Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Denial of credit on invoices issued by five star hotels for renting out conference rooms - No denial of fact that appellant availed services of five star hotels for hiring conference rooms - Pre-deposit of balance amounts waived and stay granted: CESTAT

PRIMA facie, there is no denial that the appellant availed services of five star hotels for conducting training programs. The main component of such service is providing conference halls that come within the meaning of ‘Mandap Keeper service'. The aggregate value of such services is the amount received by the Mandap keeper for such service. If this amount indicates the value of food separately, the service provider is eligible for claiming rebate. It appears that they have not claimed such rebate and the Revenue cannot force such a service provider to claim abatement.

Income Tax

Whether when the assessee inherits property after demise of his mother, he is entitled to claim cost of improvement incurred by his mother for purpose of computation of long-term capital gain - YES, rules ITAT

THE individual assessee had succeeded to a property on the demise of his mother in 1986. The property had been acquired by his deceased mother prior to April 1981. However due to a family dispute over the property, a family settlement was reached in September 2000, whereby the assessee sold the property in 2002-03. In his return, the assessee had offered long term capital gains. The return was processed but subsequently taken up for reassessment. The AO observed that as a result of the family dispute, the assessee did not ‘hold' the property until the date of the family settlement. Therefore, while computing long term capital gains, he held that the that assessee was not eligible for indexation of the cost of acquisition with effect from April 1981 as the assessee had become the owner consequent to a family settlement in September 2000.

Customs

If the imported goods have not been used for specified purposes, jurisdictional AC/DC of Central Excise is empowered to issue notice u/s 28 for recovery of Customs duty - Waiver of pre-deposit ordered and Stay granted: CESTAT

AS per the condition 5 of the Notification, the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 1996 is to be followed. As per Rule 8 of the Rules, the jurisdictional Assistant Commissioner of Central Excise shall ensure that the goods imported are used by the manufacturer for the intended purpose and in case of violation, the jurisdictional Assistant Commissioner is empowered to issue notice to recover the customs duty under Section 28 of the Customs Act. As the Commissioner of Customs is not a competent authority to issue show-cause notice, the applicants have made out a `````````strong prima facie case in their favour for complete waiver of dues adjudged.

See our columns Monday for the judgements