Jurisprudentiol - Friday's cases
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Legislation is not rejected or amended by private agreement - order passed in arbitration proceedings cannot shift liability or inherence of service tax under provisions of FA, 1994 on service recipient - appeal rejected: CESTAT
THE appellant is Delhi Transport Corporation.
The Anti-Evasion Branch discovered that the appellant had provided taxable service by providing space for advertisements on its buses, bus queue shelters, time keeping booths and other properties.
In response to the SCNs the appellant contended that agreements entered with the advertisers contained a specific clause that the liability to tax, including service tax would be borne by the recipient of the service/the other party to the agreement; there arose disputes between the appellant and recipients of the service, some of which are subject matter of arbitration proceedings; that advertisers had not reimbursed the appellant for the service tax component; that the appellant is pursuing with the Central Government for grant of exemption from tax.
Income Tax
Whether surplus arising on sale of agri land gives rise to agricultural income within meaning of sec 2(1A) read with Explanation (1) of Sec 2(14)(iii) and consequentially exempt u/s 10(1) - YES: ITAT Third Member
THE assessee purchased certain agricultural land and sold in the previous year relevant to assessment year under consideration. The case of the assessee was that the income arises from the transaction of agricultural land and hence it was exempt under section 10(1) r.w.s. 2(lA)(a) of the Act. Even otherwise the income arising therefrom is not assessable to capital gains tax in view of the provisions of section 2(14)(iii)(a)(b). On the other hand, the case of the Revenue was that it was an adventure in the nature of trade and the income from the impugned land was business income. The AO as well as the CIT(A) were of the opinion that the amount received by the assessee on sale of the impugned land deserved to be treated as profit from adventure in the nature of trade and assessable as business income.
The issues before the Bench are - Whether the transactions of purchase and sale of five pieces of agricultural land with standing crop, by way of separate conveyance deeds, beyond the prescribed distance from any municipal council, amounts to transactions on capital account or adventure in the nature of trade and Whether the surplus arising on sale of agricultural land gives rise to agricultural income within the meaning of section 2(1A) read with Explanation (1)/Section 2(14)(iii)(a) and (b) and consequentially exempt under section 10(1) of the Act. And the answers go against the Revenue.
Service Tax
Penalty - proviso inserted in s.78 of FA, 1994 has prospective effect - Penalties under sections 76 and 78 are imposable simultaneously for failure to pay service tax for period prior to 10.05.2008 although SCNs were issued in year 2010/2011: CESTAT
THE short facts of the Revenue appeals are that the respondents were held liable to pay Service Tax for the financial year 2005-06 to 2009-10 by the adjudicating authority but he imposed penalty only under section 78 of the FA, 1994. The penalty imposition under s.76 was avoided by citing the following case laws viz. First Flight Couriers Ltd. , Motor World, Bangalore 2012-TIOL-418-HC-KAR-ST.
The Revenue filed unsuccessful appeals with the Commissioner (Appeals) praying for imposition of penalty on the respondents under Section 76 of the Act for the period up to 09.05.2008 in addition to penalty imposed under Section 78.
Until Tomorrow with more DDT
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