Jurisprudentiol-Monday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

CE - Tamil Nadu Civil Supplies Corporation is neither an Institutional consumer nor Service institution - Mixies, Table Top Wet Grinders, Electric Table Fans & Electric Rice cookers supplied by appellant to TNCSC for free distribution to women beneficiaries have been rightly assessed to duty on RSP u/s 4A of CEA, 1944 - Appeals allowed: CESTAT

THE appellant procured orders from the Tamil Nadu Civil Supplies Corporation (TNCSC) for implementing the scheme of free distribution of Mixies and Table Top Wet Grinders to the beneficiaries of the families holding Rice Cards announced by the Govt. of Tamil Nadu.

SCN came to be issued demanding differential CE duty alleging that valuation should have been adopted u/s 4 of the CEA, 1944 on the ground that the goods were supplied to "institutional consumers".

Income Tax

Whether when two of most important ingredients of sale such as receipt and delivery of possession are missing, there cannot be transfer of capital asset either under TPA or u/s 2(47) of I-T Act: ITAT

SURVEY was conducted on assessee, his wife, and other family members. During the survey operation, assessee admitted that his family sold to MDPL land for a consideration of Rs.4.5 crore per acre in the FYs 2007-08 and 2008-09. AO observed that as the lands are located in close proximity to nearest municipality, they cannot be treated as agricultural land as defined u/s 2(14). Further, part of the transactions entered into through agreement to sale-cum-GPA with MDPL was subsequently cancelled as part of the transaction did not materialize. AO, however, observed that the transaction in fact has taken place in terms with the agreement of sale-cum-GPA and there is transfer of capital asset within the meaning of section 2(47) as possession over land also passed during the previous year.

The issue before the Bench is - Whether when two of the most important ingredients of sale/ transfer viz., receipt of sale consideration and delivery of possession are missing, there cannot be a transfer of capital asset either under the Transfer of Property Act or under section 2(47) of the IT Act. And the verdict goes in favour of the assessee.

Service Tax

ST - Applicant importing packaged software from foreign supplier and making payments to Microsoft, USA on account of royalty - No ST payable under IPR Services prior to 16.05.2008 or under IT Software Service after 16.05.2008 - Stay granted: CESTAT

THE applicant is a distributor of hardware, software etc. and is engaged in the business of trading in the aforesaid items on a principal to principal basis. They sell goods to resellers who in turn sell the goods to retailers/end users.

The CERA observed that the applicant has made certain payments to M/s. Microsoft Licensing GP, USA on account of royalty and on which Service Tax is required to be paid under the category of "Intellectual Property Right Services" as per Section 65(105)(zzr) of the Finance Act, 1994 for the period prior to 16.5.2008 and post 16.5.2008 the service tax liability arose under the category of "Information Technology Software Service".

See our Columns Monday for the judgements