Jurisprudentiol–Wednesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Service Tax

Applicant, a country liquor manufacturer, enters into selling agency agreement with a HUF allowing them to use their brand name ‘Pahili Dhar' – whether Service Tax payable under ‘Intellectual Property Services' – complete waiver of pre-deposit - CESTAT

THE applicant is manufacturer of sugar and molasses. The applicant is also manufacturing country liquor under their brand name “Pahili Dhar” which is approved by the State Excise authority. The applicant had entered into selling agency agreement with M/s Talreja Trade (HUF) with intention to obtain higher returns on their investments in their country liquor plant by increasing the sale of country liquor of their brand “Pahili Dhar”.

The contention of the Revenue is that the applicants have allowed M/s Talreja Trade (HUF) to use their brand name “Pahili Dhar” in selling the products and hence they are liable to pay Service Tax under the category “Intellectual Property Services”.

Income Tax

Long-term capital gains - assessee buys agri land in 1975 - sells it in 2006 - land notified as capital assets in 1994 - for calculating fair market value date is embedded in law as 1.4.1981; Govt notification does not change date of FMV but only character of land as capital asset: ITAT

CAPITAL gains from sale of property are a common form of gains for most taxpayers. But it is also a 'capital' for potential dispute with the Revenue. In this case a dispute cropped up over the date from which fair market value (FMV) is to be calculated for determining the long-term capital gains (LTCG). The assessee had bought a piece of marshy land in 1975 for Rs 9000/-. This land was sold in 2006 for more than Rs 11 Crore. Since the land was notified as capital asset by a notification of the Central Govt in 1994, the assessee took the stand that the FMV should be taken from 1994 when the agricultural land was converted into capital asset but the AO was for 1.4.1981.

See our columns Tomorrow for the judgements