Jurispruden tiol – Tomorrow's cases
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Expenditure made for use of domestic customer base and transfer of human skills – revenue in nature - allowable deduction: ITAT
THE assessee company was incorporated during the financial year 1997-98. Originally, there was a company jointly promoted by Tatas and IBM, which were known as Tata IBM. During the financial year 1997-98, it was mutually agreed between the two promoters to bifurcate the business activities into separate entities viz. IBM Global Services India Private Limited (the assessee company) and Tata IBM . As per the agreement entered into, various assets of the erstwhile Tata IBM were transferred to the assessee company has paid amounts of Rs. 9,38,57,925/- and Rs. 5.3 Crore on account of transfer of certain employees to the assessee company and on account of transfer of the data base of the domestic business. The assessee company actually paid a sum of Rs. 18.4 crore for the transfer of the employees to the assessee company but claimed an expenditure of Rs. 9,38,57,925/- as the remaining sum of around Rs. 9.01 crore was attributable to STP Unit, income of which was exempt.
The transferred data base gives the information about various customers who have purchased IBM computers in the past who continue to have service maintenance contracts. Such database enables the assessee company to provide the maintenance support services. The Assessing Officer asked the assessee company to furnish the basis of valuation at Rs. 5.3 crore in respect of value of data base. It was stated before the Assessing Officer that no independent valuation has been determined by the independent valuer. The Assessing Officer, therefore, concluded that the amount represented a mutually agreed amount payable for the transfer of data base.
Jayalalitha wins - Agricultural income and cash expenditure, not bogus: ITAT
AFTER Mayawati, it’s now Jyalalitha’s turn to win a battle royal in the ITAT!
Validity of a retracted statement.
One Mr. TSR Vasudevan who had given a statement before the Deputy Commissioner, Income Tax filed an affidavit that the statement was obtained by coercion and harassing his wife and daughters and he had signed the statement around midnight just to get rid of the raiding party.
The Tribunal observed,
On a perusal of affidavit filed by Shri T.S.R. Vasudevan , it is clear that retracted from the statement recorded on the search day. It is pertinent to note that the statements recorded on the search day have evidentiary value and credibility in law, the same should be viewed with great caution, particularly, when the same is denied, retracted or claimed to have been obtained under mental stress coercion or due to any abnormal condition and circumstances when such statements were recorded. Therefore, if a person at a later stage retracts from the statement given on the search day, it is necessary to ascertain the reasons or circumstances from such person for doing so and if satisfied not to place any reliance on such earlier statements which have subsequently been denied or retracted.
Service Tax
Service Tax paid on repairs and maintenance of civil construction - residential colony for factory employees eligible for Cenvat Credit : Tribunal
IN the case of Bajaj Electricals , the manufacturer had availed Cenvat credit of Service Tax paid on ‘Outdoor Catering services’ that were provided in the canteen of the applicant’s factory premises. The lower authorities denied the Cenvat Credit of Rs.33,956/- and imposed a penalty of Rs.5000/-.
Although the applicant argued that they are entitled for Cenvat Credit in terms of Rule 2(1) of the CCR, 2004 inasmuch as that the said services are provided to the employees and the same indirectly assists in manufacturing activities, the Tribunal observed that there was no prima facie case for complete waiver & hence ordered for a pre-deposit of Rs.15000/-.
Karnataka Sales Tax – works contract
Composition not entitled if goods are received from outside the state – amendment applicable from notified date – assessee’s agreement irrelevant – receipt of goods by branch transfer is also covered under the bar – Supreme Court
The appellant is a limited company and has its registered office at Gujarat and branch office at Bangalore , Karnataka. It is a sub-contractor for M/s Larsen and Toubro Ltd. for execution of works contract. It is registered as a dealer under the Act as well as Central Sales Tax Act, 1956 (in short the Central Act). It had opted for composition under Section 17(6) of the Act. But the benefit of composition was denied in view of the amendment to sub-section (7) of Section 17. The appellant undisputedly had received goods from the head office situated at Gujarat for execution of the work in Karnataka.
Until tomorrow with more DDT
Have a nice time.
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