CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 13, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 13, 2016

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DIRECT TAX

  • TDS u/s 194J or 194C – payments made to various TV channels – section 194J is attracted to the facts of the instant case. Merely because in earlier years this issue was not examined and the assessee’s contention got accepted without verification, cannot give license to it claim in the later years that the correctly applicable section be put under carpet
  • TDS – granting of any license to use the software amounts to ‘royalty’ and the provisions of sec.9(1)(vi) are applicable – assessee is in default u/s.201(1)/201(1A) for non-deduction of TDS
  • Principals of mutuality – Contribution by the members of a Group Housing Society – work is done by the society for and on behalf of that member – there is no question of any income – Not taxable
  • Revision u/s 263 – Directions of the Ld.CIT given to the AO to verify the unsecured creditors, unsecured loans, the AO in his fresh assessment order passed u/s 143(3) r.w.s.263 of the Act, did not draw any adverse inference. This direction of the Ld.CIT was in the nature of directing rowing enquiries. – Revision is bad in law.
  • TDS u/s 195 – Addition u/s 40(a)(ia) – no liability for deduction of tax at source arose under Section 195 in the case of mobilization and demobilization costs reimbursed to a non-resident, not being taxable in India, hence disallowance under Section 40(a)(ia) did not arise.
  • TDS u/s 195 – Addition u/s 40(a)(ia) – no liability for deduction of tax at source arose under Section 195 in the case of mobilization and demobilization costs reimbursed to a non-resident, not being taxable in India, hence disallowance under Section 40(a)(ia) did not arise.
  • Addition u/s 68 – Notice u/s 133(6) is issued by the AO could not be served on the share applicants and Inspector’s report also shows that this companies do not exists at the given address, we are of the view that no fault can be found against the assessee for this.

INDIRECT TAX

  • ST- Refund claim – As the service was rendered to self and service tax was paid thereon, burden can only passed on to self and passing on the burden to self is not tantamount to passing it to any other person. Therefore, the appellant is not hit by the doctrine of unjust enrichment
  • ST­-Refund of Cenvat credit – input services – When the premises was occupied by the appellant and day-to-day repairs and maintenance are carried out in that premises then obviously, the said services i.e. repair, maintenance, electricity are received and used by the tenant only i.e. the appellant and not by the landlord – refund allowed
  • ST-Cenvat Credit – Amount towards Exempted service wrongly shown in ST-3 return – In the absence of identification of the exempted service provided by the appellant and in the wake of the assertion of the appellant that it had not provided any exempted services during the relevant period, the demand cannot be sustained
  • ST-Whether services of cutting, drilling, punching, bending and notching of material on job work basis, in the factory of the principal, provided by the respondent falls under the category of Manpower Recruitment or Supply Agency Services
  • Central Excise-Classification of PVC Doors and Windows – The process involved before fixing the windows or doors is a simple assembly at site as the profiles beadings and other items required are as per the specific dimensions of various windows or doors. We find that applying the Rule 2 (a) of the interpretation Rules, it is clear that the unassembled windows and doors, even incomplete or unfinished are to be classified with reference to goods which are complete or finished – under heading 3925.20
  • Central Excise- Penalty under section 11AC – clearance against the dummy challan – clandestine removal – Penalty was not confirmed under any other provision nor also invoked in the show cause notice. Accordingly, confirmation of penalty cannot be sustained.

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