Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Appellant providing services to Maharashtra Knowledge Corporation Ltd. - M/s MKCL is providing Information Technology Literacy Course MS-CIT to make learner IT literate - BAS services are exempt since they come within clause (d) of the exemption Notification 14/2004-ST: CESTAT

THE appellant is engaged in providing services to M/s Maharashtra Knowledge Corporation Ltd. (MKCL) in relation to -

a) Promotion or marketing of services provided by MKCL;

b) Services incidental or auxiliary to the activity of promotion or marketing such as evaluation or development of prospective customer or vendor, public relation services, management or supervision on service activity;

c) Sale of services of MKCL.

Income Tax

Whether if money is routed indirectly from firm to assessee's account in garb of gifts, same is to be taxed in hands of donor as unexplained income - YES: High Court

THE assessee, an individual, is a partner in the Firm namely M/s Agrawal Fashion; another partner was the brother of the assessee namely, Shri Surendra Behari Agrawal. The assessee had two minor sons namely, Rajat Agrawal and Rohit Agrawal. While doing the scrutiny, the A.O. observed that the assessee had taken the loan of Rs. 21,00,000/- each from his minor sons through their mother namely, Smt. Meenu Agrawal, wife of the assessee. The AO observed that the amount was given to Shri Surendra Bihari Agrawal, brother of the assessee on his retirement from the firm, out of which a cheque of Rs. 53 lacs was given to him. It was alleged that a sum of Rs. 11 lacs was given to each minor child of the assessee by their uncle Shri Surendra Bihari Agrawal. The minor children had given the gifts to father through mother. Thus, the total loan of Rs. 42 lacs was received by the assessee from his minor children. The A.O. found the said gifts was bogus and made the addition of Rs. 42,00,000/-, which was confirmed by CIT(A). However, the Tribunal had accepted the gifts as genuine and deleted the addition.

The issues before the Bench are -Whether if the assessee has not availed opportunity of being heard as provided by the A.O, the burden shifts on the assessee to prove its bonafide on the basis of the statement made by the donor and whether in case the money is routed indirectly from the firm to the assessee's account under the garb of the gifts, the same is taxable in the hands of donor as unexplained income. And the verdict goes against the assessee.

Customs

100% EOU - Warehousing facility - Application for extension of warehousing period - Can be made even after the warehousing period is over: CESTAT

APPLICATION for extension of warehousing period - Can be made even after the warehousing period is over - Proceedings culminating in demand of duty and penalty without taking a decision on the application, held unfair and not justified - Impugned order set aside remanding matter for fresh adjudication in accordance with due process of law - Authority further directed to defreeze appellant's account.

See our Columns Tomorrow for the judgements