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Karnataka High Court

Section 37(1) of Income-tax Act – Expenditure incurred for imparting technical know-how to assessee’s personnel has to be deducted under section 37(1) and it does not fall under section 35AB

July 13, 2010 4472 Views 0 comment Print

The Tribunal was correct in holding that consideration paid by the assessee to certain American Company for providing technicians to train assessee’s personnel in manufacturing, testing, inspection and quality control of its products and to impart know-how and technical data and suggest improvements thereto, did not fall under section 35AB, but was entitled to total relief under section 37(1)

Maa Communications Bozell Ltd. Vs. Commissioner of Service Tax, Bangalore

June 3, 2010 684 Views 0 comment Print

In fact, recording of reasons ensures that the authority has applied its mind to the case and the reasons that compelled the authority to take a decision in question are germane to the contents and scope of power vested in the authority. Therefore, giving of reasons by an adjudicating body goes to the very root of the process of decision-making or adjudication and therefore, it is not just a formal requirement but indicates that the adjudicatory body has applied its own mind to the merits of the case and also to avoid any doubt as to any perfunctory approach.

Activity of procuring customers for foreign principal cannot be brought within scope of definition of `C&F Agent’ u/s 65(25) of Finance Act, 1994

May 28, 2010 435 Views 0 comment Print

Where assessee was not engaged in collecting and receiving goods of the foreign principal but it was engaged in procuring the customers for the foreign principal, the nature of activities of the assessee cannot be brought within the scope of definition of `C and F Agent’ under section 65(25)

100% EOU is entitled to benefit of refund of Cenvat Credit under rule 5 of Cenvat Credit Rules, even if the final products are exempted

April 21, 2010 4280 Views 0 comment Print

The respondent is a 100% Export Oriented Unit (‘EOU’ for short) engaged in the manufacture of parts of agricultural and farm equipment which are chargeable to ‘Nil’ rate of duty under Central Excise Tariff Act, 1985 (Tariff Act). The respondent filed three refund claims with the Assistant Commissioner of Customs, Bengaluru under Rule 5 of the Cenvat Credit Rules, 2004, being the unutilised credit availed by the respondent in respect of certain inputs used in the manufacture and export of their final product.

CESTAT not right in holding that service provided by a consignment agent not covered by sec. 65(25) of Finance Act

April 8, 2010 699 Views 0 comment Print

When the assessee is a consignment agent, as the definition of C&F agent includes consignment agents, CESTAT was not right in holding that the service provided by a consignment agent is not covered by section 65(25) of the Finance Act, 1994.

Technical assistance and technical know-how received by an Indian company from a foreign company for period November, 1998 to December, 2000 is neither taxable u/s 65(31) nor u/s 66A of the Finance Act, 1994

April 1, 2010 357 Views 0 comment Print

As on November, 1998, the word company or firm was not included under definition of section 65(31) and section 66A had come into force w.e.f 18-4-2006, therefore, service tax was not applicable to a foreign company for rendering service in India for the period November, 1998 to December, 2000

A Del Credere Agent is not liable to pay service tax in respect of service rendered by it prior to 16-6-2005

March 5, 2010 1113 Views 0 comment Print

The Deputy Commissioner of Central Excise issued a notice calling upon the respondent-assessee to pay the service tax in respect of the service rendered by it as a Dal Credere Agent. The Deputy Commissioner of Central Excise, Bangalore, passed an order in Original No. 28/2003 directing the respondent-assessee to pay the tax and also the penalty. Against which the respondent-assessee filed an appeal before the Commissioner of Central Excise (Appeals) in Order-in-Appeal No. 214/2003, where the Commissioner confirmed the order of levying of service tax on the respondent in regard to service rendered by Del Credere Agent. Being aggrieved by the same, the respondent-assessee filed an appeal before the CESTAT. CESTAT has allowed the appeal holding that Del Credere Agent is not liable to pay service tax. Against which the revenue has come in this appeal.

Doctrine of mutuality does not apply in case business activities of an assessee-firm is not restricted to partners only

February 16, 2010 10119 Views 0 comment Print

Where an Association or Company trades with its members only and the surplus out of the common fund is distributable among the members, there is mutuality and the surplus is not assessable to tax as profit.

Second hand machinery purchased for use as spare parts for existing old machineries has to be considered as an allowable expenditure on revenue side

January 23, 2010 12702 Views 0 comment Print

When an assessee purchases the spare parts for the existing machineries, same cannot be treated as capital expenditure and it has to be treated as revenue expenditure since these spare parts are purchased for the maintenance of the existing equipments.

Amount paid for compounding of offence not allowable u/s 37(1) of the Income Tax Act, 1961

January 19, 2010 7400 Views 0 comment Print

The amount paid for compounding an offence is inevitably a penalty in terms of section 483 of the Karnataka Municipal Corporation Act, 1976 itself and the mere fact that it has been described as compounding fee cannot, in any way, alter the character of the payment which payment, is in the nature of penalty.

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