Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Appellant ‘renting' their buses to ITDC and Garhwal Vikas Nigam Ltd and registering themselves as ‘Rent-a-Cab' operator w.e.f 01.06.2007 – No cause to classify them as ‘Tour Operator' for prior period and demand Service Tax – Prima facie case - CESTAT grants stay.

The appellant receives ‘rental' for their buses which were allowed to be used by M/s India Tourism Development Corporation Ltd. (ITDC) and Garhwal Vikas Nigam Ltd. With effect from 01.06.2007, they have registered themselves with the Service Tax department and are paying Service Tax under the head “Rent-a-Cab” Operator.

Income Tax

Assessee is real estate developer - borrows funds in cash to buy a plot of land - violation of Sec 269SS - Penalty u/s 271D - Since ready cash-backing helps in negotiating land deals, a reasonable cause existed u/s 273B - Penalty not sustainable: ITAT Third Member

IN all Income tax related disputes, Revenue is mandatorily one of the parties. Does it mean that by the virtue of its status in all disputes, it is an adversary of the assessees. Not necessarily. It has a unique status as it is expected to grant the relief to an assessee even if one has not claimed it out of ignorance. In other words, Revenue is expected to collect revenue only as per the law, and not to disprove a particular business practice and deny the concessions granted by the legislature. This is what happened in this case when the assessee, a real estate developer, could not resist the temptations to buy a piece of land at an attractive price, and decided to have the backing of hard cash to negotiate a better deal. For the deal the assessee borrowed cash from a trusted source and went ahead with the negotiations. But the deal fell through and the assessee had to deposit the cash in its bank account and issue a cheque for the same amount to the source which lent him the cash from his cash book register.

Central Excise

When assessee informed department manner in which they intended to value P & P medicaments after introduction of MRP based assessment, Revenue ought to have taken action immediately – Strong prima facie case on limitation – Pre-deposit dispensed with and Stay allowed unconditionally.

The appellants are engaged in the manufacture of P&P medicaments in respect of which assessment based on MRP was introduced from January 2005. The assessee submitted letter to the Assistant Commissioner intimating that they had calculated the assessable value based on the MRP as per the DPCO order and not on the basis of MRP printed on the medicaments.

See our columns Tomorrow for the judgements