AIT-2016-03-HC
M/s. Strategic Engineering Private Ltd. Vs. Addl. CCE, Madurai

Service Tax: before the amendment to Section 65(39a) under Finance Act, 2005, installation of plumbing, drain laying or other installations for transport of fluids was not included within the definition of "erection, commissioning or installation

AIT-2016-11-HC
Kulbhushan Khosla Vs. CIT, New Delhi

This was a case where the original assessment was completed under Section 143 (3). In other words there was a complete scrutiny of the accounts and all the affidavits of the donors furnished by the Assessee pursuant to the questionnaires issued to him by the AO. In the absence of any adverse material, the reopening of the assessment was at best due to change of opinion of the AO that some income had escaped assessment. This was impermissible under Section 147 of the Act.

Larger Bench: Whether, while dealing with the allowability of expenditure under section 40(a)(i) of the Income Tax Act, 1961, the status of a person making the expenditure has to be a non-resident before the provision to section 172 of the Act can be invoked ? -we overrule the view in Orient Goa's case (supra). The question referred is answered accordingly

the Court finds that the order dated 12th October, 2012 merely records that the Assessee did not carry on the business of Vyaj Badla during AY 2006-07. As pointed out by Mr Aggarwal, although in the AY in question the Assessee may not have carried out the business of Vyaj Badla, it was necessary for the ITAT to examine, in light of the stand of the Revenue in the earlier and later AYs, whether the interest income earned by the Petitioner should be treated as business income. That plainly the ITAT failed to do in the order dated 12th October, 2012. The impugned order in the rectification application also failed to deal with this aspect

since we have held that the Finance Act, 2012 will not affect Article 12 of the DTAAs, it would follow that the first determinative interpretation given to the word “royalty” in Asia Satellite, when the definitions were in fact pari materia (in the absence of any contouring explanations), will continue to hold the field for the purpose of assessment years preceding the Finance Act, 2012 and in all cases which involve a DTAA, unless the said DTAAs are amended jointly by both parties to incorporate income from data transmission services as partaking of the nature of royalty, or amend the definition in a manner so that such income automatically becomes royalty. 

The common question that arises for consideration in these writ petitions concerns the validity of the action initiated by the Respondent Income Tax Department against the Petitioners under Sections 201(1) and 201(1A) of the Income Tax Act, 1961 for non-deduction of tax at source (‘TDS’) for periods earlier than four years prior to 31st March, 2011. These petitions in turn involve the interpretation of the proviso to sub-section (3) of Section 201 of the Act, which was inserted with effect from 1st April, 2010.

there was again no material on the basis of which the AO could have applied a standard rate of Rs 4,800 per sq ft for all the floors of VT. It was also not open to the AO to draw an inference on the basis of the projection in the document, particularly when the Assessee offered a plausible explanation for the document. The burden shifted to the Revenue to show, on the basis of some reliable and tangible material, how the rate at which the flats on the second and third floors of VT was higher than that indicated in the sales register or the sale deeds themselves

The goods exported were manufactured by using the inputs received indigenously as per rule 19(2) of the Central Excise Rules 2002 and no rebate was claimed against any inputs or the final products exported as the export was under Bond. - in terms of the said Notification dated 01.04.2003, as per proviso 2(f) All Industry Rates of drawbacks are not applicable to exports if such commodity is manufactured or exported in terms of Sub Rule (2) of Rule 19 of the Central Excise Rules 2002.

Service Tax: a quasi-judicial authority must act independently and not at the dictates of some other authority. It is quite evident that the Commissioner issued the impugned show cause notice at the instance of CERA without any independent application of mind and, thereby, abdicated his powers and duty, which is not permissible in law

Service Tax: the removal of “admission and access to entertainment event and amusement facilities” [sub-clause (j) of Section 66D of the Finance Act, 1994] from the Negative List of “Services” by an Amendment of 2012 and the consequent imposition of service tax on such activity would not result in the Union Parliament trenching upon the exclusive field assigned to the State, under Entry 62 List II of the Seventh Schedule of the Constitution of India.

In light of the law explained hereinbefore, insofar as any of the above SCNs relate to the period prior to 8th April 2011 they are clearly without jurisdiction since the ADG, DRI could not have exercised such power for a period prior to 8th April 2011. Further in terms of Explanation 2 to Section 28 as has presently been enacted with effect from 8th April 2011, for the period prior to 8th April 2011, Section 28 of the Act as it stood prior to that date will apply and not the new Section 28 of the Act.

Service Tax: the Court: (i) declares Rule 5A(2) as amended in terms of Notification No. 23/2014-Service Tax dated 5th December 2014 of the Central Government, to the extent that it authorises the officers of the Service Tax Department, the audit party deputed by a Commissioner or the CAG to seek production of the documents mentioned therein on demand is ultra vires the FA and, therefore, strikes it down to that extent;

Service Tax: The controversy involved in these petition relates to the question whether the consideration paid by flat buyers to a builder/promoter/developer for acquiring a flat in a complex, which under construction/development, could be subjected to levy of service tax. According to the Petitioners, the agreements entered into by them with the builder are for purchase of immovable property and the Parliament does not have the legislative competence to levy service tax on such transaction.

Service Tax: In fact the assessees should be more happy that they are not thrown at the mercy of the Appellate Authorities for considering the question of waiver of pre-deposit condition. The law now fixes a standard rate, applicable to all persons uniformly, without subjecting the assessees to the vagaries of weather prevailing in the offices of the Appellate Authorities/Tribunals.

Service Tax: SEZ unit and DTA unit of the assessee cannot be considered as separate persons. Merely because they are required to maintain separate books of account in terms of rule 19(7) of the Special Economic Zones Rules, would not mean they are separate entities. The Tribunal was of the opinion that service tax would be levied on a transaction between a person and another person and levy of service tax therefore, would require a transaction between two persons

Service Tax: The challenge in this petition under Article 226 of the Constitution of India is to the constitutional validity of Section 65 (105) (zzzzv) of the Finance Act 1994 (FA) whereby the provision to any person by a restaurant, by having the facility of air-conditioning in any part of its establishment serving food or beverage, including alcoholic beverages or both, in its premises has been made amenable to service tax. Also challenged is the of constitutional validity of Section 65 (105) (zzzzw) of the FA whereby the provision by a hotel, inn, guest house, club or camp-site by whatever name called to any provision, accommodation for a continuous period of less than three months has been made amenable to service tax.

the Court is satisfied that what is sought to be made amenable to service tax is the activity of contract manufacturing of alcoholic liquors fit for human consumption by one entity for another. Such provision of service which is in pith and substance not covered under Entry 51 of List II of the Seventh Schedule to the Constitution of India is certainly amenable to levy of service tax by Parliament which is competent to legislate on that aspect with reference to Entry 97 of List I.

Service Tax: The Court is satisfied that in the present case the payment of Rs. 17 crores by eBIZ was not 'voluntary' but under coercion and duress and is required to be returned to eBIZ by the DGCEI forthwith and in any event not later than four weeks from today - Where an assessee has been regularly filing service tax returns which have been accepted by the ST Department or which in any event have been examined by it, as in the case of the two Petitioners, without commencement of the process of adjudication of penalty under Section 83 A of the FA, another agency like the DGCEI cannot without an SCN or enquiry straightway go ahead to make an arrest merely on the suspicion of evasion of service tax or failure to deposit service tax that has been collected. Section 83 A of the FA which provides for adjudication of penalty provision mandates that there must be in the first place a determination that a person is "liable to a penalty", which cannot happen till there is in the first place a determination in terms of Section 72 or 73 or 73 A of the FA.

Service Tax: the respondent can avail CENVAT credit on account of Service Tax paid on Mandap Keeping Services and Rent-a-Cab Services by treating the same as input services

Service Tax: Although the non compliance with Section 78 of the Act does not per se invalidate the penalty, at the same time, given that the option was not granted, and also that the appellant had deposited a substantial amount at the stage of adjudication and did not contend that it was not liable, we are of the opinion that limited relief in terms of that provision is justified in the peculiar circumstances of the case. The CESTAT’s impugned order is hereby modified. The assessee/appellant has the option to deposit the balance service tax together with accumulated interest and penalty of 25% of the entire tax due, within the period indicated in the third proviso to Section 78(1)