Jurisprudentiol–Monda's cases

By Vijay Kumar

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

AO does not allow deduction of total interest expenditure from total interest income – Assessee files revised return apportioning HO expenditure to EOU and non- EOU based on assets thereby getting more tax benefit - no reason to doubt bona fide of assessee – apportionment correct: ITAT

IN its return of income filed for the year under consideration, the assessee company had claimed a deduction of Rs.17 ,13,63,585 /- under Section 10B in respect of its 100% export oriented unit (EOU) at Mundra , Gujarat. During the course of assessment proceedings, it was noticed by the AO that the assessee company has earned interest income of Rs.898.81 lakhs during the year under consideration. The said interest income, however, was not shown by the assessee company separately in its profit & loss account and the same was adjusted against interest expenditure of Rs.5,774.18 lakhs thereby debiting the finance charges to the profit and loss account at the net amount of Rs.4875.37 lakhs (Rs.5774.18 lakhs - Rs.898.81 lakhs).

Service Tax

Courier service company collected Service Tax from clients but did not pay to Government for four long years – No cause for reduction in mandatory penalty u/s 76 - Tribunal sets aside Comm (A)'s order and allows Revenue appeal.

THIS is a Revenue appeal in a Service Tax case. Revenue is aggrieved that the Commissioner(A) was wrong in reducing the penalty imposed by the lower adjudicating authority.

The respondent is an established courier company. They provided courier services to their customers and collected the Service Tax from them but did not pay the same to the Central Government. This, they could manage to do for nearly four years.

On being pointed out, they paid the Service Tax. They also paid the interest due.

Needless to mention, a demand notice followed and which also proposed imposition of penalties under sections 76, 77 and 78 of the Finance Act, 1994.

See our columns Monday for the judgements