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11.01.2011 - Recent Update as on 11.01.2011
Tuesday, January 11, 2011

1.   DCIT vs. JINDAL PHOTO LIMITED, I.T.A. No. 4539/Del./2010,   ITAT-DELHI,  (BENCH –‘G’)

For making disallowance under Section 14A read with Rule 8D, onus on Revenue  to show nexus between expenditure & tax-free income

Held_that_the assessment order does not evince any such satisfaction of the AO regarding the correctness of the claim of the assessee. As such, Rule 8D of the Rules was not appropriately applied by the AO. It has not been done by the AO that any expenditure had been incurred by the assessee for earning its dividend income. Merely, an ad hoc disallowance was made. The onus was on the AO to establish any such expenditure.

(Please click here for judgment)

   

2.   [Contribution by  CA. Amarpal and contributor is available at email-id : amar.p.ca1@gmail.com ]

Deliberate misdeclaration is compulsory for invoking section 78 of Finance Act, 1994

Ess Ess Engineering Vs. CCE, Chandigarh [2011] 30 STT 10 (New Delhi –  CESTAT)

Subject:  For imposing penalty u/s 78 of Finance Act, 1994, some positive evidence of deliberate misdeclaration with intent to evade service tax is compulsory.

Facts & Issue:

The assessee did not pay service tax on fabrication and dismantling activity undertaken by it on belief that same were not taxable. On being pointed by auditors, he paid entire service tax along with interest. Whether he was liable for penalty.

Judgement (Conclusion):

For imposition of penalty under section 78, some positive evidence of deliberate misdeclaration of value of taxable service, with intent to evade the service tax, other than mere failure to declare the full value of taxable service in returns, must be produced. In the instant case, there was no dispute that in the books of account and other financial records, all the transactions had been disclosed and those records had been produced by the assessee before the departmental auditors. In view of those circumstances, there was no justification for imposition of penalty under section 78. [Para 6] 

(Please click here for judgment)

  

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