Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Infosys wins 160 Crores case:CENVAT Credit on insurance premium for family members of employees - not allowed; CENVAT Credit on services utilised for construction, maintenance or repair or renovation of Global Training Centre up to 01/04/2011, allowed; credit of service tax paid on services used in respect of hostel, food court, gym etc - credit would not be admissible in respect of service tax paid relating to construction, maintenance, repair or renovation to these facilities: CESTAT

THE service is correctly classifiable under “Tele Communication Service's and such services are taxable only when the same is provided by person who has been granted a licence under Indian Telegraph Act, 1985. It is not the case of the department that Foreign Service suppliers have been licensed under the Indian Telegraph Act.; No service tax in respect of information technology software services received from overseas sub-contractors to overseas branches.

Income Tax

Whether when assessee fails to prove that its income was below taxable threshold, AO can make estimation on basis of average of income declared in preceding and in succeeding AYs - YES: ITAT

THE assessee is the wife of ShriMayur M Thakkar, son of ShriManojM.Thakkar, who is one of the pioneers of chemical trade and dealing in chemicals. There was a search and seizure operation u/s 132 in Thakkar Group of cases on 21.1.1999. The search operation covered both, the business premises as well as residential premises of the members of Thakkar family. The Thakkar family is engaged in the business of manufacturing as well as trading in various chemicals. During the relevant years the assessee was associated with certain business concerns of Thakkar Group. Sunil Chemical Industry carried out trading business in petrochemicals under the proprietorship of assessee only for four months i.e. till 31.3.1998 and from 1.4.1998 this concern was converted into a partnership firm with assessee and her husband as partners.

The issue before the Bench is - Whether when assessee fails to prove that its income was below taxable threshold, the AO can make estimation on the basis of average of income declared in the preceding and in the succeeding AYs. And the answer is YES.

Central Excise

Project authority certificate issued by NTPC clearly indicates that supply of goods is under procedure of International Competitive Bidding and contract has been awarded to M/s. WPIL - as condition of Notif. 12/2012-Cus is satisfied, appellant is entitled for exemption under notif. 12/2012-CE: CESTAT

THE appellant had supplied Electrically Operated Travelling (EOT) cranes to NTPC, BARH Super Thermal Power Project as a sub-contractor of M/s. WPIL Ltd., Kolkata, who was awarded the contract for supply of equipment under International Competitive Bidding (ICB) procedure and claimed the benefit of exemption notification 6/2006-CE, 12/2012-CE.

The lower authorities denied the exemption on the ground that under the Customs Notification the benefit is available to the goods falling under Chapter 9801 and moreover the appellant has not participated in the International Competitive Bidding procedure themselves being sub-contractor. Inasmuch as a demand of Rs.9,55,304/- along with interest thereon and penalty was confirmed by the adjudicating authority and the said order was upheld by the Commissioner(A).

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