Jurisprudentiol– Wednesday's Cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.INCOME TAX

Income tax – Sec 80IA – Assessee's unit is located in hill state of Himachal Pradesh – receives freight subsidy for lack of rail network in state – claims deduction – Since subsidy income is not operational profit derived from undertaking, it is not eligible for deduction – High Court

With such an expression comprehensively explained in many of the judicial pronouncements, including the ones from the Apex Court, the High Court has held that since the transport subsidy received by the assessee is not a profit derived from business and it is not an operational profit and also the fact that the source of the subsidy is not the business of the assessee but scheme of the Central Government, it is not an eligible profit for deduction u/s 80IA.

CUSTOMS

In view of the fact that appeals relating to year 2002-2003 are coming up for final hearing now, CHA's application for early hearing allowed –CESTAT

Naturally, in the absence of completion of any proceedings of suspension, the request for early hearing could not have been made. Therefore, we find that this decision also cannot be applied to the present facts. Without going into the merits as to whether the revocation is justifiable or not, in view of the large pendency of appeals before this Tribunal and in view of the fact that business of the CHA has remained closed for nearly two years and will remain closed for years, we allow the early hearing application.

CENTRAL EXCISE

Appellant procuring inputs against contractual agreements for agreed prices – later reducing the price with retrospective effect and issuing debit notes – No cause for reducing the CENVAT Credit availed by treating reduced portion of value as deposit – CESTAT

In these circumstances, the appellants have rightly claimed the CENVAT Credit on the actual duty paid. There is no provision in the CENVAT Credit Rules that the appellants are not entitled to take the CENVAT credit of such duty paid. We have gone through the reliance placed by the learned Advocate and ratio of those reliance are that the duty has to be determined by the jurisdictional officer of the supplier unit and it is not done, it cannot be disputed by the officer of the recipient unit.

See our columns Tomorrow for the judgements