Jurisprudentiol – Wednesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax

Banks - Provision for bad debts - mere reduction in Loans and Advances or Debtors on asset side of Balance Sheet to extent of provision for bad debt would be sufficient to constitute a write off: Supreme Court

THE first question is no more res integra . Recently, a Division Bench of this Court in the case of Southern Technologies Limited vs. Joint Commissioner of Income Tax , had an occasion to deal with the first question and it has been answered, accordingly, in favour of the assessee and held, “one must understand `how to write off'. If an assessee debits an amount of doubtful debt to the profit and loss account and credits the asset account like sundry debtor's account, it would constitute a write off of an actual debt. However, if an assessee debits `provision for doubtful debt' to the profit and loss account and makes a corresponding credit to the `current liabilities and provisions' on the liabilities side of the balance-sheet, then it would constitute a provision for doubtful debt. In the latter case, the assessee would not be entitled to deduction after April 1, 1989.

Customs

Notfn. 21/2002-Cus – whether export to SEZ satisfies condition of 'export' envisaged in Exim Policy - in view of over-riding provisions of s. 51 of the SEZ Act and definition of ‘import' under SEZ Act prima facie case in favour – Pre-deposit waived & stay ordered: CESTAT

THE appellants imported Oil Well equipments and claimed the benefit of Notification no. 21/2002, Sr. no. 217. The goods were old and used equipments and import was allowed in terms of para 2.21 of the EXIM Policy 2002-2007 subject to the condition that the goods shall be exported. The appellants also produced an Essentiality certificate from Directorate General of Hydrocarbons, required to be produced as per the condition of the Notification. The importation was made on 10.01.2007. Thereafter, the appellants submitted a photo copy of Bill of Export no. 106/09 dated 29.01.2009, whereby the appellants claimed that the condition of import, which was requirement to re-export of the same, has been fulfilled.

Sales Tax

West Bengal sales Tax Act - failure to produce endorsed copy of declaration for transport by CHA– penalty imposable: Supreme Court

ON July 30, 2002, a show-cause notice was issued to the appellant by the Assistant Commissioner of Commercial Taxes alleging contravention of Section 68 of the Act. The appellant was asked to explain as to why penalty should not be levied for such contravention. In reply, the appellant contended that he had no obligation or liability under Section 68 of the Act in respect of transportation of goods from Haldia to Chichira [exit checkpost]. According to him, the goods could be moved only by the owner or the importer directly by itself or through its transporter.

See our columns Tomorrow for the judgements