Jurisprudentiol– Monday's cases
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Star India's transactions with associated enterprises - Transfer Pricing - Revenue cannot club three independent activities to determine common Arm's Length Price - And if AO differs with TPO, reasons to be recorded; Case remanded by Tribunal to AO
IF determining Arm's Length Price (ALP) in a Transfer Pricing (TP) case is a tough exercise for the Revenue, it is much tougher for the assessee which has to find reliable comparable cases involved in similar activities. And this is what happened in the latest Star India case decided by the Mumbai Bench of the Tribunal which found that neither the Revenue nor the assessee followed the guidelines decided by the law as interpreted by the Special Bench in the case of Aztec Software (). Having found that the TPO has clubbed three different activities of the assessee as one activity to determine a common ALP, the Bench has rejected the same and restored the case to the files of the AO with the direction that the case be referred to the TPO for working out fresh ALP in respect of each independent activity, and if the same is rejected, the reasons are to be recorded. And before finalising the assessment, the AO must afford an opportunity to the assessee to comment on the TPO report.
Central Excise
Common inputs - Duty paid Molasses used for manufacture of Rectified spirit which in turn is used for manufacture of dutiable denatured spirit and Country liquor which is not chargeable to duty – Payment of 8% amount under rule 6 of CCR , 2004 is proper as captive consumption is also clearance - no cause for credit reversal – Tribunal
THEY never seem to be satisfied. They try to experiment with rule 6 of the CCR , 2004 and come up with demands that are so bombastic that the adjudicating authorities and the lower appellate authorities fear ostracism if the proceedings are dropped. Just goes to show how virile the rule is.
Service Tax
Service Tax – Scientific and technical service – project report prepared before Service Tax was imposed, though deliver after – no tax: High Court
THE question of law involved in this appeal is as under:
Whether, service tax is not leviable on the service in respect of which project report by the scientific and technical expert (service provider) is prepared prior to the levy of the service tax?
Until Monday with more DDT
Have a nice Weekend.
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