Jurisprudentiol – Monday's cases

By Vijay Kumar

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

ST - Head office of appellant company at Canada has deputed some of its officials at project office in India - department demanding ST under category of ‘ Manpower Recruitment or Supply agency' - prima facie it is to be treated as service provided to itself - service tax not payable - Stay granted: CESTAT.

UNDER Section 66A (2) when a person is carrying on business through a permanent establishment in India and through another permanent establishment in a country other than India, such permanent establishments are to be treated as separate persons for the purposes of this Section. Explanation I to sub-Section (2) states that a person carrying on business through a branch or agency in any country shall be treated as having a business establishment in that country.

Income Tax

Sections 45JA, 145 - Depreciation, NPA, held for trading, held to maturity, available for sale, 1998 Directions, RBI guidelines - Whether the provisions of I-T Act, Companies Act and RBI Directions with respect to taxability of income from securities operate in different fields - Whether when assessee-bank holds its securities as investment in compliance with RBI Regulations, but shows same as stock-in-trade, deduction for any loss arising from such stock at end of FY can be denied merely because it was shown as investment in books.

ASSESSEE is a bank. It is required as per the Reserve Bank of India (RBI) Master Circular dated 01-09-2003, to classify the securities held into category of 'Available for Sale', 'Held to Maturity' & 'Held for Trading'. The assessee treated such securities as stock-in-trade and claimed depreciation on book value after valuing the Securities at lowest of cost or market value as consistently followed earlier.

Customs

Cus – Notfn. 1/2011-Cus - Even if all arguments of the Revenue are accepted that appellant has entered into various unwanted agreements of high sea sale fact remains that in view of s. 2(26) of Customs Act, appellant can be considered as a person who is holding himself out to be an importer – prima facie strong case in favour –Pre-deposit waived and stay granted: CESTAT

ON careful consideration of the submissions made by both sides and perusal of the records, we find that the issue involved in this case is regarding the differential duty of Customs which has been confirmed by the adjudicating authority by denying the benefit of Notification No.1/2011-Cus. We find that there is no dispute as to the fact that the goods which were imported, benefit of Notification No.1/2011-Cus, was claimed in respect of solar power generation project or facility for solar energy plant to be set up in Gujarat.

See our Columns Monday for the judgements