Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax

Income tax - assessee earns lease rental by financing motor vehicles - it is not 'clothes' of transactions but real substance to decide taxability - interest income earned in form of lease rental is taxable under Sec 2(7) of Interest Tax Act: ITAT Special Bench

THE verdict has gone against the assessee with the Special Bench subscribing to the views of the Special Bench decision in the Gujarat Gas Financial Services Ltd and held that it is only the substance of the transaction which is to be reckoned with and not the nomenclature given to it. Since it was a simple case lease rental, the income earned by the assessee can be brought to tax as “interest” u/s 2(7) of Interest Tax Act. It did not find any substantive reason to differ with the views of the Special Bench in Gujarat Gas Financial Services case as the transactions of the assesee were already held to be the transactions in the nature of finance/loan transaction and, such findings have attained finality.

Excise

Whether the expenses of loading of goods within the factory for clearance to a buyer are includable in the assessable value of the goods where such expenses are incurred by, or on behalf of, the buyer – matter referred to Larger Bench

NEARLY a year and a half ago, when we reported the Tribunal decision in Albright & Wilson Chemicals India Ltd. [2007-TIOL-858-CESTAT-Mum] , with the caption "Gypsum transported from appellant's yard to buyer's cement factories by contractor hired by buyer - Only amounts which buyer is liable to pay to assessee are includible in transaction value: Tribunal", a netizen while appreciating our "google-photogenic" story had expressed his reluctance to go along with the decision.

Excise

CENVAT Credit – shortage of inputs – seizure - Mere allegation or mere initiation of investigation does not justify detention of goods. Not completing the investigation after seizure does not rule out malafides on the part of the officers – Finance Secretary directed to file an affidavit

THIS is a case which apparently boomeranged on the Excise Department. They seized some goods on the ground that there was some discrepancy in the CENVAT Credit inputs account. Though receipt was shown in the register, it was not shown in the excel sheet maintained in the computer. Now the excel sheet entries can be easily changed, not the entries in the hard copy – that did not deter the Department from going ahead with the seizure.

See our columns tomorrow for the judgements