Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

So long as person rents a cab either owned by him or cabs procured from elsewhere, liability to pay service tax would arise - it is date of knowledge of the activity by department which is relevant for computing time-limit - demand upheld and appeal dismissed: CESTAT

THERE is no stipulation either in the Act or in the Rules that the person renting the cabs should also own the vehicles. So long as the person rents a cab either owned by him or cabs procured from elsewhere, the liability to pay service tax would arise and, therefore, the activity undertaken by the appellant gets squarely covered under the definition of 'Rent-a-Cab Services'.

Inasmuch as the show cause notice has been issued on 13th October 2003, i.e. within a period of one year from the date of knowledge, it cannot be alleged that the show cause notice is time barred, as has been held by the apex Court in the case of Nizam Sugar Factory Ltd. - (2006-TIOL-56-SC-CX). It is the date of knowledge of the activity by the department which is relevant for computing the time-limit.

Income Tax

I-T - Whether when assessee invests in purchase of land, which is transferred to builder for construction of flats on sharing basis, assessee continues to be eligible for Sec 54 benefits - YES: ITAT

THE assessee along with another person jointly acquired certain property for a consideration of Rs.1,95,430.00. Later another person relinquished her rights over the said property. Thereafter the assessee entered into a development agreement with M/s Tibrewala Builders for construction of flats over the said property on 50:50 sharing basis. Accordingly, five flats fell to the share of the assessee, which were claimed to have been sold by her during the year under consideration for a total consideration of Rs.1,79,00,000. The assessee filed her return of income declaring total income of Rs.58,839. In the return of income, the assessee while computing LTCG claimed exemption u/s 54 towards purchase of plot and construction of house besides deposit in capital gains account scheme. The issue before the Bench is - Whether when assessee invests in purchase of land, which is transferred to a builder for construction of flats on sharing basis, assessee continues to be eligible for Sec 54 benefits. And the verdict favours the assessee.

Customs

Date of receipt of order by the Review section is relevant date for computing period of review and not when Commissioner received it in his dak – Review done within period of limitation: CESTAT

ANYONE who is accustomed with the working in a Commissionerate probably knows by now that any communication addressed to the Commissioner first lands at his PA's desk and then into the 'dak' of the Commissioner who then marks it to the section concerned. Mind you, some of the addressees are so finicky that unless they have their 'directions' engraved on the 'tapal', the letter cannot leave his 'teak table'. Even if he is on leave, the 'communication' cannot leave!

The 'tapal' then begins its mighty descent and finally reaches the section concerned where more often than not they try to show scant concern for what is engraved thereon.

But this does not usually happen in sections where matters are 'time-bound'.

In this scenario, Revenue should be mighty pleased with this order for they can now probably buy more time.

See our Columns Wednesday for the judgements