Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Income Tax - payment of advance-tax and self-assessment tax is not an expenditure incurred for the purpose of business. This is an item of appropriation of income – penalty on Microsoft sustained – ITAT

The assessee had taken loan of about Rs. 13.13 crore from Microsoft Corporation, U.S.A.. Due to fluctuation in rate of the foreign exchange, a loss of Rs. 39.90 lakh was incurred in this year on account of the restatement of the liability on the closing day of the previous year. This amount was claimed as a revenue loss. The AO considered the facts and the submissions. It was mentioned that it is the assessee who claimed revenue loss occurring on account of change in rate of foreign exchange. Therefore, the onus of proving that the loss was a revenue loss is on the assessee. This onus has not been discharged. Therefore, the loss was disallowed. Penalty was also imposed.

Central Excise

An assessee can claim CENVAT Credit only on the basis of invoices of duty paid goods which had actually reached the premises of the assessee and not otherwise – P&H HC holds the order of Tribunal allowing the credit as perverse and speculative.

THE revenue is in appeal against the CESTAT order allowing the appeals of the assessees who were denied credit on the invoices issued by a registered dealer by the lower authorities. The credit was denied based on some investigations conducted at the dealer’s end. Based on the statements recorded from various persons it was held by the lower authorities, that the goods received were not co-relatable to the invoices issued and the trucks in which the inputs were shown to have been received were actually used for transporting some other goods on the same day.

Customs

CHA - Written Examination conducted before 2004 and oral examination conducted after 2004. Department directed to grant relief: High Court

IN the present case, the Madras High Court dealt with a different issue. The petitioners had cleared the written examination under CHALR 1984, apparently before new regulations, namely, CHALR 2004 came into force. The department conducted oral examination for these petitioners after February 23, 2004 and the petitioners passed the oral examination after 2004.

See our columns Tomorrow for the judgements