Jurisprudentiol – Friday's cases
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Services utilised in residential colony set up by appellant so that personnel are available 24 hours near factory - CENVAT Credit not available on such welfare activity in view of precedent decisions of High Courts in Manikgarh Cement and Gujarat Heavy Chemicals Ltd .: CESTAT
IT is quite common in cement factories to provide residential colony to employees since cement factories are invariably located in remote areas. Similarly in the case of big chemical factories also residential colony virtually becomes a necessity since such big factories are established not always in the middle of the city where all facilities are available. Under these circumstances, the submission that residential colony is not welfare activity and when it is not welfare activity, credit is admissible does not seem to flow from the precedent decisions. As regards the penalty, in view of the fact that issue involved is a pure question of interpretation of law, question of imposition of penalty does not arise.
Income Tax
Whether when assessee has claimed deduction of interest payments made against house loan u/s 24(b), same can be claimed again at time of computation of capital gains u/s 48 - YES: ITAT
ASSESSEE, an individual had filed his ROI declaring income of Rs.6,40,440/-. During assessment, AO noticed that the assessee had purchased a house property for Rs.32.64 lakhs and in addition to the said consideration, he had also paid Rs.4.00 lakhs towards registration cost and Rs. 39,926/- as cost of improvement. Thus, the assessee had paid net cost of Rs.37,03,926/-. In the enclosures with the return, the assessee had added an amount of Rs.4,82,042/- as interest on housing loan taken in 2003 for purchasing the property. Finally, the assessee sold the said property for Rs.26.00 lakhs. AO held that since the interest on housing loan, had already been claimed as deduction u/s 24(b) in AYs 2004- 05 to 2006-07, the same could not be taken into consideration for computation u/s 48. Therefore, AO added back the interest amount to the income of the assessee from short term capital gains. The issue before the Bench is - Whether when the assessee has claimed deduction of interest payments made against house loan u/s 24(b), the same can be claimed again at the time of computation of capital gains u/s 48. And the verdict goes against the assessee.
Central Excise
ISD invoices issued by HO pertaining to Input Services not used at appellant's plant - since in appellant's own case for earlier period on an identical issue the CESTAT has held that appellant is entitled for Input Service credit, Bench is not required to go into details of arguments advanced by Revenue - Order set aside and appeal allowed: CESTAT
THE lower authorities denied CENVAT credit on the ground that the appellant had received Input Service Distributor invoices from Head Office pertaining to input services not used in or in relation to manufacture of goods at Borivali plant.
Incidentally, in the appellant's own case for the earlier period on the same issue, the Division Bench had decided in their favour - () ;by placing reliance on the decision in ECOF Industries Pvt. Ltd. - ().
Before the CESTAT, the appellant relied on the aforesaid decisions and also submitted that in the case of Mercedes Benz India Pvt. Ltd. vs. UOI - () it has been held that the Bench has to follow the order passed by another co-ordinate bench in identical set of facts for the earlier period and hence their appeal should be allowed, submitted the appellant.
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