Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Whether Sec 10A(4) aims at ensuring no double benefits are reaped by assessee, and thus to be deducted before claiming brought forward losses - YES: Delhi High Court

THEissues before the Bench are - Whether Section 10A provides for total exemption from tax or only a deduction from the income; Whether difference between exemption and deduction is that an exempt income does not enter the computation of total income whereas in case of deduction, it first gets included in the total income, and then gets deducted subject to several conditions; Whether sub-section (4) of Sec 10A aims at ensuring that there is no double benefit arising to the assessee in respect of the same income and Whether for the purpose of Section 10A, the losses suffered in the non-EPZ Unit can be set off from the profit/income of the EPZ Unit - Whether for computing deduction u/s 10A in respect of EPZ Unit, brought forward losses of the Non-EPZ Unit are to be first deducted / reduced. And the verdict goes in favour of the assessee.

Service Tax

Turf Club gallops away from Six crores Service Tax demand- Fees charged from bookies, royalty income received from other racing clubs for live telecast of races and royalty from caterers are not chargeable to Service Tax under 'Business Support Services', 'Broadcasting Services' and 'Intellectual Property Rights Services'- total confusion in minds of adjudicating authorities as to nature of the tax and the measure of tax: CESTAT

A perusal of the impugned orders clearly evidences the lack of clarity and understanding on the part of the department. The activity of live telecast of the horse race has been classified as broad casting services during one part of the period and during another period the very same activity is classified as intellectual property rights service - during the same period, the activity has been classified under the above two categories based on the mode of payment for the services, that is, whether payment is lump sum or varying as a percentage of the bet amounts - different classifications have been adopted based on different modes of payment, for the same activity - same confusion prevails in respect of the consideration received from the book makers - There is a total confusion in the minds of the adjudicating authorities as to the nature of the tax and the measure of the tax. On this ground alone the impugned orders deserve to be set aside.

Central Excise

Observations made by the adjudicating authority that arguments made by departmental representative were ignored by Tribunal, are not only bad in taste but amounts to contempt: CESTAT

THE adjudicating authority has not carried out the directions of the Tribunal but has virtually sat in appeal over the Tribunal's judgement. If the Revenue was not in agreement with the Tribunal's decision, it was open to them to challenge the same before the higher appellate forum. The Revenue having not done so, is deemed to have accepted the order of the Tribunal and the original adjudicating authority was bound to implement the same and to carry out the instructions/directions given by the Tribunal.

Cenvat - GTA Service - Place of removal automatically extends up to port of shipment when goods are to be delivered on board vessel: CESTAT

THE appellant availed the credit of the service tax paid on GTA services in respect of the transportation of goods from the factory premises to the port of shipment in India which according to the appellant was the place of removal in respect of export goods. The department was of the view that since these services are rendered outside the factory premises after clearance of the goods, the same is not an input service and, hence, the appellant is not eligible for availing the Cenvat credit on the service tax paid on these services.

See our columnsTomorrowfor the judgements