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TMI Tax Updates - e-Newsletter
January 12, 2012
Case Laws in this Newsletter:
Income Tax
Service Tax
TMI SMS
Highlights / Catch Notes
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Income Tax:
Determination of annual value where premises are not regulated by Delhi Rent Control A/C - income from house property - Standard Rent Cannot be adopted" - the rateable value, if correctly, determined, under the municipal law can be taken as ALV under Section 23(1)(a) of the Act.... - HC
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Income Tax:
Block Assessment - Interpretation of Word 'Abatement' - If the interpretation given by the ITAT is to be accepted, the entire proceedings of penalty will also abate giving an unreasonable advantage to the assessee, insptie of adverse findings inviting penalty..... - HC
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Income Tax:
Non-deduction of tax at source u/s 194J - payment made by the University to the coordinator colleges to be paid to evaluation staff for conducting the evaluation of copy books of the examinees - matter restored to CIT(A) for fresh decision.... - AT
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Income Tax:
The opinion of the Assessing Officer may have been legally erroneous but this cannot be a ground for initiation of re-assessment proceedings. An erroneous decision which is prejudicial to the Revenue can be revised but the said option was not exercised. .... - HC
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Income Tax:
Eligibility of deduction u/s 80IB – Workers engaged in all the units are required to be considered while computing total number of workers employed by the assessee. .... - AT
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Income Tax:
Undisclosed investment - Block Assessment - The peak theory worked out by the A O for the purpose of making addition on account of undisclosed investments was not valid .... - AT
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Income Tax:
Registration u/s 12A - the assessee has not explained as to why the object clause specifically provides that the benefit of the foundation goes to the members in a narrow sense - applicant remains a paper company - no registration u/s 12A .... - HC
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Income Tax:
Commercial Expidency:- Non-charging of interest on advances by the sister concern, particularly in the situation where both the concerns having benefits of such mutual accommodation, could indeed be justified on the ground of commercial expediency in a particular fact situation. - claim of deduction of interest allowed..... - AT
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FEMA:
Review of the policy on Foreign Direct Investment- liberalization of the policy in Single-Brand Retail Trading. - Cir. No. Press Note No.1 (2012 Series) Dated: January 10, 2012
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Service Tax:
Levy of Service Tax on free after sale service - Service Tax cannot be charged on free after sale services.... - AT
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Service Tax:
Penalty - Revenue is empowered to levy penalty at the rate of Rs. 100/- per day if the assessee fails to pay duty only in respect of the period from 10-9-2004 onwards and not prior to the said date..... - HC
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Service Tax:
Cenvat Credit - 'Repair and Maintenance' Services on air-conditioning plant for the office space of the factory - credit allowed .... - AT
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Service Tax:
Inasmuch as a penalty under Section 78 is being sustained, there is no justification for restoring the penalty under Section 76 as sought for by the department. However, the Commissioner (Appeals) has clearly erred in reducing the penalty imposed by the original authority under Section 78 without any valid reasons..... - AT
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Service Tax:
Refund in terms of notification No. 41/2007-ST - Period of limitation - When a notification itself provides the period for claiming the exemption in terms of the said notification, such period cannot be extended by taking recourse to the provisions of section 11B.... - AT
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Service Tax:
Due date for filing of Service Tax Return for the period ending September, 2011 extended till 20-1-2012
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Central Excise:
CENVAT Credit - It is the obligation of the assessee that he takes precautions under Rule and then only take credit. Availment of credit without such verification would lead to a conclusion that there was suppression of facts of non-verification/non-compliance with the provisions of rule and therefore mandatory penalty u/s 11AC is attracted..... - AT
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Central Excise:
Demand and Penalty - Clandestine removal of M.S. Ingots - adopting of power consumption norm of another unit is arbitrary and the confirmation of duty demand on this basis would not be sustainable.... - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2012 (1) TMI 6
Validity of re-opening of assessment – erroneous deduction u/s 80HHC & 80IA – change in opinion – Held that:- The question of deductions u/s 80IA and 80HHC were specifically examined at the time of original assessment proceedings. Assessee had justified the claim and furnished documentary evidence or proof. The quantification of the claim was justified. This is a case of change of opinion. The opinion of the Assessing Officer may have been legally erroneous but this cannot be a ground for initiation of re-assessment proceedings. An erroneous decision which is prejudicial to the Revenue can be revised but the said option was not exercised. - Decided against the Revenue.
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2012 (1) TMI 5
DTAA with AUSTRALIA – Fees for technical services (FTS) or inclusive contracts of technical nature - applicability of Articles 7 or 12 of the DTAA – assessee having PE in India – whether income to be construed as 'business income' or gross receipts to be taxed without any deduction – assessee opted to be taxed as per the provisions of the DTAA - Held that:- The payment in the present case is for furnishing of evaluation report. The assessee undertook certain tests, mapping and studies. Drilling for tests as to evaluate is to gain information and knowledge. The payment made is to acquire technical information. Therefore, it is fee for technical services. As per articles of DTAA, once an assessee has a PE in the contracting state of which he is not resident, then paragraphs 1 and 2 of the Article 12 of DTAA would not apply. In such cases Article 7 or 14 would apply. Thus, it is held that Article 12 of the DTAA is not applicable. Article 7 deals with business profits and will apply. Expenses incurred by the assessee can be claimed as a deduction but only in accordance with and subject to limitation stipulated in the Act. Section 44D postulates non-applicability of Sections 28 to 44C in case of foreign company earning income by way of royalty or fees from technical services. Thus, Section 44D is applicable to compute taxable Income. - Decided against the Revenue
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2011 (12) TMI 152
Non-deduction of tax at source u/s 194J - payment made by the University to the coordinator colleges to be paid to evaluation staff for conducting the evaluation of copy books of the examinees - evaluation work deemed to be technical in nature by A.O. - assessee did not filed replies before the AO nor ascribed any reasons as to why tax was not deducted at source – demand imposed - Held that:- CIT(A) deleted the addition on the basis of additional material submitted before him, without following the principles of natural justice. Since CIT(A) has not recorded any findings on the applicability or otherwise of provisions of sec. 194J of the Act nor the relevant documents, explaining the exact nature of payments made by the University to the Principals of aforesaid colleges are presented, therefore, the issues raised in appeal are restored to file of CIT(A) for fresh adjudication in accordance with law, in the light of aforesaid observations, bringing out clearly as to whether or not provisions of sec. 194J are applicable in this case.- Decided in favor of Revenue for statistical purposes.
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2011 (12) TMI 150
Eligibility of deduction u/s 80IB – rejected on basis that the number of workers working in the manufacturing process was less than 10 – deduction of expenses towards salary & wages – benefit of indexation on UTI-deep discount bonds - Held that:- A.O. has not considered workers engaged in another washing unit of same activity. Workers engaged in all the units are required to be considered while computing total number of workers employed by the assessee. Though the name of workers engaged in bottle washing unit were not entered into muster roll but were in the wages register and attendance register. This issue has been decided by the Tribunal in Cavour of the assessee in his own case thereby, assessee is eligible for deduction u/s 80IB and expenses towards salary & wages are also allowed. - Decided against the Revenue It is also held that UTI-MIP-99 is a bond & hence, the assessee is not eligible for indexation in view of 3rd proviso to Section 48. - Decided in favor of Revenue.
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Service Tax
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2012 (1) TMI 4
Penalty imposed u/s 76, 78 of Finance Act 1994 deleted by Tribunal – service tax liability established on payments/commission received by assessee from banks/financial institutions on cars sold under finance schemes - Business Auxiliary Service – two corrigendums were issued calling upon and asking the assessee to defend the penalty - Held that:- The order of Tribunal specifically states that the corrigendums were issued invoking Section 78 of the Act hence, penalty u/s 78 cannot be deleted on the ground that the show cause notice did not grant any opportunity of rebuttal to the respondent to defend the penalty under the said Section. Therefore, the matter is remitted to the Tribunal for a fresh decision. The Tribunal while deleting the penalty u/s 76 has not discussed and stated the stand of the assessee only. Thus, matter is restored back to the Tribunal to decided whether or not there was any reasonable cause. - Decided in favor of Revenue.
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