Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Bottles used in manufacture of soft drink form part of Capital Investment, but crates do not: Supreme Court

SO far as bottles are concerned, they are essential part of components and equipment necessary for the running of the factory and therefore such value of the investment would form part of the fixed capital investment and would be entitled to exemption as provided for. But so far crates are concerned they are used by the respondent only for the purpose of marketing. Use of crates is necessary for taking out the bottled beverages out of the factory and while doing the marketing of the sealed bottled beverages. The aforesaid view also receives support from the contents of the eligibility certificate given by the appellant and therefore crates have no use so far as running of the factory of the respondent. Therefore, the value of crates cannot be deemed to be investment for the purpose of including it within the meaning of expression "Fixed Capital Investment" as per sub-section (4) of Section 4-A of the Act.

Income Tax

Whether, if assessee does not claim Sec 80IB benefits in first year of production, it loses right to avail such benefits in subsequent year as well - NO, rules Delhi High Court

THE two issues before the Bench are - Whether, if the assessee does not claim Sec 80IB benefits in the first year, it loses right to avail such benefits in subsequent years as well and whether it is necessary for the assessee to be registered under Industries Act as SSI to avail such benefits. And the verdict goes in favour of the assessee.

Service Tax

C&F Agents - Whether reimbursement charges are includible in taxable value - Matter referred to Larger Bench : CESTAT

TRIBUNAL found that different benches are taking different views on includibility or otherwise of the reimbursement charges received by a provider of taxable service in the calculation of gross amount for discharge of service tax. Since there are two views taken by the coordinate benches, Tribunal referred the matter to the President to constitute a larger bench and settle the issue of "includibility or otherwise of the reimbursement charges.

See our columns tomorrow for the judgements