Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

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

Penalty – enhanced penalty by Revision Authority Commissioner - There was no basis for Revisional Authority-cum-Commissioner to acquire jurisdiction to impose penalty: High Court

HAVING heard learned counsel for the revenue we are of the view that the provisions of Section 80 of the Act in un-mistakable terms provide that despite the provisions of Section 78, no penalty should be imposed on the assessee for any failure referred in that section if the assessee has shown that there was reasonable cause for the said failure.

Income Tax

Transfer of Trade Mark is not transfer of goodwill - goodwill of a business cannot be sold without business itself – no capital gains on sale of trade mark during relevant period – No undisclosed income when receipts were shown in accounts and matter was pending in Court: ITAT

THE importance of maintaining the distinction between the goodwill and the trademark arises because transfer of goodwill became assessable to capital gains tax with effect from 1.4.1988 by virtue of the amendments made to section 55(2). The capital gains have been assessed as undisclosed income for the assessment year 1996-97. Therefore, the assessment to capital gains can be sustained only if the capital asset transferred was the goodwill of the assessee company; if what is transferred is the trade mark, there will be no capital gains to be assessed since the amendment making the cost of acquisition of trade mark to be taken at Rs. Nil came into effect only from 1.4.2002.

Customs

Misuse of aircraft imported without duty, for Non-scheduled Air Transport Services – Prima facie, Customs has jurisdiction to adjudicate the case – writ petition dismissed: Bombay High Court

THIS is a strange case – it can happen only in the labyrinth of Indian Legal system.

The petitioner had imported an aircraft for Non-scheduled (Passenger) Air Transport Services, without payment of Customs Duty. When the Customs seized the aircraft, he goes to the High Court but withdraws the petition when the department undertook to adjudicate the case within three months.

When the Customs Department issues a Show Cause Notice, he is back in the High Court with a plea that Customs has no jurisdiction because his licence is not cancelled.

See our columns tomorrow for the judgements