Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Financial difficulty - Nobody can make a claim that investment in equity shares should be kept intact while Service Tax liability should be deferred by exercising the discretion of Tribunal - Pre-deposit ordered of adjudged ST amount: CESTAT

ACCORDING to the Income Tax return, the appellant had invested in equity shares amounting to more than Rs.4.7 lakhs. In view of the fact that the demand of Service Tax is of Rs.2.31 lakhs, it cannot be said that the appellant is in such a financial position that he cannot pay this amount. Nobody can make a claim that the investment in equity shares should be kept intact while the Service Tax liability should be deferred by exercising the discretion of the Tribunal.

Income Tax

Income tax - Whether a developer is liable to pay tax on ALV of unsold flats owned as stock-in-trade under head 'income from house property' even if flats are not actually let out - YES: Delhi HC

THE issues before the Bench are - Whether assessee is liable to pay income tax on the annual letting value of unsold flats owned by it as stock in trade under the head “income from house property”, even when the same is not actually let out; Whether the levy of income tax in the case of one holding house property is premised not on whether the assessee carries on business, as landlord, but on the ownership; Whether annual letting value method is a permissible method for determination of tax regardless of whether actual income is received or not; Whether existence of an artificial method itself would not mean that levy is impermissible and Whether mere passive occupation of one’s own property, amounts to "own occupation" in the course of business, and for the purpose of business, qualifying for exemption from income tax. And the verdict favours Revenue.

Central Excise

Finding that intention of applicant was just to delay decision on their application for waiver of pre-deposit of dues, ‘cost' of Rs.50,000/- imposed: CESTAT

THE application for waiver of pre-deposit was adjourned six times at the request of the appellant and on the 7th time none appeared on behalf of the appellant in spite of notice. No request for adjournment was also made. In such a circumstance, the application for waiver of pre-deposit of dues was dismissed by the Bench for non-prosecution vide stay order dt. 28.12.2011. Subsequently, the appellant filed an application for modification of the stay order and the hearing was adjourned on the request of appellant two times and listed for hearing for the third time on 17.05.2012 and on that day also none appeared for appellant nor any request for adjournment was made. Therefore, the application for modification of stay order was also dismissed for non-prosecution along with appeal as appellant failed to comply with the condition of stay order.

See our columns Tomorrow for the judgements