mar Ujala & A & M Publication had being merged & Assessing officer disallowed cost of finance incurred for merger of above said companies & thus CIT(A), ITAT & Highcourt deleted addition made by AO & thus gave following decision: All the funds available at that point of time with the respondent / assessee were, in the course of the year, deployed in the business of the respondent/assessee. Therefore, the Assessing Officer could not have disallowed the discount and interest on borrowing through commercial papers and non-convertible debentures.
Hon’ble High Court of Delhi held that no Service tax under Section 65(105)(zzzh) of the Finance Act to be levied on composite contract as there is no machinery provision for ascertaining the service element involved in the composite contract.
The Hon’ble High Court, after detailed analyses: Declared Rule 5A(2) of the Service Tax Rules, as amended, 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, as ultra vires the Finance Act and, therefore, struck it down to that extent;
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
Thus, while the legislative competence of the Parliament to tax the element of service involved cannot be disputed but the levy itself would fail, if it does not provide for a mechanism to ascertain the value of the services componentwhich is the subject of the levy.[Para 37]
Delhi HC 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;
Held by Hon’ble Delhi HC-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 to the FA and, therefore, strikes it down to that extent;
It was held that Once the assessment order of the AO in the quantum proceedings was altered by the CIT (A) in a significant way, the very basis of initiation of the penalty proceedings was rendered non-existent. The AO could not have thereafter continued the penalty proceedings on the basis of the same notice.
It is held that Instruction No.1 of 2015 dated 13th January 201shall not hereafter be relied upon to deny refunds to the Assessees in whose cases notices might have been issued under Section 143(2) of the Act.
Amount deposited but not utilized wholly or partly for purchase or construction of new asset within the specified period will be charged to tax under Section 45 in the previous year in which the period of three years from the date of transfer of original asset expired.
