Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Whether Mumbai Metropolitan Regional Development Authority (MMRDA) is Road Construction Corporation under control of State of Maharashtra or not? - As there are divergent views of Tribunal on same issue, matter referred to Larger Bench: CESTAT

THIS matter is referred to the Hon'ble President to place before the Larger Bench of this tribunal the following issue:-

Whether as per Condition No.40(a) of the Notification No.21/2002-Cus (sl.no.230) MMRDA is Road Construction Corporation under the control of the State of Maharashtra or not?”

Income Tax

Whether it is mandatory for Settlement Commission to record findings on 'full and true disclosure' of particulars of undisclosed income and 'manner' in which such income was derived by assessee - NO: Delhi HC

THE issues before the Bench are - Whether it is mandatory for the Settlement Commission to record its findings with regard to the issues of “full and true disclosure” of particulars of undisclosed income and “the manner” in which such income was derived by the assessee; Whether the Settlement Commission would not have the jurisdiction to pass any order u/s 245D(4) of the Act setting out the terms of settlement unless it records its satisfaction on these aspects and Whether the point of maintainability of an application u/s 245C(1) does not get foreclosed by virtue of the Settlement Commission passing an order u/s 245D(1) or Section 245D(2C) of the Act and such an issue could be examined by the Settlement Commission at the final hearing of the matter, that is, at the stage of passing an order u/s 245D(4) of the Act. And the final ruling goes against the Revenue.

Service Tax

Notional interest on security deposit taken for premises rented out on lease basis - whether to be considered as additional consideration for renting of immovable property for payment of ST - no evidence led by revenue to show that such security deposit has influenced rent received and it is only presumption - prima facie appellant has made case in favour - Pre-deposit waived and stay granted: CESTAT

THE appellant is a service provider engaged in various services including renting of immovable property of commercial construction undertaken by them. The appellant has been discharging service tax liability on the rent received from the lessees. The appellant has also taken security deposit from the lessees.

The department took a fancy to this "security deposit" and was of the view that notional interest on the security deposit is also a consideration for the renting of the immovable property and, therefore, service tax liability should be discharged on the notional interest @18% per annum on the security deposit collected by the appellant. Accordingly, a service tax demand of Rs.3,26,12,102/- was made on the appellant.

See our Columns Monday for the judgements