Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Activity of teaching math through abacus training program a recreational program to increase children's interest in math – Eligible for exemption under Notification No. 9/2003-ST: CESTAT

THE appellant conducts mental arithmetic programs for children between 5 to 12 years by using the ancient tool ‘abacus'. Department proceeded against them by issuing a show cause notice demanding service tax under the taxable service category of ‘Commercial Training & Coaching Service' and also denied benefit of exemption notification 9/03-ST on the ground that the activities undertaken by them would not come under the category of ‘recreational training'. Their contentions were rejected by the lower authorities resulting in an appeal before the CESTAT.

Income Tax

Assessee sells gifted asset - computation of long term capital gains - cost of acquisition to be worked out by applying cost inflation index in relation to year when previous owner first held the asset and not the year when asset was gifted to assessee - Revenue's appeal dismissed: ITAT Special Bench

IT is not uncommon to see in our society that a daughter gifts a flat to her father. This is what happens in the instant case. But a dispute arises when the father decides to sell off the flat and computes the capital gains tax by taking into account the indexed cost of acquisition in relation to the year in which his daughter first held the asset. But the AO disagrees and insists on computing the same from the year in which the father gets control of the asset. Since there were conflicting decisions on this issue, the matter is referred to the Special Bench.

Customs

Equipment imported for supply to BSNL – contract with BSNL cancelled – goods detained by DRI – allowed to be re-exported: High Court

Action in the matter is possible only after the conclusion of the proceedings in the said show-cause. Therefore, at this stage, only relief that can be granted is to allow the petitioner to re-export the goods, subject to furnishing of the Bond (as that condition is not challenged) and leaving the petitioner to seek the appropriate remedy after the orders pursuant to the said show-cause notice are passed by the respondents.

See our columns Tomorrow for the judgements