Jurisprudentiol–Tuesday's cases

By Vijay Kumar

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

Central Excise – No bar in assessee with LTU to pre-deposit at any of their factories – When Commissioner (Appeals) at Bangalore LTU has power to take up an appeal of Kolkata unit of assessee, pre-deposit made by its Vadodara unit cannot be held as invalid – Matter remanded for consideration of appeal without insisting on further pre-deposit – CESTAT

THE Tribunal after considering the submissions from both sides observed that when the assessee was recognized as LTU by the Department, the amount pre-deposited by one their manufacturing units should be considered in as much as Commissioner (Appeals) at LTU Bangalore has taken up disposal of appeal against the assessees West Bengal unit.

Income Tax

Income tax - If an expenditure is incurred for enhancing efficiency and no asset is created, it is to be treated as revenue expenditure - legal and professional charges are revenue expenditure; 'Router' is integral part of computer system and is entitled to depreciation at rate of 60% - ITAT

THE battle over whether an expenditure is revenue or capital in nature is legion. Revenue misses no opportunity to brand an expenditure as capital in nature even if it may take an additional pound of foolhardiness! In the latest case decided by the Delhi Bench of ITAT the AO treated legal and professional charges as capital expenditure and disallowed deduction. And one mantra which we may help in distinguishing an expenditure, the Tribunal notes, is that if an expenditure is incurred to enhance the efficiency of business and no asset is created, such an expenditure is to be treated as revenue expenditure. Merely following the enduring benefit theory may not help in doing justice. And thus the Tribunal has allowed the assessee's appeal.

FERA/FEMA

FERA - Appeal filed by Director is appeal by Central Government; Possession of foreign exchange not illegal; going to Burma Bazar with foreign exchange does not mean, respondents were going there to sell it: Madras HC

THE Supreme Court had held that the expression 'Government of India' includes all the officers functioning under the three wings and that the Deputy Director, Enforcement Directorate is an officer of the Government of India coming under the Department of Revenue, Ministry of Finance and is not independent of the Government of India; he is an Officer of the Union and his acts and duties are only official and he is acting for the Government of India. The High Court observed that when the appeal is filed by the Union of India represented by the Director, then the appeal is filed by the Central Government and the Central Government is the aggrieved party. The Central Government will have to be represented by an officer and the officer in this case is the proper officer.

See our columns Tomorrow for the judgements