Deduction Of Trade Discount From Assessable Value Is Admissible On Sale Transactions: CESTAT

The Mumbai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the deduction of trade discount from assessable value is admissible on sale transactions.The bench of S.K. Mohanty (Judicial Member) and M.M. Parthiban (Technical Member) has observed that the transaction value should be considered as the price at which the CNG were supplied by the appellants to Brihanmumbai Electric Supply and Transport (BEST), and such a price should be considered as the value for...

No Service Tax Exemption On Race Tracks Not Meant For Public Use: CESTAT

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that no service tax exemption on race tracks is meant for public use.The bench of Rachna Gupta (Judicial Member) and Hemambika R. Priya (Technical Member) has observed that the race track constructed by the appellant is definitely a "road'. But to avail the benefit of Notification No. 17/2005, the appellant should have constructed a road meant for public use, i.e., a public road or place. The race track...

Colourable Devices To Evade Tax Can't Be Tax Planning, Rules Telangana High Court

The Telangana High Court has held that tax planning may be legitimate, provided it is within the framework of the law. Colorable devices cannot be part of tax planning, and it is wrong to encourage or entertain the belief that it is honorable to avoid the payment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges.The bench of Justice P.Sam Koshy and Justice Laxmi Narayana Alishetty has relied on the decision of...

Responsibility Of Customs Broker Does Not Include Keeping Continuous Surveillance On Client: CESTAT

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the responsibility of the customs broker under Regulation 10(n) of the Customs Brokers Licensing Regulations, 2018 does not include keeping continuous surveillance on the client.The bench of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the responsibility of the customs broker under Regulation 10(n) does not include keeping continuous surveillance on the client to...

Aircraft Used Only For Providing Non-Scheduled Passenger Services Entitled For Customs Exemption: CESTAT

The Delhi Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the aircraft used only for providing non-scheduled passenger services is entitled to customs exemption.The bench of Binu Tamta (Judicial Member) and P. V. Subba Rao (Technical Member) has observed that the conditions of exemption notification were not complied with as the appellant therein had not used the aircraft for rendering any 'Air Transport Service' within the meaning of Rule 3(9) of the Aircraft...

Unsettled Claims As Well As IBNR Would Amount To Contingent Liabilities; Section 37 Deduction Allowable: Delhi High Court

The Delhi High Court has held that the deduction under Section 37 of the Income Tax Act is allowable on unsettled claims as well as Incurred But Not Reported (IBNR), which would amount to contingent liabilities.The bench of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav has observed that if the historical trend indicates that a large number of sophisticated goods were being manufactured in the past and if the facts established show that defects existed in some of the items...

Auction By Based On Non-Existent Order; Punjab & Haryana High Court Imposes Cost On Income Tax Authorities

The Punjab and Haryana High Court has held that the auction proceedings based on a quashed ex-parte income tax appellate tribunal (ITAT) order by the tax recovery officer are void ab initio.The bench of Justice Sanjeev Prakash Sharma and Justice Sudeepti Sharma has directed the respondent department to restore the properties of the petitioner-HUF from the auction purchasers and subsequent purchasers, assignees, or persons to whom interest has been devolved. The bench held that any transfer of...

AO's Failure To Make Proper Enquiry On Bogus Claim Of LTCG By Sale Of Shares; Calcutta High Court Upholds Revision Order

The Calcutta High Court has upheld the revision order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act, as the AO failed to make a proper inquiry on the bogus claim of long-term capital gain (LTCG) by the sale of shares.The bench of Chief Justice T.S. Sivagnanam and Justice Hiranmay Bhattacharyya has observed that in the order under Section 263 of the Act, which shows that the PCIT has applied its mind, it came to the prima facie conclusion that...

Income From Reselling Of Subscription Based Product Is Royalty: ITAT

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that the income from the reselling of subscription-based products is royalty.The bench of Kavitha Rajagopal (Judicial Member) and Om Prakash Kant (Accountant Member) has observed that the assessee has sold not only the digital product but also all copyrights therein, which squarely falls under the definition of 'royalty' both under Article 12 of the Double Taxation Avoidance Treaty (DTAA) between India and Ireland and provisions...

Redemption Fine And Penalty Can Be Imposed On Re-export Of Prohibited Goods: CESTAT

The Chennai Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that a redemption fine and penalty can be imposed on the re-export of prohibited goods. Section 125 enables the Customs Officer to grant an option to the owner or the person from whose possession the goods have been seized to pay a fine in lieu of confiscation. In an adjudication proceeding as in the present case these are the provisions which would come into play. If the owner gets the goods released...

Direct Tax Cases Weekly Round-Up: 02 To 08 June 2024

Delhi High CourtOnce Issue Of Arm's Length Remuneration Settled By TPO, Question Of Ascertaining Existence Of PE Is Academic; Delhi High Court Quashes Reassessment ProceedingsCase Title: Progress Rail Locomotive Inc. (Formerly Electro Motive Diesel Inc.) Versus Deputy Commissioner Of Income-TaxCitation: 2024 LiveLaw (Del) 671The Delhi High Court, while quashing the reassessment proceedings initiated by the income tax department against the Caterpillar Group, held that once the issue of arm's...

Indirect Tax Cases Weekly Round-Up: 02 To 08 June 2024

Kerala High CourtClaim For Sales Tax Exemption In Respect Of Transit Sales To Be Justified By Showing Sale As Having Occurred In Transit: Kerala High CourtCitation: 2024 LiveLaw (Ker) 336Case Title: M/S.I.T.I.LTD Versus State Of KeralaThe Kerala High Court has held that a claim for exemption in respect of transit sales must be justified by showing the sale as having occurred in transit.Time Limit To Avail ITC Is Till 30th November In Each Financial Year From Beginning Of GST Regime: Kerala High...