Jurisprudentiol – Wednesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Pre-deposit amount reduced in view of ongoing Telangana Agitation - CESTAT.

THOUGH the Tribunal did not find a clear case for the appellant, the Bench was inclined to consider the submission that the appellant is running through a financial crisis on account of the ongoing Telangana agitation.

Income Tax

Whether when assessee is leasing and finance company, it gets deprived of depreciation benefits on assets leased out to third parties - NO: SC

THE issues before the Bench are - Whether when the assessee is a leasing and finance company, it gets deprived of depreciation benefits on assets leased out to third parties - Whether for the purpose of claiming depreciation on trucks leased out, it is not necessary for the assessee to use the assets for its own use; Whether when the wording in the Sec 32 emphasises on the ownership of the asset, to decide the question of ownership a reference to Sec 2(30) of the Motor Vehicle Act can be resorted to for verification of registration of vehicle in the name of lessor; Whether Sec 2(30) of the MV Act is a deeming fiction and it cannot be relied upon to decide the question of ownership of the vehicle and Whether when the assets were used for the purpose of business, the assessee is entitled to higher rate of depreciation. And the verdict goes in favour of assessee.

Whether when assessee-club places surplus funds in form of FDs with its member-banks to earn interest income, since such funds are loaned out to third parties for earning higher interest income, it violates privity of mutuality - YES: SC

THE issues before the Bench are - Whether when the assessee-club places its surplus funds in the form of FDs with its member-banks to earn interest income, since such funds are loaned out to third parties for earning higher interest income, it violates the privity of mutuality; Whether in such a case there is a lack of identity between the contributors and the participators and Whether when the banks loan out the funds placed by the assessee to third parties it can be said that the funds were not utilised for the benefit of its members and thus went beyond the principle of mutuality. And the verdict goes in favour of the Revenue.

Service Tax

Proprietorship concern is known by proprietor of firm and no entity can be identified without proprietor: CESTAT

THE appellant started security agency in the year May 1997 under the name and style as Jai Jawan Securities under the proprietorship of Shri S.N. Mahajan. In May 2002, Shri Mahajan changed the name of the security agency to Veer Jawan Securities Services and applied for registration to the department on 28.11.2003. It is submitted that the demand has been raised against the assessee namely Veer Jawan Securities which came into existence in May 2002 and hence the demand for the period prior to May 2002 is not sustainable

See our Columns Tomorrow for the judgements