Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Whether entire income is to be assessed in year in which development rights are transferred and cost of acquisition to be allowed as deduction - YES: ITAT

THE issues before the Bench are - Whether postponement of payment stops accrual of income - Whether entire income is to be assessed in the year in which development rights are transferred irrespective of payments received in instalments; Whether in case the entire consideration is received and offered to tax in a year, it is justified to allow cost of acquisition as a deduction and Whether there would be any impact on the taxability of consideration received, in case search proceedings were initiated for that same assessment year. And the verdict partly goes in favour the assessee.

Service Tax

Applicant seeking clarification from department as to whether activity undertaken by them is chargeable to Service Tax - CCE informing vide letter dated 07.12.2006 that applicant is not covered under category of ‘Commercial Training & Coaching' service - SCN issued in April, 2009 demanding ST of Rs.3.58 Crores for period 2003 to 2008 - extended period not invokable - Prima facie case for waiver of pre-deposit - Stay granted: CESTAT

THE applicant National Institute of Bank Management (NIBM) was established by the Reserve Bank of India (RBI) in consultation with the Government of India in the year 1969 as an apex autonomous and non-profit institution in the arena of banking and finance with the role of a "think-tank" for the banking system. The applicant had sought a clarification from the department as to whether the activity undertaken by them is chargeable to service tax or not and it has been clarified by the department that the applicants are not covered under ‘Commercial Training' for the purpose of levy of Service Tax vide letter dated 7.12.2006.

Central Excise

Appellant manufacturing insecticides on job work basis and clearing same in 25 kgs packs by adopting transaction value on ground that those packages were meant for industrial consumers - department seeking valuation u/s 4A of CEA, 1944 - since consignee M/s Bayer Crop Science Ltd. is registered with Excise Department as dealer and not an industrial producer, exemption from affixing MRP not available - so also, 25 kgs pack are out of scope of rule 2A of SWAM Rules - Pre-deposit ordered: CESTAT

RULE 2A(a) provides exemption from printing MRP on the packages more than 25 kgs. Admittedly, in this case, the packages cleared by the appellant were of 25 kgs. and not more than 25 kgs., as such, Rule 2A does not help the appellant. As regards limitation, the case of the Department is that the appellant in his ER-1 return did not disclose the fact that he was clearing 25 kgs. package without printing MRP to industrial consumer. Thus, this is a clear case of concealment of the fact from the Department otherwise also. The question of limitation is a mixed question of law which cannot be looked into at this prima facie stage.

See our columns Tomorrow for the judgements