Treatment of Waiver of loan granted by government in determination of actual cost
Where the government granted loan to the assessee for acquisition of capital assets and later on the government waived the loan so granted then the amount of loan waived by the government would have to be reduced from actual cost of the assets. Accordingly, depreciation would be computed on the amount remaining after the reduction of loan amount waived.- Vide Steel Authority of India Ltd. v. Commissioner of Income Tax (2012) 45 (I) ITCL 11 (Del-HC)
SERVICE TAX
Club and association service-Clubs providing services to its members-Taxability of
- In view of the mutuality and in view of the activities of the club, if club provides any service to its members may be in any form including as mandap keeper, then it is not a service by one to another in any form including as mandap keeper, then it is not a service by one to another, as foundational facts of existence of two legal entities in such transaction is missing.
- It is true and sale and service are two different and distinct transaction. The sale entails transfer of property whereas in service, there is no transfer of property. However, the basic feature common in both transaction requires existence fo the two parties; in the matter of sale, the seller and buyer, and in the matter of service, service provider and service receiver. :-Ranchi Club Ltd. v. CCCE&ST (Jhar-HC) W.P. (T) No. 2388 of 2007, decided on 15-3-2012
Where the government granted loan to the assessee for acquisition of capital assets and later on the government waived the loan so granted then the amount of loan waived by the government would have to be reduced from actual cost of the assets. Accordingly, depreciation would be computed on the amount remaining after the reduction of loan amount waived.- Vide Steel Authority of India Ltd. v. Commissioner of Income Tax (2012) 45 (I) ITCL 11 (Del-HC)
SERVICE TAX
Club and association service-Clubs providing services to its members-Taxability of
- In view of the mutuality and in view of the activities of the club, if club provides any service to its members may be in any form including as mandap keeper, then it is not a service by one to another in any form including as mandap keeper, then it is not a service by one to another, as foundational facts of existence of two legal entities in such transaction is missing.
- It is true and sale and service are two different and distinct transaction. The sale entails transfer of property whereas in service, there is no transfer of property. However, the basic feature common in both transaction requires existence fo the two parties; in the matter of sale, the seller and buyer, and in the matter of service, service provider and service receiver. :-Ranchi Club Ltd. v. CCCE&ST (Jhar-HC) W.P. (T) No. 2388 of 2007, decided on 15-3-2012
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