Now coming to the other aspect on the basis of which the AO disallowed the claim as to whether or not expenditure incurred as a result of compounding of violation of municipal laws & Environmental laws falls within the ambit of aforesaid explanation to sec. 37(1) of the Act, Hon’ble Karnataka High Court in CIT v. Mamta Enterprises [2004] 266 ITR 356 held that compounding of the offence cannot take away the rigors of the Explanation to S.37(1) in view of the expression ‘shall not be deemed to have been incurred’ used in that Explanation.
Section 65(19) of the Act defines business auxiliary service and excludes ‘information technology service’ which is defined in the Explanation to the said section as “any service in relation to designing, developing or maintaining of computer software, or computerised data processing or system networking, or any other service primarily in relation to operation of computer systems.
Whether the disclosure/admission of Assessee of taxing the income @ 8% when faced with detailed enquiry is a voluntary surrender and not liable for penalty under section 271(1)(c) of the Act?”
The principle is that the assessee has to prove the identity of the creditor, the genuineness of the transaction and the creditworthiness of the creditor in order to discharge the burden cast on him, that a particular cash credit found in his books is genuine having regard to the nature and the source thereof and, therefore, cannot be added to his income under section 68.
Section 48(1) of the Act provides for mode of computation and deduction while charging capital gain. Clause-I thereof in particular provides for a payment from the value of consideration received or accrued as a result of transfer of capital asset, expenditure incurred wholly and exclusively in connection with such transfer. The Tribunal found that looking to the peculiar facts of the case noted above, such expenditure cannot be stated to be incurred wholly and exclusively in connection with such transfer. We do not find that Tribunal committed any legal error.
Overseas commission agent services promotes the assessee’s business activities and adds to Revenue earning by manufacture and sale of incremental quantity, activity may have nexus to such sales and Service Tax paid on such services has to be held as includable in the definition of inputs services.
Once the cause of default is not traced, it is not possible to determine whether that was reasonable or not. There is no whisper about deliberate breach of law by the appellant which normally is consideration while invoking penalty provision. Penalty being not automatically leviable and also no wilful breach of law is there, the matter deserves to be considered from the point of peculiar circumstances.
Under Clause 2.1 of the assignment agreement dt.29.6.2001, CIDBI assigned and transferred the concession agreement in favour of the respondent and the respondent unconditionally agreed to accept the said assignment/transfer of the concession agreement and undertook to execute/perform the concession agreement as if the said agreement was entered into between NHAI and the respondent.
Section 8 of the Central Sales Tax Act, 1956 provides for the rate of tax on sales in the course of inter-State Trade and commerce. Further, sub¬section (1) of section 8 states that every dealer, who in the course of inter-State trade or commerce, sells to a registered dealer the class or classes of goods that are specified in the certificate of registration of the registered dealer purchasing the goods for the purposes enumerated in sub-section (3) of section 8 of the Central Sales Tax Act, 1956 shall be liable to pay tax at notified rate i.e. @ 2% with effect from 1st June 2008.
The section 23 of the MVAT Act, 2002 provides for the assessment of tax under different contingencies. 2. Sub-section (11) of section 23 provides that, (1) where a dealer has been assessed under sub-section (2), (3) or (4) and if he makes an application in Form-316 to the Commissioner within thirty days from the date of service of the assessment order, for the cancellation of the assessment on the ground that he was unable to attend before the Commissioner for hearing.
