Jurisprudentiol – Friday's cases

By Vijay Kumar

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

‘Sulphonated fish oil' classifiable under Chapter 34029020 - No infirmity in impugned order of Appellate Commissioner - Revenue appeals rejected: CESTAT

THE issue before CESTAT was with regard to classification of imported goods described as Sulphonated Fish Oil in bills of entry. The department allowed provisional clearance of goods after drawing samples which were sent to CRCL for testing. As per the test reports, the goods were identified as ‘a preparation having sulphonated fish oil and additives'.

Income Tax

Whether while computing Sec 10A benefits, if export turnover in numerator is to be calculated after excluding certain expenses, same is also to be excluded for computing export turnover as component of total turnover in denominator - ruled in favour of assessee: HC

ASSESSEE is engaged in the business of specialized after sales services, marketing and distribution of customized high technology computer systems and storage devices, computer consultancy and solutions and software promotion. The main source of revenue for the assessee had been from trading division and STP unit engaged in Call Centre operations. Assessee claimed exemption u/s 10-A for the profits and gains derived from STP unit alongwith form 56F and Annexure A thereto. In the total turnover, the assessee did not include Rs 10.44 crores incurred by it towards communication expenses. Assessee was asked to substantiate the non inclusion of this expenditure incurred in foreign currency for the purpose of computation of exemption of income claimed u/s 10-A. AO held that section 10A defines only export turnover and total turnover is not defined which clearly manifests the legislature's intention to give the natural meaning to the term 'total turnover' and therefore, the communication expenses is to be excluded from the export turnover only. Consequently, the excess claim was disallowed.

Service Tax

Service Tax - Amalgamation - Date of amalgamation is date from which High Court allowed amalgamation, not date of filing application with ROC - Service to Self - Not taxable: CESTAT

AS per facts on record, M/s ITC Hotels Ltd. and M/s Ansal Hotels Ltd. were subsiding companies of ITC Ltd. while holding company was also running a few hotels of its own M/s ITC Hotels Ltd. were paying service tax under the category of 'management consultant services' being provided by them to M/s ITC Ltd. and M/s Ansal Hotels Ltd. During the period April, 2004 to September, 2004, Amalgamation proceedings in respect of the three were going on before the Delhi High Court and Kolkata High Court and vide their respective orders, the High Courts allowed the amalgamation of the two companies with the parent company, ITC Ltd. with effect from 1.4.2004 i.e. the appointed date as per Amalgamation Scheme duly approved by the High Courts.

See our columns Tomorrow for the judgements