C.A. Vipul Padliya

Post amendment in S.36(1)(vii), assessee is not required to demonstrate that debt is bad

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INCOME TAX APPELLATE TRIBUNAL, MUMBAI

ITA Nos. 4882, 2475, 6527/Mum/2010

Assessment Years-2003-04, 2004-05 and 2005-06

ACIT Vs. M/s. Bobcards Ltd.

Date of pronouncement: 20.6.2012

AO has not given any reason for disallowing the claim. We also find that the AO has simply followed the findings of earlier assessment years. As similar additions in earlier assessment year has been deleted by Ld. CIT(A) which has been accepted by the Revenue as Committee on Dispute declined to give permission to the department to proceed with the appeal , findings of the Ld. CIT(A) become final. As Ld. CIT(A) has rightly pointed out that after the amendment in Section 36(1)(vii), the assessee is not required to demonstrate that the debt is bad . We do not find any infirmity in the finding of Ld. CIT(A). We also draw support from the order of Tribunal in ITA No. 500/M/06 for assessment year 2002-03 in the case of very same assessee in which the Tribunal has allowed the claim of bad debt. Respectfully following the decision of the Tribunal, the claim is allowed for this year also.

Service Tax on study materials provided by Commercial training or coaching service provider

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CESTAT, NEW DELHI BENCH

FIITJEE Ltd.

Commissioner of Service Tax, Delhi

STAY ORDER NO. ST/482 of 2011

application no. st/stay/2873 OF 2010

APPEAL NO. ST/1355 OF 2010

AUGUST 2, 2011

Prima facie coaching material has intimate connection with the commercial coaching provided by the assessee and the contents of the study material are relevant to the coaching to make the later fruitful and meaningful so that the enrolled candidates are benefited out of commercial coaching. There was no evidence to effect that these coaching materials are sold as text books by book sellers and no way useful to the enrolled students. So also there is no evidence to suggest that these coaching materials by any means enjoy exemption under law and not taxable.

In view of prima facie observation as above, the Revenue shall be prejudiced if no pre-deposit is called for during pendency of the appeal. Accordingly, the assessee was directed to make pre-deposit of part of demand.

Section 531A Prohibits lease of property for 30 years by a Company one year prior to its winding up petition

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HIGH COURT OF MADRAS

Sri Krishnasamy Reddiar Educational Trust

Official Liquidator

O.S.A No. 129 of 2008

August 16, 2011

The appellant is said to have entered into a lease agreement with the company-in-liquidation on 22-1-2000, for demised building of 8,400 sq.ft. along with adjacent vacant land (about 5.33 acres) for a lease rent of Rs. 5,000 per month for a period of 11 months, which expired on 21-12-2000. Again, the company-in-liquidation is said to have entered into a fresh lease agreement for a period of 30 years in respect of the said building of 8,400 sq.ft. and the adjacent vacant land at Rs. 5,000 per month with 20 per cent increase in rent on every five years, commencing from 22-12-2005 and so on. The terms of lease deed are heavily loaded in favour of the lessee. It is difficult to understand as to how such large extent of property with a spacious building has been rented out for a meagre sum of Rs. 5,000 per month with marginal increase once in 5 years.

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CESTAT, BANGALORE BENCH

Bhagyalaxmi Electroplast (P.) Ltd.

Commissioner of Customs & Central Excise, Hyderabad

STAY ORDER NO. 52 OF 2012

ST/STAY/226 OF 2011

ST/397 OF 2011

JANUARY 11, 2012

Entire demand on the freight element is based on Rule 2(1)(d)(v) of the Service Tax Rules, 1994. Sub-clause (v) was inserted in Rule 2(1)(d) only on 3.12.2004 and the same cast Service Tax liability on the person paying the freight. Prima facie, the appellant did not pay the freight and therefore there is no tax liability on their part.

Exemption to Specified Services Received By Exporter of Goods – Corrigendum

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Section 66b of The Finance Act, 1994 – Charge Of Service Tax On And After Finance Act, 2012 – Exemption To Specified Services Received By Exporter Of Goods – Corrigendum

Notification [F. NO.334/1/2012 -TRU], DATED 29-6-2012

In the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 31/2012-Service Tax, dated the 20th June, 2012 published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 473 (E), dated the 20th June, 2012, in the proviso, in clause (d),-

for “column (4)”, read “column (3)”.

Expenditure on purchase of software is revenue expenditure

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HIGH COURT OF DELHI

CIT v. Amway India Enterprises

IT APPEAL NOS. 1344 AND 1363 OF 2009

NOVEMBER 4, 2011

The first issue being: the treatment to be accorded to expenditure incurred by the assessee on purchase of software applications. These applications being: MS Office Software, Anti Virus software, Lotus Notes Software and Message Exchange applications. The assessee in respect of these applications acquired a licence to use the said applications on payment of consideration. The said expenditure has been disallowed by the Assessing Officer in each of the assessment years by treating the expenditure as one incurred on capital account. Accordingly, depreciation at the rate of 25% was allowed to the assessee.

Certificate by DSIR must to claim deduction for R&D activity u/s. 35(2AB)

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HIGH COURT OF DELHI

CIT v. Sandan Vikas (India) Ltd.

IT APPEAL NO. 348 OF 2011

FEBRUARY 24, 2011

The Gujarat High Court in CIT v. Claris Lifesciences Ltd. [2010] 326 ITR 251/[2008] 174 Taxman 113 detailed in no uncertain terms that the cut-off date mentioned in the certificate issued by the DSIR would be of no relevance. What is to be seen is that the assessee was indulging in R&D activity and had incurred the expenditure thereupon. Once a certificate by DSIR is issued, that would be sufficient to hold that the assessee fulfils the conditions laid down in section 35(2AB).