Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Equities come under categories of ‘products' and are considered as ‘goods' under Sale of Goods Act, 1934 - research on equity is, therefore, product research - equity research undertaken by appellant falls within scope of definition of ‘Market Research Services' and accordingly, appellant is, prima facie, liable to pay service tax on said activity - Pre-deposit ordered: CESTAT

THE appellant is a joint venture company between M/s Kotak Mahindra Bank Ltd. and M/s Goldman Sachs Ltd. They have a research department which conducts equity research and prepare research reports on the financials of the companies listed on the bourses and the stock market performance of equity shares of such companies. In the Profit and Loss account for the years 1999-2000 to 2002-03, they had shown "Fee income/Research Fees received amounting to Rs. 6,51,79,558/-.

The department was of the view that the activity pertaining to research undertaken by the appellant would merit classification under the category of "Market Research Services" and the appellant is liable to pay service tax thereon.

Income Tax

Whether a partnership firm having 20 partners, can admit an existing individual partner in representative capacity of Deloitte Haskins & Sells, Mumbai, an already participating firm, so that they became entitled for share of profit - Invocation of Sec 263 upheld: ITAT

THE issues before the Bench are - Whether a partnership firm having 20 partners, can admit an existing individual partner in the representative capacity of Deloitte Haskins & Sells, Mumbai, an already participating firm, so that they became entitled for a share of profit; Whether this can be construed as indirectly bringing on board Deloitte Haskins & Sells, Mumbai and circumventing the statutory limit of 20 partners under the Partnership Act; Whether when assessee has claimed substantial amount as remuneration to its partners u/s 40(b) which was allowed without considering the crucial aspect of the legality of its claim of status as a firm, such assessment order becomes an erroneous one and prejudicial to the interests of Revenue; Whether when an attempt is made by a concern to evade tax using subtle camouflages, bounden duty of the authorities is to find out the real intention and Whether the CIT went over board when he directed the AO to modify the assessment order by treating the assessee as an AOP and disallow the claim of remuneration to its partners. And the verdict partly goes in favour of the Revenue.

Customs

Import of Cars - Cars manufactured in America and transshipped to India via Dubai and Thailand - Cannot be treated as imported from USA - confiscation upheld - CESTAT by majority.

ONE of the Conditions for import of a new vehicle as per Import Policy (Chapter 87 in Schedule 1 of the ITC HS) is that the vehicle should have been imported from the country of manufacture. In the instant case, the cars were shipped from USA to India via Dubai and Thailand. It is the argument of revenue that that the car should have been imported from the Country of Origin. The argument of the importer is that the goods were shipped from USA to UAE to Thailand and then to India and hence the condition is complied.

See our Columns Friday for the judgements