Tax
Software Development Expenses For Rendering Services To Clients Is Revenue Expense: ITAT
The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has held that the software development expenses for rendering services to clients are revenue expenses.The two-member bench of Vikas Awasthy (Judicial Member) and Gagan Goyal (Accountant Member) has observed that the expenditure has been incurred in the regular course of business of the assessee and for earning revenue and...
No Service Tax Payable On Facility Charges Attributable To Electricity Expenses: CESTAT
The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that service tax is not payable on the amount received as facility charges as it was wholly attributable to electricity expenses, which have been shared proportionately by the assessee and its sister concerns.The bench of Anil Choudhary (judicial member) has observed that electricity is a good and not...
Payment Made To Non-Resident Marketing Partners for Sale Services is FTS: ITAT
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has held that payment made by the assessee to non-resident marketing partners for providing pre and post-sale services related to software solutions is in the nature of fees for technical services (FTS).The two-member bench of V. Durga Rao (Judicial Member) and G. Manjunatha (Accountant Member) has observed that since the assessee...
ITAT Restricts Addition To Estimated Profit Of 30% Of Cash Deposits Made During Demonetisation Period
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has directed the AO to estimate a 30% net profit on total cash deposits made during the demonetization period and deleted the balance additions made under Section 69A of the Income Tax Act.The two-member bench of V. Durga Rao (Judicial Member) and G. Manjunatha (Accountant Member) observed that neither the assessee proved its...
Assessment Made To Best Of Judgment Of Authority Would Not Be Sufficient For Imposition Of Penalty: Madras High Court
The Madras High Court has held that the assessment made to the best of the authority's judgement would not be sufficient for the imposition of penalty, as the degree of proof required for the imposition of penalty is much higher than that required for the purpose of framing a best judgement assessment.The single bench of Justice Anita Sumanth has observed that the petitioner has...
ITAT Is Last Fact Finding Authority And Bound To Follow Directions Issued By High Court in Pith and Substance: Rajasthan High Court
The Rajasthan High Court has held that the Income Tax Appellate Tribunal (ITAT) is the last fact-finding authority and is bound to follow the directions issued by the High Court in pith and substance.The division bench headed by Chief Justice Pankaj Mithal and Justice Anoop Kumar Dhand has held that the direction of the High Court in remanding the matter to the Tribunal was to verify the...
GST Not Payable On Notice Pay Recovery From Outgoing Employee: Punjab AAR
The Punjab Authority of Advance Ruling (AAR) has held that the GST is not payable on notice pay recovered from outgoing employees.The member bench of Sunder Lal and Kumud Singh has observed that the amount received as notice pay recovery by the applicant from the employees who leave the applicant company without serving the mandatory notice period mentioned in the employment contract is not...
Activities Carried Out by Sub-Contractor For Shifting Electrical Utilities Can't be Regarded as Composite Supply of Works Contract: AAR
The West Bengal Authority for Advance Ruling (AAR) has held that activities carried out by subcontractors for the shifting of electrical utilities for the construction of roads cannot be regarded as a composite supply of works contracts.The two-member bench of Brajesh Kumar Singh and Joyjit Banik has observed that providing services of shifting electrical utilities alone cannot be regarded...
Liquidated Damages Recoverable From Bi-electric India For Delay In Commissioning, Doesn't Qualifies As Supply, No GST Payable: AAAR
The Telangana Appellate Authority of Advance Ruling (AAAR) has held that liquidated damages recoverable by the applicant from Bi-electric India on account of delay in commissioning do not qualify as a "supply" and no GST is payable.The two-member bench of B.V. Siva Naga Kumari and Neetu Prasad has observed that the amount paid as "liquidated damages" is an amount paid only to compensate for...
ITC Can Be Claimed Under Marginal Scheme On Rent, Advertisement expenses, commission, Professional expenses: AAR
The Karnataka Authority of Advance Ruling (AAR) has held that the input tax credit (ITC) under the marginal scheme on expenses like rent, advertisement expenses, commission, professional expenses, and other like expenses is subject to sections 16 to 21 and rules 36-45 of the CGST Act and Rules 2017.The two-member bench of M.P. Ravi Prasad and Kiran Reddy T. has observed that ITC can be claimed...
Tax Cases Weekly Round-Up: 30 October To 5 November 2022
Supreme CourtIndustrial Townships Are "Local Areas" For Entry Tax Levy By States Though They Are Excluded From Municipalities : Supreme Court Case Title: OCL India Limited vs State of Orissa Citation: 2022 LiveLaw (SC) 911 The Supreme Court upheld States' power to impose entry tax from Industrial Township/Areas. The bench of CJI UU Lalit, Justices S. Ravindra Bhat and J...
Expenses Towards Advertisement, Brokerage And Commission, Incurred By A Real Estate Developer; Deductible As Revenue Expenditure: Delhi High Court
The Delhi High Court has ruled that advertisement expenses, Software Developing Charges, and expenses towards brokerage and commission, incurred by a real estate developer, are in the nature of general administration cost and selling cost, as classified by the Guidance Note issued by the ICAI. Thus, they qualify for deduction as revenue expenditure. The bench of Justices Manmohan...