Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Appellant has been functioning as an ‘Authorized Service Station' of M/s Tata Motors and, therefore, services rendered by appellant is prima facie classifiable under the category of 'Authorized Service Station' - Pre-deposit ordered of Rs.1.10 Crores for obtaining stay: CESTAT

HE appellants are engaged in servicing of vehicles manufactured by M/s Tata Motors Ltd. and M/s Fiat India Ltd. During the course of audit of the records of M/s Pandit Automotive Private Ltd., Pune (M/s Pandit in short), it was noticed that though M/s Pandit are Authorized Service Station for M/s Tata Motors, however, they were only paying Service Tax on the pay-off received from the Tata Motors on servicing done during the warranty period. After the warranty period is over, their purported sister concern, who is the appellant herein, does the servicing of vehicles and no Service Tax is paid on the services done by the appellant for servicing of such vehicles.

Income Tax

Whether business loss in form of business expenses against NIL business receipt is eligible for set off against income from other sources when interest income earned by assessee was considered as income from other sources - YES: ITAT

ASSESSEE was engaged in the business of real estate development. A search & seizure operations were carried out u/s 132. Therefore, notices u/s 153A were issued .The AO observed that the assessee had started a real estate project and had booked expenses incurred on the project under the head work in progress, during the year nothing was sold. The assessee had earned an interest income of Rs.24,19,085/- partly from the loan given to sister concern and partly from bank deposits and after claiming various expenses the net profit was declared at Rs.2,85,123/-. The AO treated the income of interest as income from other sources and disallowed the amount expenses debited in the P&L Account treating them as not related to earning of interest income. THE issues before the Bench are - Whether the business loss in the form of business expenses against NIL business receipt is eligible for set off against income from other sources when interest income earned by the assessee was considered as income from other sources and Whether the AO can force the assessee to change the method of accounting. And the verdict goes against the Revenue.

Customs

ADD notification 86/2011-Cus -tolerance is given to product not to limits - tolerance is to be added to width actually found in consignments - in case on hand, width was found to be more than 1250mm and which already is beyond tolerance limit of notification for attracting Anti-dumping duty - demand set aside- Appeals allowed: CESTAT

THE appellant filed a Bill of Entry for clearance of the goods declared as Stainless Steel Cold Rolled Coils Ex Stock Slit (Trim Edge Grade 430 BA Width 1258 MM Thk Below 4mm). The Revenue was of the view that the goods are mis-declared with regard to the characteristic of the goods and in terms of Notification No. 14/2010- Cus dated 20.02.2010 read with the Notification No. 86/2011-Cus dated 06.09.2011, Sl. No. 22, the appellants are required to pay anti-dumping duty. Therefore, proceedings were initiated against the appellants.

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