Jurisprudentiol – Friday's cases

By Vijay Kumar

Customs

Suspension of CHA license - Final notice not issued even after lapse of time stipulated in Board's Circular 9/2010 dated 08.04.2010 – No indication of any time frame within which Revenue would issue such notice - Since employees are out of work, CHA allowed to function with certain restrictions: CESTAT

THE appellant, a CHA licensee was charged with violation of CHALR, 2004 resulting in suspension of the license on 19.07.2010 which was confirmed by the Commissioner of Customs in his order dated 25.10.2010 resulting in this appeal before CESTAT. The main ground on which the suspension was confirmed by the Commissioner was that the appellant lent their CHA licence to unauthorized persons for monetary consideration even without knowing the actual exports, which is a mandatory condition of Regulation 12 of CHALR, 2004.

Income Tax

Whether income from unsold flats of builder, given on rent, is to be treated as income from house property or income from business - Income from house property, rules Calcutta HC

ASSESSEE is a property developer and builder. Assessee constructed a building in which there were some unsold flats which were appearing as stock-in-trade under the current assets and were meant for sale. Costs of these unsold flats were Rs.26.09 lacs and the rental income of Rs.49.00 lacs from these flats were shown under the head ‘operating income'. Assessee had shown the rental income under the head “income from house property” and, thus, claimed statutory reduction of 1/5th on account of repair from annual letting out value. AO stated that in the wealth tax proceedings, the assessee had considered the unsold flats as stock in trade and not assets for the purpose of wealth tax.

Service Tax

Activity of supplying labour for harvesting & transportation of sugarcane from farmer's fields to sugar factory – No prima facie case for full waiver of pre-deposit - Pre-deposit of Rs. 7.5 lakhs ordered: CESTAT

THE appellant, a charitable trust formed under Bombay Public Trust Act, 1950, was solely created for the welfare and social cause of sugarcane growers/farmers. They were engaged in the activity of ‘harvesting & transportation of sugar cane' from farmer's fields to sugar factory by engaging sub-contractors. The department issued show cause notice to the appellants demanding service tax under the head ‘manpower recruitment and supply agency's service'.

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