Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Explanation added to Notification 11/97- Cus to exclude software used for performing specific functions other than data processing from the ambit of ‘computer software' had the effect of imparting a technical meaning to ‘computer software' - A restriction prejudicial to importers of computer software cannot be given retrospective effect – CESTAT Larger Bench

AN interesting aside to this Larger Bench story is that the Member who delivered the judgments in the referral order as well as this Larger Bench judgment is one and the same (How could it be possible? Well it happens in CESTAT). Further, the decisions relied upon by the assessee before the referral bench were also the same. But the clincher which led to this about-turn is the affirmation of the Tribunal's decision in BPL Mobile Communications by the Apex Court. Ironically, the Apex Court's approval came on 16.08.2001 much before the date of decision of the referral bench which actually led to the constitution of this Larger Bench. Had the assessee's counsel brought this fact to the notice of the referral bench, probably there wouldn't have been a Larger Bench at all in the first place.

Income Tax

Assessee makes payment to non-resident Co - bill received at time of finalisation of audit - TDS deducted and deposited - since it was not deposited in previous year relevant for AY, no fault can be found with AO's order invoking provisions of Sec 40(a)(i); ITAT

FOR those who tend to take TDS provisions in the Income Tax Act casually, the TDS cannot only be tedious but also draconian. Given the widespread practice of finalising Audit at the eleventh hour, it is more often than not, some last-minute bills are received and TDS deducted and deposited accordingly. But what treatment is meted out to such expenditure u/s 40(a) can be seen from the latest ruling of the Tribunal.

Service Tax

Hike in rate by Finance Act - Service tax is NOT payable at revised rate, if rates are revised by law, during operation of policy already issued

THE appellants are engaged in providing services under the category of general insurance and are registered with the department. The Finance Act, 2004, increased the rate of service tax to 10% from the earlier rate of 8% and in addition Education cess @2% on the gross amount of service tax was also imposed from 10.09.2004. Seeing that the appellants had received advance premium from their customers at the time of issuance of the general insurance policy prior to 10.09.2004, a differential service tax demand was raised of Rs.5.36 crores and Education Cess of Rs.53.59 lakhs.

See our columns tomorrow for the judgements