Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Service tax is not leviable on discounts/incentives received by advertising agency from media: CESTAT

THE appellant rendered the services of advertising agency and discharged service tax on the commission received by them from their client, the advertiser. The transaction involves three parties, the advertiser, the advertising agency and the media, which puts out the advertisement. Print media has been exempted from service tax while the broadcasting media is not and they have discharged service tax under the broadcasting services on the consideration received. In certain cases, the media (broadcaster), gave a volume discount to the advertising agency based on the volume of business given by the advertising agency, at the end of the year, which was shown as income in the books of accounts of the advertising agency.

Income Tax

Whether when STT is included in brokerage income of assessee, same is to be excluded while computing total taxable income - YES: ITAT

THE issues before the Bench are - Whether STT is a tax collectible only from buyers and sellers of shares; Whether when STT is included in the brokerage income of the assessee, the same is to be excluded while computing total taxable income; Whether a broker is entitled to claim loss arising from error trade; Whether when the assessee earns dividend income, disallowance of a part of expenditure is warranted as per Rule 8D and Whether when the assessee fails to deduct TDS on VSAT and leased line expenses, such expenditure is liable to be disallowed u/s 40(A)(ia). And the assessee's appeal was partly allowed.

Central Excise

Monthly ER-1 return is NOT required to be filed by an assessee who is operating under compounded levy scheme - Penalty imposed u/r 27 for alleged contravention of rule 12 of CER, 2002 set aside and appeal allowed with consequential relief: CESTAT

THE appellant manufactures aluminium circles and operates under the Compounded Levy scheme notified under notification No. 17/07-CE dated 01/03/2007, which prescribes a levy of Rs.12,000/- per cold rolling machine installed in the appellant's factory premises and which the appellant discharges.

The jurisdictional Central Excise authorities did not find fault with this mode of duty payment but were annoyed that the appellant did not file any monthly ER-1 return in the prescribed form within 10 days of the close of the month.

See our columns Tomorrow for the judgements