Income Tax
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High Court rules no penalty u/s 271D for reclassified Rs. 40,00,000 transaction as capital contribution by AOP member.
Case-Laws - HC : Penalty u/s 271D - violation of the provisions of section 269SS or not - treating the deposit/loan of ₹ 40,00,000/- as capital contribution of the member of AOP, for the AOP - transactions are genuine - no penalty - HC
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Supreme Court: Share Capital from Shareholders Not Business Income.
Case-Laws - SC : Share capital received from the various share-holders ought not to have been treated as business income. - SC
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Disallowance u/s 40A(2)(b) removed as assessee proves arm's length pricing; initial decision found arbitrary.
Case-Laws - AT : Disallowance made u/s 40A(2)(b) deleted for the reason that the assessee has proved that the price paid is at arm’s length and not excessive or unreasonable and as the disallowance made on ad-hoc basis is arbitrary. - AT
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Assessee Company Fails to Prove Borrowings Were for Business, Affecting Interest Expenditure Allowability.
Case-Laws - AT : Allowability of interest expenditure - The assessee-company had failed to controvert the suspicion entertained by the AO with evidence. Therefore, assessee had failed to discharge the onus of proving that the borrowings were made only for business purpose - AT
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Deduction for Advance VAT Payment Disallowed u/s 43B; Not Considered "Sum Payable" for Tax Purposes.
Case-Laws - AT : CIT(A) had rightly disallowed the deduction claimed U/s 43B of the Act for advance payment of VAT - this advance tax is not covered within the meaning of definition of ‘any sum payable’. - AT
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Excess stock is business income, not u/s 69. Partner's earnings taxed as business income per Section 28(v).
Case-Laws - AT : Excess stock found during the course of survey is income from business and profession and cannot be assessed U/s 69 - U/s 28(v) the interest, salary, bonus, commission and remuneration in the name of partner is assessed to tax as income from business and profession. - AT
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Assessing Officer to Estimate Income at 20% of Gross Receipts Due to Improper Cash Expenditure Records by Assessee.
Case-Laws - AT : Net income determination - assessee has not maintained proper vouchers but spent it in cash - instead of disallowing 50% of cash expenditure, AO should have estimated the income - AO directed to determine the net income of the assessee at 20% of the gross receipts - AT
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Deduction u/s 54 Allowed Despite Construction Delay if Advances Paid for Asset Acquisition Qualify for Capital Gains Use.
Case-Laws - AT : Deduction u/s. 54 - construction of the house was not completed within the stipulated period - Advances paid for the purpose of purchase and/or acquisition of the aforesaid assets would certainly amount to utilization by the assessee of the capital gains made by him for the purpose of purchasing and/or acquiring the aforesaid assets - AT
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Penalty u/s 271B canceled as audit report submitted during proceedings; accounts were audited and taxes paid timely.
Case-Laws - AT : Penalty u/s. 271B - Failure to get accounts audited - assessee has filed the audit report before the AO during the course of penalty proceedings, got his accounts audited, paid the tax and filed the return of income much before the specified date - penalty cancelled - AT
Customs
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Phosphoric Acid Import Gains Full Exemption for Fertilizer Production under Notification No. 265/92-CUS, Easing Customs Regulations.
Case-Laws - AT : Classification - import of Phosphoric acid - full exemption under Notification No.265/92-CUS dated 27.08.1992 for the manufacture of fertilizers allowed - AT
Service Tax
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Filing ER-1 Returns with Detailed Service Tax Credits Limits Authority's Demand Period on Ineligible Credits Discovery.
Case-Laws - AT : Service tax credit - When the ER-1 returns containing the details credit were filed regularly extended period demand cannot be raised later in case it was found that certain credits are not eligible to the assessee - AT
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Appellant Granted Cenvat Credit for Service Tax Paid on Employee Medical Claims.
Case-Laws - AT : Cenvat credit - the service tax credit on medical claim for employees of the appellant is available - AT
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Court Upholds Eligibility for Cenvat Credit on Service Tax Paid for Job Worker Crushing Charges.
Case-Laws - AT : Cenvat credit - eligibility - service tax paid on crushing charges to the job worker - there is no justifiable reasons for denial of part of credit of service tax availed by the appellants - AT
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Extended Limitation Periods Not Justified for Service Tax Credits on Photocopied Documents.
Case-Laws - AT : Invokation of extended period of limitation - It is not tenable to contend that if the credit is taken on photocopies of the documents, extended period can automatically be invoked. - AT
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Company Challenges CENVAT Credit Claim for Director-Provided Services Due to Insufficient Evidence and Transparency Issues.
Case-Laws - AT : Cenvat credit - management consultancy service and consulting engineering service” provided by the Directors to their own company i.e. appellant - Whether the appellant has availed CENVAT credit on the basis of proper evidence for payment of tax - the appellant not having come out with clean hands, it is difficult to entertain the appeal on merit - AT
Central Excise
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Exemption Granted for Deemed Export: Indirect Supply to SEZ Units via Shree Bajrang Alloys Ltd. Recognized.
Case-Laws - AT : Exemption - deemed export - respondent has not supplied the goods directly to SEZ Unit but has supplied the same to M/s. Shree Bajrang Alloys Ltd., who have further supplied the goods to SEZ Units - Benefit of Exemption allowed - AT
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Extended Limitation Period Applies When Audit Issues Prevent Detection of Inadmissible Credit in Central Excise Cases.
Case-Laws - AT : Period of limitation - If audit could not take place then this inadmissible credit availed by the appellant could not be detected. Therefore, the extended period of limitation is rightly invoked - AT
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Pharmaceutical Manufacturers' Sample Valuation Based on Cost Data: No Malafide Intent, No Extended Tax Assessment Period.
Case-Laws - AT : Valuation - physician samples - most of the pharmaceuticals manufacturers were adopting assessable value on the basis of cost data, we are of the view that no malafide intention can be attributed to the assessee so as to invoke the longer period of limitation - AT
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Rock Bolts in Mining Qualify for Cenvat Credit u/r 2(a)(A)(iv) as 'Fixtures' in Cenvat Credit Rules 2004.
Case-Laws - AT : Cenvat credit - The rock bolts being used as fixtures in mining process are entitled for credit as they are covered by specific description of 'fixtures' under Rule 2(a)(A)(iv) of Cenvat Credit Rules, 2004 - credit allowed - AT
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Cenvat Credit Denial Overturned: No Evidence of Suppression or Intent to Evade Duty in Audited Records Dispute.
Case-Laws - AT : Denial of cenvat credit - the credit entries were in the regular records, which were audited and the dispute arose thereafter only. Therefore, invoking extended period with an allegation of suppression of facts and willful mis-statement with an intend to evade payment of duty is not sustainable. - AT
VAT
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Works Contracts with Iron & Steel: Taxed at Accretion Point, No Further Taxation Allowed.
Case-Laws - SC : Taxability of works contract - the point at which these iron and steel products are taxable is the point of accretion, that is, the point of incorporation into the building or structure - Transaction cannot be taxed again - SC
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Reversal of Input Tax Credit for 'Invisible Loss' in Manufacturing Ordered for Reassessment by Revenue Authorities.
Case-Laws - HC : Reversal of Input tax credit (ITC) - assessment, pertaining to 'Invisible Loss' during manufacturing activity - revenue directed to redo the assessment in accordance with law. - HC
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Court Rules Degummed Soyabean Oil Retains Classification for VAT if Essential Properties Intact After Processing.
Case-Laws - HC : Rate of Tax / VAT - classification of Crude Degummed Soyabean Oil - oil will remain oil if it retains its essential properties and merely because it has been subjected to certain processes would not convert it into a different substance - HC
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