Direct Tax Basket 2014-TIOL-327-HC-MAD-IT M/s CRN Investments Pvt Ltd Vs CIT Income Tax - Sections 147, 154, 271(1)(C) - Whether the CIT(A) committed an error apparent on the face of the record by not considering the available Supreme Court decision on the issue of imposing penalty when the assessee has incurred losses - Whether this mistake qualifies to be a mistake for rectification u/s 154. - Assessees appeal partly allowed : MADRAS HIGH COURT 2014-TIOL-326-HC-KAR-IT CIT Vs M/s Hewlett Packard India Sales Pvt Ltd Income Tax - Section 37 - provision for warranty - contingent liability - Whether provision made for warranty is allowable as business expenditure, even in a case where such an obligation has its origin in the past - Whether “provision made for warranty” liability in respect of products sold is a contingent liability. - Revenues appeal dismissed : KARNATAKA HIGH COURT 2014-TIOL-325-HC-AHM-IT Kunal Organics Pvt Ltd Vs DCIT Income Tax Act- Section 142(1), 143(3), 147, 148. - Whether the second notice for reopening of assessment on the same ground on which the previous notice was issued for the same purpose, but later on dropped not on technical but substantive grounds, is impermissible. - Assessees petition allowed : GUJARAT HIGH COURT 2014-TIOL-324-HC-KERALA-IT C P Abdul Nizar Vs ITO Income Tax - Writ - Sections 143(2), 144, 271(1)(b), 271(1)(c) - recovery - abeyance - Whether in case an assessee has asked for preparation time for filing of an appeal, the CIT(A) can pass a order u/s 144 for recovery for amounts due without giving an opportunity of being heard to the assessee. - Assessees writ allowed by way of an interim order : KERALA HIGH COURT 2014-TIOL-143-ITAT-DEL Den Networks Ltd Vs ACIT Income Tax - Section 14A, rule 8D - borrowed funds - investment - interest - Whether 60% depreciation on printers, UPS, Scanner etc. can be allowed as against normal rate of 15% depreciation - Whether in case it has been proved that the interest paid on borrowed capital is directly attributable to the acquisition of business assets and working capital only, can it be assumed that the loan amount is utilised for acquisition of mutual funds also - Whether in case the interest component is not disputed towards acquisition of business assets, the application of rule 8D(2)(iii) can be made applicable. - Assessees appeal allowed, Revenues appeal dismissed : DELHI ITAT 2014-TIOL-142-ITAT-MUM + Story Mrs Usha Mayur Thakkar Vs DCIT Income Tax - Section 158BC - Whether the fact that the assessee has failed to prove by any documentary evidence that the income of assessee was below taxable limit, estimation of income can be made by the AO on the basis of the quantum of income declared by assessee in the preceding as well as in the succeeding AYs by taking average of the same - Whether any addition can be made out of foreign travel expenditure when no material/document or evidence was found during the course of search and /or inquiries made following search that the assessee had incurred the expenditure on her visits to Dubai and not her husband. - Assessee’s appeal partly allowed : MUMBAI ITAT 2014-TIOL-141-ITAT-AHM 20 Microns Ltd Vs DCIT Income Tax - Sections 10(34), 14A, 35, 35AB, 36(1)(iii), rule 8D - product development expenses - depreciation on Particle Size Analyzer - dust collector - Whether expenses claimed on the basis of project development report can be allowed, even in case the agreement mentioned in such report is back dated and there is weak possibility of its actual use in the year under consideration - Whether in case, an assessing officer who has initially allowed depreciation@100% on certain equipments treating them as pollution control equipments, in a subsequent year it can disallow the same claim made without any change in circumstances - Whether dividend received from foreign company is taxable in India in the hands of recepients - Whether section 14A can be applied on receipt of such dividend - Whether amount paid as interest u/s 36(1)(iii) can be disallowed in case the amount of loan taken was utilised in increment of capital Work in Progress. - Case remanded : AHMEDABAD ITAT Indirect Tax Basket SERVICE TAX SECTION 2014-TIOL-411-CESTAT-MAD M/s Coimbatore Anamallais Agencies Pvt Ltd Vs CCE (Service Tax) Service Tax - Stay/dispensation of pre deposit - Valuation in Servicing of Motor Vehicle - Appellant paid tax on service component but not on value of goods, disputed by revenue, resulting in tax demand with interest and penalties, agitated herein. Held: Ratio of ruling in Seva Automobiles case law applicable - waiver of pre-deposit granted for admission of appeal, with stay on collection of dues arising from impugned order till the disposal of the appeal. - Stay granted : CHENNAI CESTAT 2014-TIOL-410-CESTAT-DEL M/s KEC International Ltd Vs CST Frivolous Litigation - Costs Imposed on Revenue: This application seeking rectification/review of the order dated 19.8.2013, condoning a delay of nine days, for the detailed reasons recorded therein, is clearly a fundamentally misconceived and frivolous application. Tribunal is burdened with a huge pendency. It is regrettable that not only are such frivolous applications filed by Revenue but are even argued by DRs at great length and unmerited vehemence. There is also no provision, conferring jurisdiction on the Tribunal to review an order condoning delay in presenting the appeal. Since a wholly frivolous application is filed by Revenue, seeking review of an order condoning the delay while recording reasons therefore, seeking exercise of a jurisdiction not vested in the Tribunal and what is more, such application is pursued with great vehemence, resulting in wastage of substantial time of a docket overloaded Tribunal, it is appropriate to dismiss this application with costs of Rs . 10,000/- payable by the petitioner/Revenue to the Prime Ministers Relief fund, within two weeks from today. - ROM Rejected : DELHI CESTAT 2014-TIOL-409-CESTAT-BANG + Story Infosys Ltd Vs CST Service Tax - Demand of service tax under reverse charge under Section 66A - No service tax in respect of information technology software services received from overseas sub-contractors by overseas branches. Telecommunication service - reverse charge - such services are taxable only when the same is provided by person who has been granted a licence under Indian Telegraph Act, 1985. It is not the case of the department that Foreign Service suppliers have been licensed under the Indian Telegraph Act - Demand set aside. Service Tax - CENVAT Credit on insurance premium for family members of employees - not allowed; CENVAT Credit on services utilised for construction, maintenance or repair or renovation of Global Training Centre up to 01/04/2011, allowed. Credit of service tax paid on services used in respect of hostel, food court, gym etc - it is quite clear from the definition that both of them cannot be considered as premises from where the service is provided or an office relating to the premises from where service is provided. Therefore, the question of their necessity or essentiality is not really material once it is clear that the services are not covered by the definition itself - credit would not be admissible Held: (a) Denial of CENVAT credit and demand for the same in respect of service tax paid on insurance premium in respect of group health insurance scheme as regards employees is set aside. However, the matter is remanded to verify and limit the demand to the extent of service tax payable on insurance premium attributable to families of employees, if other family members are covered and expenses are borne by the appellant. (b)(1) Denial of CENVAT credit attributable to services utilised for construction, maintenance or repair or renovation of Global Training Centre up to 01/04/2011 is not sustainable and is set aside. However for the period subsequent to 01/04/2011, if any service has been used for setting up of global training center, such credit would not be available. To examine this aspect and to quantify the amount in this regard, the matter is remanded to Original Authority. (b)(2) As regards credit of service tax paid on services used in respect of hostel, food court, gym etc., in view of the interpretation of definition,, CENVAT credit would not be admissible in respect of service tax paid relating to construction, maintenance, repair or renovation to these facilities. Credit has been simply disallowed in relation to all services attributable to construction service and maintenance or repair service. The adjudicating authority is requested to get each invoice verified and quantify the demand. (c) The demand of service tax with interest in respect of Telecommunication service is set aside. (d) The demand for service tax in the capacity of receiver for ITSS received from overseas sub-contractor by overseas branches of the appellant is also set aside. (e) All the penalties under various Sections imposed on the appellant in their entirety set aside. - Appeal disposed of mostly in favour of assessee. : BANGALORE CESTAT CENTRAL EXCISE SECTION 2014-TIOL-328-HC-AHM-CX CCE & C Vs Gujarat Fashions Pvt Ltd Central Excise - 100% EOU - Deemed exports are to be taken into account for the purpose of computation of entitlement of DTA clearances under Notification No 2/95 CE - The issue is covered by the decisions in case of Commissioner of Central Excise v. Shilpa Copper Wire Industries and Commissioner of Central Excise and Customs v. NBM Industries - No merit in revenues appeal. - Appeal rejected : GUJARAT HIGH COURT 2014-TIOL-412-CESTAT-MAD M/s Kilburn Chemicals Ltd Vs CCE Central Excise - Stay / dispensation of pre deposit - CENVAT credit - credit availed on tax component of service tax paid on the rent of immovable property toward corporate office situated at Kolkata in dispute herein. Held: Prima facie, the observation of Commissioner (Appeals) that the rent paid for corporate office will not form part of cost of production is unacceptable - Tribunal, in the case of National Engineering Industries, held that rent paid for corporate office would come within the purview of Rule 2(l) of CENVAT Credit Rules, 2004 - waiver of predeposit of entire amount of duty along with interest and penalty granted and recovery thereof stayed during the pendency of the appeals. - Stay granted : CHENNAI CESTAT 2014-TIOL-408-CESTAT-MUM + Story Unique Industrial Handlers Pvt Ltd Vs CCE CE - Exemption - Project authority certificate issued by NTPC clearly indicates that the supply of goods is under the procedure of International Competitive Bidding and the contract has been awarded to M/s. WPIL - Since in the Annexure to the certificate, appellants name figures as a sub-contractor, the condition that the goods should be supplied against ICB procedure is clearly satisfied - moreover, certificate of the Jt. Secy, GOI states that the BARH Super Thermal Power Project has capacity of 1000MW or more - as condition of Notif. 12/2012-Cus is satisfied, appellant is entitled for exemption under notif. 6/2006-CE, 12/2012-CE - Appeal allowed: CESTAT - Appeal allowed : MUMBAI CESTAT 2014-TIOL-407-CESTAT-DEL CCE Vs M/s Vinay Traders Central Excise - Offence and penalty - M/s Surya Cotspin effected clandestine clearances under parallel invoices by suppressing production, evidenced by octroi record, established to have designed the fraud - respondent being one of the beneficiary of clandestinely removed goods by Surya Cotspin, penalty of Rs.10,000/- imposed in adjudication; set aside by Commissioner (Appeals) and agitated by Revenue herein.- Appeal allowed : DELHI CESTAT CUSTOMS SECTION 2014-TIOL-413-CESTAT-MAD Goyal Ispat Ltd Vs CC Customs - Stay / dispensation of pre deposit - Import of steel rerolling scrap, accompanied by a certificate from BVQI to the effect that the consignment did not have any arms / ammunition / explosive material in the containers - Revenue raised technical dispute that the agency issuing the certificate was not a recognized agency at the load port, hence the import is not legal, adjudicating confiscation of seizure under section 111 (d) of the Customs Act, 1962 apart from penalties and RF; agitated herein. Held: Prima facie, it appears that there was no intention to contravene any of the provisions of the law and the applicant had complied with the provisions to the best of their knowledge though there is a technical violation - issue whether fine and penalty needs to be imposed in such circumstances can be examined at the time of appeal hearing - waiver of the requirement of pre-deposit of penalty arising from the impugned order for admission of appeal considered proper - There shall be stay on collection of such dues arising from the impugned order during the pendency of the appeal. - Stay granted : CHENNAI CESTAT
Posted on: Tue, 18 Mar 2014 15:30:10 +0000
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