From our Legal Corner – tomorrow's cases

By Vijay Kumar

Income Tax

Income tax - Depreciation of over Rs 1.9 Cr on ground that very purchase of machinery was doubted in spite of the fact that assessee produced unimpeachable evidence - Case remanded : ITAT

THE assessee has purchased Air Pollution Equipment and leased the same to M/s Prakash Industries Ltd and the assessee being the owner of the equipment claimed to be entitled to depreciation @ 100% of the cost of Air Pollution Equipment. Revenue doubted the very existence of the Air Pollution Control Equipment and has held that the transaction of purchase of equipment and lease to M/s. Prakash Industries Ltd. is a paper transaction only.

Central Excise

Appellant could not produce cement and put it to commercial sale in absence of BIS certificate - Production started only from June 15, 2002 - Eligible for exemption under Not 56/2002 : Tribunal

L-6 premises and L-4 premises are situated within same campus - Supervision charges not required to be paid when services provided by departmental officers within normal office hours : Tribunal

Service Tax

Yet another overlap of services - 'Interior decoration' or 'finishing services under commercial construction service'? Cestat orders pre-deposit of Rs 10 lakhs

CLASSIFICATION of the services is going to be the major area of disputes in Service Tax. With 100 services in the tax net and without any codification of the services, the correct classification of any particular service is bone of contention between the revenue and the assessees, especially in cases where there is likelihood of a service being classifiable under more than one service. In this case we are reporting today, the revenue demanded Rs 1,09,39,242/- service tax under the category of "Interior Decorator" from period 1.10.2000 to 30.9.2005. The appellant contended that their service is classifiable under "Commercial or Industrial Construction Service" which is taxable only with effect from 16.6.2005.

See our columns tomorrow for the judgements