Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Sponsoring Delhi Daredevils is sponsoring in relation to a sporting event - not taxable at the relevant time: CESTAT

THE appellant Hero Motorcorp in an agreement with GMR Sports Pvt. Ltd agreed to sponsor the GMR team called ‘Delhi Daredevils' in the tournament conducted under auspicious of BCCI/IPL. The agreement in issue (between GMR and the appellant) clearly constitutes sponsorship. That is also the admitted position, since that is the basis for initiation of proceedings leading to the assessment of the appellant's liability to service tax under provisions of Section 65(105) (zzzn). Since the sponsorship agreement, falls within the exclusionary clause i.e. the clause, which excludes sponsorship services in relation to sports events, the appellant is clearly immune to the charge of service tax.

Income Tax

Whether when partners in a firm make capital contribution in a company by relinquishing rights and such a company is succeeded by another company, which finally sells entire share-holding at book value, such transactions can be construed as colourable device to avoid capital gains tax - NO: ITAT

THE issue before the Bench is - Whether when partners in a firm make capital contribution in a company by relinquishing their rights and such a company is succeeded by another company, which finally sells entire share-holding at book value, such a series of transactions can be construed as colourable device to avoid capital gains tax. And the answer favours the assessee.

Customs

Goods cleared in DTA by SEZ - Refund of SAD cannot be denied on ground that supplies in DTA are not "imports" for the purpose of Notification No 102/2007 Cus dated 14.09.2007: CESTAT

SUPPLY of goods from and to SEZ is always a subject matter of different interpretations leading to various disputes. When the revenue demanded export duty on supplies made to SEZ by treating them as "exports", the same was set aside by the High Court of Gujarat in 2009-TIOL-674-HC-AHM-CUS and upheld by the Supreme Court in 2010-TIOL-50-SC-SEZ, by holding that the definition of export under SEZ cannot be imported into Customs Act for imposing export duty.

Now, the revenue seeks to deny the refund of SAD ( Additional duty of Customs) paid by an SEZ Unit on supplies made in DTA, on the ground that the same cannot be treated as "Imports" for the purpose of extending the benefit of refund under provisions of Notification No 102/2007 Cus dated 14.09.2007.

See our Columns Tomorrow for the judgements