TMI Tax Updates - e-Newsletter
February 1, 2012
Case Laws in this Newsletter:
Income Tax
Service Tax
Indian Laws
Articles
By: Dr. Sanjiv Agarwal
Summary: The article discusses the scope of taxable services under "management, maintenance, or repair" as defined by various amendments to tax laws from 2003 to 2008. Initially, the service covered maintenance or repair of goods or equipment, excluding motor vehicles. Over time, it expanded to include management of properties and servicing of goods, including computer software. The definitions of "maintenance" and "repair" are explored through legal dictionaries, emphasizing their nuances. The article clarifies that while reconditioning and restoration of goods are taxable, these services for immovable properties are not subject to service tax under the specified law.
By: Dr. Sanjiv Agarwal
Summary: Section 292 of the Companies Act, 1956 allows companies to invest funds, while Section 49 mandates that investments be held in the company's name. The article discusses whether these provisions apply to the purchase of immovable property, such as land. Section 49 primarily concerns investments in securities, like stocks and debentures, not immovable property. According to Accounting Standard AS 13, investment properties are assets held for income or capital appreciation, not for operational use. Therefore, the purchase of land for business operations may not fall under Section 49's requirements, as it is not considered an investment in securities.
By: DR.MARIAPPAN GOVINDARAJAN
Summary: The case involves an employee whose service was terminated by a municipal corporation due to his absence from duty while in judicial custody for a criminal case. The Labour Court initially ruled the termination illegal, citing a lack of notice and violation of Section 25-F of the Industrial Disputes Act. However, the High Court found that the employee, a trainee, was not entitled to the same protections as a permanent employee and had refused a show cause notice. The court held that the employee had not completed the required training satisfactorily and allowed the appeal, setting aside the Labour Court's decision.
News
Summary: The Indian economy is projected to have an inflation rate between 6% and 7% and a growth rate above 7% by March 2012. In 2010-11, the GDP grew by 8.4%, with agriculture, industry, and services sectors showing varied growth rates. Savings and investment rates declined slightly. The Ministry of Finance anticipates a moderate economic upswing in 2012-13, supported by improved industrial performance, particularly in manufacturing. Credit growth to the manufacturing sector increased, and indicators like HSBC PMI and UBS LEI suggest strong conditions. Coal and cement production, along with electricity sector growth, also showed positive trends. Inflation moderation may boost investment.
Summary: The Finance Ministry of India has developed the Comparative Rating Index of Sovereigns (CRIS), a new index that evaluates sovereign credit ratings comparatively using Moody's ratings and GDP data from the IMF. This index ranks 101 economies over five years (2007-2011) to provide a relative investment attractiveness measure. India improved its CRIS score and ranking, moving from the fourth to the third quintile. European countries like Greece, Ireland, and Portugal saw significant declines in their CRIS scores. In contrast, countries like China, Brazil, and South Africa showed improvements. The index highlights shifts in global economic standings based on relative performance.
Summary: India and France are eager to finalize the India-EU Broad-based Trade and Investment Agreement (BTIA) negotiations promptly. The Indian Commerce Minister met with the French Foreign Trade Minister in Paris, emphasizing the need for a balanced agreement to enhance market access in goods and services. They also discussed the progress in bilateral trade and the potential for deeper economic ties. The Indian Minister invited French investment in sectors like automobiles, fashion, IT, pharmaceuticals, and energy. Additionally, the CEO of IKEA met with the Indian Minister, expressing interest in the Indian market and discussing the implications of the recent FDI policy changes.
Summary: The Indian Minister for Commerce, Industry, and Textiles has invited French luxury goods companies to establish manufacturing bases in India, highlighting the potential for increased French investment in the country. With India set to receive over US$ 100 billion in nuclear power sector investments in the next two decades, at least a quarter from France, the Minister emphasized the strong partnership between the two nations. He also encouraged French involvement in India's IT, automobile, and infrastructure sectors, citing successful examples like Capgemini and Renault. The Minister noted India's recent policy changes, such as allowing 100% FDI in single-brand retail, as opportunities for French companies.
Summary: The Index of Eight Core Industries, which constitutes 37.90% of the Index of Industrial Production, recorded a growth of 3.1% in December 2011, down from 6.3% in December 2010. From April to December 2011-12, the cumulative growth was 4.4% compared to 5.7% in the previous year. Coal production grew by 5.6% in December 2011 but had a negative cumulative growth. Crude oil and natural gas production declined, while petroleum refinery products and fertilizers showed modest growth. Steel, cement, and electricity production increased, with electricity showing significant cumulative growth of 9.2% compared to 4.7% in the previous year.
Summary: The Ministry of Corporate Affairs in India announced a refund process for statutory fees paid for certain services through MCA21. Previously, there was no mechanism for stakeholders to reclaim fees paid in error. Stakeholders must file a new refund e-Form to request a refund, which will be either approved or rejected. Refunds are applicable for multiple payments of Form 1 and Form 5, incorrect payments, and excess payments. However, the refund process does not apply to services such as public inspection of documents, certified copies requests, transfer deeds payments, stamp duty fees, IEPF payments, STP forms, and DIN e-Form.
Summary: The Indian Government has partnered with the University of Chicago to establish the Swami Vivekananda Chair, commemorating the 150th birth anniversary of Swami Vivekananda. A $1.5 million endowment will fund this initiative, promoting Indian studies and Vivekananda's teachings. The Chair will host visiting scholars for two-year terms to conduct research and engage with the academic community. The program aims to foster cultural understanding between India and the United States, with public presentations to honor Vivekananda's legacy. This collaboration underscores the enduring impact of Vivekananda's message of universal harmony and spiritual unity.
Summary: The Finance Minister of India addressed the Chicago Council on Global Affairs, discussing the global economic challenges post-financial crisis, particularly in Europe, and their impact on global recovery. He emphasized India's resilience due to its domestic demand-driven economy and outlined measures taken to combat inflation and stimulate growth. Key initiatives include easing capital controls, encouraging foreign direct investment, and launching a new manufacturing policy to boost economic growth and job creation. The Minister highlighted India's infrastructure development plans, financial sector reforms, and commitment to sustainable growth, urging global investors to seize opportunities in India's robust economy.
Notifications
Companies Law
1.
G.S.R. 32(E) - dated
18-1-2012
-
Co. Law
Company Law Board (Amendment) Regulations, 2012 - Amendment in regulation 30.
Summary: The Company Law Board (Amendment) Regulations, 2012, amends regulation 30 of the Company Law Board Regulations, 1991. The amendment specifies that parties or their authorized representatives can inspect records of pending cases and obtain certified copies upon written application and payment of fees. The inspection fee is fifty rupees per day, and certified copies cost ten rupees per page. Applications can be submitted in person or by post. Non-parties require consent or a Bench order for access. Inspections are not allowed on hearing dates without a Bench order. Inspections and certified copies are processed within two and three working days, respectively.
Customs
2.
09/2012 - dated
30-1-2012
-
Cus (NT)
Rate of exchange of conversion of each of the foreign currency with effect from 1st February, 2012.
Summary: The Government of India, through the Ministry of Finance and the Central Board of Excise and Customs, issued Notification No. 9/2012-Customs (N.T.) on January 30, 2012. This notification supersedes the previous notification No. 88/2011-Customs (N.T.) and establishes new exchange rates for converting foreign currencies into Indian rupees, effective February 1, 2012. The rates are specified for both imported and exported goods across various currencies, including the Australian Dollar, Canadian Dollar, Euro, Pound Sterling, US Dollar, and Japanese Yen, among others. These rates are detailed in two schedules attached to the notification.
3.
08/2012 - dated
30-1-2012
-
Cus (NT)
Amends Notification No. 12/97-Customs (N.T.), dated the 2nd April, 1997 thereby notifying Tondiarpet (TNPM), Chennai as ICD.
Summary: The Government of India, through the Ministry of Finance's Department of Revenue, has amended Notification No. 12/97-Customs (N.T.) dated April 2, 1997. This amendment designates Tondiarpet (TNPM) in Chennai as an Inland Container Depot (ICD). This change is included in the Customs Non-Tariff Notification No. 8/2012, issued on January 30, 2012. The amendment allows for the unloading of imported goods and the loading of export goods at this newly designated ICD. This notification was published in the Gazette of India and is part of ongoing updates to customs regulations.
Indian Laws
4.
F.7/9/2008-NS.II - dated
19-1-2012
-
Indian Law
IT : PPF Scheme, 1968/Senior Citizens Savings Scheme Rules, 2004 - Notified branches of Central Bank of India authorized to receive, with immediate effect, subscriptions under said schemes.
Summary: The Central Government has authorized 111 branches of the Central Bank of India to accept subscriptions for the Public Provident Fund Scheme, 1968, and the Senior Citizens Savings Scheme Rules, 2004, effective immediately. These branches are located across various cities including New Delhi, Mumbai, Goa, and others. The authorization is subject to conditions such as remitting funds to the Government Account at RBI, CAS, Nagpur within three days, with penalties for delays. Compliance with scheme rules is mandatory, and non-compliance may result in penalties or de-authorization, with the bank bearing any financial liabilities from non-compliance.
Circulars / Instructions / Orders
FEMA
1.
71 - dated
30-1-2012
Memorandum of Instructions governing money changing activities.
Summary: The circular issued on January 30, 2012, addresses all authorized persons in foreign exchange regarding the guidelines for money-changing activities. It announces the removal of criteria related to outreach and locational advantages for issuing new licenses to Full Fledged Money Changers (FFMC), thereby providing more flexibility in branch location selection. All other instructions from the previous circular dated March 9, 2009, remain unchanged. The directions are issued under the Foreign Exchange Management Act, 1999, and must be communicated to relevant parties.
2.
72 - dated
30-1-2012
Memorandum of Instructions for Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-resident Exchange Houses.
Summary: The Reserve Bank of India has revised the guidelines for Category-I Authorised Dealer banks regarding Rupee Vostro accounts of non-resident Exchange Houses. Banks no longer need prior approval from the Reserve Bank for each account, provided they have initial approval for arrangements with Exchange Houses from specified regions. After reaching twenty Rupee Drawing Arrangements (RDAs), banks must conduct an external audit of their systems. If satisfactory, they can authorize more RDAs, with the necessary documentation filed with the Reserve Bank. All other instructions from the 2008 circular remain unchanged, and banks should inform their constituents of these updates.
Companies Law
3.
10/36/2001-CLB - dated
19-1-2012
Section 10E of the Companies Act, 1956 - Board of Company Law Administration - Constitution of - Revision of fees payable in terms of regulations 29 & 30 of the CLB Regulations, 1991.
Summary: The Company Law Board has revised the fees under Regulations 29 and 30 of the Company Law Board Regulations, 1991, as per Notification No. GSR 32(E) dated January 18, 2012. The fee for inspecting case documents is increased from ten to fifty rupees per day, and the fee for certified copies of orders or documents is raised from five to ten rupees per page. This revision rescinds the previous Order No. l/10/88-CLV/CLB/Admn/90 from June 4, 1991, without affecting actions taken under that order before this notification.
Highlights / Catch Notes
Income Tax
-
Extended Deadline for Capital Gain Account Deposits u/s 139(4) Validates Early Tax Returns.
Case-Laws - HC : Capital gain - period of limitation for deposit the amount in Capital Gain Account Scheme - Sub-Section (4) of Section 139 provides extended period of limitation as an exception to Sub-Section (1) of Section 139 of the Act. Sub-Section (4) is in relation to the time allowed to an assessee under Sub-Section (1) to file return. Therefore return filed by the assessee before the expiry of the year ending with the Assessment Year is valid under Section 139(4) of the Act..... - HC
-
Car Dealer Expenses on Accessories for Customers Not Sale Promotion or Publicity u/s 115WB(2) for Tax Purposes.
Case-Laws - HC : Fringe Benefit Tax car dealer - Expenditure incurred on accessories which were supplied to customers who have purchased cars cannot be treated as sale promotion including publicity expenses under clause (D) of Section 115WB(2)..... - HC
-
Assessing Officer Must Use DVO's Valuation for LTCG if Lower Than Stamp Duty Value per Section 50C(2.
Case-Laws - AT : Capital gains In view of the provisions of sub-section (2) of section 50C, if fair market value as assessed by the DVO is lower than the value adopted by Stamp Duty Authorities for collecting stamp duty then the value so adopted by DVO has to be adopted by the Assessing Officer for the purpose of computation of LTCG..... - AT
-
Expenses for Black Rose Tennis Court Construction Allowed as Revenue Expenses u/s 37(1) of Income Tax Act.
Case-Laws - HC : Allowable u/s 37(1)- Whether the expenses incurred on construction of tennis court are allowable as revenue expenses or are capital in nature - the expenditure on Black Rose Tennis Court by the appellant firm is allowable u/s 37(1) of the Act .... - HC
-
Tribunal Corrects Obvious Mistake in Stock Valuation; Decision Favors Assessee's Recorded Cost Price.
Case-Laws - HC : Unexplained Investment The assessee had valued the stock at cost price. The cost price as recorded in the books was not rejected or adversely commented upon in the assessment order. Thus an obvious mistake has been corrected by the Tribunal Decided in favor of assessee..... - HC
-
Tribunal denies Section 43B deduction for interest on additional sales tax, overlooks Himachal Pradesh Sales Tax Act provisions.
Case-Laws - HC : Deduction u/s 43B in respect of interest paid on additional sales-tax - Tribunal rejected the claim on the ground that interest did not fall within the expression any sum payable used in Section 43B - Tribunal, not having considered the said provisions of Himachal Pradesh General Sales Tax Act has committed an error in law.... - HC
-
Loan Waiver Deemed Capital Receipt; Section 41 Not Applicable Due to No Previous Allowance or Deduction.
Case-Laws - HC : Waiver of the loan liability - Capital receipt or Revenue receipt - the amount claimed as capital receipt is in respect to which there was no allowance or deduction claimed by the assessee for the previous year. - Thus Section 41 is not attracted..... - HC
-
Assessing Officer can't force depreciation inclusion in books or adjust partner capital for section 40(b) disallowance.
Case-Laws - AT : Disallowance u/s 40(b) - interest to partners - Assessing Officer is not entitled to compel the assessee to provide for depreciation in the books of account and consequently not entitled to recomputed the capital account balances of the partners by deducting the cumulative amount of depreciation that was allowed in the hands of the assessees herein .... - AT
Customs
-
EPCG Scheme: Cars Not Registered as Tourist Vehicles Still Qualify for Customs Duty Exemption Under Notification 44/2002.
Case-Laws - AT : Notification 44/2002 - EPCG Scheme - The facts that the cars were not registered as a tourist vehicle and the Appellants did not bill for the use of car separately cannot be fatal for claiming the customs duty exemption... - AT
-
New Foreign Currency Exchange Rates Effective February 1, 2012, Announced via Notification No. 09/2012-Customs (N.T.
Notifications : Rate of exchange of conversion of each of the foreign currency with effect from 1st February, 2012. - Ntf. No. 09/2012- Customs (N.T.) Dated: January 30, 2012
-
Chennai's Tondiarpet (TNPM) officially designated as an Inland Container Depot via Notification No. 08/2012-Customs.
Notifications : Amends Notification No. 12/97-Customs (N.T.), dated the 2nd April, 1997 thereby notifying Tondiarpet (TNPM), Chennai as ICD. - Ntf. No. 08 /2012 - Customs (N.T.) Dated: January 30, 2012
FEMA
-
Regulations for Money Changing Activities under Circular No. 71: Compliance Guidelines in Currency Exchange Operations per FEMA.
Circulars : Memorandum of Instructions governing money changing activities. - Cir. No. 71 Dated: January 30, 2012
-
Guidelines for Opening and Managing Rupee and Foreign Currency Vostro Accounts by Non-Resident Exchange Houses under FEMA.
Circulars : Memorandum of Instructions for Opening and Maintenance of Rupee / Foreign Currency Vostro Accounts of Non-resident Exchange Houses. - Cir. No. 72 Dated: January 30, 2012
Corporate Law
-
Company Law Update: Revised Fees Under CLB Regulations 29 & 30 as per Circular Dated January 19, 2012.
Circulars : Section 10E of the Companies Act, 1956 - Board of Company Law Administration - Constitution of - Revision of fees payable in terms of regulations 29 & 30 of the CLB Regulations, 1991. - Cir. No. 10/36/2001-CLB Dated: January 19, 2012
-
Amendment to Company Law Board Regulations 2012: Key Changes in Regulation 30 per Notification G.S.R. 32(E) January 18, 2012.
Notifications : Company Law Board (Amendment) Regulations, 2012 - Amendment in regulation 30. - Ntf. No. G.S.R. 32(E) Dated: January 18, 2012
Service Tax
-
General Motors Dealer Not Taxed for Servicing Non-GM Vehicles Under Finance Act 1994, Section 65(9) Definition.
Case-Laws - AT : Authorized service station - authorised dealers of General Motors - also undertook the servicing of vehicles manufactured by the other manufacturers services provided in respect of vehicle cannot be held to be taxable services in the light of the definition of the authorized service station appearing under section 65 (9) of Finance Act 1994.... - AT
-
Government Insurance Business Liable for Service Tax; Not a Sovereign Act under Taxable Services.
Case-Laws - HC : Liability to pay Service tax by government authority undertaking Insurance business Insurance business is not a sovereign act. - service tax would be leviable and it falls within the ambit of taxable service. .... - HC
-
High Court Rules Service Tax Registration Not Required for Cenavt Refund on Software Exports; Supports Previous Case Laws.
Case-Laws - HC : Refund of Cenavt - Requirement of Service Tax Registration - Registration not compulsory for refund - Export of software not a taxable service still refund cannot be denied.... - HC
-
High Court Confirms Service Tax on Preferential Location Charges in Real Estate, Clarifies Tax Scope in Property Deals.
Case-Laws - HC : Levy of service tax upheld on preferential location charges or development of complex..... - HC
-
High Court Upholds Service Tax on Builders After Amendments to Clauses (zzq), (zzzh), and (zzzzu) Confirmed Valid.
Case-Laws - HC : Levy of service tax on Builders - amendment to clauses (zzq), (zzzh) and (zzzzu) - Constitutional validity of levy of service tax upheld..... - HC
-
Service Tax Applicable on Total Charges of Advertising Agencies Due to Ambiguous Client Agreement.
Case-Laws - AT : Advertising Agency Service valuation - In instant case from the agreement between agency & its clients it does not come out clearly that the agency is working as a pure agent of the client. Therefore, service tax would be levied on the gross amount charged from clients.
.... - AT
-
High Court Dismisses Appeal for Service Tax Refund on Interest Collected, Citing Voluntary Payment Not Under Protest.
Case-Laws - HC : Application for refunds - assessee paid service tax on the interest collected from customers voluntarily and not under protest - Claim made under Article 265 of the Constitutions - refund not granted - appeal dismissed. .... - HC
-
Leased Line Telephone Service via ACSR or Copper Wire Classified Under Existing Category Before July 16, 2001.
Case-Laws - AT : Telephone service provided through leased line (ACSR/copper wire) - covered under the existing entry for telephone service even prior to the period 16-7-01..... - AT
Central Excise
-
High Court Rules: Interest Claims Limited to Same Period as Principal, Demand Beyond One Year Set Aside.
Case-Laws - HC : Period of limitation, unless otherwise stipulated by the statute, which applies to a claim for the principal amount should also apply to the claim for interest thereon. - Demand of interest beyond one year set aside.... - HC
-
Central Excise Registration: Premises Change Deemed Minor Breach, Existing Registration Validated, Favoring Assessee. Department Directed.
Case-Laws - HC : Central Excise Registration - Change in premises - new address communicated - existing registration continue and no new registration sought - a technical or venial breach - Decided in favor of assessee with direction to department.... - HC
Case Laws:
-
Income Tax
-
2012 (1) TMI 100
Validity of reassessment proceedings failure to issue notice u/s 143(2) within the period stipulated in the proviso to clause (ii) - effect of Section 292BB - petitioner had filed returns of income vide letter dated 19th November, 2009 in response of notice issued u/s 147/148, adopting their earlier returns u/s 139(1) objections to the reopening were filed by petitioner on 13th July, 2010 and 19th July, 2010 and supplementary objections on 8th August, 2010 - A.O. issued notice u/s 143(2) on 23rd November, 2010 which is beyond the period of six months prescribed in the proviso to Section 143(2)(ii) - petitioner being foreign company, filed an application with the RBI for closure of their liaison office NOC required from the Income Tax Department Held that:- In the present case, the final assessment order has not been passed and only a draft assessment order u/s 144C has been passed. The proviso to section 292BB is applicable. The principle of estoppel u/s 292BB will, therefore, not apply. In respect of returns filed pursuant to notice u/s 148 after 1st October, 2005, it is mandatory to serve notice u/s 143(2), within the stipulated time limit. Thus, in present case, notice u/s 143(2) is deemed not to be served within the stipulated time. See ACIT vs. Hotel Blue Moon (2010 - TMI - 35251 - Supreme Court Of India. In view of the aforesaid position, reassessment proceedings should not continue as no notice u/s 143(2) was served on the assessee within the stipulated time. Accordingly, the writ petition is allowed and a Writ of Certiorari is issued quashing the assessment proceedings pursuant to the notices u/s 148. A Writ of Mandamus is issued to the Department to issue NOC to the petitioner as per the needs and requirements of the RBI within the stipulated time Decided in favor of petitioner.
-
2012 (1) TMI 97
Validity of reopening of assessment previously framed after scrutiny beyond 4 years from the end of relevant A.Y. - assessment reopened on ground that income derived from the works contract would not qualify for deduction u/s 80IA - Explanation to Section 80IA added in year 2009 with retrospective effect from 1.4.2000 A.Y. 05-06 Held that:- By virtue of such retrospective amendment assessment previously framed after scrutiny could not have been reopened beyond the period of 4 years without any thing on record to suggest that the income chargeable to tax had escaped assessment for the failure on the part of the assessee to fully and truly disclose all material facts. The suggestion that the assessee failed to disclose the nature of works executed and that the same was executed only as works contractor and not as a developer, cannot be accepted for two reasons. Firstly, the reasons recorded do not refer to such a ground. Secondly, when the assessee filed the return of income, the Explanation in question was not in picture. It would not be possible to expect the assessee to comply with the requirements of such Explanation by making disclosures in this regard which Explanation did not form part of the statute book when he filed his return Decided in favor of assessee.
-
2012 (1) TMI 96
Fringe Benefit Tax car dealer - levy of FBT on car accessories provided free of cost to the customers Revenue contending it to be sales promotion expenses - Held that:- Expenditure incurred on accessories which were supplied to customers who have purchased cars cannot be treated as sale promotion including publicity expenses under clause (D) of Section 115WB(2). Until and unless a customer purchases a car, no accessories are provided or furnished. The customer was not given a largesse but was offered and has managed to get a better deal for the consideration paid. Revenue did not invoke clause (O) to sub-section (2) to Section 115WB. It was not the contention of the Revenue that the accessories given free of cost as gifts. This is rightly so as gifts are given or presented without consideration. Consideration, in the present case is inbuilt as per person/customer is paying consideration for purchase of the car. For gift under clause (O), the same should be paid without consideration. There is no finding to this effect by the Assessing Officer or by the tribunal. - Decided in favor of assessee.
-
Service Tax
-
2012 (1) TMI 98
Levy of service tax on Builders - amendment to clauses (zzq), (zzzh) and (zzzzu) - constitutional validity - held that:- The fact that the activity in question is an activity which is rendered on land does not make the tax a tax on land. The charge is on rendering a taxable service and the fact that the service is rendered in relation to land does not alter the nature or character of the levy. The legislature has expanded the notion of taxable service by incorporating within the ambit of clause (zzq) and clause (zzzh) services rendered by a builder to the buyer in the course of an intended sale whether before, during or after construction. There is a legislative assessment underlying the imposition of the tax which is that during the course of a construction related activity, a service is rendered by the builder to the buyer. Whether that assessment can be challenged in assailing constitutional validity is a separate issue which would be considered a little later. At this stage, what merits emphasis is that the charge which has been imposed by the legislature is on the activity involving the provision of a service by a builder to the buyer in the course of the execution of a contract involving the intended sale of immovable property. - The submission that the explanation brings in two fictions and is ultra vires the provisions of Sections 67 and 68 of the Finance Act is completely lacking in substance. The levy under Section 66 is on the value of taxable services. Section 65(105) defines taxable services. The explanation cannot possibly be held to be ultra vires Sections 67 and 68. - Constitutional validity of levy of service tax upheld. Service tax on Preferential location charges or development of complex clause (zzzzu) - held that:- These according to the Revenue involve value additions and services when the prospective purchaser purchases a flat or a unit before the completion certificate is obtained. We find merit in the contention which has been urged on behalf of the Revenue that if no charge is levied for a preferential location or development, no service tax would be attracted in the first place. Builders, however, follow the practice of levying charges under diverse heads including preferred development of the property intended to be sold or in terms of a preferred location which is made available to the buyer. Clause (zzzzu) only intends to obviate a leakage of revenue and plugs a loophole which would have otherwise resulted. To reiterate, if no separate charge is levied, the liability to pay service tax does not arise and it is only where a particular service is separately charged for that the liability to pay service tax arises. The fact that the service is rendered in the context of a location, does not make it a tax on land within the meaning of Entry 49 of List II. The tax continues to be a tax on the rendering of a service by the builder to the buyer. There is no vagueness and uncertainty. The legislative prescription is clear. Hence, there is no excessive delegation. - Levy of service tax upheld on preferential location charges or development of complex.
-
Indian Laws
-
2012 (1) TMI 95
Indian Contract Act 1872 - Breach of contract agreement to sale failure of appellant in not having obtained the permission from the Income Tax Authorities u/s 230A nad 269UC - forfeiture of earnest money Held that:- In view of decision of Supreme Court in case of Fateh Chand vs Balkishan Dass, there is no merit in the appeal inasmuch as not only because the appellant was guilty of breach of contract but also because the appellant did not plead and prove the forfeiture of earnest money or any loss having been caused to him. The appellant was, therefore, liable to refund the amount which he received under the Agreement to Sell Decided against the appellant.
9911796707
