Jurisprudentiol – Wednesday's cases

By Vijay Kumar

Income Tax

Merely because assessee had claimed expenditure, which claim was not accepted or was not acceptable to Revenue, that by itself would not, attract penalty under Section 271(1) (c): Supreme Court

BY any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. It is obvious that it must be shown that the conditions under Section 271(1)(c) must exist before the penalty is imposed. There can be no dispute that everything would depend upon the Return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise.

As the assessee had furnished all the details of its expenditure as well as income in its Return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the Return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, attract the penalty under Section 271(1) (c).

Customs

Description of goods in invoice and shipping bill for export of Poly Acrylic/Wool/Lycra Blended knitted garments merits classification under S. No. 60.07 of Drawback Schedule and not 61.01 as claimed by petitioner - When interest under Section 75A(2) is mandatory and automatically applies for recovery of excess drawback, no separate notice required for recovery of interest: High Court

THE assessee was engaged in manufacture and export of knitted garments. They exported Poly Acrylic/Wool/Lycra Blended knitted garments under claim for drawback. Subsequently, lower authority issued a notice to recover excess drawback on the ground that the goods exported were blended knitwear which merited classification under Serial No.60.07 of drawback schedule and not under S. No. 61.01 as claimed by the assessee and the demand was confirmed. An appeal to the Commissioner (Appeals) failed.

However, the Commissioner (Appeals) set aside the demand of interest since there was no mention of this in the notice. Cross appeals were filed by the assessee challenging the recovery of excess drawback and Revenue for recovery of interest which was earlier set aside by the Commissioner (Appeals). Joint Secretary (Drawback) while dismissing the appeal filed by the assessee allowed the appeal filed by the Revenue resulting in a Writ Petition before the High Court.

See our columns Tomorrow for the judgements

Tomorrow is Ram Navami Holiday.