Jurisprudentiol - Wednesday's cases

By Vijay Kumar

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

CENVAT - Rules 4A, 4(2) of STR, 1994 - Rule 9 of CCR, 2004 -objection raised for denial of credit is that information is not in one page but several pages - Appeal allowed: CESTAT

THE appellant rendered ‘Business Auxiliary Service' to M/s. HDFC Bank Ltd. For rendering of the service, the appellant occupied part of the premises of their client from where services were rendered.

M/s. HDFC Bank, the client, charged the appellant rentals for the area occupied by the appellant on a monthly basis. At the end of the month, HDFC Bank raised debit notes on the appellant at the appellant's registered office at Chandivli, Mumbai. The said debit notes contained an annexure wherein details of the service rendered, monthly licence fees charged and the service tax amounts were indicated. The appellant availed CENVAT credit of the service tax paid on the monthly rentals charged on them by M/s. HDFC Bank Ltd. by treating the same as ‘input service'.

The department was of the view that the appellant was not eligible for the CENVAT credit on two grounds. Firstly, the debit notes containing the annexure is not a ‘prescribed document' for availing CENVAT credit. Secondly, the individual premises for which rentals were charged and from where the services were provided, were not registered by the appellant..

Income Tax

Whether when assessee makes capital gains on sale of property, there is any bar u/s 158BB(4) to claim deduction of carried forward losses pertaining to house property - NO: HC

THE assessee and his wife were partners of a firm known as M/s.Century Complex at Manjeri. There was a search of the premises of the appellant. The firm had filed its returns of income for the assessment years 1993-94 to 1995-96. The assessee sought for settling the tax pertaining to the block period before the Settlement Commission, that was, block period ending with 01.02.1996. The Settlement Commission, while considering income of the house property and the capital gains on sale of Century Complex at Manjeri, had taken into account the sale price apart from brokerage as well as index cost of land appearing in the document. Ultimately the long term capital gains was arrived at Rs. 22,54,446/-. The applicant had sought reduction of losses under two categories under the head of house property - loss from the house property carried forward amounting to Rs. 5,15,389/- and interest paid on borrowings for previous years that was Rs. 8,20,028/-.

THE issue before the Bench is - Whether when the assessee makes capital gains on sale of property, there is any bar u/s 158BB(4) to claim deduction of carried forward losses pertaining to house property. And the answer goes in favour of the assessee.

Customs

Writ Petition against validity of Notification No 127/99 Cus fails - Madras High Court upholds validity of Notification issued under Section 8A(1) of Customs Tariff Act, 1975 - Expression "Free" mentioned in Customs Tariff to be interpreted as "Nil rate" or "Zero rate".

VIDE Notification No 127/99 Cus dated 01.12.1999, issued under Section 8A(1) of the Customs Tariff Act, 1975, Government had imposed 50% duty on goods falling under sub-heading Nos. 1001.10 and 1001.90 in view of the slow off take of wheat from the Central Pool. Section 8A(1) empowers the Government to increase the import duties by amending the First Schedule if the circumstances exist which render it necessary to take immediate action.

It is the contention of the Petitioner that that the Notification is ultra-vires Section 8A of the Customs Tariff Act, 1975.

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