there was no transfer of capital asset, hence S.45 of the Act was not attracted, and the assessee was not liable to capital gain tax. Citing similar cases like Maheshwar Prakash -2 CHS Ltd. Vs ITO and Om Shanti Co. Op. Hsg. Soc. Ltd. Vs ITO, the Tribunal held that no capital gains were liable to be taxed in this case. Therefore, the appeal filed by the assessee was allowed.
Conclusion
The Tribunal ruled in favor of the assessee, holding that no capital gains were liable to be taxed on the facts of the case, based on the transfer of development rights and relevant judicial pronouncements.
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2013 (1) TMI 914
Issues involved: The judgment deals with the issue of the deletion of a specific amount by the Assessing Officer (AO) regarding the transfer of development rights of additional Floor Space Index (FSI) and whether it should be assessed as long-term capital gains.
Summary of Judgment:
Issue 1: Deletion of amount by AO
The Respondent Co-op. Housing Society's building was constructed in 1971 on a plot of land in Mumbai. In 1991, the Municipal Corporation relaxed FSI rules, and the Society received additional FSI which was sold to developers. The CIT(A) allowed the appeal of the assessee Society, stating that no capital gains shall be exigible. The Coordinate Bench in the assessee's own case for the assessment year 2006-07 also held that the amount received on the sale of FSI is not taxable under capital gains. The Tribunal upheld the CIT(A)'s decision, stating that the gain arising on the transfer of FSI/TDR is chargeable to tax under capital gains, but as there is no cost of acquisition, there will be no liability to capital gains.
Issue 2: Applicability of Coordinate Bench Decision
The AR pointed out that the impugned issue is now covered by the decision of the Coordinate Bench in the assessee's own case. Since the issue has been decided by the Coordinate Bench and there is no deviation in facts, the Tribunal dismissed the appeal filed by the department, upholding the decision of the CIT(A) and the Coordinate Bench.
In conclusion, the Tribunal dismissed the department's appeal, following the decisions of the Coordinate Bench and holding that no capital gains are chargeable due to the lack of cost of acquisition in the transfer of FSI.
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2013 (1) TMI 913
Issues Involved:
The issues involved in this case include challenges to an order related to export obligations under the EPCG Scheme, rejection of extension requests, jurisdictional concerns regarding the authority passing the order, and the interpretation of relevant policies and acts.
Challenge to Order on Export Obligations:
The petitioner, an industry engaged in manufacturing and exporting industrial fabrics, challenged an order stating they were not eligible for benefits due to not meeting export obligations by the specified deadline. The petitioner sought relief through writ petitions, one of which requested a mandamus to consider their representation for fulfilling export obligations.
Extension of Export Obligations and Rehabilitation:
The petitioner had imported goods under the EPCG Scheme with specific export obligations. They requested extensions and revisions to these obligations, citing financial difficulties and requests for further time. The petitioner also highlighted their registration as a Sick Industrial Company and subsequent rehabilitation efforts by the BIFR.
Jurisdictional Objections and Legal Interpretation:
The petitioner raised objections regarding the authority passing the impugned order, contending it lacked jurisdiction. The court considered the interpretation of relevant acts and policies, emphasizing the need to assess the petitioner's financial status and sickness of the industry in determining eligibility for extensions under the Exim Policy.
Court's Decision and Remand:
After considering submissions from both sides, the court found merit in the petitioner's contentions and set aside the impugned order. The matter was remanded to the competent authority for reconsideration, directing them to review the petitioner's financial evidence and sickness status to make a decision in accordance with the law. The petitioner was granted an opportunity to submit a fresh representation for further consideration within a specified timeline.
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2013 (1) TMI 912
Issues Involved:
1. Whether the impugned lands were more than 2 KMs away from the municipal limits of Sanand and thus not capital assets u/s 2(14)(iii)(b) of the IT Act.
2. Whether the deletion of addition of Rs. 2,16,46,780/- made on account of the Assessee's share in short-term capital gains arising out of the sale of land was justified.
Summary:
Issue 1: Distance of Lands from Municipal Limits
The A.O. argued that the lands were within two kilometers of the Sanand municipal limits, making them capital assets u/s 2(14)(iii)(b) of the IT Act. The A.O. relied on certificates from the Talati cum Mantri and a map indicating the lands were within two kilometers. However, the CIT(A) visited the site and found the lands were more than two kilometers away, using the approach road method for measurement, as supported by the Hon'ble Punjab & Haryana High Court in CIT vs. Satinder Pal Singh and ITAT, Mumbai in Laukik Developers vs. DCIT. The CIT(A) concluded that the lands were not capital assets under the IT Act.
Issue 2: Deletion of Addition of Rs. 2,16,46,780/-
The A.O. added Rs. 2,16,46,780/- as short-term capital gains, arguing the lands were not used for agricultural purposes and were within the municipal limits. The CIT(A), however, found that the lands were used for agricultural purposes, supported by 7/12 extracts and the appellant's agricultural income records. The CIT(A) also noted that the lands were sold as agricultural lands and were more than two kilometers from the municipal limits, thus not falling under the definition of capital assets u/s 2(14)(iii)(b). Consequently, the addition was deleted.
Conclusion:
The Tribunal upheld the CIT(A)'s findings, confirming that the lands were agricultural and situated more than two kilometers from the municipal limits, thus not capital assets u/s 2(14)(iii)(b). The appeal of the Revenue was dismissed.
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2013 (1) TMI 911
Issues involved: Determination of treatment of long term capital gain as business income, disallowance of interest under Section 14A read with Rule 8D, addition of expenses of personal nature.
Long term capital gain vs. business income: The assessee, engaged in share trading, claimed long term capital gain (LTCG) as exempt income under section 10(38). The Assessing Officer (AO) treated the LTCG as business income, citing lack of distinction between investment and trading. The CIT(A) upheld the AO's decision. However, the ITAT found that the assessee maintained separate investment portfolio and accounts, indicating intention for capital gain. Lack of evidence supporting trading activity led ITAT to treat the income as LTCG exempt under the Act.
Disallowance of interest under Section 14A: The AO disallowed interest of Rs. 1,21,726 under Section 14A read with Rule 8D, related to exempt income. The assessee argued no borrowing for investment, having sufficient own funds. ITAT agreed, setting aside the disallowance as unjustified.
Addition of expenses of personal nature: The AO made an addition of Rs. 85,000 for personal expenses, reduced from Rs. 1,00,000. CIT(A) allowed motor and telephone expenses, considering low withdrawals. ITAT granted further relief of Rs. 35,000 due to unique circumstances, restricting disallowance to Rs. 50,000.
In conclusion, the ITAT partially allowed the assessee's appeal, ruling in favor of treating LTCG as exempt income, setting aside disallowance of interest, and granting relief on personal expenses.
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2013 (1) TMI 910
Issues involved: Appeal against the order of CIT(A) allowing deduction u/s 80IB(10) for exceeding built-up area limit.
The department appealed before ITAT Nagpur Bench against the CIT(A)'s order for the assessment year 2006-07, regarding the deduction u/s 80IB(10) for constructing commercial area exceeding the prescribed limit. The AO disallowed the deduction of &8377; 8,60,684/- stating violation of conditions. The CIT(A) considered submissions and relied on a Tribunal decision in a similar case, directing to allow the deduction on a proportionate basis after excluding units exceeding 1500 sq.ft. The department's representative supported the AO's order, while the assessee's representative supported the CIT(A)'s order. ITAT found no issue with CIT(A)'s decision, confirming it based on the Tribunal's previous ruling on similar facts. Consequently, the department's appeal was dismissed on 2nd Jan. 2013.
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2013 (1) TMI 909
Issues involved: Assessment of undisclosed bank account deposits u/s 68 of the IT Act for assessment year 2007-08.
Summary:
1. The assessee, a commission agent, declared total income of &8377; 1,55,820/- for the year. The AO added &8377; 15,58,100/- as unexplained cash deposits in the bank, initiating penalty proceedings.
2. The assessee argued that total bank credits should be considered turnover, proposing a 5% profit estimation. The CIT(A) restricted the addition to &8377; 15,32,778/-, partly allowing the appeal.
3. The Tribunal analyzed the bank statement, noting an erosion of capital and commission income. It sustained an addition of &8377; 11,40,000/-, considering peak credit and personal expenses paid, differing from the CIT(A)'s decision.
4. The appeal was partly allowed, with the Tribunal's order pronounced on 11-01-2013.
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2013 (1) TMI 908
Disallowance u/s 14A r/w Rule 8D - The AO ascertained some interest being attributable to the earning of exempt income and disallowed the same u/s 14A. - HELD THAT: - The matter requires to go back to the file of the AO for deciding it in the light of MAXOPP INVESTMENT LTD., CHEMINVEST & OTHERS VERSUS COMMISSIONER OF INCOME TAX, COMMISSIONER OF INCOME TAX VERSUS ESCORTS FINANCE LTD [2011 (11) TMI 267 - DELHI HIGH COURT].
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2013 (1) TMI 907
Issues involved: Disallowance of various expenditures u/s 14A, software license fees, consultancy charges, repairs to furniture, and legal fees.
Legal Fees and Other Fees Disallowance:
The appeal contested the disallowance of legal fees and other fees, treating them as contingent liabilities. The assessee failed to provide evidence to justify the claims, leading to dismissal of these grounds as provisions are not allowable deductions without proper substantiation.
Software License and Consultancy Charges Disallowance:
Both parties agreed to remand the issues of software license fees and consultancy charges back to the AO for fresh adjudication, considering the decision in the case of Amway India Enterprises Ltd vs. DCIT. The AO was directed to reexamine the issues after considering relevant judgments.
Repairs to Furniture Disallowance:
The expenditure on repairs to furniture was challenged, with the assessee demonstrating that the payment was for refurbishing old furniture, not for procuring new items. The Tribunal found the expenditure to be revenue in nature, reversing the addition confirmed by the CIT (A).
Interest Expenses Disallowance u/s 14A:
The disallowance of interest expenses u/s 14A was contested, highlighting that the CIT (A) did not consider the binding jurisdictional judgment of the High Court. It was noted that Rule-8D applied by the AO was not applicable for the assessment year in question. The issue was remanded to the AO for fresh adjudication in line with the relevant judgment.
Conclusion:
The Tribunal partly allowed the appeal, setting aside certain disallowances and directing the AO to reexamine specific issues in light of relevant legal precedents. The order was pronounced on January 2, 2013.
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2013 (1) TMI 906
Issues involved: Interpretation of Section 54F of the Income Tax Act regarding exemption claim for demolished property within 3 years of purchase.
Summary:
1. The main issue in this case is whether the respondent-assessee is entitled to benefit under Section 54F of the Income Tax Act when the purchased property is demolished within three years.
2. The revenue argued that the demolition of the property within three years of purchase would amount to transfer, thus disqualifying the assessee from the exemption under Section 54F.
3. The Commissioner of Income Tax (Appeals) allowed the assessee's claim, stating that the demolition did not constitute a transfer as per Section 54F(3) of the Act.
4. The Tribunal upheld the CIT(A)'s decision, citing the Supreme Court case of Vania Silk Mills P. Ltd., which held that destruction of assets does not constitute a transfer under the Act.
5. The revenue's counsel tried to distinguish the Vania Silk Mills case by arguing that the destruction in that case was involuntary due to fire, but the court found this distinction irrelevant and applied the same reasoning to the present case.
6. The High Court dismissed the appeal, stating that there was no reason to entertain the proposed question of law, and upheld the decision in favor of the respondent-assessee.
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2013 (1) TMI 905
Whether assessee is entitled to claim deduction u/s. 54F - Sale proceeds of the property and investment of the consideration in a new residential building - whether assessees purchased a residential building or not - Held that:- Assessee claimed that since it was residential bungalow at the time of purchase he is entitled to claim deduction - Merely because it was demolished at a later stage it cannot alter the character of purchase of residential house - demolition of an asset does not amount to transfer since there is no transferee and there is no consideration
Held that:- Any extinguishment on account of act of the assessee would amount transfer and the only exception provided therein was the extinguishment on account of act of God - since this aspect was not considered the matter is directed to be reconsidered - Matter remanded back
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2013 (1) TMI 904
Issues involved: Denial of input service credit for maintenance and insurance services related to immovable property.
Summary:
The appellant, engaged in renting out immovable property, was denied input service credit for service tax paid on maintenance and insurance of the property. The appellant contended that they are entitled to the credit as per Rule 2(l) of Cenvat Credit Rules, 2004. The respondent argued that the credit was taken based on unspecified documents under Rule 9 of the Rules.
After hearing both parties, the Tribunal found that the appellant, being in the business of renting out immovable property service, is indeed entitled to input service credit u/s Rule 2(l) of the Rules. However, it was noted that proper documents supporting the credit were not filed. Therefore, the matter was remanded to the adjudicating authority for verification of the documents.
The Tribunal allowed the appeal by way of remand, directing the adjudicating authority to examine the documents on which the credit was taken. The stay application was also disposed of accordingly.
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