Political contribution deductions require assessee-specific proof before cash-back allegations can justify disallowance or unexplained-money additions...
The appellants, service providers of Mall Maintenance and Repair (MMR) services, were subjected to service tax demand on the reimbursements received towards expenses incurred for purchasing consumables used in rendering MMR services. The key points are: The agreements expressly stated that consumables would be directly purchased by the appellants on behalf of clients, and the cost would be recovered without any profit element. The reimbursed cost of consumables should not form part of the taxable value of MMR services provided. The consideration charged is only the management fee, on which service tax has been duly paid. The expenses incurred for procuring consumables, reimbursed by service recipients, are not towards any service provided by the appellants. As per the Supreme Court's ruling in Bhayana Builders case, such reimbursed amounts do not qualify as consideration u/s 67 of the Finance Act, and hence, are not taxable. The extended period of limitation was wrongly invoked, as there was no suppression of facts or intention to evade tax payment. The non-taxable reimbursed amounts need not be disclosed, and complete information regarding taxable services was provided in the returns. Consequently, the service tax demand on reimbursed amounts and the imposed penalty were held to be incorrect, and the appeal was allowed by the CESTAT (Appellate Tribunal).
The appellants, service providers of Mall Maintenance and Repair (MMR) services, were subjected to service tax demand on the reimbursements received towards expenses incurred for purchasing consumables used in rendering MMR services. The key points are: The agreements expressly stated that consumables would be directly purchased by the appellants on behalf of clients, and the cost would be recovered without any profit element. The reimbursed cost of consumables should not form part of the taxable value of MMR services provided. The consideration charged is only the management fee, on which service tax has been duly paid. The expenses incurred for procuring consumables, reimbursed by service recipients, are not towards any service provided by the appellants. As per the Supreme Court's ruling in Bhayana Builders case, such reimbursed amounts do not qualify as consideration u/s 67 of the Finance Act, and hence, are not taxable. The extended period of limitation was wrongly invoked, as there was no suppression of facts or intention to evade tax payment. The non-taxable reimbursed amounts need not be disclosed, and complete information regarding taxable services was provided in the returns. Consequently, the service tax demand on reimbursed amounts and the imposed penalty were held to be incorrect, and the appeal was allowed by the CESTAT (Appellate Tribunal).
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