Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
July 31, 2014
Case Laws in this Newsletter:
Income Tax
Service Tax
CST, VAT & Sales Tax
Articles
News
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Claim of exemption u/s 80IA miscellaneous income had been earned by the assessee from the non-regular cargo of other nearby jetty which had been handled at the assessee's jetty - exemption allowed - AT
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Rejection of application for registration u/s 12AA before going into this aspect, objects of the trust and its activities, it is very much essential to see that the assessee is a valid trust - AT
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The refund of VAT receivable by the assessee is not chargeable to tax u/s 41(1) until the claim of refund is adjudicated by the commercial tax authority - AT
Service Tax
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Commercial coaching and training centre - vocational coaching services - these training courses though imparted with the aid to computers cannot be treated as computer training courses and, hence, would be eligible for exemption - AT
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Self adjustment of excess service tax paid - Refund claim of service tax paid earlier - sub-rule 6(3) is not dependent on provision of sub-rule 6(4) - there is no time limit prescribed under sub-rule 6(3) for making adjustment - AT
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Sub-contractor - consultancy services provided to Main architect - there is nothing on record to show that the architects paid service tax for value of services rendered by the appellants. - prima facie case is against the assessee - AT
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Valuation - Franchisee service - royalty referred to in the agreement and actually collected by the appellant from the franchisee ought to have been made part of the taxable value of the Franchise Service for the period of dispute - AT
Case Laws:
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Income Tax
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2014 (7) TMI 1039
Levy of penalty u/s 271(1)(c) Addition u/s 68 on disallowance of interest expenses and unexplained cash credit Held that:- Assessment proceedings and penalty proceedings are separate and distinct and the finding in the assessment proceedings cannot be regarded as conclusive for the purposes of the penalty proceedings - assessee had disclosed the material facts namely name of the depositors copy of their PAN card, confirmation of the depositor and their acknowledgement of return of Income - When the assessee has furnished all the material facts relevant thereto, the disallowance of such claim cannot automatically lead to the conclusion that there was concealment of particulars of his income by the assessee or furnishing inaccurate particulars - What is to be seen is whether the said claim made by the assessee was bona fide and whether all the material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty u/s 271(1) (c) of the Act as all the necessary facts were furnished, simply because the addition has been made it does not call for levy of penalty u/s 271(l)(c) Decided in favour of Assessee.
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2014 (7) TMI 1038
Disallowance out of interest expenses Business funds diverted to non-business purposes Held that:- Assessee was having interest free funds in the form of Share Capital and Reserves aggregating to ₹ 10.79 crores and the advance for purchase of land was ₹ 4.15 crores following the decision in The Commissioner of Income Tax Versus Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] - if there are funds available both interest free and over drafts and/or loans taken, then a presumption would arise that the investments would be out of the interest free funds generated or available with the company, if the interest free funds were sufficient to meet the investments assessee submitted that the land was purchased out of the amount that was advance to A.D Gravures in earlier years - Assessee had charged interest from A.D. Gravures and the interest was assessed as business income - CIT(A) has deleted the addition there is no reason to interfere with the order of CIT(A) Decided against Revenue.
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2014 (7) TMI 1037
Reopening of assessment u/s 147 r.w section 148 Computation of book profit u/s 115JB Held that:- The assessee returned an income which was accepted u/s 143(3) subsequently notice u/s 148 was issued on 31.03.2011 after recording of reasons wherein the book profit u/s 115JB was re-computed and it was held as deemed to be a taxable income of the assessee company - the order is challenged not only for want of approval of the CIT(A) but also on various other grounds which was specifically made clear in the letter relied upon before the CIT(A) - In the light of these facts and the submissions of the parties before the Bench considering the material available on record, it would be appropriate in the peculiar facts of the case to restore the issue back to the CIT(A) as the assessee had not withdrawn the ground raised and had only withdrawn one specific argument assailing the validity of the proceeding - Since the Jurisdictional issue is to be first decided and only thereafter the appeal on merits can be decided the matter remitted back for fresh adjudication Decided in favour of assessee.
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2014 (7) TMI 1036
Claim of exemption u/s 80IA Infrastructure development of port Held that:- So far the income from sale of water is concerned, it had been earned by the assessee for supply of water to cargo ships for their engine cleaning and other miscellaneous purposes and the same in our view was a part of the activity of operation of the jetty - the miscellaneous income had been earned by the assessee from the non-regular cargo of other nearby jetty which had been handled at the assessee's jetty for which the assessee had charged them for use of its jetty - the claim of deduction on account of income from sale of water and miscellaneous income was justified as the same was part of operation and maintenance activity of the assessee at the jetty. So far the income on account of storage facility is concerned, in the earlier assessment year also, CIT(A) had put a specific query to the assessee as to whether the storage facility was owned by the assessee and whether the same was part of the infrastructure facility of the jetty assessee submitted that the storage facility was adjacent to the jetty and the assessee was paying ₹ 5000/- per month to M/s. Hindalco Industries Ltd as license fee for the said storage facility thus, the storage facility was not part of the infrastructure facility of the jetty and even the assessee was not owner of the said storage facility but it belonged to M/s. Hindalco Industries Ltd. - thus, the assessee was not entitled to claim any deduction in respect of income earned on account of storage facility. So far so, the transportation charges are concerned, the income had been earned by the assessee for arranging the transportation from the jetty to party's place it cannot be said to be a part of infrastructure facility development at the jetty - the claim of the assessee in respect of miscellaneous income and income from sale of water is allowed whereas, the claim of deduction on account of income from storage facility and transportation charges is hereby disallowed Decided partly in favour of Assessee.
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2014 (7) TMI 1035
Assessment u/s 153A Unexplained expenses Held that:- The AO has challenged the order of the CIT(A) only on the jurisdictional issues whereas the relief is granted by the CIT(A) on merits as well - the scope of reassessment is only with regard to the income escaping assessment and the matter which have attained finality in original assessment cannot be re-agitated in reassessment proceeding - Relying upon ACIT Vs KS Food Products [2014 (7) TMI 897 - ITAT AGRA] - the scheme of Section 153 A does not permit such an exercise by the AO revenue has not been able to point out our attention to any judicial precedent to support his case or demonstrate as to how the addition in respect of those very issues, which have received finality earlier and in respect of which no new or incriminating material is found, can be taken upon the course of proceedings u/s 153A on the basis of the search the order of the CIT(A) is upheld Decided against Revenue.
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2014 (7) TMI 1034
Jurisdiction u/s 263 Claim of set off of loss - Held that:- AO has not discussed anything about the set off of loss claimed by the assessee and the difference in TDS certificate - When the order of the AO is appealable before the CIT(A) and subjected to revision u/s 263 before the Administrative Commissioner, the AO has all the more reasons to disclose the reasons for allowing or disallowing a claim of the assessee - the application of mind shall be reflected in the assessment order as also the reasons for conclusion available in the order itself AO cannot strengthen his order by filing an affidavit or by supplementing by any other document before the appellate or revisional proceedings - The assessment order has to stand on its own leg on the reasons stated in the order itself. Relying upon Commissioner of Income-tax vs Sunil Kumar Goel [2005 (1) TMI 34 - PUNJAB AND HARYANA High Court] - this Tribunal is of the considered opinion that the assessing officer has not conducted any proper enquiry with regard to set off of loss claimed by the assessee even though he disallowed the claim of loss in the earlier assessment year. The assessment order does not reflect the application of mind nor does it contain any reason for allowing the claim of the assessee - the Administrative Commissioner has rightly exercised his jurisdiction since the order is not only erroneous but also prejudicial to the interest of the revenue there was no infirmity in the order of the lower authority Decided against Assessee.
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2014 (7) TMI 1033
Rejection of application for registration u/s 12AA Held that:- The assessee has furnished copy of Indian Trust Act, 1882 also but he did not point out any relevant provision of this Indian Trust Act, 1882 to establish that this Act is applicable only to private trust and not public trust - the issue should go back to CIT - All the arguments should be made before the CIT and he should give a finding about all the arguments after providing reasonable opportunity of being heard to the assessee - if the CIT finds that the assessee is a valid trust as per the provision of Indian Trust Act, 1882 or as per section 92 of CPC, as claimed by the assessee, then he should give his finding about the objects of the trust and the genuineness of the activities and decide the issue regarding registration of the assessee trust u/s 12AA of the Act - before going into this aspect, objects of the trust and its activities, it is very much essential to see that the assessee is a valid trust because the registration is available only to a trust and specified institutions and not to any other person the matter is remitted back to the CIT Decided in favour of Assessee.
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2014 (7) TMI 1032
Penalty u/s 271(1)(c) Inaccurate particulars furnished Valuation as per section 50C Held that:- Where addition is made on account of application of section 50C and Revenue failed to produce any evidence to the effect that assessee has actually received more amount than that shown by it on the sale of property then penalty under section 271(1)(c) cannot be levied Following the decision in COMMISSIONER OF INCOME TAX, KOLKATA - IV Versus MADAN THEATRES LTD [2013 (6) TMI 96 - CALCUTTA HIGH COURT] - where addition is made on account of application of section 50C and there is no material on record to show that assessee had received more amount than that shown by it on sale of property then penalty u/s 271(1)(c) cannot be levied Decided in favour of Assessee.
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2014 (7) TMI 1031
Restriction of Labour charges Held that:- A reasonable rate should have been applied by CIT(A) - it would be fair and reasonable to allow labour charges as claimed by the assessee - the short comings of the assessee shall also be addressed - an average rate can be allowed instead as claimed by the assessee The decision in Dy. Commissioner of Income-Tax Versus M/s. M. Kantilal Exports [2014 (7) TMI 819 - ITAT AHMEDABAD] followed - thus, the order of the CIT(A) is modified in respect of an adhoc disallowance Decided partly in favour of Revenue. Under valuation of closing stock of polished diamonds Held that:- This year can be treated as a demarcating year from the past years; hence, without disturbing the value of the opening stock, the AO is authorized to change the method of valuation for valuing the closing stock - an average of the two valuations is the right solution - The average of the two valuations - To resolve this long pending issue is a reasonable and fair approach to compute the value of the stock of the polished diamond at an average value of the closing stock - Closing stock of the diamond was and by applying the rate - The decision in Dy. Commissioner of Income-Tax Versus M/s. M. Kantilal Exports [2014 (7) TMI 819 - ITAT AHMEDABAD] followed - the AO is directed to re-calculate the valuation of the polished diamond by adopting the average rate of the two figures and accordingly compute the under valuation of the polished diamonds Decided partly in favour of Revenue. Valuation of closing stock of polished diamonds - Valuation made without any method Valuation made at average rate of purchases Held that:- The valuation of the stock is to be made at the market price or the cost price, whichever is lower - when the complete information about the quality of the stock is not made available then to resolve the issue a middle path is to be adopted - the assessee was in possession of the rough diamond; hence, the difference of the two, i.e., purchase cost (- minus) sale cost is the correct method for determining the valuation of the rough diamond - The decision in Dy. Commissioner of Income-Tax Versus M/s. M. Kantilal Exports [2014 (7) TMI 819 - ITAT AHMEDABAD] followed - the AO is directed to re-compute the valuation of the closing stock of the rough diamonds by adopting an average rate on the same guidelines Decided partly in favour of Revenue. Admission of additional evidence Deduction u/s 80HHC Export realization during extended period Held that:- The assessee has received approval from the R.B.I, and the realising Bank for extension of period for realisation in terms of section 80HHC (2)(a) of the Act there was no reasons for not allowing deduction u/s 80HHC of the Act on this realization - The AO is directed to include the said late realisation in export sale proceeds and allow deduction u/s 80HHC of the Act on this amount also Decided against Revenue. Defects in Labour payment expenses Held that:- The labour charges are different from lot to lot depending upon the quality of the diamond manufactured - while explaining the correctness of the valuation of the stock in the past year, the assessee himself had taken a plea that the diamonds are of two qualities, a superior quality and inferior quality - the valuation of such type of diamonds effect the overall valuation of the closing stock - it was impractical to pay an identical rate of job charges to all the job workers - Certain other doubts have also been raised such as a huge amount of labour charges remain outstanding at the end of the financial year- the AO is directed to re-compute the disallowance an average is to be taken for the purpose of disallowance of labour expenses Decided partly in favour of Assessee.
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2014 (7) TMI 1030
Undisclosed payment to land owners Proper appreciation of facts and evidences not made - Held that:- The main contention of the assessee was that SNOA wanted to develop a housing scheme for which land was purchased from several land owners - About 28,500 sq. yard of land was transacted and alleged that SNOA had entered into a contract for purchase of land from different land owners - the question is that whether the transactions as appeared in the seized diary were in fact the transaction of SNOA or those transactions belonged to the assessee - it was expected from the AO to examine the books of accounts of SNOA, to see whether there was sufficient cash in the books of accounts before making an expenditure in cash or through cheque thus, the matter is remitted back to the AO - The queries cannot be treated as an exhaustive list and the AO, therefore, in his discretion can raise allied question to verify the claim of the assessee that the payment was not made by the assessee but by SNOA. Once the issue was restored back to the file of the First Appellate Authority, but at that time there was an apparent denial of opportunity to the assessee as prescribed under Rule 46-A by learned CIT(A) - even after the perusal of the Remand Report the questions/doubts as raised could not be removed thus, it is not only necessary but also justifiable to restore the matter back to the stage of investigation, i.e., the assessment stage so that the assessee as well as the Revenue both can go upto the hilt of the facts and thereupon can arrive at the correct conclusion Decided in favour of assessee. Addition made cash deposit in bank account source of income not appreciated Held that:- The assessee has not explained the exact details of the agriculture holding and the income earned there from - It was necessary on the part of the assessee to place on record the area/measurement of the agriculture holding duly supported by the evidence - Assessee was also required to show agriculture crop produced. Be that as it was - the assessee had produced bills during the course of assessment proceedings - the assessee had produced evidence to this extent confirming the agriculture income, therefore, the AO is directed to reduce the addition and rest of the amount is confirmed Decided partly in favour of Assessee. Investment for the purpose of visa Held that:- A deposit made for the purpose of obtaining Visa cannot be termed as an investment - A Visa may or may not be granted, therefore, the amount in question appears to be an expenditure and not an investment - undisclosed income has already been taxed coming out of the seized material, therefore, the expenditure for obtaining Visa can be set-off against that income the addition is set aside Decided in favour of Assessee.
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2014 (7) TMI 1029
Penalty u/s 271(1)(c) Disclosure of additional income - Held that:- the assessee voluntarily disclosed additional income during the course of assessment proceedings and paid tax - it cannot be said that additional income disclosed during the course of assessment proceedings was not voluntary or that the assessee wanted to conceal the income - Even though the revised return was found to be invalid, the AO accepted the income as declared in the revised return and computation - AO did not bring any material on record that the declaration of income made by the assessee in his revised return or his explanation was not bona fide - there appears to be no basis for imposition of penalty on the ground that the assessee furnished inaccurate particulars of income - revenue have not placed before us any material nor brought to our notice any contrary decision so as to enable us to take a different view in the matter Decided against Revenue.
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2014 (7) TMI 1028
Rejection of books of accounts Held that:- The shareholders of the company appointed new auditors who submitted audit report on 01.09.2009 and the assessment was completed on 31.12.2010 without considering the same - it is mandatory to file return in time as prescribed in section 139 (1) of the Act as provided in Fourth Proviso to section 10 (B)(1) of the Act - This appears to be a reasonable cause to file return in haste and on the basis of unaudited results and statement of accounts - it is not a case of non-maintenance or not keeping stock register but it is case of not having stock register being maintained according to certain standard of compliance required by the auditors - the issue of rejection of books of accounts is remitted back to the AO with a direction that the qualifications mentioned in the audit report Decided in favour of Assessee. Gross Profit rate to be applied @ 28.39% or 12.55% - Held that:- The AO has not properly verified and examined the explanation of assessee pertaining to decline in GP rates at Bhiwadi and Delhi unit - neither the AO nor the CIT (A) attempted to examine the veracity of reasons submitted by the assessee for decline in GP rate AO as well as the CIT (A) made and confirmed the addition mainly on the reason that books of accounts stood rejected - As the issue of rejection of books to the file of the AO for fresh and de novo adjudication - the issue of GP rate is also remitted back to the AO for fresh adjudication Decided in favour of Assessee. Managerial remuneration and salary to directors relatives Held that:- The managerial remuneration which could be paid by the assessee per managerial person comes to ₹ 1,25,000/- monthly or say ₹ 15 lacs per annum - the amount paid is only ₹ 12,96,000 - this is well within the limit as prescribed in the Companies Act, 1956 - CIT (A) was not justified in sustaining the same - the salary can be paid to relative of the directors were up to ₹ 20,000/- per month or ₹ 2,40,000/- per annum - the salary paid was only ₹ 2,40,000/-, therefore, the payment was also within the limits of Companies Act, 1956 which does not require any approval from Board or Central Government Decided in favour of Assessee. Foreign exchange fluctuation loss - Held that:- The issue is covered by the judgment CIT vs. Woodward Governor India Pvt. Ltd. [2009 (4) TMI 4 - SUPREME COURT] - "Loss" suffered by the assessee on account of fluctuation in the rate of foreign exchange as on the date of the balance-sheet is an item of expenditure under section 37(1) of the Act - Under the mercantile system of accounting, what is due is brought into credit before it is actually received, it brings into debit an expenditure for which a legal liability has been incurred before it is actually disbursed Decided in favour of Assessee. Disallowance of VAT written off Profits chargeable to tax under s. 41(1) - Held that:- Following the decision in ITO vs. Binayak Hi Tech Engg. Ltd. [2012 (5) TMI 331 - ITAT, Kolkata] - Refund arises pursuant to the decision of the commercial tax authority who has to adjudicate the claim After the claim of refund is made by the assessee in the prescribed form, the Commercial Tax Department has to accept or reject the claim No benefit has accrued to the assessee during the relevant year as the claim was not adjudicated by the commercial tax authority Therefore, refund receivable by the assessee is not chargeable to tax - the refund of VAT receivable by the assessee is not chargeable to tax u/s 41(1) until the claim of refund is adjudicated by the commercial tax authority Decided in favour of Assessee. Exemption u/s 10B Held that:- As decided in assessees own case for the earlier assessment year, it has been held that, drawback received by the assessee under a scheme to encourage export was not profit and gains derived from industrial undertaking and therefore, not entitled for deduction u/s 80IB - the assessee has been allowed claim u/s 10B but with certain observations in the earlier orders - the claim of the assessee is allowed on the same conditions Decided in favour of Assessee.
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Service Tax
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2014 (7) TMI 1051
Telecommunication service - non receipt of consideration for services rendered - Wrong availment of CENVAT Credit - non consideration of all pleas of assessee - Violation of principle of natural justice - Held that:- during the period for which these demands have been confirmed, the service tax payable on the basis of the amount realized was more than the service tax actually paid. It is considered that assessee's contentions for demand of service, education cess or CENVAT credit were not considered - Matter remanded back for de novo adjudication - Decided in favour of assessee.
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2014 (7) TMI 1050
Commercial coaching and training centre - vocational coaching services - Exemption Notification No. 24/2004-ST dated 30/06/2004 - Held that:- Technology based training for employment skill development, the training courses for medical transcriptionist, insurance agents etc. are vocational course which enable the persons receiving such training to get direct employment or get self-employed. Therefore these training courses though imparted with the aid to computers cannot be treated as computer training courses and, hence, would be eligible for exemption under Notification No. 24/2004-ST. - stay granted. Cenvat credit demand of ₹ 81,476/- the same is based on the allegation that though the appellant provide taxable services as well as fully exempt services and have used common inputs/input services in respect of the same, they have not maintained separate account in this regard and have not confined the Cenvat credit availment only to the input services meant for taxable services. Though the appellant plead that they were maintaining separate account of inputs/input services, prima facie no evidence in this regard has been produced. Therefore, on this count, the appellant have not established prima facie case in their favour - stay granted partly.
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2014 (7) TMI 1049
Valuation - Construction of complexes - inclusion of free material supplied - Abatement of 67% - Exemption Notifications - Whether the value of free supply material supplied by the customers is to be included in the gross amount for the purpose of notification no.15/2004-ST dated 10.09.2004 and notification no.18/2005-St dated 7.6.2005 - Held that:- since the building was used for commercial purposes, the construction service provided in respect of the same would have to be treated as civil or industrial construction service. However, the appellant's plea that the amount of ₹ 8,26,971/- also includes the service tax demand on the free supply material supplied by M/s. Ashok Leyland Ltd. and service tax charged on account of free supply material in all the project executed by the appellant is included in the amount of ₹ 31,38,281/-, this point has to be examined by the adjudicating authority for which the same would have to be remanded. Building to be used by the Tanzania High Commission is not covered by the definition of Commercial or Industrial Construction Service as given in Section 65(25b) - service tax demand of ₹ 31,58,281/- in respect of the value of free supply materials supplied by the customers and the service tax demand of ₹ 10,65,742/- in respect of the construction of Tanzania High Commissions building and their staff quarters is set aside - Decided in favour of assessee.
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2014 (7) TMI 1048
Self adjustment of excess service tax paid - Refund claim of service tax paid earlier - unjust enrichment - assessee is entitled for self adjustment u/r 6(3) of excess service tax paid - revenue argued that assessee did not opt for provisional assessment u/s 6(4) - appellant has already refunded the excess service tax along with credit bill to its customers. - Period of limitation for self adjustment - Held that:- excess amount of service tax paid by the assessee can be adjusted against his service tax liability for the subsequent period. Only condition for eligibility of this sub-rule is that if assessee has refunded the value of taxable service and service tax thereon to the person from whom it was received. Appellant claims that appellant has refunded the excess S-T to its customers - this sub-rule is applicable not only to the case of excess payment of service which can be made good in subsequent period and bit also to the case where taxable values are not ascertainable for longer period - sub-rule 6(3) is not dependent on provision of sub-rule 6(4). Moreover there is no time limit prescribed under sub-rule 6(3) for making adjustment - Following decision of assessee's own previous case [2014 (7) TMI 830 - CESTAT NEW DELHI] - Matter remanded back - Decided in favour of assessee.
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2014 (7) TMI 1047
Sub-contractor - consultancy services provided to Main architect - Till 15-10-1998, the appellants were paying service tax for the total consideration received by them for such services. With effect from 16-10-1998, services rendered by architects were brought under service tax levy and since then the appellant stopped paying service tax. - Invocation of extended period of limitation - Held that:- The main contention of the assessee is that, the Architects paid service tax on value of services rendered by the appellants. This is a highly unlikely scenario. The burden to prove such payment was on the appellants who were claiming relief from tax liability. No such evidence has been produced - there is nothing on record to show that the architects paid service tax for value of services rendered by the appellants. Further the Ministrys clarification is with reference to service rendered by one consulting engineer to another consulting engineer. When the levy on consulting engineers were introduced the stand of the architects were that they were not consulting engineers. In the next Financial Year levy was imposed separately on the service of architects. So there is no reason to consider the impugned services as services rendered through architects as claimed by the appellants. - appellant was registered with service tax authorities and paying tax appropriately upto a particular point of time and thereafter they discontinued disclosure of receipt of consideration from architects without any reason. So the extended period of time is rightly invoked in this case. Demand to be raised on Partnership firm or Pvt. Ltd. company - Modification of order - Penalty u/s 78 - Held that:- documents showing the conversion of the partnership firm to the Private Ltd. company has not been produced at any stage of this proceeding below the lower authorities - Commissioner (Appeals) has passed orders giving certain reliefs in quantum of tax to be paid. However no specific order for corresponding reduction of penalty imposed under Section 78 is passed. So we direct that the adjudicating authority may determine differential tax liability as per directions of Commissioner (Appeals) and also re-determine the penalty under Section 78 in accordance with law - Decided against assessee.
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2014 (7) TMI 1046
Waiver of pre deposit - service provided to associated enterprises - amendment to section 67 is prospective or retrospective in nature - man-power recruitment and supply services and engineering consultancy services - Held that:- in view of insertion of Explanation (c) in section 67 of the Finance Act, 1994 on May 10, 2008, where the transaction is with any associated enterprises, the service tax on taxable service is liable to be paid as soon as the transaction is entered in the books of account - the transaction of the taxable service with the associated enterprises was entered in the books of account prior to May 14, 2008 and waiting for actual remittances. Amount in question was not realised till date and was shown in the balance sheet - they have also realised part amount and against which they have already paid an amount of ₹ 1,13,642. Prima facie, the Tribunal had given a detailed finding on the issue of applicability of the Explanation prospectively - applicant has made out a prima facie case for waiver of pre-deposit of the entire amount of tax and penalty - Following decision of Sify Technologies Ltd. [2012 (5) TMI 376 - CESTAT, CHENNAI] and [2010 (11) TMI 232 - CESTAT, CHENNAI] - Decided in favour of assessee.
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2014 (7) TMI 1045
Cargo handling service - Revenue contends that Commissioner travelled beyond SCN - Commissioner while deciding the case relied upon on the work orders which were not covered in the show-cause notice - Held that:- Commissioner has proceeded on the premise that the period and amount in the bills raised tally with the contracts considered by him. He has considered the work orders shown in para 6 of his order despite attempting the fact that he himself agreed there is mismatch of this contract number vis-a-vis the contract number mentioned in the show-cause notice. Moreover, there is no whisper of the contract number mentioned in show-cause notice, by the respondent in their written submission dated October 7, 2009. Therefore, we find that the learned Commissioner has traversed beyond the scope of show-cause notice and this work requires to be examined. Therefore, after setting aside the learned Commissioner's order we remand the matter to learned Commissioner to decide the case afresh - Decided in favour of revenue.
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2014 (7) TMI 1044
Valuation - Franchisee service - Non inclusion of amount of royalty - Held that:- Prima facie, the appellant is liable to include the so-called royalty as part of the taxable value of Franchise Service. It has been claimed by the learned counsel that the royalty was collected by the franchisor from the franchisee as part of a profit sharing arrangement, which argument does not appeal to us inasmuch as the royalty is the only consideration specifically mentioned in the relevant agreement as consideration to be paid by the franchisee to the franchisor - royalty referred to in the agreement and actually collected by the appellant from the franchisee ought to have been made part of the taxable value of the Franchise Service for the period of dispute - Prima facie case not in favour of assessee - stay granted partly.
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CST, VAT & Sales Tax
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2014 (7) TMI 1043
Waiver of pre-deposit - petitioner moved the appeals after depositing 25% of the disputed taxes - second respondent further directed the petitioner to deposit a further 25% of the disputed taxes and furnish bank guarantee for the balance of tax and penalty. - TANVAT Act, 2006 - Held that:- Writ Petitions are disposed of, with a direction to the petitioner to deposit a further 25% of the disputed taxes and to execute a personal bond, instead of furnishing bank guarantee, as required by the appellate authority as a condition for grant of stay, in each case. Such amount shall be deposited and personal bond shall be executed within a period of three weeks from the date of receipt of a copy of this order. On such deposit and receipt of the personal bond, the appellate authority is directed to dispose of the appeals on merits. On deposit of a further 25% of the disputed taxes and execution of the personal bond, the stay granted by the appellate authority shall continue till the disposal of the appeals - Decided conditionally in favour of assessee.
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2014 (7) TMI 1042
Detention of goods - Incorrect invoices - same serial number of two different invoices were available with driver - Held that:- without going into the correctness or otherwise of the order impugned in this Writ Petition, the respondent is directed to release the goods detained, to the petitioner forthwith, on condition that the petitioner pays the entire tax amount, which will be assessed by the respondent as contemplated under the Act. It is made clear that the petitioner has to subject himself to the adjudication proceedings that may be initiated by the respondent - Writ Petition is disposed of.
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2014 (7) TMI 1041
Levy of tax - Seal of check-post of the State of Rajasthan on the documents not available - Held that:- There is no quarrel in the factual position that the required documents, as per the provisions of section 78 (2) (b) of the Act of 1994, were available and produced at the time of checking of vehicle/goods and required tax had already been paid by the assessee. The only reason assigned in the impugned order passed by the learned Tax Board for restoring the order of the assessing authority is that the seal of the check-post of the State of Rajasthan on the documents is not available. From a bare reading of section 78(2)(b) of the Act of 1994, it is amply clear that the requirement of seal of the check-post is not mandatory - Following decision of Commercial Taxes Officer v. Devendra Yadav [2010 (11) TMI 885 - RAJASTHAN HIGH COURT] - Decided in favour of assessee.
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2014 (7) TMI 1040
Condonation of delay - Inordinate delay of 1583 days - Held that:- Following decision of State of Gujarat v. Karnavati Veneers Pvt. Ltd. [2014 (7) TMI 362 - GUJARAT HIGH COURT] - Condonation denied.
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