Jurisprudentiol – Monday's cases

By Vijay Kumar

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

There is a vast difference between the term "Biology Instruments" and "Biological Instruments" - The term ejusdem generis is a facet of Nositur a Sociis . - Supreme Court

Classification of any commodity cannot be made on its scientific and technical meaning. It is only the common parlance meaning of the term which should be taken into consideration for the purpose of determining the tax liability. The term Biology Instrument refers to a limited range of instruments confined for their use in study of Jeev Vigyan only. The word Biological Instrument is a general word with its utility where wide scale applications including the goods as manufactured by the assessee/respondent are taken.

Income Tax

Income tax - Whether expenditure incurred by assessee-hotel on account of gifts given to guests can be allowed when tax audit report itself treats it as not allowable - Yes, it is allowable u/s 37(2) - YES, says HC

THE three issues before the Bench are - Whether the expenditure incurred on account of gifts can be allowed as deduction when tax audit report of the assessee itself states that the same is disallowable under Rule 6B; Whether the expenditure incurred on account of gifts is covered by Section 37(2) of the Act; and Whether for computing deduction u/s 80HHD of the Act “receivables” are to be included in the total turnover. And the verdict goes against the Revenue.

Service Tax

Expenses were not returned in the service tax returns for the purpose of payment of tax – Prima facie , charges of suppression proved – Pre-deposit ordered:

THE appellant paid service tax on “erection, commissioning and installation” services provided to their customers during the period April, 2003 to March, 2006. However, they did not pay any service tax on the ‘reimbursable expenses' incurred by them in connection with providing of the above services to the customers. Incidentally, these expenses were shown separately in the relevant invoices issued.A demand of service tax of Rs.1,11,103/- was raised by the jurisdictional authorities invoking the extended period and confirmed along with imposition of equal penalty and interest.

See our columns Monday for the judgements