Jurisprudentiol - Thursday's cases

By Vijay Kumar

Income Tax

Whether when lessee chooses equipment and pays for insurance and taxes and agrees to buy asset at end of non-cancellable lease period, any depreciation can be allowed to assessee financing same and claiming it to be an operating lease - NO, rules Special Bench

THE assessee bank filed its return claiming depreciation of Rs 25,70,03,293. The Assessing Officer observed that there was substantial variation between the amount of depreciation as per books of account and that claimed in the computation of income. Such variation was found mainly due to 100% depreciation claimed on leased assets to the tune of Rs.9,72,74,434 during the year. This depreciation was in addition to the claim of depreciation in respect of certain other assets leased in earlier years.

Service Tax

CENVAT Credit - Maintenance of staff colony and planation, Input services: HC

THE staff colony, provided by the respondent Company, being directly and intrinsically linked to its manufacturing activity could not therefore be excluded from consideration. Consequently, the services which were crucial for maintaining the staff colony, such as lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding etc., necessarily had to be considered as ‘input services' falling within the ambit of Rule 2(l) of the CENVAT Rules, 2004.

See our columns Tomorrow for the judgements