Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Transfer of business division to another company - Capital gains tax cannot be levied on sale of business as a going concern - ITAT

Sale of a business division as a going concern - Provisions concerning computation of capital gains in S.48 contain three basic elements viz., cost of acquisition, cost of improvement and date of acquisition for working out the capital gains - In the case of sale of a going concern, these essential ingredients are not ascertainable and, therefore computation provisions under s. 48 of the Act would be incapable of computing the capital gains. Capital gains tax cannot be levied on sale of a going concern in such instances.

Central Excise

Manufacture involves production, but production may not result in manufacture - Activity of applying anti-corrosion coating on steel bars would amount to providing Business Auxiliary Service: CESTAT

THE expressions 'production' and 'manufacture' are not synonymous with each other and cannot be held to be interchangeable in the context of the present statute, though broadly speaking and from a prudent ordinary man's point of view, they may mean same. As it is settled law that when an expression is defined in the statute, the same has to be understood and interpreted in the light of the language used in the definition.

Service Tax

Business Auxiliary Service – the argument that since the main service is not a taxable service, the auxiliary service is also not taxable does not hold water – CESTAT orders Chennai Port Trust to pre-deposit.

WE are not impressed with the argument that any service incidental or auxiliary to a service or activity which is not taxable in the hands of the railways cannot be said to be taxable in the category of BAS.

See our columns Tomorrow for the judgements