Gist of recent important tax caselaws

Below are the recent important tax caselaws related to Income tax, Service tax, Excise in brief. The citation is made available for your benefit :

INCOME TAX

SECTION 2(15)

CHARITABLE PURPOSE

Medical relief : Where assessee, a non-profit making company entered into agreement with State Government in terms of which assessee had to provide Emergency Medical Transport Services to patients free of cost, it was to be concluded that assessee was incorporated for charitable purpose of providing medical relief and, thus, its application seeking registration under section 12AA was to be allowed - GVK EMRI (UP) v. Director of Income-tax (Exemption), Hyderabad (2014) 45 taxmann.com 90 (Hyderabad - Trib.)     SECTION 37(1) BUSINESS EXPENDITURE - ALLOWABILITY OF Education expenses : Where expenditure on higher education of employee had an intimate and direct connection with assessee's business, it would be appropriately deductible, even though such an employee was son of a director - Kostub Investment Ltd. v. Commissioner of Income-tax (2014) 45 taxmann.com 123 (Delhi)       SECTION 40A(2) BUSINESS DISALLOWANCE - EXCESSIVE OR UNREASONABLE PAYMENTS Commission : Where revenue authorities disallowed payment of sales commission made by assessee to its agents by invoking provisions of section 40A (2), in view of fact that those agents were house wives were not in a position to offer any professional advice on matters relating to production, market survey or procurement of orders, impugned disallowance was to be confirmed - Luxco Electronics v. Commissioner of Income-tax (2014) 45 taxmann.com 122 (Allahabad)       SECTION 92 Comparables and adjustments/CUP Method/TNMM : Where assessee had to incur additional cost in relation to services rendered by it to unrelated parties as compared to similar services rendered to related parties, assessee should have been allowed relief on account of functions performed, risk assumed and asset employed in services rendered by it to related and unrelated parties - J.P. Morgan India (P.) Ltd. v. Assistant Commissioner of Income-tax (2014) 44 taxmann.com 466 (Mumbai - Trib.)       Comparables and adjustments : Where comparable was a big company in all respects including range of turnover, same should be excluded from list of comparables to small companies which were captive service providers having considerably low turnover - United Online Software Development (India) (P.) Ltd. v. Income-tax Officer (2014) 44 taxmann.com 424 (Hyderabad - Trib.)     CENTRAL EXCISE ACT SECTION 11B REFUND – GENERAL Refund has to claim only as per section 11B of Central Excise Act, 1944 and no civil suit cannot be instituted for refund of claim based on discovery of mistake of law - Union of India v. Rajasthan Spinning & Weaving Mills Ltd. (2014) 45 taxmann.com 2 (Rajasthan) SECTION 14 SUMMONS - RETRACTION OF STATEMENT Onus lies on Department to prove that there was clandestine removal by assessee; and for that purpose, department must put forth evidence and conduct examination of witnesses and buyers to prove the charge - Commissioner of Central Excise, Ahmedabad v. Gopi Synthetics (P.) Ltd. (2014) 45 taxmann.com 57 (Gujarat)