Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

Since there is no difference of opinion that the demand which is confirmed by invoking extended period is liable to be set-aside on the ground of Revenue neutrality, appeal allowed with consequential relief: CESTAT by Majority

ALL the three show cause notices, which raise the demand on the appellant, are for the period beyond one year. Since there is no difference of opinion between the Members, that the demand which is confirmed by invoking extended period is liable to be set-aside on the Revenue neutrality.

Income Tax

Whether exemption u/s 54 is restricted to a 'residential unit' and is not available to a 'residential house' having multiple floors with independent entrance - NO, it is available: ITAT

ASSESSEE, an individual, had filed his return declaring total income of Rs.38,851. In the annexure to ROI filed, it had also indicated that LTCG of Rs.1,01,73,965 was earned and claimed as exempt u/s 54 and 54EC, on account of investment in new flat at Rs.59,17,500 and Rs.50,00,000 respectively. The capital gain arose on account of transfer of assessee's 50% share in property by virtue of Redevelopment agreement. During assessment, AO worked out income under the head "Capital gain" at Rs.76,64,008. On appeal, CIT noticed that the assessee had received a sum of Rs.2.18 crore on account redevelopment agreement and offered the same to capital gain after claiming exemption u/s 54EC. On the perusal of clause 3(1) of the redevelopment agreement, CIT observed that the assessee was further entitled to and in fact received 50% of the constructed area free of cost. Thus, it was opined that the value of such entitlement was also liable to tax. The issues before the Bench are - Whether exemption u/s 54 is restricted to a 'residential unit' or a 'residential house' having multiple floors with independent entrance; Whether when there are two views possible on a particular issue, the view of higher authority should be given preference, even if the view taken by the lower authority is sustainable in law and Whether revision can be made on a debatable issue. And the answers go in favour of the assessee.

Service Tax

Applicant entering into agreement with Singapore company for providing Virtual Private Network (VPN) facility - as data being retrieved or accessed by applicant is from their own data centre which were maintained by them in India, USA & UK, prima facie it cannot be said that applicant have received service of 'Online information and database access or retrieval' - applicant has made case in their favour - Pre-deposit waived and stay granted: CESTAT

COMMISSIONER of Service Tax, Mumbai issued a Service Tax demand of Rs.2.61 Crores to the State Bank of India and like always, confirmed the demand along with interest and impressive amounts of penalty. The short issue on which the service tax demand is raised is - that the applicants are availing Online information and data base access or retrieval service through computer network service and as the ‘service provider' is located abroad, the bank is required to discharge the Service Tax. The bank is before the CESTAT with a Stay application. And the Revenue got itself represented through a Special Consultant for defending its case.

See our Columns Tomorrow for the judgements