Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Interest has been waived by Commissioner(A) regardless or by being oblivious to provisions of Explanation to sub-section ( 2B ) of Section 11A - CESTAT terms it as illegal and sets aside order

Explanation to sub-section ( 2B ) declares that interest under section 11AB shall be payable on the amount paid by the assessee under sub-section ( 2B ). This liability of the assessee is also explicit from the text of sub-section (1) of section 11AB of the Act .

Income Tax

Assessee relinquishes life membership of registered society - receives sum as part of quid pro quo deal - Such sum cannot be treated as capital in nature as assessee was not earning any income by holding posts - no monetary loss involved - to be treated as income from other sources: High Court

RECEIVING any form of compensation may be a short-term relief for the recipient but it can result in a source of discomfiture if it is not properly classified in one's income return. This is what happened in this very interesting case. The assessee receives a sum in the form of honorarium or quid pro quo for having agreed to relinquish Secretaryship of a Society which runs two schools in the city. Now the question is that whether it is capital receipt or revenue receipt. For the AO it is revenue receipt but the assessee treats it as a payment having nexus with his goodwill and relinquishment of the society post. And the Tribunal agrees with the assessee.

Customs

Rejection of applications by Settlement Commission – A common application for settlement of cases against three different SCNs not maintainable unless duty liability in excess of Rs 3 lakhs is shown in each of three different cases in terms of Sec 127B (1)(b) of Customs Act - Writ Petitions dismissed: Madras High Court

The High Court held that the petitioner had not complied with the conditions prescribed for admitting his application by the Settlement Commission in terms of Section 127B (1)(b) of the Act. It was held that the exports were undertaken by the petitioner under different shipping bills through different ports of export and the show cause notices issued by three different authorities cannot be clubbed to be regarded as one for the purpose of these provisions in spite of the applicant having a single Import-Export code.

See our columns Monday for the judgements