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Monthly Archives: December 2015

Compensation for loss of income-generating asset is not revenue in nature

CIT Vs. Sharda Sinha (Delhi High Court), Appeal No. ITA 471/2003, Date of Pronouncement-22.12.2015
The Respondent is the successor-in-interest and legal representative of the deceased Assessee. The Assessee was a journalist by profession and was appointed as the Foreign Correspondent in India of a German news magazine Der Spiegel by an agreement dated 14th December 1970 at a monthly flat rate honorarium of $250 in addition to a further payment for any published contributions whose copyright would be with the German publisher. Either party could terminate the contract at the end of a calendar quarter by giving notice of six weeks. Der Speigel terminated the contract with effect from 1st December 1993 and paid compensation of DM 3,00,000 (Rs.53,82,000) for the association of the past 23 years and loss of work space.
In the original return the assessee claimed this amount as a revenue receipt but on revising the return, it was claimed to be a capital receipt.

GST- Proposed Input tax credit methodology

Goods & Service tax (GST), the mile stone tax reform since independence of India is on its way to implementation journey and proposed GST bill is under discussion everywhere. This is very crucial stage to understand the various methodologies proposed in the GST bill.

As we all aware that GST is the value added tax, we can take input tax credits as like present VAT credits in various taxes/levies by the Central & State Governments. Proposed GST given the provision of manner of taking input credit and utilization thereof.

Pre-delivery inspection charges and after sales service charges not includible in assessable value

SC overruled the CESTAT Larger Bench decision in Maruti Suzuki case and held that pre-delivery inspection charges and after sales service charges are not to be included in assessable value
Commissioner of Central Excise, Mysore Vs. TVS Motors Company Ltd. [2015 (12) TMI 874 – SUPREME COURT]

Refund allowable where Service tax is paid twice due to clerical error

Refund is allowable where Service tax is paid twice by the Appellant due to clerical error and the same is proved by supporting documents
Tikaula Sugar Mills Ltd. Vs. CCE, Meerut-I [2015 (12) TMI 884 – CESTAT NEW DELHI]
Tikaula Sugar Mills Ltd.(the Appellant) has filed refund claim of Service tax paid on Goods Transport Agency service (GTA service) twice due to clerical error for the month March, 2013. Further, the payment of Service tax made twice was reflected in the ST-3 returns as well as the Appellant also produced challan along with CA certificate. Even though, the Department has rejected the refund claim on ground that the Appellant has not produced any supporting documents that the payment has been made twice by them.

Issue Questionnaire with First Notice in scrutiny cases: CBDT

Instances have come to the notice of the Board that in cases selected under scrutiny, while issuing the first notice, Assessing Officers do not convey the specific compliance requirements like production of accounts, furnishing of documents, information, evidences, submission of other requisite particulars etc. Since the taxpayers or their authorized representatives are required to comply with the statutory notice issued by the Assessing Officer, they remain clueless about the information required to be submitted and their appearance before the Assessing Officer does not serve any fruitful purpose except recording of their presence. This causes undue hardship to the taxpayers and unnecessary wastage of their time.

Clarification on Scope of scrutiny in cases selected through CASS

Scrutiny Assessments-some important issues and scope of scrutiny in cases selected through Computer Aided Scrutiny Selection (‘CASS’)-reg .-
The Central Board of Direct Taxes (‘CBDT’) , vide Instruction No. 7/2014 dated 26 09.2014 had clarified the extent of enquiry in certain category of cases specified therein , which are selected for scrutiny through CASS . Further clarifications have been sought regarding the scope and applicability of the aforesaid Instruction to cases being scrutinized.

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