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2014 (4) TMI 841 - MADRAS HIGH COURTNature of agreement - Whether transaction was sale or a works contract – Levy of penalty – evasion of tax - Held that:- contract is a not a simple sale, it is a composite works contract, u/s 3-B of the TNGST Act – and not a simple sale - The contract provides for assembling of design, manufacture assembling, supply erection, commissioning and handing over within a period and the second crane to be erected, commissioned and handed over - In the light of the nature of agreement the taxable turnover, hence, has to be worked out only in accordance with the provisions under Section 3B of the Tamil Nadu General Sales Tax Act - Various terms of the agreement show that the assessee entered into an agreement with Japanese Corporation and signed a collaboration agreement with M/s.Hitachi Limited for importing components required for cranes and whereby, Hitachi had agreed to sell the drawings and other necessary documents to the assessee - and the second crane to be erected, commissioned and handed over - the nature of agreement and the taxable turnover has to be worked out only in accordance with the provisions under Section 3B – assessment set aside - Matter remitted back to the AO for re-working out the deduction – In absence of details available in the books of accounts as regards the turnover not involving transfer of property of goods, the agreement falls u/s 3B(e), the assessee entitled to deduction at 30% as by way of standard deduction - Decided partly against assessee.
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