Jurisprudentiol – Monday's cases

By Vijay Kumar

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

In terms of Rule 7 of Valuation Rules, value of goods under assessment shall be transaction value of goods sold from depot at time nearest to time of removal: CESTAT

THE appellant is engaged in the manufacture of pesticides. They filed a price list in respect of transfer of the pesticides 'D-ALLETHRIN' to their depot situated at Himachal Pradesh for sale and declared the assessable value of Rs.4,000/- per kg. On going through the invoices issued by the assessee from their depot at Parwanoo , H.P, it was observed that all the sales of such goods from the Parwanoo depot were made at the transaction value of Rs.5,500/- per kg. during the impugned period irrespective of the quantity of the goods sold to a buyer at a time.

Income Tax

Whether while arriving at profit of business, ninety per cent of gross interest and gross rent are to be excluded before allowing deduction u/s 80HHC - NO, it should be net interest and net rent: SC

FOR the assessment year 2003-04, the assessee filed a return of income claiming a deduction of Rs.34,44,24,827/- under Section 80HHC of the Act. The Assessing Officer passed the assessment order deducting ninety per cent of the gross interest and gross rent received from the profits of business while computing the deduction under Section 80HHC and accordingly restricted the deduction under Section 80HHC to Rs.2,36,25,053/-. The Commissioner of Income-Tax (Appeals), confirmed the order of the Assessing Officer excluding ninety per cent of the gross interest and gross rent received by the assessee while computing the profits of the business for the purposes of Section 80HHC. The Tribunal held, that netting of the interest could be allowed if the assessee is able to prove the nexus between the interest expenditure and interest income and remanded the matter to the file of the Assessing Officer.

Service Tax

Arranging of celebrities for promotion and publicity is not an advertisement agency service prior to 01.07.2003 - Pre-deposit waived:CESTAT

DURING the period April, 2002 to June 2003, the applicant was engaged in the activity of arranging celebrities namely Sourav Ganguly, Virendra Sehwag, Yuvraj Singh, Harbhajan Singh and Mohd. Zaheer Khan for promotion and publicity of the two-wheelers manufactured by Hero Honda Ltd.

The department was of the view that this activity is covered under advertisement agency service.

See our columns Monday for the judgements