Gist of recent important tax judgements

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

 Date of SetUp

SECTION 28(i)

BUSINESS - COMMENCEMENT OF /CARRYING ON OF

Setting up of business : Where assessee-company was incorporated on 4-8-2005 to carry on real estate business and it had taken loan for business on 16-5-2006 and later on 31-5-2006 it had entered into a memorandum of understanding with third parties in respect of a project and subsequently joint venture agreement was executed between assessee and third parties on 5-7-2006, Assessing Officer was wrong in concluding that business of assessee was set up on 5-7-2006 - Commissioner of Income-tax , Delhi –I v. Arcane Developers (P.) Ltd. (2014) 42 taxmann.com 10 (Delhi)     SECTION 271(1)(C) PENALTY - FOR CONCEALMENT OF INCOME Revise return, effect of filing of : Where assessee offered additional income after search operation unearthing substantial undisclosed income for earlier years, concealment penalty was to be imposed upon assessee and waiver of penalty could not be granted - Commissioner of Income-tax (Central), Ludhiana v. Bansal Abushan Bhandar (2014) 42 taxmann.com 9 (Punjab & Haryana)       SERVICE TAX SECTION 65(102) STORAGE AND WAREHOUSING OF GOODS SERVICES Supply of vessels on charter hire basis for offshore operations involving transport of crude oil and incidental storage thereof is prima facie 'Supply of Tangible Goods for Use Service'; and not Storage and Warehousing of Goods Service - Shipping Corporation of India Ltd. v. Commissioner of Central Excise & Service Tax (LTU), Mumbai (2014) 42 taxmann.com 91 (Mumbai - CESTAT)

Summary of latest 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 10(6)(viii)

SALARY TO FOREIGN CITIZEN AS FOREIGN SHIP CREW

Scope of exempt : Payments made to foreigner-crew member of ship who worked for a period of less than 90 days in India, were not income of employees in India liable to TDS - Director of Income-tax v. Dolphin Drilling Ltd. (2014) 42 taxmann.com 264 (Uttarakhand)     SECTION 28(i) BUSINESS LOSS/DEDUCTIONS - ALLOWABLE AS Provision for fraud : Where assessee-bank claimed deduction of 'provision of fraud', in view of fact that incident which resulted in irregularities/embezzlement occurred during relevant previous year and, moreover, actual amount involved in fraud was calculated by assessee's vigilance cell after detailed study, amount so computed was to be allowed as business loss - Deputy Commissioner of Income Tax v. ING Vysya Bank Ltd. (2014) 42 taxmann.com 303 (Bangalore - Trib.) SECTION 37(1) BUSINESS EXPENDITURE - ALLOWABILITY OF Sales incentives : Where manufacturer of two-wheelers had launched an incentive scheme for encouraging prompt delivery of two-wheelers from site of manufacturing plant up to door step of dealers and in pursuance of said scheme, assessee having received certain amount from manufacturers, paid a part of same to drivers as incentive, amount so paid was to be allowed as business expenditure - Commissioner of Income-tax, Central-II v. Shree Dhain Auto Transport Corporation (2014) 42 taxmann.com 281 (Gujarat) Community welfare expenses : Where assessee incurred expenditure on building a school and toilet at village which was near vicinity of factory for better relationship with workers and employees of assessee, same was allowable as community welfare expenses - Lubrizol Advanced Materials India (P.) Ltd. v. Deputy Commissioner of Income-tax (2014) 42 taxmann.com 263 (Ahmedabad - Trib.)     SECTION 194C DEDUCTION OF TAX AT SOURCE - CONTRACTORS/SUB-CONTRACTORS, PAYMENTS TO Reimbursement of expenses : Where expenses were incurred by C&F agents on behalf of assessee and claims were made on actual basis, assessee while making reimbursement of said expenses was not liable to deduct tax at source under section 194C - Deputy Commissioner of Income-tax -11(1) Bangalore v. Dhaanya Seeds (P.) Ltd. (2014) 42 taxmann.com 277 (Bangalore - Trib.)

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