Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Revenue on a winning spree - demand of service tax on residential flats constructed under joint development agreement, upheld: CESTAT

THE demand involved three issues. First issue is whether the appellant company was liable to pay service tax on the flats handed over to the land owner towards the cost of land given for development, second issue is whether service tax was payable on the rest of the flats constructed for individual buyers and the third is whether the complex constructed would qualify as "residential complex" having more than 12 residential units.

Income Tax

Whether when assessee reimburses interest payments to parent company for availing loans under its borrowing facility given by bank, any TDS obligation arises u/s 194A - NO: ITAT

THE assessee company is engaged in the business of software development, trading of software and hardware and allied software and hardware services. The assessee had taken over a banking division of its parent company i.e. M/s. Onward Technologies Ltd. (OTL). In view of the taking over of the banking division the assessee had to share the interest cost burden of M/s OTL, based on the funds utilised as the parent company was enjoying borrowing facilities from the bank for its group companies. The assessee filed the return of income for the A.Y. 2005-06 declaring total income of Rs. ‘Nil'. It was noticed by the A.O. that the assessee had credited an amount of Rs.1,41,12,002/- in account of it's parent company namely ‘M/s OTL' towards the interest payment.

Customs

Imported customs duty paid goods falling under CETA, 1985 are 'excisable goods' but duty is payable under section 11D(1) of CEA, 1944 by a manufacturer or producer - since appellant is not a manufacturer or producer, duty u/s 11D is not payable: CESTAT LB by Majority

THE following is the reference made to the Larger Bench -

"Whether imported custom duty paid goods falling in any of the Schedules to the Central Excise Tariff Act, 1985 would come within the ambit of the expression "excisable goods" used in the text of sub-section (1) of Section 11D of the Central Excise Act."

The dispute is whether the duty charged by the appellant in their invoices on customs duty paid stock is recoverable as per the provisions of Section 11D(1) of the Central Excise Act or not?

See our columns Tomorrow for the judgements