Dcm Shriram Industries Ltd. Vs. Union Of India & Ors.(HC-Delhi)(25 May, 2016)

Held: The Petitioner was clearing PAA, made from captively consumed BeCN cleared by paying nil duty and further that PAA was also being cleared upon payment of nil duty. The fact that it asked the Petitioner to reverse the MODVAT credit on inputs purchased from outside and the Petitioner complied, belies the Department's case to the contrary. Secondly, a comparison of the two SCNs shows that the second SCN for the extended earlier period 1st March 1986 till 31st December 1989 is a virtual repeat of the first SCN dated 19th February 1991 except for one paragraph extracted hereinbefore. This merely sets out the language of the proviso to Section 11A(1) and makes no reference to material that was not already available with the Department when the first SCN was issued. the conditions for invoking the extended period of limitation in terms of the proviso to Section 11A(1) of the CE Act were not fulfilled and that the demand raised in respect of the BeCN used in the manufacture of PAA for the extended period of 1st March 1986 till 31st December 1989 was barred by limitation. Appeals allowed.

Judgements/Tribunals

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DCIT Vs. M/s. Reliance Life Insurance Co. Ltd.(ITAT-Mumbai)(25 May, 2016)

Held: The assesse engaged in the life insurance business needs various types of services such as storage of data, scanning and sorting of documents, processing charges, call centre operations and business services besides other basic works connected and incidental therewith which were outsourced by the assesse to outside agencies on contractual basis. The assesse made the payment for these services after deducting TDS under the provisions of section 194C of the Act believing these are basic type of services involving no technical or professional qualification whereas the AO came to the conclusion that these are technical services and were required to be subjected to TDS under the provisions of section194J of the Act and finally treated the assesse in default under the provisions of section 201(1) of the Act and raised the demand accordingly. The ld CIT(A) examined the contract with Writer Information Management Services and found that very basic services were contracted and rendered by the said party involving no special technical skill or professional qualification. AO treated the assesse as "an assesse in default' within the provisions of section 201 for not deducting TDS u/s 194J of the Act in respect of event management expenses and worked out the default. Appeals dismissed.

M/s. IDS Infotech Ltd. Vs. The D.C.I.T., Chandigarh. (ITAT-Chandigarh)(24 May, 2016)

Held: The income is taxable in India only if that foreign entity carries on business in India through a permanent establishment situated in India. No such finding with regard to existence of any permanent establishment in India has been brought on record by any of the lower authorities or even by the learned D. R. at the time of hearing before court. In view of this, the position emerges that the payment to a person who happens to be a resident of country with whom India has entered into DTAA and where the business profits are taxed only in the country and does not have a permanent establishment in India, the assesse is not required to deduct tax at source. Therefore, the provisions of section 40(a)(i) of the Act cannot be invoked. The provisions of tax deduction at source are not applicable to the impugned payments as the amounts received by the recipients are not in the nature of income deemed to accrue or arise in India in their hands. The services rendered by the non-residents are not in the nature of technical services, no income deemed to have accrued to the non-resident entities, there is no liability on the assesse to deduct tax at source on such payment. Therefore, the provisions of section 40(a)(i) of the Act are not exigible in the present case. Appeal partly allowed.