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TMI Tax Updates - e-Newsletter
January 5, 2012
Case Laws in this Newsletter:
Income Tax
Service Tax
Central Excise
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Provision of liability made for expenditure to be incurred in removal of encroachments in and around the technical area of the Airport - held as revenue expenditure.... - HC
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Assessee has right to adopt an accounting system of his choice. - Interference is permissible if the accounting system adopted is contrary to the prescribed accounting standards etc. under Section 145/145A of the Act..... - HC
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TDS u/s 194J or 195 - global management services and VSAT uplinking - reimbursement of the expenses - no tax at source was deductible and the provisions of Section 40(a)(i) of the Act were not attracted. .... - HC
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Voluntary Retirement Scheme (VRS) u/s 35DDA - merely because payment of more than Rs. 5 lakhs is made would not mean that the schemes are not in conformity with Rule 2BA and the provisions of Section 10(10A) of the Act.... - HC
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Capital gains – payment made by the assessee for vacancy of the property had a link with the sale of property and, therefore, was entitled for set off against sale consideration.... - HC
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Unpaid liabilities cannot be added as the assessee’s income under Section 41(1) merely because they remained unpaid for a sufficiently long time.... - HC
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The Revenue's principal objection is that the activities of the Trust, which are limited to running a School, is being run on commercial lines, so that there is no question of it being charitable - Decided in favor of revenue..... - AT
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Business of civil contracts for construction of roads, highways etc. - not engaged in the business of developing any infrastructure facility – Not eligible for deduction u/s 80IB .... - AT
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The owners entered into land development agreement with the developer while retaining the ownership, assigned certain rights – Held as transfer u/s. 2(47)(v) of the I.T. Act..... - AT
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TDS u/s 194H - Discount offered to Collection Centres for testing of samples - No TDS.... - AT
Indian Laws
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Clarification on Interest Rates on Small Savings Schemes.
Service Tax
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Service provided by visa facilitator in the form of assistance to individuals who intend to travel abroad, directly, does not fall under any taxable service under Section 65(105) of Finance Act, 1994. .... - AT
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Since the car is owned by an individual (director) and not by the appellant, the services rendered in relation to the car cannot be considered as input services for the appellants company..... - AT
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Job for pre-commissioning - civil construction work performed does not fall under the category of commissioning and installation..... - AT
Central Excise
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Refund of Cenvat credit - Rule 5 of CCR - in absence of any confirmed demand, reduction from the refund claim is not proper.... - AT
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since the Appellant could not have carried on his business without sending the samples to its dealers and prospective buyers and also without transmitting documents, cenvat credit of service tax paid on courier services allowed..... - AT
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CE - electricity consumption is not the criteria to determine output level..... - AT
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Amends Notification No. 3/2006-Central Excise - Effective Rate of Duty on goods of Chapter 1 to Chapter 25. - Ntf. No. 1/2012-Central Excise Dated: January 3, 2012
Case Laws:
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Income Tax
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2011 (12) TMI 135
Validity of re-opening of assessment u/s 147/148 of the Act – assessee had not questioned the re-opening before the A.O. and the CIT – change in opinion of A.O. - Held that:- The relevant facts/materials were available before the tribunal, when the assessee raised the additional plea challenging the very initiation of re-assessment proceedings on the ground that the jurisdictional pre-conditions were not satisfied. No new or fresh evidence was adduced before the tribunal. If the jurisdictional pre-conditions are missing and are absent, the assessee can object and question the reopening in the appellate proceedings. Further, the tribunal has observed that no fresh material had come to the knowledge or information of the Assessing Officer after passing of the first assessment order. Therefore, this is a case of change of opinion as this issue in question was examined in the original assessment proceedings.- Decided against the Revenue
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2011 (12) TMI 134
Addition on account of dis-allowance of interest and financial charges u/s 36(1)(iii) – Revenue contention that there is no co-relation between the utilization of borrowed funds and investments( selling off a segment of business to subsidiary & getting shares of it) made by it - Held that:- The Assessing Officer while disallowing the payment of interest and financial charges had failed to notice and given due credence to the fact that there was increase in interest payment this year, but the term loan and the credit facility had continued from the last year. Further, the assessee had declared a loss of Rs.1.88crs in the return filed for the assessment year in question. Lastly there are contradiction in the finding recorded by the Assessing Officer that involvement of the respondent in subsidiary company cannot be regarded as on account of business consideration.- Decided against the Revenue.
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Service Tax
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2011 (12) TMI 138
Power of the Commissioner (Appeals) to remand - export of IT software - refund claim under Rule 5 of CENVAT Credit Rules 2004 read with Notification No. 5/2006 dated 14.3.2006 on input services used in the export of output services – Held that:- The Commissioner (Appeals) has examined and found nexus between the input services (viz manpower recruitment, commercial training, management consultancy etc) and the output services. In effect, the Commissioner (Appeals) has not remitted any issue on merits to be decided by the original authority. It is basically for quantification purposes based on the Chartered Accountant's certificate as envisaged in the Board's Circular dated 19.1.2010. - Decided against the Revenue.
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2011 (12) TMI 136
CENVAT Credit of Service Tax on rent-a-cab service - rent-a-cab service was not exclusively used in relation to manufacture – period involved April 2005 to October 2009 - Held that:- The issue is only of interpretation of law. However, the relevant decisions regarding limitation as well as admissibility of credit or otherwise, were not cited before lower authority and therefore, the matter is remanded to original adjudicating authority, who shall consider the issue afresh in the light of the decisions of the Supreme Court/High Court/Tribunal and also the provisions of law.
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2011 (12) TMI 132
Power of the Commissioner (Appeals) to remand - export of IT software - refund claim under Rule 5 of CENVAT Credit Rules 2004 read with Notification No. 5/2006 dated 14.3.2006 on input services used in the export of output services – Held that:- The Commissioner (Appeals) has examined and found nexus between the input services( viz telcom service, security agency, chartered accountant service etc) and the output services. In effect, the Commissioner (Appeals) has not remitted any issue on merits to be decided by the original authority. It is basically for quantification purposes based on the Chartered Accountant's certificate as envisaged in the Board's Circular dated 19.1.2010. - Decided against the Revenue.
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2011 (12) TMI 131
Refund of service tax to include education cess - Held that:- Board's Circular No. 134/3/2011-ST dated 8.4.2011 clarifies since Education Cess is levied and collected as percentage of service tax, when and wherever service tax is NIL by virtue of exemption, Education Cess would also be NIL. In view of the above, Order-in-Revision passed by the Commissioner to recover education cess from the refund granted on the ground that the exemption was only in respect of service tax and does not cover the education cess cannot be sustained.- Decided in favor of assessee.
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Central Excise
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2011 (12) TMI 137
Manufacture of turpentine oil and rosin – assessee claimed nil rate of duty on the ground that the same are manufactured without the aid of power and also demands are time-barred - Held that:- Water is lifted to the water tank with the aid of power and the water so lifted is further used in the manufacture of final product, in view of the decision of the Supreme Court in CCE, Nagpur vs. Gurukripa Resins Pvt. Ltd. (2011 - TMI - 204457 - Supreme Court Of India) it is held that the goods are manufactured with the aid of power. Hence turpentine oil, is classifiable under Heading 3805.11 and rosin is classifiable under Heading 3806.11 of the Tariff. Further it is held that the demand beyond the normal period of limitation as provided under the provisions of Section 11A of the Central Excise Act are not sustainable hence set aside. Consequently, the demand for the normal period is confirmed and the Revenue's appeal is allowed to that extent.
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2011 (12) TMI 127
Classification of pleasure vessel – designed & registered as pleasure vessel - Casino and entertainment activity - Held that:- Vessel in question on one hand is classifiable as a cruise ship under heading 8901 and on the other hand it is classifiable as a vessel for pleasure under heading 8903. In such a situation the Rules for interpretation of the classification come into play. Since the Rule 1,2, & 3 (a) or (b) are not applicable in the present situation, it is found that under Rule 3(c) when the goods cannot be classified by reference to Rule 3 (a) & (b) they shall be classified under heading which occurs last in the numerical order among those which equally merit consideration. Therefore, it is more appropriately classifiable under heading 8903 of the Central Excise Tariff. Matter is remanded back to original authority for deciding issue relating to valuation of vessel, limitation whether there was any suppression of facts and imposition of penalty. - Decided in favor of Revenue
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