Service Tax - 2008 - TMI - 30459 - CESTAT NEW DELHI
Non-compliance with order of pre-deposit as directed by commissioner - applicants are directed to deposit the amount as directed by Commissioner (Appeals) for hearing of the appeal. On deposit of the above-mentioned amount, the pre-deposit of remaining amount of Service Tax and penalty is waived - As the Commissioner (Appeals) has not decided the appeal on merit, therefore, the impugned order is set aside and matter is remanded to the Commissioner (Appeals)

Service Tax - 2008 - TMI - 30458 - CESTAT MUMBAI
Enhancement of penalty - issue involved in this case is regarding the discharge of service tax liability - entire amount of service tax, which was due, was paid on 12-7-2004. The Amnesty Scheme, which was introduced by the Central Government for non-imposition of penalty, if the Service Tax liability and interest thereof is paid before 30-10-2004, squarely applies in this case - penalty imposed on the appellant is liable to be set aside

Service Tax - 2008 - TMI - 30457 - CESTAT, KOLKATA
Demand of 3 crores & equal amount of penalty - held under the impugned order that Assam State Transport Co. (ASTC) is rendering business auxiliary services to private bus owners by way of allowing such bus owners to ply passenger buses under the banner of ASTC on bus routes which are not open to the private bus operators - prima facie this activity does not come under the category of business auxiliary services – stay is granted

Service Tax - 2008 - TMI - 30456 - CESTAT NEW DELHI
Application for waiver of penalty - It is stated on behalf of the appellant that the entire amount of service tax along with interest has been paid and the service tax is not in issue - it is stated that against penalty of Rs. 34,51,446/- under Sections 76, 77 and 78, the appellant deposited Rs. 34 lacs under protest - In these circumstances, we waive the pre-deposit of balance amount of penalty

Service Tax - 2008 - TMI - 30455 - CESTAT NEW DELHI
‘Site formation’ - service tax demanded in respect of construction of ash dyke and related activities - prima facie not able to accept the contention of assessee that ash dyke can be considered as a dam - definition clause for site formation is fairly extensive and prima facie, many of the activities under taken by the appellant may attract service tax as held by the Commissioner - applicant has not made out a prima facie strong case for total waiver of dues

Service Tax - 2008 - TMI - 30454 - CESTAT NEW DELHI
Rent-a-cab service – also registered as tourist operator – demand contested on ground of violation of principles of natural justice – quantum of tax also challenged - No valid reason has been given for not filing any reply to SCN - submissions by assessee regarding violation of principles of natural justice are not prima facie sustainable – stay partly granted

Service Tax - 2008 - TMI - 30453 - CESTAT BANGLORE
Authorized service station - allegation is that they have not paid service tax in respect of amounts collected and accounted as contract charges, in respect of paint and body job charges collected from the customers - appellants contend that Service Tax is not being required to be paid on the inputs as they have already paid Service Tax on the contract charges – since assessee has pre-deposited an amount of Rs. 7,149,611 out of 10,18,922, stay is granted for balance amount

Service Tax - 2008 - TMI - 30452 - CESTAT NEW DELHI
Manpower recruitment agency and security services - reimbursement of actual expenses towards salary of the employees - applicant claim that such reimbursed amounts cannot be treated as part of the gross amounts received by them - Prima facie, we find that the value of so-called reimbursed amount shall be part of gross receipts on which service tax is payable - Taking into account the financial hardship urged, stay is partly granted

Service Tax - 2008 - TMI - 30439 - CESTAT MUMBAI
Services of chipping, painting and repairing of ships and vessels under authorization of Mumbai Port Trust - activities were carried out in the premises of the appellants (which is leased out by Port) and in the case of inadequacy of facility in their premises, they carried out these activities in the premises of Mumbai Port Trust - held that “port service” as defined under Section 65(67) would not cover the impugned services – assessee’s appeal is allowed

Service Tax - 2008 - TMI - 30438 - CESTAT MUMBAI
Telephone Services, Online Information & Database Access & Retrieval Services, Leased Circuit Service etc. - refund claim filed on ground that they had paid tax on MRP of the Recharge Coupon Vouchers (RCVs) for their pre-paid services but the recharge vouchers had actually been sold to the distributors at a discounted price - respondent & their agent has received only the amount shown in the invoices & not received amount for the vouchers distributed free, hence, refund is allowed

Service Tax - 2008 - TMI - 30437 - CESTAT, CHENNAI
Business of Auxiliary Service (BAS) – demand contested for the period prior to 1-5-06 - It is submitted that the same service cannot get classified under two different entries u/s 65[clause (104c) & clause (19)] - there is substance in submission of appellants that, for period prior to 1-5-06, they are not liable to pay tax on the services rendered by them, in the category of “BAS” - appellants have made out prima facie case – stay granted for the demand related to period prior to 1.5.06

Service Tax - 2008 - TMI - 30436 - CESTAT BANGLORE
Appellant paying Service Tax under the category of ‘Packaging Activity’ services from 16-6-2005 - Revenue proceeded to recover Tax for the previous period under category of ‘Cargo Handling Services’- we hold that the activities of Appellants is taxable as cargo handling service - appellants were engaged in ‘cargo handling service’ and hence they are required to pay the demanded amount - are required to pre-deposit the amount of Rs. 2,25,19,764/- but waiver to pre-deposit of penalty is granted

Service Tax - 2008 - TMI - 30435 - CESTAT NEW DELHI
Penalty - Respondents deposited the tax on 10-10-2006 for the period 1st April, 2005 to 31st March, 2006. Show cause notice was issued on 28-2-2007 - Commissioner (Appeals) observed that the respondent has acted in a bona fide manner which was not disputed by the Revenue - So, Commissioner (Appeals) has rightly set aside the penalty u/s 76 - appeal of Revenue is rejected

Service Tax - 2008 - TMI - 30434 - CESTAT BANGLORE
Appellant has got an office in USA for receiving export orders - Revenue has proceeded to consider this activity to fall within the ambit of Business Auxiliary Service as he has received commission from the Indian clients for rendering service outside the country - appellant’s contention that he was carrying on the services outside India and during the relevant period, the Service Tax was not leviable, has got force in the light of the Board’s Circular 36/4/2001 – stay granted

Service Tax - 2008 - TMI - 30433 - CESTAT, NEW DELHI
Delay in filing of the Return – reduction of penalty u/s 78 by Commissioner (A) – Comm. (A) observed that Section 76 for imposition of penalty for non-filing of return was proposed in the SCN. But no penalty was imposed u/s 76 in the adjudication - So submission of revenue to impose penalty u/s 78 (for delay in filing return) have no force – Comm. (A) is justified in upholding the penalty u/s 78 only for the period prior to registration & reducing penalty accordingly – revenue appeal rejected

Service Tax - 2008 - TMI - 30432 - CESTAT NEW DELHI
Commissioner (Appeals) set aside the penalty u/s 80 – Rent-a-cab - appellant is sort of illiterate person and may not have been fully aware of the provisions of service tax law - appellant deposited tax & interest voluntarily during the adjudication proceedings and did not challenge liability of the service on their activity service - Further appellant did not even charge service tax from their customers - power conferred u/s 80 to waive penalty has properly been invoked in favour of assessee

Service Tax - 2008 - TMI - 30422 - CESTAT, BANGALORE
Whether the revised rate of 8% would be applicable even to those cases where the hire purchase agreement was entered prior to 14-5-2003 when the rate of service tax was 5% - held that in respect of hire purchase contract, the rate of tax applicable is the rate prevailing on the day the contract is entered into - higher rate is not applicable for contract entered prior to the hike - demand of differential amount applying the higher rate not justified

Service Tax - 2008 - TMI - 30421 - CESTAT BANGLORE
Credit of input service on Mobile Phones for the period from March, 2004 to August, 2005 - Board’s Circular No. 59/8/2003 dated 20-6-2003 was relied on by the appellants but the Commissioner has not accepted the same - assessee had claimed Cenvat credit for the period from 10-9-2004 when the new Cenvat Credit Rules, 2004 came into effect – in view of impugned Circular & Tribunal’s decision in identical case, issue is settled in assessee’s favour – assessee’s appeals are allowed

Service Tax - 2008 - TMI - 30420 - CESTAT MUMBAI
Enhancement of penalty by commissioner – Appellant, Architect failed to pay the Service Tax within the stipulated time - as per Extra Ordinary Tax Payer Friendly Scheme, any person who will discharge Service tax liability and interest before 30th October 2004 will not be penalized - appellant has deposited the entire amount of Service Tax and interest thereof by 1st March 2004 – so order of commissioner is set aside and Assessee’s appeal is allowed

Service Tax - 2008 - TMI - 30419 - CESTAT BANGLORE
Appellant have not produced any piece of evidence to substantiate their claim for non-levy of service tax on the alleged services of housekeeping rendered by them - certificate of C.A has also not been produced for scrutiny - C.A’s certificate ought to have given break up of house keeping services furnished year-wise - assessee has not discharged their burden to seek benefit of non-levy of service tax on house keeping services – but in view of financial hardship, stay is partly granted

Income Tax - 2008 - TMI - 30460 - HIGH COURT DELHI
Revocation order did not amount to execution of a search as no asset was seized under that order – it could not be said that there was an execution of a search on 23.12.2000 so as to enable the reckoning of the period of limitation from the end of December 2000 – assessment could, therefore, not be passed on any date beyond 31.10.2002 - since the assessment order was passed on 27.12.2002, it was beyond time and consequently, the assessee’s appeal was allowed

Income Tax - 2008 - TMI - 30445 - HIGH COURT DELHI
Assessee paid sum of Rs 10,64,930/- to the State Electricity Board for installing the transformer and LT Lines for supply of electricity to its factory - though the assessee had spent some amount towards transformer and LT Lines ownership of the same did not belong to the assessee, but belonged to the State Electricity Board and, therefore, the benefit that the assessee got was of a commercial nature and was in the nature of a business advantage- hence these expenses are revenue expenditure

Income Tax - 2008 - TMI - 30444 - HIGH COURT DELHI
Re-assessment proceedings - Validity of notice issued u/s 148 - In absence of the finding that escapement in income had occurred by reason of failure on the part of the assessee, action taken by the Assessing Officer is wholly without jurisdiction - invocation of Section 147, the issuance of the notice under Section 148 and the subsequent order on the objections are all without jurisdiction - impugned notice u/s 148 as well as the reassessment proceedings pursuant thereto are quashed

Income Tax - 2008 - TMI - 30443 - HIGH COURT DELHI
Additions made by AO on account of the unexplained investment made by the assessee through Certificate of Deposit - Tribunal uphold the decision of Commissioner of deletion of additions - revenue could not seek to add the amount to the income of the assessee without any substantial material and merely on the basis of surmises – in similar issue revenue appeal against deletion of addition by tribunal was dismissed by HC – in view of the same, impugned appeal of revenue is liable to be dismissed

Income Tax - 2008 - TMI - 30442 - HIGH COURT DELHI
Whether tribunal was correct in accepting the additional agricultural income of the assessee by relying on post search facts, and ignoring the fact that the additional agricultural income already formed part of the undisclosed income u/s 158 BB – some important aspects not examined by tribunal – hence matter is remanded to tribunal to consider the entire issue with regard to additional agricultural income declared as part of undisclosed income afresh and return a finding in accordance with law

Income Tax - 2008 - TMI - 30441 - HIGH COURT DELHI
Penalty u/s 271 - Inadvertently, the assessee had claimed 100% deduction under Section 80 HHE, when he was actually entitled to only an 80% deduction – assessee did this on the basis of expert advice which had been certified by his Chartered Accountant – explanation offered by the assessee was bona fide and that all facts which were material to the computation of his income had been disclosed by the assessee – penalty not imposable

Income Tax - 2008 - TMI - 30440 - HIGH COURT DELHI
Exemption u/s 2(14) - assessee claim is that the agricultural land sold by it was not a capital asset & consequently, no capital gains accrued at the hands of the assessee and he was not required to pay any tax thereon – there was no material before the AO on the basis of which he could have maintained a belief that it was a capital asset within the meaning of Section 2(14) - AO was embarking on mere exploration without any belief – revenue’s appeal is dismissed

Income Tax - 2008 - TMI - 30427 - HIGH COURT DELHI
Settlement expenses towards settlement of a foreseeable liability in respect of premature termination of an agreement for use of premises – impugned expenses paid for an early exit from PBC’s premises meets the test of commercial expediency – there is no substance in revenue contention that there was no obligation under the contract on the assessee to pay these expenses, so they can’t be treated as incurred for business purpose – expenses allowable u/s 37(1) – revenue appeal dismissed

Income Tax - 2008 - TMI - 30426 - HIGH COURT DELHI
A new ground may be allowed to be raised only when it arises from the facts which are on record – ITAT is correct in law and on facts in declining the departments request in the form of additional ground of appeal - so questions are decided in favour of the assessee – held that sales-tax liability is an allowable deduction – held that litigation expenses were not of a capital nature and so they are allowable as an expenditure

Income Tax - 2008 - TMI - 30401 - HIGH COURT UTTARAKHAND
Assessee a foreign company, NRC, resident of USA – rate of tax – revenue submitted that ‘surcharge’ is includible within the meaning of ‘tax’ as ‘surcharge’ is nothing but ‘additional tax’ - Tribunal has erred in law in holding that word ‘tax’ does not include ‘surcharge’ for the purposes of Clause (2) of Article 14 of the DTAA with United States of America - Assessing Officer is justified in holding that the respondent assessee is liable to pay tax at the rate of 65 %, instead of 60%

Income Tax - 2008 - TMI - 30347 - GUJARAT HIGH COURT
Interest on refund - Order passed by Commissioner, Chief commissioner refusing to pay interest on the excess amount of tax deducted at source on the ground that the excess amount of tax deducted at source was not as a result of any order passed by the authority under the Income Tax Act, is liable to be set aside - respondents are directed to grant compensation by way of interest, for delay in payment of amounts lawfully due to assessee

Income Tax - 2008 - TMI - 30346 - MADRAS HIGH COURT
Assessee claimed an expenditure as lease rental payable to various finance companies – assessing authority noted that assessee had inflated the claim on the value of cost of acquisition on steel rolls, so claim was restricted – Commissioner partly allowed the claim of assessee – tribunal was justified in noting that cost of steel rolls had not been referred for any valuation – tribunal was right in allowing claim by relying on confidential note by Deputy Commissioner for subsequent A.Y

Income Tax - 2008 - TMI - 30345 - DELHI HIGH COURT
Assessee, is a Statutory Corporation receives grants and loans from Government of India – assessee advances grants, loans and subsidies to cooperative societies through State Governments/Apex Cooperative Banks – the same could not be claimed to be expenditure, hence disbursements made out of its interest income as loans could not be treated as revenue expenditure – therefore not deductible - questions raised is answered in favour of the Revenue and against the Assessee

Income Tax - 2008 - TMI - 30344 - PUNJAB AND HARYANA HIGH COURT
Penalty - Assessee claimed a certain amount as business expenditure incurred on education of one Varun on basis of a written agreement - there is any material to this effect available on the record that the said agreement was false - assessee had not claimed the expenditure intentionally and deliberately in order to evade the tax liability - therefore, in view of above fact, CIT (Appeals) has rightly deleted the penalty - No substantial question of law is involved – revenue appeal dismissed

Income Tax - 2008 - TMI - 30343 - GUJARAT HIGH COURT
Amendment to section 2(24)(ix) has been made w.e.f. April 1, 2002 – after amendment prize by draw of lots was treated as lottery – admittedly the Assessment Year in instant case is 1997-98 and this amendment has been made with effect from 1.4.2002, hence amount distributed as prize by draw of lots did not form part of term “lottery” for the period prior to this amendment

Income Tax - 2008 - TMI - 30341 - HIGH COURT DELHI
Money deposited with the Bank towards margin money for issuance of letters of credit for import of capital goods – interest earned on this amount should not be treated as income from other sources – impugned deposited are not investment so interest earned is required to be credited against pre-operative expenses(pending capitalization) incurred by the Assessee - loss on account of foreign exchange rate fluctuation cannot be disallowed – revenue appeal dismissed

Income Tax - 2008 - TMI - 30330 - SUPREME COURT
Appellant, Committee claimed exemption on the ground that it was a "local authority" - Agricultural Market Committee (AMC) is neither a Municipal Committee nor a District Board under the Explanation to Section 10(20) which was inserted w.e.f. 1.4.03, therefore, not entitled to exemption u/s 10(20) – it is not a sound rule of interpretation to seek the meaning of words used in an Income Tax Act, in the definition clause of other statutes – assessee’s appeal dismissed

Income Tax - 2008 - TMI - 30329 - HIGH COURT DELHI
HUF - agreement for sale dated 24.06.77 was substituted by the collaboration agreement dated 6.10.81 & the agreement to sell dated 6.10.81- There was no interest, much less, any right transferred in the property in favour of SSPL by the assessees - and hence, there was no transfer of a right in property as contemplated u/s 2 (47) - Tribunal was right in holding that there was no transfer of a capital asset within the meaning of Section 2(47) and hence no capital gain has arisen to the assessee

Income Tax - 2008 - TMI - 30310 - ALLAHABAD HIGH COURT
Deduction claimed for various expenses disallowed - Tribunal has recorded a categorical finding of fact that the assessee did not carry any business in relevant accounting year - In these circumstances, when the assessee did not carry any business, the question of allowing deduction on account of salary, bonus, etc., to the employees and other staff did not arise - Tribunal has rightly disallowed the loss/expenditure claimed by the assessee – assessee’s appeal dismissed

Income Tax - 2008 - TMI - 30309 - ALLAHABAD HIGH COURT
Assessee, manufacturer of soft drinks - Tribunal was legally correct in holding that the bottles and crates in the assessee’s case did not constitute its stock-in-trade and should be treated as plant – depreciation on bottles and crates is allowable