Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Business Auxiliary Service – Section 65(19) of Finance Act, 1994 underwent a change retrospectively and in view of this it cannot be attributed to assessee that there was suppression of facts for a period prior to issue of notification dated 01.03.2005: High Court

REVENUE filed an appeal against the order of CESTAT wherein the Tribunal set aside the order of Service Tax Commissioner holding the assessee liable to pay service tax on the process charges collected by them for the job work activity of enhancing the acidic value of humic acid supplied to them by its sister concern.

Income Tax

Sec 17(3) - Can non-compete fees be treated as profit in lieu of salary - NO, it cannot be taxed under head 'salary' as there is clear-cut finding that assessee provided consultancy service to his former employer: Madras HC

ASSESSEE, a qualified chartered electrical engineer, received non compete fee from the employer company on retirement - claimed the same as exempt being capital receipt - AO took the view that the same is profit in lieu of salary and reopened the assessment and made the addition - CIT(A) confirmed the order of the AO - Tribunal deleted the addition but upheld the reopening - Revenue filed further appeal to the High Court and argues that the amount of non-compete fee was actually received in connection with the employment and therefore the AO is justified in treating the same as profit in lieu of salary.

FEMA

Recording of statement pursuant to issue of summons under s. 37 of FEMA does not necessitate presence of an advocate since it is only a preliminary enquiry – Writ Petitions dismissed: Madras High Court

THIS is a case under the FEMA where the High Court categorically held that there is no requirement of an advocate's presence while recording statements from persons summoned by the officials of Enforcement Directorate. But what about summons under Customs/Central Excise/Service Tax legislations? In this regard please refer to our TIOL-DDT 1115 dated 21.05.2009 where this aspect was analyzed threadbare and we concluded by saying that a person summoned before a Central Excise/Customs/Service Tax Officer does NOT have the right to be accompanied by an Advocate.

See our columns Tomorrow for the judgements