TaxTMI 
TaxTMI 
2009 (6) TMI 960
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....ed in metal fabrication work for various parties. In fact, among the several contracts executed by the respondent during the year 1997-98, they paid tax at compounded rate under section 7(7A) for some items of work which is 70 per cent of the rate of tax payable on the entire contract amount for the item of work under the Fourth Schedule to the Act. So far as the contract receipt for the balance items of work is concerned, the respondent claimed assessment under section 5C of the Kerala General Sales Tax Act, 1963 (hereinafter called, "the Act") which provides for various deductions from the contract receipts for determination of the taxable turnover. Even though various deductions including labour charges were claimed under section 5C, the....
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....he transfer of property involved in the execution of works contract shall, from the 1st day of April, 1984, be arrived at after deducting the following amount from the total amount received or receivable by the dealer for the execution of the contract- (a) . . . (b) . . . (c) all amounts towards labour charges and other service charges such as- (i) charges for planning and designing and the architect's fee; (ii) charges for obtaining on hire or otherwise, machinery and tools used for the execution of the works contract; (iii) cost of consumables used; (iv) cost of establishment of the dealer to the extent it is relatable to the supply of labour and services; (v) profit earned by the dealer to the extent it is ....
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.... [1998] 229 ITR 383 that the Tribunal can only entertain new questions of law arising from facts found by the income-tax authorities. In other words, Tribunal should not allow fresh facts and grounds based on the same to be raised before it. Therefore, on the face of it, we are of the view that the claim of depreciation raised by the respondent before the Tribunal in second appeal for the first time should not have been entertained by the Tribunal. However, since the Tribunal has decided the eligibility on the merits, we proceed to consider the respondent's entitlement for claim of depreciation as a deduction in the taxable turnover for works contract under section 5C(1)(c)(ii) of the Act. The Government Pleader contended that the clause....
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....re allowable. However, counsel for the respondent pointed out that the sub-heading of the section does not control the specific provisions under the said sub-clause which includes deduction of cost of consumables, cost of establishment of the dealer to the extent related to supply of labour and services, and profit earned by the dealer to the extent relatable to supply of labour and services. Even though sub-clause (c)(ii) may not control the entries specifically covered therein, we notice that what are allowable under sub-clause (ii) are charges incurred by the contractor for taking on hire machinery or tools or similar expenses. The word "otherwise" according to counsel for the respondent should take in depreciation on machinery used b....