Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Appellant had provided construction services to UP Vikas Parishad for housing BPL persons and institutions for promotion of educational objectives - such services prima facie appear to be outside the ambit of "construction of residential complex" and "commercial or industrial construction" - Pre-deposit waived and stay granted: CESTAT

THE appellant had provided construction services to around 36 bodies/ institutions during 01/04/2005 to 31/03/2010 and 01/04/2010 to 31/03/2011, including to an Uttar Pradesh State instrumentality known as the U.P. Avas Avam Vikas Parishad (Vikas Parishad) for housing persons who are below the poverty line; the LIC, several trusts and foundations promoting and maintaining educational institutions and to another State instrumentally, the U.P. Rajkiya Nirman Nigam Ltd. - for establishment of a medical college and hospital; to the IIT Kanpur; and to several private bodies for establishment of infrastructures towards pursuing commercial or industrial objectives.

In the absence of any attribution in the show cause notice or in the impugned adjudication order that constructions by the petitioner were in relation to construction of residential complex service, since more than 12 residential units were constructed and since there is no finding recorded that the residential units were not for the personal use of the recipient in terms of the statutory definition, in particular the explanation set out in Section 65 (91a) of the Act, Tribunal saw a strong prima facie case in favour of the petitioner.

Income Tax

Whether when assessee-Trust fails to produce any of donors contributing to building fund, such sums are to be treated as unexplained credit u/s 68 - NO: High Court

THE Assessee is a Charitable Trust duly registered u/s 12A. The income of the Trust was exempted u/s 11. For the AY 2001-02, the assessee had received donations towards building fund amounting to Rs.54,38,999/- and for the AY 2002-03, it had received a sum of Rs.12,74,672/-. The return filed u/s 139 for those assessment years was accepted by AO. However, notice u/s 148 was issued to the assessee for reopening the assessment. In response to the said notices, an AR of the assessee appeared before the AO and produced all the details. The assessee also objected for reopening of the assessment u/s 148. In the balance sheet filed along with the returns, the assessee had made known the donations received towards the building fund and had also furnished the details of the donors.

Theissues before the Bench are - Whether when the assessee-Trust fails to produce any of the donors contributing to building fund, such sums are to be treated as unexplained credit u/s 68; Whether the exemption u/s.11(1)(a) is allowable only on income derived from property held under Trust wholly for charitable or religious purposes and Whether in case the amounts received from the third party has been accounted and utilized for charitable purposes by the assessee trust, but the assessee has failed to disclose the names and addresses of the donors as well as the mode of payment, it is entitled for deduction u/s 11. And the verdict favours the assessee.

Central Excise

Appellant clearing own manufactured goods to principal manufacturer under job work challans - procedure for functioning under the job work is different - duty correctly demanded - Revenue neutrality would arise only if activities of clearance takes place within the sister concern or their own units - appeal rejected: CESTAT

DURING the course of preventive checks in the appellant's unit it was observed that the appellants had received goods from their principal manufacturers for carrying out job work. The appellants, instead of clearing goods manufactured out of the said raw materials received from their principal manufacturers, cleared their own manufactured finished goods under the cover of job work challans to the principal manufacturers during period from May to November, 2007.

See our Columns Tomorrow for the judgements