Recent important tax caselaws

Below are the recent important tax caselaws related to Income tax, Service tax, Excise in brief. The citation is made available for your benefit :

INCOME TAX

SECTION 2(47)

CAPITAL GAINS - TRANSFER

Immovable property : Where in terms of joint development agreement of land, assessee executed a power of attorney in favour of representative of builder agreeing to authorize him to execute sale of built-up area, even though builder could not subsequently complete said agreement, in view of fact that substantial construction had already been completed, transfer took place within meaning of section 2(47) and, thus, assessee was liable to pay capital gain tax on such transfer - Smt. Prameela Krishna v. Income-tax Officer, Ward -1(2), Mysore (2014) 42 taxmann.com 185 (Karnataka)     SECTION 12AA CHARITABLE OR RELIGIOUS TRUST - REGISTRATION PROCEDURE Scope of power : Question as to whether trust is created or established for benefit of any particular religious community or caste would be relevant only when income of trust is being assessed in terms of section 11, however, at time of disposing of application of a trust seeking registration, Commissioner has to merely decide whether said trust has fulfilled necessary requirements of registration as provided under section 12A - Commissioner of Income-tax, Rajkot –II v. Leuva Patel Seva Samaj Trust (2014) 42 taxmann.com 181 (Gujarat)       SERVICE TAX SECTION 65(27) COMMERCIAL TRAINING OR COACHING SERVICES - STAY ORDER Sale of CD ROMs containing "live virtual class" provided to enhance skill or impart knowledge on certain subjects to buyers of CDs and imparting "online learning/e-learning" to certain customers not covered under Commercial Training or Coaching Services - Sun Microsystems (I) (P.) Ltd. v. Commissioner (LTU), Bangalore (2014) 42 taxmann.com 321 (Bangalore - CESTAT)       SECTION 93 EXEMPTIONS - SERVICE TAX If a co-owned property is rented out by its co-owners to a single person, every co-owner can avail small service provider's exemption separately - Manju Champaklal Bafna v. Commissioner of Service Tax, Ahmedabad (2014) 42 taxmann.com 320 (Ahmedabad - CESTAT)

Assessee engaged in running a blood bank cannot be said to be engaged in providing medical facilities so as to be entitled to exemption under section 11

[2013] 38 taxmann.com 360 (Ahmedabad - Trib.)

IN THE ITAT AHMEDABAD BENCH 'A'

Advance Transfusion Medicine Research Foundation

v.

ADIT (Exemption), Ahmedabad*

G.C. Gupta, VICE-PRESIDENT
AND ANIL CHATURVEDI, ACCOUNTANT MEMBER

IT Appeal No. 399 (Ahd.) of 2013
[ASSESSMENT YEAR 2009-10]

SEPTEMBER  20, 2013 

Section 2(15), read with sections 11 and 13, of the Income-tax Act, 1961 - Charitable purpose [Medical relief - Blood bank] - Assessment year 2009-10 - Assessee, registered under section 12AA, was engaged in running a blood bank - During year, it had entered into transaction of sale of fresh frozen plasma (FFP) with its associated concern - Assessing Officer noticed that assessee had supplied FFP to patients at higher price and held that assessee was not eligible for deduction under section 11 as it had granted concessional benefit to its associated concern - Whether since assessee was not an educational institution and it also could not be said to be a hospital or medical institution as it was not engaged in dispensing medical facility, assessee was not entitled to exemption under section 11 and, thus, no interference with order of Assessing Officer was called for - Held, yes [Para 15] [In favour of revenue]

FACTS

■		The assessee, a company registered under section 12AA, had entered into transaction of sale of fresh frozen plasma (FFP) with its associated concern and during the year it had supplied FFP to said concern.
■		The Assessing Officer found that the assessee had supplied FFP to patients at higher price and had also charged service charges from patients which were not charged to the said concern. The Assessing Officer was, thus, of the view that since the assessee had provided concessional benefit to its associated concern it was not eligible for deduction under section 11.
■		The Commissioner (Appeals) upheld the order passed by the Assessing Officer.
■		On second appeal:

HELD

■		As per sub-section (6) of section 13 a trust running an educational institution or a medical institution or a hospital shall not lose the benefit of exemption of any income other than the value of benefits of educational or medical facilities provided to the specified persons, solely on the ground that such benefits have been provided to specified persons. It should be noted that the sub-section covers, (i) only those trusts running an educational institution or a medical institution or a hospital; (ii) the benefit extends only in respect of educational or medical facilities and not any other facility. In the present case, it is an undisputed fact that assessee has entered into transactions with the related concerns. It is also a fact that it cannot be said that the assessee is an educational institution and cannot be said to be a hospital or medical institution as it is not engaged in dispensing medical facility though it is engaged in running a blood bank. [Para 15]
■		Considering the totality of facts, the assessee cannot be considered to be engaged in providing medical facilities so as to be entitled to exemption of income. In view of the aforesaid facts, there was no reason to interfere with the order of the Assessing Officer. [Para 15]