Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Mandap Keeper - contract of a Mandap keeper with its customer, even if it involves catering service, is a contract of service not a contract for sale - cost of food cannot be deducted: CESTAT

the contract of the Mandap keeper with its customers is to allow use of Mandap with all its facilities like decoration, lighting, stage, music, catering service etc. for some consideration for organizing some official, social or business function. The catering service provided is a service incidental and ancillary to the service in relation to use of Mandap and though it involves supply of food and beverages, it is essentially a service contract, not for sale of food and beverages. Thus the contract of a Mandap keeper with its customer, even if it involves catering service, is a contract of service not a contract for sale: there was no sale contract in the Appellant's contract as Mandap keeper for the purpose of levy of service tax under Finance Act, 1994 and therefore exemption Notification No. 12/03-ST is not available to the Appellant.

Income Tax

Whether interest on delayed payment by manufacturer to jobworker is admissible deduction u/s 80IB only if it is treated as business income for undertaking - YES, rules High Court Full Bench

THE issue before the High Court is - Whether interest earned by assessee on delayed payment by tyre manufacturers is admissible deduction under Sec 80IB only if it is treated as business income for the undertaking. Other issue is - Whether manufacture of rubber compound on jobwork basis for tyre companies as intermediate product is eligible for deduction u/s 80IB. And the answers to both the questions are YES.

Tomorrow is a Holiday

See our columns Thursday for the Judgements