Transfer-pricing treatment of ITeS margins excludes pass-through tax recoveries and separate delayed-receivables interest after working-capital adjust...
Capacity-utilisation adjustments under TNMM can neutralise substantiated COVID-related idle costs where underutilisation materially affects profitabil...
TNMM functional comparability requires excluding rice manufacturers from a pure Basmati rice trader's benchmark and recognising operating export recei...
Working-capital adjustment subsumes delayed-receivable effects in TNMM benchmarking of captive software-development services, avoiding separate notion...
Transfer-pricing comparability requires exclusion of financially illogical super-profit comparables and correction of unsupported annual-report and ma...
Charitable character assessment preserves Section 80G approval despite inclusive spiritual teachings and incidental religious expenditure within the s...
Penalty proceedings for cash-loan acceptance require assessment proceedings and recorded Assessing Officer satisfaction; absent these, the proceedings...
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The CESTAT held that amounts collected as fines, penalties, liquidated damages, or forfeiture of deposits from contractors for failure to meet contractual obligations do not constitute consideration for taxable services under Section 65B(44) of the Finance Act, 1994. Such amounts are penal in nature, intended to compensate for losses or deter breaches, and lack nexus with any service rendered. Consequently, these amounts cannot be classified as "Declared Services" under Section 66E(e) without an independent agreement to tolerate or refrain from an act. The tribunal affirmed that no service was performed corresponding to these charges, and thus no service tax demand under Section 66E(e) is maintainable. The impugned order demanding service tax on such amounts was quashed, and the appeal was allowed.
The CESTAT held that amounts collected as fines, penalties, liquidated damages, or forfeiture of deposits from contractors for failure to meet contractual obligations do not constitute consideration for taxable services under Section 65B(44) of the Finance Act, 1994. Such amounts are penal in nature, intended to compensate for losses or deter breaches, and lack nexus with any service rendered. Consequently, these amounts cannot be classified as "Declared Services" under Section 66E(e) without an independent agreement to tolerate or refrain from an act. The tribunal affirmed that no service was performed corresponding to these charges, and thus no service tax demand under Section 66E(e) is maintainable. The impugned order demanding service tax on such amounts was quashed, and the appeal was allowed.
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