Tax Cases Weekly Round-Up: 21 May to 27 May 2023

Supreme CourtNo Service Tax Applicable on User Development Fee collected From Passengers by Delhi, Mumbai and Hyderabad International Airports: Supreme CourtCase Title: Central GST Delhi – III vs Delhi International Airport LtdCitation : 2023 LiveLaw (SC) 457The Supreme Court has ruled that “user development fee” (UDF) levied and collected by the airport operation, maintenance, and development entities from passengers departing the concerned airports, is a statutory levy, and thus, it is not subjected to levy of service tax under the provisions of the Finance Act, 1994.Delhi High CourtRejection Of Application Under SVLDR Scheme Without A Hearing Is Violative Of Principles Of Natural Justice: Delhi High CourtCase Title: Carpet Export Promotion Council Versus Union Of IndiaCitation: 2023 LiveLaw (Del) 434The Delhi High Court has held that the summary rejection of the application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) without affording the opportunity to be heard would violate the principles of natural justice.ITATIncome To Be Computed First After Making The Disallowance And Only 40% Resultant Income Has To Be Treated As Taxable Income: ITATCase Title: M/s. Stewart Holl (India) Limited Versus Assistant Director of Income TaxThe Kolkata Bench of Income Tax Appellate Tribunal (ITAT) has held that the income of the assessee should be computed first after making the disallowance and whatever the resultant income only 40% of that income has to be treated as taxable income in terms of Rule 8(1) of the Income Tax Rules, 1962.ITAT Allows Income Tax Deduction On Effluent Water TreatmentCase Title: Dy. Commissioner of Income Tax Vs. M/s. Viral Alkalis LtdThe Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the income tax deduction on effluent water treatment.Dept. Failed To Prove Sundry Creditors To Be Bogus: ITAT Deletes Addition Against Buffalo Meat TraderCase Title: ACIT Versus Al Nasir Agro FoodsThe Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has deleted the addition against the buffalo meat trader as the department has failed to prove sundry creditors to be bogus.Additions Can’t Be Made In Absence Of Incriminating Material: ITAT Deletes Income Tax AdditionCase Title: DCIT Versus Bhavya Pankaj ShahThe Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the additions could not have been made in the absence of any incriminating material.Once The Existence Of Goodwill Is Established, Depreciation On Goodwill Cannot Be Questioned: ITATCase Title: Dy. Commissioner of Income Tax, Circle 2 Versus Blujay Solutions (India) Private LimitedThe Hyderabad Bench of the Income Tax Appellate Tribunal (CESTAT) has held that once the existence of goodwill is established, depreciation on goodwill cannot be questioned.CESTATBagasse Is An Agricultural Waste: CESTAT Quashes Excise DutyCase Title: M/s. Vithal Corporation Ltd. Versus Commissioner of Customs Excise & Service TaxThe Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), while quashing the excise duty, held that bagasse, being an agricultural waste or residue, could not be manufactured.CENVAT Credit Is Not Admissible On Input Services Attributable To Trading Activity: CESTATCase Title: M/s Woodward Governor India Limited Versus Commissioner of Central ExciseThe Chandigarh Bench of the Income Tax Appellate Tribunal (CESTAT) has held that CENVAT credit is not admissible on input services attributable to trading activity.‘Input Service’ Include Any Service Received In Or In Relation To Setting Up, Modernisation, Renovation Or Repair Of The Factory Premises: CESTAT Allows Cenvat CreditCase Title: M/s Rico Auto Industries Ltd. Versus Commissioner of ExciseThe Chandigarh Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that the construction services and other services that are necessary for the renting of the business fall under the definition of ‘input service’ as provided under Rule 2(l) of the Cenvat Credit Rules, 2004.Demand Under Service Tax On RCM, Has To Be Worked Out And Calculated Transaction-Wise And Invoice-Wise: CESTATCase Title: M/s. M.P. Audyogik Kendra Vikas Nigam Versus Principal Commissioner of Central Goods & Service Tax and Central ExciseThe Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that demand under service tax on reverse charge mechanisms has to be worked out and calculated transaction-wise and invoice-wise.

Tax Cases Weekly Round-Up: 21 May to 27 May 2023

Mariya Paliwala

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