Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Appellant providing rooms to service receiver who booked Conference/Banquet Hall - details about number of rooms provided, whether on complimentary basis is not forthcoming - addition of room rent in value of service provided as Mandap Keeper is proper: CESTAT

The appellants are running Hotel along with Banquet Hall and Conference Hall for social functions. When Banquets Hall or Conference Hall is booked, the appellants are also providing rooms.

By taking into consideration the room rent for arriving at the assessable value as provider of Mandap Keeper service, the lower authority confirmed the demand and which was upheld by the Commissioner(A).

Income Tax

Whether mere disallowance of legal claim can be made basis for levy of penalty u/s 271(1)(c) - NO: ITAT

The assessee has paid a sum of Rs.42.00lacs to Court Receiver as per direction of the High Court for calling bids from the partners for the purpose of fixing royalty and the higher bidder would be appointed agent of Receiver who shall carry on the business of Blood Bank which was being carried on by erstwhile partnership firm. The licence to operate the Blood Bank was obtained by the Assessee in his individual capacity as agent of the Court Receiver and there was no user of such licence of the erstwhile partnership firm by the assessee. On the plea that assessee has not deducted tax at source u/s. 194J on the payment of royalty by invoking provisions of section 40(a)(ia), AO disallowed payment for non deduction of TDS.

The issue before the Bench is - Whether mere disallowance of legal claim can be made the basis for levy of penalty u/s 271(1)(c). And the answer is NO.

Central Excise

Dept. seeking reversal of CENVAT credit contained in finished goods destroyed in fire and appellant paying same with interest - denial of benefit of remission on ground that godown not registered is contrary to facts obtaining on records - appeal allowed: CESTAT

Vide an order dated 28/05/2008 the CCE, Thane-I denied remission of CE duty of Rs.11,70,405/- on cotton grey fabrics destroyed in fire on 23/05/2004 in the premises of the appellant. The ground adduced for rejection of remission application is that the godown of the appellant situated at the 1 st floor of the appellant's premises at H. No. 1286, Shankeshwar Compund, Narpoli, Bhiwandi was not part of the registered premises of the appellant.

See our Columns Monday for the judgements