Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Filing writ/appeal in wrong court - Forum Shopping deprecated: SC

THE petitioner filed a writ petition before the Delhi High Court against an order in original passed by the Commissioner of Customs, Kanpur. The very filing of writ petition by the petitioner in Delhi High Court against the order in original passed by the Commissioner of Customs, Kanpur indicates that the petitioner took chance in approaching the High Court at Delhi which had no territorial jurisdiction in the matter. Filing of the writ petition or for that appeal before Delhi High Court was not at all bona fide. The appellant was assisted and had the services of the counsels, who are expert in the central excise and customs cases. They took a chance, which apparently appear to be the practice of the counsels appearing in such matters at Delhi High Court and succeeded in getting interim orders.

Income Tax

Whether expression 'wholly and exclusively' appearing in Sec 37 does not mean necessarily - YES: HC

THE issues before the Bench are - Whether when an expenditure is claimed to have been incurred by an assessee for promotion of his business, there is a legal obligation to prove that the expenditure was necessary for promotion of his business; Whether for the allowability of an expenditure u/s 37, it is relevant as to whether the benefit, expected to be accrued out of an expenditure incurred, is to accrue immediately or after a lapse of time, whether directly or indirectly; Whether the expression "wholly and exclusively", appearing in Section 37, does not mean necessarily; Whether expenditure incurred on foreign visits by directors and garden managers for promoting the sales of tea can be questioned, merely because the assessee has appointed a selling agent abroad and Whether expenditure incurred in connection with the travels of the wives of the tea estate managers can be allowed, when it is customary in the European countries for the wives to accompany their husbands. And the verdict goes against the Revenue.

Service Tax

In definition of Mandap keeper Service, crucial word is ‘temporary occupation' - appellant leased out premises to a hotel for an interest free deposit - since premises is not given for temporary occupation, demand of service tax is not sustainable - appeal allowed: CESTAT

THE appellant rented out their premises at Ajivasan Hall, Juhu Tara Road, Mumbai to M/s Hotel Siddharth in terms of agreement entered into between the two parties. As per the said agreement, Hotel Siddharth agreed to furnish an interest free deposit of Rs.40 lakhs to the appellant, of which they had already paid a sum of Rs.25 lakhs and the balance payment to be paid at the time of occupation of the premises. The department classified the said activity under the category of "Mandap Keeper Service" and demanded Service Tax on the sum of Rs.25 lakhs received by the appellant.

In the words of the CESTAT, even the lower appellate authority ‘mechanically' confirmed the demand and rejected the appeal.

See our Columns Monday for the judgements