From our Legal Corner - tomorrow's cases

By Vijay Kumar

Income Tax

Deduction under Section 80 HHC can be allowed only if there is a positive profit - Supreme Court

This is a rare case where the assessee lost consistently at all stages from AO, through, Commissioner (Appeals), ITAT, High Court and now the Supreme Court.

For the assessment year 1992-93, the assessee appellant had claimed deduction under Section 80-HHC of the Income Tax Act. The assessing officer disallowed the claim on the ground that the 'profits of the business' computed under Section 80-HHC indicated a negative figure. An appeal was preferred before Commissioner of Income-Tax (Appeals), who also was of the same view and dismissed the appeal. The assessee failed before the ITAT also and the following questions were referred to the High Court.

Block assessment - notice u/s 158BC(a) cannot be equated with that of notice u/s 148; Defects in notice protected under umbrella of Sec 292B : Bombay HC

THE issue before the High Court was : If a notice under Sec 158BC(a) is not issued, but the assessment order is passed, will it render the assessment illegal and without jurisdiction?

Customs

Signal decoder used by Cable operators is classifiable under tariff heading 8528 - Supreme Court

The Supreme Court was faced with the difficult task of classification of Signal Decoder which is normally used by a Cable Operator for distributing Satellite signals collected by Dish Antenna. Is it under Entry 8528 or 8529".

Such collected signals, if weak, are strengthened by the Decoder and are fed further to the customers' television. Normally, the signals so collected by the feed-horn are weak and, therefore, a device called Low Noise Block down Converter is used for the amplification of those signals. The Decoder also converts the signals received from the Satellite by way of Dish Antenna into useable signals. In short, the signals are modulated into proper frequency and with the help of channel combiners, distribution amplifiers, channel converters and top off boxes, the signals are distributed to the subscribers for viewing the programmes. This apparatus is useful in case of some of the broadcasters transmitting the Pay Channels and for that purpose the Cable Operator connects the Decoder after the Satellite Receiver and the Decoders perform the de-coding function only after the reception of signals by Satellite Receiver and then feeds into the frequency level which the Decoder can withstand.

Service Tax

Boilers supplied on lease contract - Interest collected from buyers on unpaid amount of credit not chargeable to service tax under head 'Banking and Financial Services' - clause (Viii) of Explanation 1 to Sec 67 clarificatory in nature : Tribunal

THE appellants are registered manufacturers of Industrial boilers, heaters, pollution control equipments, heat pumps, chillers etc. They are also registered under Service Tax for providing services under the five categories viz. Consulting Engineering, Installation and Commissioning, Repairs and Maintenance, Technical Testing and Analysis, Franchisee Service.

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