Where the so called new unit set up by the assessee was merely an expansion of its existing business and was not setting up of a new business, the expenses incurred in that regard were allowable as revenue expenses.
Hon’ble Gujarat High Court (HC) held that the application made by the taxpayer before the DRP seeking its consent to approach the Assessing Officer (AO), requesting him to finalise the draft assessment order passed under Section 144C(1) of the Income-tax Act, 1961 so as to enable it to file an appeal before the CIT(A), does not tantamount to withdrawal of the DRP application. The HC further held that the case ought to have been considered on merit even in case the DRP was of the opinion that it did not have the requisite powers under the provisions of the Act to entertain the application of the taxpayer.
Explore the Tribunal’s decision on Service Tax exemption (Notification No. 6/05-ST) for an assessee promoting a registered/branded entity. Details on the case and legal considerations.
It was held that clause (iii) of Explanation 1 to section 115JB of the Income-tax Act, 1961 (“the Act”) cannot be said to be discriminatory and hence unconstitutional. This clause relates to set-off of unabsorbed business loss or unabsorbed depreciation, whichever is lower. The HC also held that the approach of reading down a provision by modifying the language of a statute to achieve the intention of the legislature, cannot apply to such a provision.
In a recent ruling Gujarat High Court (HC) in the case of Vodafone Essar Gujarat Ltd (hereinafter referred to as VEG/ Transferor/ Tax Payer) [Company petition no. 183 of 2009] on the issue of whether a scheme of demerger of infrastructure assets between group companies for ‘Nil’ consideration could be sanctioned under the provisions of the Indian Tax law (ITL) and Indian Company law (ICL). The decision of the HC discusses various aspects with regard to the validity of the scheme of demerger u/s 391-394 of the ICL, ITL, Indian Contract Act 1872, laws governing commercial taxes like VAT, Stamp Duty etc. The HC concurred with the objections placed by the Tax Authority and rejected the scheme of demerger which was viewed as an attempt to evade taxes including income-tax, stamp duty, VAT and to defraud the Tax Authority for its legitimate right to recover its dues out of the assets of the Taxpayer and other group companies. The HC also agreed that the assets were being demerged to a paper/conduit company for a subsequent tax neutral transfer to another infrastructure company.
Reopening of tax assessment beyond four years on the basis of a retrospective amendment is not justified, if the assessee has fully and truly disclosed all the material facts necessary during the original assessment proceedings
The respondent can reverse the CENVAT credit availed on capital goods treating it as undesirable credit to claim depreciation under Section 32 of the Income Tax Act, 1962, and pay duty from PLA otherwise payable after exhausting CENVAT Credit balance thereby claiming refund of the same under Notification No.39/2001-CE dated 31.07.2001.
Although Circular has been issued for the purpose of non- seizure of jewellery during the course of search, the basis for the same recognizes customs prevailing in Hindu Society. In the circumstances, unless the revenue shows anything to the contrary, it can safely be presumed that the source to the extent of the jewellery as stated in the Circular stands explained.
Whether the liability has been deferred or not has to be considered not from the simplistic point of the term ‘defer’ but in context of the incentive scheme for deferral, as is evident from the circular issued by Central Board of Direct Taxes. The subject matter of Circular no.496 dated 25th September, 1987 is Sales Tax Deferral Scheme and applicability of provisions of section 43B of the Act.
A plain reading of Section 76 of the Act indicates that a person who is liable to pay service tax and who has failed to pay such tax is under an obligation to pay, in addition to the tax so payable and interest on such tax, a penalty for such failure. The quantum of penalty has been specified in the provision by laying down the minimum and the maximum limits with a further cap in so far as the maximum limit is concerned.
