Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Tennis club providing services such as health club, organizing tennis matches by renting ground, renting place for party purpose, organizing tournaments etc. - merely because they are a registered as a Charitable Trust cannot absolve them of Service Tax liability: CESTAT

THE appellant is a non-profit organization registered under Bombay Public Trust Act and is engaged in providing service of health club/sports activities to its members . The services provided by the appellants are clearly covered by the definition of the taxable services under Section 65(25)(a). - "Club or association".

Income Tax

Sec 37(1) - Whether, even in absence of a written agreement to join back firm, expenditure incurred on higher education abroad of grandson of one of firm's partners working there as apprentice can be claimed as business expenditure - NO: ITAT

ASSESSEE firm, having five partners, is engaged in the business of export of durries, curtains, rugs, made-ups etc. The assessee firm incurred expenses towards the education of the grandson of one of the partners of the assessee firm on behalf of a HUF for pursuing Master's Degree in Strategic Marketing from De Mont Fort University, U.K. AO disallowed the said expenses stating that the expenses were incurred for providing education to the grandson of a partner and these expenses were not incurred for the purpose of business. The CIT(A) confirmed the addition.

Central Excise

CESTAT recommends disciplinary action against adjudicating authority – contemptuous approach on part of Commissioner - on remand, he had no business to observe that he was in full agreement with reasoning given by his predecessor – earlier order is not in existence in the eyes of law once it was set aside by Tribunal: CESTAT

IT is seen that the Commissioner totally forgot that he had to carry out the directions as per the Tribunal's order, it virtually tried to sit in appeal over the order of the Tribunal. It clearly discloses contemptuous approach on the part of the Commissioner. Once the Tribunal has held that the reasonings given by the Commissioner for arriving at the quantification were not acceptable, the Commissioner, on remand, had no business to observe that he was in full agreement with the reasonings given by his predecessor. The order passed by the predecessor was not in existence in the eyes of law once it was set aside by the Tribunal. Besides to say that he was fully in agreement with the reasoning of an order which has been set aside by the higher authority is certainly an act of insubordination. Commissioner of Central Excise, Mumbai III, while passing the above order should have borne in mind that he was dealing with a matter on remand by the Tribunal which is higher authority to him and, therefore, he should not have decided the matter in the manner he has decided the same. The manner in which the matter has been decided certainly calls for disciplinary action against such authority.

See our columns Tomorrow for the judgements