TIOL-DDT 1864 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14276"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt_1794.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font><font color="#663399" size="3">TIOL-DDT 1864</font><br>
24.05.2012<br>
Thursday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service of Orders - Speed Post still not recognised!!!! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> assessee filed an appeal against an order of a Commissioner (Appeals), two years after the order was passed. The assessee's ground for the delay was that it was not served with a copy of the order. The <em>CESTAT</em> found that the order was sent by speed post and therefore the requirement of Section 37C was complied with. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 37C of the Central Excise Act reads as:- </font></p>
<p align="justify"><strong><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 37C. ­ Service of decisions, orders, summons etc. </font></em></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(1) Any decision or order passed or any summons or notices issued under this act or the rules made thereunder, shall be served, ­ </em></font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) by tendering the decision, order, summons or notice, or sending it by <strong>registered post with acknowledgment due</strong>, to the person for whom it is intended or his authorized agent, if any; </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) if the decision, order, summons or notice cannot be served in the manner provided in clause (a), by affixing a copy thereof to some conspicuous part of the factory or warehouse or other place of business or usual place of residence of the person for whom such decision, order, summons or notice, as the case may be, is intended; </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) if the decision, order, summons or notice cannot be served in the manner provided in clauses (a) and (b), by affixing a copy thereof on the notice board of the officer or authority who or which passed such decision or order or issued such summons or notice. </font></em></p>
</blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Every decision or order passed or any summons or notice issued under this Act or the rules made thereunder, shall be deemed to have been served on the date on which the decision, order, summons or notice is tendered or delivered by post or a copy thereof is affixed in the manner provided in sub­section (1)."</font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, Section 37C does not recognize "Speed Post", nor does the Bombay High Court. On appeal by the assesse against the CESTAT order, the Bombay High Court recently held that sending the order by Speed Post was not enough compliance; "<em>As per Section 37C(1)(a) of the Central Excise Act, 1944, it was obligatory on the part of the Revenue, either to tender a copy of the decision to the assessee or to sent it by registered post with acknowledgment due to the assessee or its authorized agent. In the present case, neither of the above have been complied with by the Revenue</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 37C was introduced in the statute in 1985. At that time, there was no speed post, which was introduced a little later in 1986 and nobody thought of amending Section 37C to include Speed Post. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In fact very recently, in 2011, a Commissioner of Service Tax suggested to the Board to include “Speed Post” in Section 37C. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner submitted, </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Virtually/there is no difference between the two services viz. RPAD and SPAD. In both the cases, the sender is required to fill up the Ack. Due Card with both details of addressor and addressee, and after delivery AD card is returned to the sender by the postal authorities. Many courts are taking decision that despatch of notice/ order by SPAD is not permissible/ correct mode of service, under the law based on an age-old system under the statute. In the circumstances, it is high time to include the SPAD mode of service or orders / notices also in the said provision of law."</font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner also suggested e-mail as a mode of service, but the wise men in the Board do not have much respect for the wisdom or lack of it of Commissioners in the field. (Of course, the opinion is reciprocal). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2010, the Chief Commissioner, Kolkata Zone had made a similar reference to the Board and the Board told him that ‘Speed Post' is covered by the term ‘Registered Post'. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11769" target="_blank">DDT 1502-07.12.2010</a></strong>. We had also discussed the issue in<strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=9032" target="_blank">DDT 1111 - 15.05.2009</a></strong> </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 1984, the Supreme Court of India had struck down electronic voting as ‘ballot' meant the ballot paper and not a button on a machine and there was no provision for such pressing the button to cast a vote. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Please see </strong></font><strong><font size="1" face="Verdana, Arial, Helvetica, sans-serif"> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=33&filename=legal/hc/2012/2012-TIOL-395-HC-MUM-CX.htm" target="_blank">2012-TIOL-395-HC-MUM-CX </a></font></strong> </p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT issues Explanatory Notes to provisions of Finance Act, 2011 </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBDT has issued explanatory notes to the provisions of the Finance Act, 2011 - just a couple of days before the Finance Act 2012 is effective. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AMENDMENTS AT A GLANCE</strong></font></p>
<table width="90%" border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top"><p><em><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section/Schedule </font></strong></em></p></td>
<td valign="top"><p><em><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Particulars/Paragraph number </font></strong></em></p></td>
</tr>
<tr>
<td valign="top"> </td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finance Act, 2011</font></strong></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">First Schedule </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rate Structure, <strong>3.1 - 3.3.6</strong></font></p></td>
</tr>
<tr>
<td valign="top"> </td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Income-tax Act, 1961</font></strong></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2(15) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Definition of "charitable purpose" <strong>4.1 - 4.4 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10(45) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption of certain perquisites of chairman and members of Union Public Service Commission <strong>5.1 - 5.3</strong> </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10(46), 139(4C)(g) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provision relating to exemption of a specified income of certain bodies or authorities or trust or board or commission <strong>6.1 - 6.2</strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10(47), 139(4C)(h), 115A, 194LB </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Infrastructure Debt Fund <strong>7.1 - 7.4</strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">35(2AA) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Weighted deduction for contribution made for approved scientific research programme <strong>8.1 - 8.3 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">35AD </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Investment-linked deduction in respect of specified business <strong>9.1.1 - 9.3</strong> </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">80CCE, 36(1),40A(9) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax benefits for New Pension System (NPS) <strong>10.1 - 10.6</strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">80CCF </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Deduction for investment in long-term infrastructure bonds <strong>11.1 - 11.3 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">80-IA(4)(iv) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Extension of sunset clause for tax holiday for power sector <strong>12.1 - 12.3 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">80-IB(9) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Deduction in respect of profits and gains from undertakings engaged in commercial production of mineral oil <strong>13.1 - 13.5 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">92C, 92CA, 92CA(7), 139 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rationalisation of provision relating to Transfer Pricing <strong>14.1 - 14.3.2</strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">94A </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tool box of counter measures in respect of transactions with persons located in a Non-co-operative jurisdiction <strong>15.1 - 15.2 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">115BBD </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Taxation of certain foreign dividends at a reduced rate <strong>16.1-16.3 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">115R(2) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax on Distributed Income to unit holders <strong>17.1 - 17.3 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">115JB </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Minimum Alternate Tax <strong>18.1.1 - 18.2.5 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">115JB(6), 115-0(6), 10(34) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provisions relating to Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) in case of Special Economic Zones <strong>19.1.1 - 19.3.2 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">115JC, 115JD, 115JE, 115JF </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Alternate Minimum Tax for certain Limited Liability Partnerships <strong>20.1 - 20.7</strong> </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">131,133 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Collection of information on requests received from tax authorities outside India <strong>21.1 - 21.5 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">139, 296 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption to a class or classes of persons from furnishing a return of income <strong>22.1 - 22.5 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">143 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Centralised Processing of Returns <strong>23.1 - 23.3 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">153,153B </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Extension of time-limit for assessments in case of exchange of information <strong>24.1 - 24.5</strong> </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">245C(1) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Modification in the condition for filing an application before the Settlement Commission <strong>25.1 - 25.6 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">245D(4) </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Power of the Settlement Commission to rectify its orders <strong>26.1 - 26.6</strong> </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">282B </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Omission of the requirement of quoting of Document Identification Number <strong>27.1 - 27.3 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">285 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Reporting requirement by certain non-residents <strong>28.1 - 28.3 </strong></font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Fourth Schedule </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Recognition to Provident Funds - Extension of time-limit for obtaining Exemption from EPFO <strong>29.1.1 - 29.3</strong> </font></p></td>
</tr>
<tr>
<td valign="top"> </td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Wealth-tax Act, 1957 </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">22D </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Procedure on receipt of an application for settlement of cases <strong>26.5 </strong></font></p></td>
</tr>
<tr>
<td valign="top"> </td>
<td valign="top"><p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Special Economic Zones Act, 2005 </font></strong></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Second Schedule </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Modifications to the Income-tax Act <strong>19.2.2 - 19.3.2 </strong></font></p></td>
</tr>
</table>
<p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/explanatory_note_fiance_act_2011.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Circular No. 02/2012 [F. NO.142/01/2012-SO(TPL)], Dated May 22 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">8.8 percent Interest for Provident Fund </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOVERNMENT</strong> has announced that during the year 2012-2013, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8.8% (Eight point eight per cent) per annum. This rate will be in force during the financial year beginning on 1.4.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The funds concerned are:- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The General Provident Fund (Central Services). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. The Contributory Provident Fund (India).</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The All India Services Provident Fund.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The State Railway Provident Fund.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The General Provident Fund (Defence Services).</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. The Indian Ordnance Department Provident Fund.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. The Indian Ordnance Factories Workmen's Provident Fund.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. The Indian Naval Dockyard Workmen's Provident Fund.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. The Defence Services Officers Provident Fund.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. The Armed Forces Personnel Provident Fund.</font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/RESOLUTION.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ministry of Finance (Dept. of Economic Affairs) Resolution in F.NO. 5(1)-B(PD)/2012 Dated May 22 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise AC, Superintendent, Inspector in CBI Custody </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SOME </strong>Central Excise officers in Pune noticed that a hotel was not paying Service Tax on the Mandap Keeper Service, it had rendered. The officers computed the total liability including tax and penalty around Rs. 15 lakhs. So, a bribe of Rs. 5 Lakhs was demanded, which was finally settled for a fairly reasonable figure of Rs. 2.5 Lakhs. But the assessee did not keep its part of the bargain and informed the CBI, which spoiled the show by nabbing the Superintendent of Central Excise red handed while accepting the bribe of Rs. 1.25 lakhs as advance. The CBI arrested the Superintendent and his Assistant Commissioner and Inspector. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case, it seems the complaint was only against the Superintendent, but CBI enlarged the scope of investigation and arrested the other two officers. Now, it is not necessary that one has to be caught red-handed - even the other hands do get hauled up. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> - Friday's cases</font></strong></font></strong></font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Central Excise </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Since under statute, power of granting refund are with Assistant/Deputy Commissioner of Central Excise, passing of refund orders by Additional Commissioner has rightly been held as unsustainable: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">EVERYTHING about this case is interesting - right from adjudication till appeal. And, therefore, it was but natural that the case had to go back to the "proper" adjudicating authority. Coming to think of it, it is just unimaginable as to how "powers are usurped" by the higher adjudicating authorities citing that they can exercise powers of any officer who is subordinate to him! </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income tax - Whether when assessee has deducted tax at source on payments made to related party, and there is no attempt to evade taxes, even then AO can disallow such payments questioning necessity of availing services from sister concern - NO, rules ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ON</strong> scrutiny of the assessee's income tax return, the AO observed that the assessee had paid service fees to its associate person, while being under the same control and management. The assessee's explanation for justification of expenditure was found to be general in nature, which did not specify any services which needed specific expertise. The AO noted that the assessee's agreement was brief and basic and did not indicate that it had been prepared by an expert. The assessee company already had a team of professionals looking after financial matters, and the agreement / reports did not reflect any benefit to the assessee's business. The AO therefore held that the service payment was superfluous expenditure and had no correlation with the business of the assessee whatsoever. The AO disallowed the entire amount and made an addition to the assessee's income. The AO also disallowed the commission on sales paid, for similar reasons. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Valuation - Stock Broker Service - No amount other than commission or brokerage made by a stock broker is covered in ambit of assessable value of service: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> dispute in all the appeals relates to the inclusion of certain charges like Demat Charges, Turnover charges, BSE Charges, SEBI Charges etc in the taxable value. It is the case of revenue that all these charges are includable in the taxable value under the provisions of Section 67 of the Finance Act, 1994. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All the appellants contested the demand on the ground that other than Brokerage or Commission charges, no other charges will form part of the taxable value. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Day </font></p>
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