Jurisprudentiol –Thursday's cases

By Vijay Kumar

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

C&F Agency – Whether Reimbursement of expenses includible in value - No conflict between Division Benches - Reference Returned: CESTAT LB

ONLY when the service recipient has an obligation legal or contractual to pay certain amount to any third party and the said amount is paid by the service provider on behalf of the service recipient, the question of reimbursing the expenses incurred on behalf of the recipient shall arise. For example, when rent for premises is sought to be claimed as reimbursement, it has to be seen whether there is an agreement between the landlord of the premises and the service recipient and, therefore, the service recipient is under obligation for paying the rent to the landlord and that the service provider has paid the said amount on behalf of the recipient.

Income Tax

Whether when business assets like property are exploited for greater profits, such receipt is taxable as business income - Yes, rules Allahabad HC

THE issues before the Bench are - Whether, when assessee gets interest-free advance and earns rent on property without discontinuing its own business running from the same property, such receipts are taxable as business income and not income from house property and Whether when a business asset is exploited for greater profit, such income is to be treated as business income. And the verdict goes in favour of the assessee.

Customs

Exports - DEPB - Overvaluation - Burden to prove that PMV is inflated is on department - No fresh evidence after ten years: CESTAT

IF the department wanted to rely on this crucial evidence, it was incumbent upon them to produce the same before the adjudicating and appellate authorities at the relevant point of time, which they failed to do, which shows the utter carelessness with which the department has been dealing with the case. It is a settled position in law that additional evidence cannot be allowed to be submitted and considered at the appellate stage. In the instant case the delay is almost 10 years after the issue of show-cause notice.

Central Excise

Appeal - Jurisdiction - Order passed by Mumbai Bench of CESTAT; Bombay HC has jurisdiction; Pre-deposit - Tribunal should have considered impact of Supreme Court Judgement: HC

AT least a part of the cause of action has arisen within the jurisdiction of this Court in view of the fact that the impugned order was rendered by a bench of the Tribunal at Mumbai. In Sri Nasiruddin Vs. State Transport Appellate Tribunal, the Supreme Court held that where a part of the cause of action had arisen within the jurisdiction of the Lucknow Bench of the Allahabad High Court that Bench would have jurisdiction to entertain a Petition under Article 226 of the Constitution.

See our columns Tomorrow for the judgements