RECENT CASES

RECENT SERVICE TAX CASES

Service Tax - S. B. ENTERPRISES Versus COMMR. OF C. EX., COCHIN = 2008 Date of Decision: February 18, 2008 - CESTAT BANGALORE

No evidence to say that the appellant carried out clearing and forwarding activities on behalf of the Principal - held that mere procuring or booking orders for the Principal by an agent on a payment of commission basis would not amount to providing services as clearing and forwarding agent within the meaning of definition of that expression under Section 65(25)
Service Tax - NATIONAL ENGG. INDUSTRIES LTD. Versus COMMR. OF C. EX., JAIPUR = 2008 Date of Decision: December 13, 2007 - CESTAT, NEW DELHI

Tax wrongly paid on the commission got from foreign Co. through Indian railways under Business Auxiliary service - Rule 3 of Export of Services Rule, exempts export of service - contract reveals that the appellant would be paid USD equipment to non-convertible Indian Rupee at the Rate of Exchange prevailing on the date of supply order - equivalent amount of foreign exchange payable to the appellant was not released to the Indian Railways, so appellant complied with Rule 3(1)(b) -refund allowed

Service Tax - COMMR. OF C. EX., LUDHIANA Versus CITY CABLE = 2008 Date of Decision: April 7, 2008 - CESTAT, NEW DELHI

Application by revenue seeking grant of stay of order of Commissioner (A) setting aside the penalties - Commissioner observed that entire tax with interest was deposited before SCN so penalty is not justified - stay of the Commissioner order would enable Dept. to realise dues, which would not be proper without adjudication on merit by the Tribunal - At this stage, we are not inclined to go into the question of propriety of the imposition of penalty, so application is rejected
Service Tax - NCR CORPORATION INDIA PVT. LTD. Versus CST, BANGALORE = 2008 Date of Decision: May 16, 2008 - CESTAT BANGALORE

Appellants supplied Automatic Teller Machines (ATMs) for the period from July 2003 to March 2005 – Revenue contended that appellants rendered the cash replenishment services & caretaker services for the above period and these would fall under Business Auxiliary Service - automatic teller machine services came under the Tax net only w.e.f. 1.5.2006 and also the cash replenishment has also been included in the said services - hence tax cannot be levied for the period prior to that date
Service Tax - RAJINDER KUMAR Versus COMMR. OF C. EX., CHANDIGARH = 2008 Date of Decision: April 17, 2008 - CESTAT, NEW DELHI

Demand is confirmed on the ground that the applicants were providing business auxiliary service to the petroleum company - Contention of the applicants is that establishment expenses are being reimbursed to them by the company, and therefore, that portion cannot be added for charging service tax on the business auxiliary service - applicants are directed to deposit Rs. 35,000/-each in addition to the amount already deposited by the applicants – stay partly granted
Service Tax - COMMISSIONER OF C. EX., JAIPUR-I Versus TARGET INSTITUTION OF COMPETITION = 2008 Date of Decision: February 25, 2008 - CESTAT, NEW DELHI

Assessee obtained the registration on 27-7-04 and did not pay the tax but they recorded the fees in their records - no material for suppression of facts with intent to evade payment of tax so penalty u/s 78 is not justified - new levy on coaching centre and there was a dispute regarding availability of the exemption benefit and the respondent paid the tax before issue of SCN so imposition of penalty u/s 76 is excessive, so it is reduced
Service Tax - COMMISSIONER OF C. EX., LUDHIANA Versus BHANDARI HOSIERY EXPORTS LTD. = 2008 Date of Decision: February 19, 2008 - CESTAT, NEW DELHI

Import of services – assessee, service recipient - demand for the period from 9.2.2004 to February, 2006 prior to introduction of Section 66A - provisions of Section 66A of the Finance Act introduced w.e.f. 18.4.06, provides that the recipient of taxable service (provided by a person who is residing outside India) is liable to service tax - In the present case as the period of demand is prior to the introduction of Section 66A, Therefore, demand is not sustainable and, hence, set aside

Recent I.T Cases

Recent INCOME TAX Cases

Income Tax - THE COMMISSIONER OF INCOME TAX-V versus RELIANCE ELECTRONICS INDUSTRIES INDIA LIMITED = 2008

Date of Decision: July 16, 2008 - HIGH COURT DELHI

Addition on account of obsolete stock - assessee was in the business of mfg. television sets which required electronic components in respect of which technical obsolescence was a well-known fact - tribunal is justified in concluding that the assessee had valued its closing stock at the approximate market value as estimated by a qualified Chartered Engineer and AO could not point out any defect in the valuation report - no substantial question of law arises – revenue appeal dismissed
Income Tax - THE COMMISSIONER OF INCOME TAX DELHI (CENTRAL)-III versus M/S D. D. SALES CORPORATION = 2008 - TMI - 30048Date of Decision: July 22, 2008 - HIGH COURT DELHI

Question was with regard to the bar of limitation in making an assessment order u/s 158 BC - search having been conducted on 29.08.96 /30.08.96, the assessment made on 31.10.1997, is barred by limitation in view of the provisions contained in Section 158 BE - impugned order having been passed beyond the period of one year from the end of the month in which the last authorization for search had been executed - no substantial question of law arises – revenue’s appeal is dismissed
Income Tax - M/S KESHAV SHARES and STOCKS LIMITED versus INCOME TAX OFFICER AND OTHERS = 2008 Date of Decision: July 2, 2008 - HIGH COURT DELHI

Assessment u/s 143 - demand on account of income tax & interest raised - prior to the making of assessment order, no speaking order was passed by AO in respect of the objections taken by the assessee in its letter dated 17.09.07– in view of decision in Smt Kamlesh Sharma v. B.L. Meena, Income-Tax Officer case & inasmuch as the directives of the Supreme Court in GKN Driveshafts we set aside the assessment order – AO is directed to pass a speaking order and then proceed with assessment
Income Tax - COMMISSIONER OF INCOME TAX, DELHI-V. versus RBG INVESTMENT and FINANCE LTD. = 2008 Date of Decision: July 21, 2008 - HIGH COURT DELHI

Arrangement made between assessee & certain mutual funds with regard to subscription of fully convertible debentures, offered as a rights issue by the assessee’s sister concern - mutual funds were assured fixed rates of returns & assessee was able to obtain the fully convertible debentures of sale debentures only to make profits – so these can’t be treated as non business transaction - service charges were allowable expenses u/s 37 as they were wholly and exclusively expended for the business
Income Tax - COMMISSIONER OF INCOME TAX DELHI (CENTRAL)-III versus J.P.M FARMS (PVT.) LTD. = 2008 Date of Decision: July 18, 2008 - HIGH COURT DELHI

Levy of surcharge - proviso to Section 113 of the Income Tax Act, 1961 was inserted w.e.f 1.6.2002 whereby surcharge was sought to be levied by revenue on tax payable on undisclosed income determined in a block assessment year (1.4.1990 to 19.3.2001) - ITAT was correct in law in holding that the surcharge U/S 113 of the Income Tax Act, 1961 was not leviable in the present case - issue does not require any further investigation
Income Tax - COMMISSIONER OF INCOME TAX, DELHI-X versus M/S PRIMA INDIA PRODUCTS = 2008 Date of Decision: July 11, 2008 - HIGH COURT DELHI

Commissioner’s order u/s 263 requiring further investigation as Income-tax Officer had failed to enquire into the source of deposits/investments – Commissioner’s order merely raise doubts & suspicion - Tribunal is justified in concluding that the investments made by the assessee and its partners had a direct nexus with the sum disclosed by the assessee before the Settlement Commission - no further examination was required by the Income-tax Officer – revenue appeal dismissed
Income Tax - MALABAR AND PIONEER HOSIERY P. LTD. Versus COMMISSIONER OF INCOME-TAX = 2008 Date of Decision: January 16, 2008 - KERALA HIGH COURT

Preliminary expenditure incurred for construction of a shopping complex cannot be anything other than a capital expenditure as it goes to add to the capital of the project - Obviously, impugned expenditure is capital in nature & cannot be treated as revenue expenditure - rectification carried out u/s 154 of the Income-tax Act is perfectly justified - Tribunal rightly dismissed the assessee’s appeal on the validity of rectification as well as against disentitlement for the claim
Income Tax - COMMISSIONER OF INCOME-TAX Versus KARTAR SINGH AND CO. = 2008 Date of Decision: January 29, 2008 - PUNJAB AND HARYANA HIGH COURT

Issue whether deduction of interest & salary paid to partners could be disallowed or not in a case where the assessment was completed u/s 144(on status of registered firm), is highly debatable – AO rectified the assessment order on ground that since assessment was completed u/s 144, the status of firm was required to be taken as association of persons & hence disallowed deduction claim of assessee – impugned mistake is not apparent from record, hence rectification order is not valid

Postal Index Number (PIN)

Postal Index Number (PIN) is a 6 digit code.There are 8 PIN regions in the country. The first digit indicates one of the regions. The first 2 digits together indicate the sub region or one of the postal circles. The first 3 digits together indicate a sorting / revenue district. The last 3 digits refer to the delivery Post Office.

FOR PIN CODE SEARCH :-----CLICK

The first digit of PIN indicates as below:

First Digit : Region States : Covered

1---Northern--- Delhi, Haryana, Punjab,

Himachal Pradesh, Jammu & Kashmir
2 ---Northern ---Uttar Pradesh and Uttaranchal
3 ---Western--- Rajasthan and Gujarat
4--- Western--- Chattisgarh ,Maharastra and Madhya Pradesh
5 ---Southern--- Andhra Pradesh and Karnataka
6 ---Sothern ---Kerala and Tamil Nadu
7--- Eastern--- West Bengal, Orissa and North Eastern
8--- Eastern ---Bihar & Jharkand
9 ---APS ---Army Postal Service


The first 2 digits of PIN indicates as below:

First 2 Digits of PIN Circle
11----------- Delhi
12 and 13 ---Haryana
14 to 16 -----Punjab
17----------- Himachal Pradesh
18 to 19 -----Jammu & Kashmir
20 to 28 ---- Uttaar Pradesh
30 to 34 -----Rjasthan
36 to 39 -----Gujarath
40 to 44----- Maharastra
45 to 49----- Madhya Pradesh
50 to 53----- Andhra Pradesh
56 to 59----- Karnataka
60 to 64----- Tamil Nadu
67 to 69----- Kerala
70 to 74----- West Bengal
75 to 77----- Orissa
78----------- Assam
79----------- North Eastern
80 to 85------Bihar
90 to 99------ APS

FRIENDSHIP.........

TRUE FRIENDSHIP

The Leave Applications

The Leave Applications

From H.A.L. Administration Dept: "As my mother-in-law has expired and I am only one responsible for it, please grant me 10 days leave."

Another leave letter written to the headmaster: "As my headache is paining, please grant me leave for the day."

Covering note: "I am enclosed herewith..."

READ MORE IN FUN BOX TOMORROW.......

HAPPY FRIENDSHIP DAY

HAPPY FRIENDSHIP DAY

“Friends and Medicine play the same role in our life .both care for us in pain But ………..The only difference is that friendship does not have an expiry date……!”

FROM :--

JAB WE MET CA

"UNITED WE STAND, DIVIDED WE FALL"

Garbage Truck

'The Law of the Garbage Truck

One day I hopped in a taxi and we took off for the airport. We were driving in the right lane when suddenly a black car jumped out of a parking space right in front of us. My taxi driver slammed on his breaks, skidded, and missed the other car by just inches! The driver of the other car whipped his head around and started yelling at us. My taxi driver just smiled and waved at the guy. And I mean, he was really friendly. So I asked, 'Why did you just do that? This guy almost ruined your car and sent us to the hospital!' This is when my taxi driver taught me what I now call, 'The Law of the Garbage Truck..' He explained that many people are like garbage trucks. They run around full of garbage, full of frustration, full of anger, and full of disappointment. As their garbage piles up, they need a place to dump it and sometimes they'll dump it on you. Don't take it personally. Just smile, wave, wish them well, and move on. Don't take their garbage and spread it to other people at work, at home, or on the streets. The bottom line is that successful people do not let garbage trucks take over their day.

Life's too short to wake up in the morning with regrets,

so.....

'Love the people who treat you right. Pray for the ones who don't.'

Life is ten percent what you make it and ninety percent how you take it!

Rgds....

DIVYA SHARMA

MEMBER JAB WE MET CA

"Live Well, Laugh Often, Love Much"

Corporate language !!

Corporate language !!

'We will do it'

means

' You will do it'

'You have done a great job'

means

'More work to be given to you'

'We are working on it'

means

'We have not yet started working on the same'

'Tomorrow first thing in the morning'

means

'Its not getting done... At least not tomorrow !'.

'After discussion we will decide - I am very open to views'

means

'I have already decided, I will tell you what to do'

'There was a slight mis-communication'

means

'We had actually lied'

'Lets call a meeting and discuss'

means

'I have no time now, will talk later'

'We can always do it'

means

'We actually cannot do the same on time'

'We are on the right track but there needs to be a slight extension of the deadline'

means

'The project is screwed up, we cannot deliver on time.'

'We had slight differences of opinion'

means

'We had actually fought'

'Make a list of the work that you do and let's see how I can help you'

means

'Anyway you have to find a way out no help from me'

'You should have told me earlier'

means

'Well even if you told me earlier that would have made hardly any difference!'

'We need to find out the real reason'

means

'Well I will tell you where your fault is'

'Well... family is important, your leave is always granted. Just ensure that the work is not affected'

means

'Well you know...'

'We are a team'

means

'I am not the only one to be blamed'

'That's actually a good question'

means

'I do not know anything about it'

'All the Best'

means

' You are in trouble'

ST ON CONSTRUCTION

SERVICE TAX ON CONSTRUCTION OF RESIDENTIAL COMPLEX

Gauhati High Court has held in Magus Construction v. Union of India that when a person is engaged in construction of residential complex for sale to various persons, it does not amount to service and the transaction is not taxable under service tax laws. When the construction company doing construction activity on its own self, and selling the complex to various buyers, it does not fall under the ambit of service tax. Until the time sale deed is executed, the construction company remains the owner and it cannot be said that the construction company is doing construction activity on behalf of any person. Mere agreement to sale at some future date does not transfer the ownership.
The court further held that service is an intangible commodity in the form of human effort and to have service there must be service provider rendering services to some other person, who shall be the recipient of service.
The court further held that departmental circulars are not binding on the courts.
The judgment is a landmark judgment and will be applicable in a variety of other situations, where service tax is demanded by the department without establishing as to who is a service provider and who is a service recipient.

THANKS TO GOD

AKHAND PATH

AKHAND PATH WAS ORGANISED BY MANIT KAUR (40TH RANKHOLDER ,MAY 2008) to THANK GOD for helping her to achieve her goal.

All the relatives and near and dear ones of MANIT KAUR (40th rank holder) were present on this occasion.
Following members of JAB WE MET CA were ALSO present on this great occasion:-

MANIT KAUR (40TH RANKHOLDER)

ABHISHEK

KASHYAP

HEMANT

POOJA BATRA

VIVEK SAWHNEY

SATBIR SINGH

DEEKSHA SYAL

ASHUTOSH SHARMA

VIKAS BHARDWAJ

PRIYANKA

RITIKA

SHARD

AMAN MALHOTRA

ASEEM

VISHAL SINGLA

BY...

SATBIR SINGH

PRESIDENT

JAB WE MET CA

REDEFINING PROFESSIONALISM.....

"UNITED WE STAND , DIVIDED WE FALL"