Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Import of Services - Section 66A - Constitutional validity upheld: HC

IN this case the petitioners have challenged the validity of Section 66A of the Act on its extra territorial operation. It is alleged that the amendment seeks to levy service tax on the taxable event outside India. It is submitted by the petitioner that any act of receiving or rendering of service outside the territory of India is not amenable to the Finance Act, 1994. The impugned provisions/rules, it is submitted, create another taxable event namely from services provided to services received in India, which is against the scheme of legislation. It has been challenged as artificial, as taxable services can never be received in India.

Income Tax

Whether when assessee's housing society enters into agreement with property developer, cash compensation received by assessee in addition to larger flat does not fall under any of Heads of Income in I-T Act, and thus not taxable - YES: ITAT

THE housing society, along with its members, entered into an agreement with a developer, and, under the said agreement, the developer was to demolish the residential building owned by the housing society, and reconstruct a new multistoried building. Under this arrangement, the assessee, received a slightly larger flat in the new building, a displacement compensation of Rs.6,12,000, and an additional compensation of Rs.11,75,000. The AO was of the opinion that the cash compensation was to be treated as ‘casual income', and, accordingly, taxable in the hands of the assessee. The CIT(A) confirmed the addition.

Customs

Nickel Silver Turning imported - Whether eligible for exemption under Notification No 21/2002 Cus - Matter referred to Third Member: CESTAT

THE respondents imported a consignment of Nickel Silver Turning from Italy. To examine the claim of the importer for exemption under Notification No 21/2002 Cus, samples of the scrap were sent to the CRCL. The CRCL, vide its test report opined that the sample contains 60.6 by weight of copper, 13.90 by weight NICKEL and rest is mainly Zinc. Based on the above test report, Revenue entertained a view that the benefit of notification is not available to the respondent, inasmuch as the goods cannot be held to be nickel or article of nickel.

See our columns Tomorrow for the judgements