Jurisprudentiol – Friday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

If all the machineries that are required to set up a plant can get a benefit, there is no justification to deny the benefit to the plant itself - Desalination Plants being Water Treatment Plants are entitled for exemption from Central Excise duty in terms of notification 6/2006-CE: CESTAT

It is only logical that the exemption, which is available to all items of machinery including instruments, apparatus and appliances, auxiliary equipment and their components/parts required for setting up of water treatment plants, should be available to the plant also. Any contrary interpretation, which defeats the objective of the Notification, needs to be avoided.

Income Tax

Interest Income from non-resident company cannot be treated as Fee for Technical Services, taxable at 20%, not 30%: In re-assessment proceedings, ITO's jurisdiction is confined to only such income which has escaped tax – assessee cannot be permitted to re-agitate questions which had been decided in original assessment: ITAT

In proceedings under section 147 of the Act, the Income tax Officer may bring to charge items of income which had escaped assessment other than or in addition to that item or items which have led to the issuance of the notice under section 148 and where reassessment is made under section 147 in respect of income which has escaped tax, the income-tax Officer's jurisdiction is confined to only such income which has escaped tax or has been under assessed and does not extend to revising, reopening or reconsidering the whole assessment or permitting the assessee to reagitate questions which had been decided in the original assessment proceedings. It is only the underassessment which is set aside and not the entire assessment when reassessment proceedings are initiated. The Income-tax Officer cannot make an order of reassessment inconsistent with the original order of assessment in respect of matters which was not the subject matter of proceedings under section 147. An assessee cannot resist validly initiated reassessment proceedings under this section merely by showing that other income which had been assessed originally was at too high a figure except in cases under section 152(2).

Customs

Appeal against Tribunal order setting aside confiscation and penalty not maintainable as High Court does not have jurisdiction over valuation matters - Revenue at liberty to approach Apex Court: Madras High Court

Whether or not the authorities were justified in holding that the respondents had undervalued the goods for the purposes of assessment of duty - this question shall be raised by filing a statutory appeal before the Supreme Court.

See our columns tomorrow for the judgements