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    Electricity is not fuel for GST rate entry 10(i); electrically operated bus rentals with operators fall under the residual entry instead.
    CSR donations and Section 80G deduction: Tribunal view treats eligibility dispute as a legal interpretation issue, not a rectifiable mistake.
    Contract for service, not manpower supply, can qualify for agricultural service tax exemption and refund where statutory conditions are met.
    Contractual interest deduction allowed where capital bond agreement created an enforceable obligation matching taxable interest income.
    Co-operative society deduction under section 80P survives where income is attributable to member credit facilities and no non-member dealings are show...
    TDS on year-end provisions applies when payee and amount are identifiable; salary tax follows actual payment
    Explained jewellery in search assessments accepted where gifts, purchases and family circumstances support reasonable possession.
    Transfer pricing interest adjustment remanded after subsidiary liquidation evidence and additional material undermined sustainability of the addition.
    Depreciation on amalgamation goodwill upheld; no section 14A disallowance without exempt income
    CUP benchmarking with reliable market quotations upheld; transfer pricing adjustment deleted, while penalty initiation challenge was premature.
    Section 56(2)(x) valuation follows the allotment agreement date when part payment is made through banking channels.
    Reassessment jurisdiction and best judgment estimation: new factual ground rejected, unsupported lower commission rate set aside.
    Writ challenge to customs notices is premature; AIFTA verification does not bar statutory scrutiny of preferential duty claims.
    Duty-paid diesel proof accepted on HPCL certificate, setting aside demand and interest for the disputed quantity.
    Customs valuation and limitation rules require corroborated evidence for reassessment, confiscation, and duty recovery
    Indirect tax refund claims remain subject to limitation and unjust enrichment, even when payment is said to arise from mistake of law.
    Statutory appeal bars writ interference where no exceptional circumstances, jurisdictional defect, or prima facie vires issue is shown.
    Statutory appellate remedy bars writ interference where notice and hearing were given in a GST refund dispute.
    Limitation and reassessment jurisdiction: bona fide delay was condoned, and Section 151 approval had to be examined first.
    Condonation of delay and Article 136 interference refused in dispute over inter-state movement of goods for purchase orders.
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Electricity is not fuel for GST rate entry 10(i); electrically operated bus rentals with operators fall under the residual entry instead.
Electricity is not "fuel" for purposes of Notification No. 11/2017-Central Tax (Rate), so rental services of electrically operated buses with operators do not satisfy entry 10(i), which requires fuel cost to be included in the consideration. The Authority applied the notification's ordinary language and noted that electrically operated vehicles are dealt with separately, confirming that electricity cannot be read into the concessional entry by implication. The service therefore falls within the residual entry 10(iii) for rental services of transport vehicles with operators not covered by entries 10(i), 10(ia) or 10(ii), and is taxable under that entry.
AI TextQuick Glance (AI)Headnote
CSR donations and Section 80G deduction: Tribunal view treats eligibility dispute as a legal interpretation issue, not a rectifiable mistake.
CSR-related donations to charitable organisations may still qualify for deduction under Section 80G of the Income-tax Act, 1961 if the donation is otherwise eligible. The ITAT Mumbai followed its earlier coordinate-bench view that CSR expenditure does not, by itself, bar Section 80G relief. It also noted the interaction of Section 135(5) of the Companies Act, 2013 and Explanation 2 to Section 37(1) of the Income-tax Act, and treated the Revenue's objection as a legal interpretation dispute rather than a patent mistake. On that basis, denial of the deduction could not be corrected under Section 154 as a mistake apparent from the record.
AI TextQuick Glance (AI)Headnote
Contract for service, not manpower supply, can qualify for agricultural service tax exemption and refund where statutory conditions are met.
Where a contract leaves supervision, disciplinary control, wage liability, statutory compliance and employment responsibility with the contractor, the arrangement is treated as a contract for service rather than manpower supply. Applying the control, organisation and multifactor tests, the activity was classified as business auxiliary service, not manpower supply service. Because the work involved processing unmanufactured tobacco, it fell within agricultural produce, so the service met the exemption conditions under the pre-negative list notification and the corresponding post-negative list treatment for services in relation to agriculture. The refund claim was therefore accepted and rejection of refund was not sustainable.
AI TextQuick Glance (AI)Headnote
Contractual interest deduction allowed where capital bond agreement created an enforceable obligation matching taxable interest income.
Contractual interest payable under a capital bond arrangement was held to be deductible as business expenditure where the agreement expressly required the assessee to pay interest to the counterparty on funds placed in the capital bond account. The liability was treated as enforceable under the contract and coextensive with the interest income earned from those deposits, which was taxable in the assessee's hands. On a fresh reading of clause 5, the earlier view that no obligation existed was not accepted, and the corresponding interest expenditure was allowed as a deduction. The disallowance was deleted and the deduction claim succeeded.
AI TextQuick Glance (AI)Headnote
Co-operative society deduction under section 80P survives where income is attributable to member credit facilities and no non-member dealings are shown.
A credit co-operative society registered under the Karnataka Souharda Sahakari Act, 1997 was treated as a co-operative society within section 2(19) of the Income-tax Act and was held entitled to deduction under section 80P(2)(a)(i) on income attributable to providing credit facilities to members, including regular or nominal members. The record did not establish dealings with non-members, so the revenue's basis for denying the deduction on that ground failed. A disallowance of tax-related expenditure did not defeat the deduction because it only affected the quantum of eligible business income, and the alternative denial under section 80P(2)(d) also failed since the assessee had not claimed the income under that provision.
AI TextQuick Glance (AI)Headnote
TDS on year-end provisions applies when payee and amount are identifiable; salary tax follows actual payment
Year-end provisions for ascertained expenses can fall within TDS obligations when the payee, nature of payment and amount are identifiable, even if the credit is routed to an expenses payable account and later reversed. Relief from being treated as an assessee in default may still be available if the recipient has already offered the income and the statutory verification requirements under the first proviso to section 201 are met. Salary or incentive payments are governed by deduction at the time of actual payment, so where tax is deducted on payment and forms are issued accordingly, no salary-related TDS default or consequential interest survives.
AI TextQuick Glance (AI)Headnote
Explained jewellery in search assessments accepted where gifts, purchases and family circumstances support reasonable possession.
Jewellery found during search was explained by affidavits, purchase invoices, bank withdrawals and family details showing gifts on ceremonial occasions and purchases from disclosed funds. The authorities' rejection of that explanation was found inconsistent with the surrounding facts and customary family possession of jewellery. CBDT guidance on seizure of jewellery supported acceptance of a reasonable quantity for family members, and the remaining jewellery was treated as explained on the material produced. The addition for unexplained jewellery was therefore deleted; the separate challenge to approval under section 153D was not adjudicated because it was not pressed.
AI TextQuick Glance (AI)Headnote
Transfer pricing interest adjustment remanded after subsidiary liquidation evidence and additional material undermined sustainability of the addition.
The transfer pricing adjustment imputing interest on the loan advanced to the German subsidiary was set aside because additional evidence showed the subsidiary had entered liquidation and the investment and loan had been written off. As the new material directly affected the sustainability of the interest adjustment, the matter was remitted for fresh adjudication by the Assessing Officer after granting the assessee an effective opportunity of hearing. The additional evidence was taken on record, and the substantive transfer pricing issue was left open for reconsideration.
AI TextQuick Glance (AI)Headnote
Depreciation on amalgamation goodwill upheld; no section 14A disallowance without exempt income
Goodwill arising from a court-approved amalgamation was treated as an intangible asset eligible for depreciation, and the 5th proviso to section 32(1) and Explanation 3 to section 43(1) were held inapplicable on the facts. Where no exempt income was earned during the year, disallowance under section 14A read with rule 8D was deleted because the statutory nexus to exempt income was absent. An additional ground challenging disturbance of the opening written-down value was admitted as a pure question of law and was allowed, supporting the depreciation claim. The assessee obtained relief on the disputed depreciation and related cross-objection issues.
AI TextQuick Glance (AI)Headnote
CUP benchmarking with reliable market quotations upheld; transfer pricing adjustment deleted, while penalty initiation challenge was premature.
Authentic and reliable price quotations or market publications may be used as comparable uncontrolled price data for benchmarking imports of crude palm oil, and the Tribunal held that quotations from Sunvin Group and MMSPL were valid CUP inputs where no material existed to doubt their reliability; the transfer pricing adjustment was therefore deleted. The challenge to initiation of penalty proceedings under section 270A was treated as premature because penalty proceedings are separate from assessment proceedings, so that objection was rejected.
AI TextQuick Glance (AI)Headnote
Section 56(2)(x) valuation follows the allotment agreement date when part payment is made through banking channels.
For section 56(2)(x), where an allotment letter fixes the consideration and records part payment through prescribed banking channels on or before that agreement date, the provisos apply and the relevant value is the stamp duty value linked to the agreement date rather than the later registration date. On the facts, the allotment letter operated as the agreement fixing consideration, the scheduled payments were made in line with that letter, and the authorities erred in treating registration as decisive. The addition based on stamp duty value as on the registration date was therefore unsustainable and was deleted.
AI TextQuick Glance (AI)Headnote
Reassessment jurisdiction and best judgment estimation: new factual ground rejected, unsupported lower commission rate set aside.
A cross-objection challenging reassessment under section 147 on the basis that section 153C alone applied was held not entertainable for the first time before the Tribunal because it required fresh factual inquiry beyond the existing record. In a best judgment assessment involving accommodation entries, the Assessing Officer's commission estimate at 2% was restored because the Commissioner (Appeals) reduced it to 0.5% without evidentiary support or identified infirmity in the assessment. The Revenue's appeals were allowed and the assessee's cross-objections were dismissed.
AI TextQuick Glance (AI)Headnote
Writ challenge to customs notices is premature; AIFTA verification does not bar statutory scrutiny of preferential duty claims.
Writ petitions challenging customs show cause notices were treated as premature because a writ court will ordinarily not interfere at the notice stage when the statutory adjudicatory remedy remains available. The Court also found that territorial nexus existed in most petitions through import activity, the petitioners' location, or notice issuance, though one petition lacked such nexus. On the tariff issue, treaty-based origin verification under AIFTA was held to be facilitative rather than a mandatory precondition, and it did not curtail customs authorities' statutory power to scrutinise preferential duty claims, seek documents, and examine origin and regional value content under domestic law.
AI TextQuick Glance (AI)Headnote
Duty-paid diesel proof accepted on HPCL certificate, setting aside demand and interest for the disputed quantity.
HPCL's certificate was accepted as credible documentary proof that the diesel oil supplied on 13.03.2008 was duty paid, because HPCL acted as both charterers and bunker suppliers and no cogent reason was shown to reject the certificate. On that basis, duty and interest demand on 49.431 MT of diesel oil was set aside. The remaining findings, including those relating to the balance quantity and the wider factual matrix, were left undisturbed, so the appeal succeeded only to that limited extent.
AI TextQuick Glance (AI)Headnote
Customs valuation and limitation rules require corroborated evidence for reassessment, confiscation, and duty recovery
Reassessment of imported second-hand cranes after clearance must rest on legally sustainable rejection of declared value and follow the sequential valuation scheme; internet prices, industry estimates, or broad thumb rules are insufficient without corroborated evidence of actual transaction value. Confiscation, redemption fine, and penalties require proof of statutory misdeclaration or other admissible evidence, and cannot be sustained merely because a higher notional value is proposed. Duty demands for consignments beyond the statutory limitation period are barred, and voluntary deposits cannot be adjusted against non-sustainable time-barred recoveries. The commentary emphasises that reassessment, confiscation, penalty, and recovery must each satisfy the Customs Act's evidentiary and limitation requirements.
AI TextQuick Glance (AI)Headnote
Indirect tax refund claims remain subject to limitation and unjust enrichment, even when payment is said to arise from mistake of law.
Refund of service tax paid on construction of complex service was denied because the claimant did not establish entitlement on the merits of the alleged mistaken classification, and the refund had to satisfy the statutory conditions in any event. The Tribunal held that a claim said to arise from mistake of law still remains subject to the refund limitation regime and the bar of unjust enrichment. As the appellant failed to show that the tax incidence had not been passed on to customers, the refund requirements were not met and rejection of the claim was upheld.
AI TextQuick Glance (AI)Headnote
Statutory appeal bars writ interference where no exceptional circumstances, jurisdictional defect, or prima facie vires issue is shown.
An efficacious statutory appeal under the CGST Act ordinarily bars direct writ intervention, and the Court reiterated that bypassing the appellate remedy is justified only in exceptional circumstances. It also accepted that GST intelligence officers may be assigned functions as proper officers for inquiry and adjudication, so the jurisdictional objections to summons and proceedings failed. The challenge to the Circulars and related vires arguments was rejected because no strong prima facie case for constitutional or delegated-legislation interference was shown. The result was that the writ court declined interference and left the petitioners to pursue the statutory appellate remedy.
AI TextQuick Glance (AI)Headnote
Statutory appellate remedy bars writ interference where notice and hearing were given in a GST refund dispute.
Writ interference under Article 226 is ordinarily unavailable where a functional and efficacious statutory appellate remedy exists under the GST framework. The Court noted that the petitioner had been put to notice, had filed replies, and had been afforded personal hearings at both the adjudication and appellate stages, so the complaint was not one of total denial of hearing but of disagreement with the findings and appreciation of material. Questions on refund entitlement and sufficiency of supporting documents were held to be matters for the statutory appellate forum. Accordingly, the Court declined to interfere and left the petitioner to pursue the available appellate remedy.
AI TextQuick Glance (AI)Headnote
Limitation and reassessment jurisdiction: bona fide delay was condoned, and Section 151 approval had to be examined first.
Limitation should not be applied rigidly where the explanation shows a bona fide impediment; the death of the assessee's authorised representative and the shift to a faceless regime were treated as sufficient cause for condoning a 430-day delay in filing the appeal. A challenge to reassessment for lack of proper approval under Section 151 was treated as a jurisdictional objection going to the root of the proceeding, and it had to be decided as a preliminary issue before other matters. The impugned order was set aside, the delay was condoned, and the matter was remitted for fresh adjudication with jurisdiction to be determined first.
Quick Glance (AI)Headnote
Condonation of delay and Article 136 interference refused in dispute over inter-state movement of goods for purchase orders.
Delay in filing the special leave petition was condoned, but the Supreme Court declined interference under Article 136 and dismissed the petition. The dispute concerned classification of movement of goods from the appellant's factory in Maharashtra to Haridwar in Uttarakhand to meet purchase orders of Patanjali, but no further interference with the impugned order was found warranted.

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1995 (9) TMI 94 - AT - Income Tax

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Validity of reassessment upheld based on loan transaction doubts; ITAT affirms CIT (A) decision.
The ITAT upheld the validity of the reassessment proceedings initiated by the Assessing Officer under section 147(b) based on information received from ... Summary

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Acts Income Tax