Jurisprudentiol – Tomorrow's cases

By Vijay Kumar

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

Lease of table space to financial institutions and receiving remuneration for the same cannot be categorized as Business Auxiliary service - Not liable to service tax: Tribunal

APPELLANTS are engaged in sales and services of two wheelers. They also arrange loan from various financial institutions/banks for Hire Purchase and are therefore promotion/marketing of the products/services of the financial institutions/banks for which they are getting a consideration called pay-out/incentive/commission from the financial institution/banks. Service tax authorities tried to fasten service tax liability on the appellant for the consideration received in this regard by categorizing the activity under ‘Business Auxiliary service'. The revenue's appeal against the order of the Commissioner (Appeals) which went in favour of the assessee was dismissed by the Tribunal.

Central Excise

Attachment of property - whether in name of company or Director – Remand proceedings - Reliance on findings of an earlier order which was itself remanded by Tribunal is an incorrect proposition in law – Matter once again remanded by Tribunal

THE present case when the applicants had filed an application for stay was reported by us [2008-TIOL-597-CESTAT-Mum] with the caption – Attachment of property – legal heir of the deceased Director claims that property is in name of late Director and not company and hence cannot be attached – Tribunal restrains Revenue from taking further action. We had then parted the story thus – Another piece of statistics.

The matter had come up for final hearing recently and was remanded again with the finding that the adjudicating authority ought to have considered the entire evidences on record.

Income Tax

A person may conduct his business by way of any constitution that he desires, be it as individual, as a proprietor of a proprietary concern or as a director of a company - So long as he renders services specified under the provisions, deduction cannot be denied – Services rendered by the assessee covered under call centre services, data processing services and insurance claim processing as notified by the Board - Activities are certified by STPI as consultancy services in relation to software development on site abroad – Deduction under Sec. 10A allowed – ITAT

THE assessee is engaged in providing services for development of computer software and claimed deductions under Sec.10A of the IT Act for the assessment years 2000-01 to 2003-04. The assessee filed revised returns declaring higher income and shifting the deduction claim from under Sec.10B to Sec.10A. The assessing officer rejected the claims of the assessee on the premise that the company is not engaged in software development, one of the two directors of the company is not adequately literate, the company is run solely by a director and that the company does not have any facility including internet connection to run its operations. After perusing the agreements entered by the company with its ‘clients', the assessing officer held that the director in fact worked as a consultant, there is no software development activity and that he worked under the supervision of the ‘clients' which rendered his claims infructous. The assessee took his grievance to the CIT (Appeals) but did not get any redressal. Finally he is before the Tribunal.

See our columns Tomorrow for the judgements