Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Valuation – assessment made purely on basis of LME Bulletin without any corroborative evidence of contemporaneous import, not valid: Supreme Court

NO details of any contemporaneous imports or any other material indicating the price notified by the LME had either been referred to by the adjudicating Officer in the adjudication order or such material was placed before the Tribunal at the time of hearing of the appeal. Learned counsel for the Revenue has not been able to controvert the said observations by the Tribunal. In that view of the matter no fault can be found with the order passed by the Tribunal setting aside the additional demand created against the assessee.

Income Tax

Capital gains vs business income - Frequent sale and purchase of shares in short period with motive to earn profit is a case of short term capital gains and not business profit: ITAT

ASSESSEE is an individual and a Director in a few companies. All the companies were involved in the business of trading of shares. For the impugned year assessee filed return of income declaring business income as ‘NIL' and showing short term capital gain. Considering the volume, frequency and investment in the share trading business the AO took the view that the short term capital gain should be taxed as business income. CIT(A) also affirmed the view of the AO. Before the Tribunal the assessee argues that she is a high net worth investor having substantial capital. Assessee further pleaded that many of the transactions are delivery based transaction and the principles established by the ITAT in the case of Gopal Purohit vs. JCIT (2009-TIOL-319-ITAT-MUM) will apply to the facts of the case and further submitted that volume, frequency and other factors did not effect the nature of income.

Customs

Drawback repaid with interest by assessee for not realizing export proceeds within time – Since RBI gave ex-post facto extension of time for recovery of export proceeds and assessee having realized them within the stipulated time period, refund of drawback amount repaid earlier with interest allowable – Revenue also directed to pay interest @6% for not sanctioning refund amount in time: High Court

THE assessee, a garment exporter, exported consignments of garments under 37 shipping bills under claim for drawback. The drawback of Rs. 14,58,368/- was sanctioned to them. Since they did not realize the export proceeds within the first six months, they sought an extension of time for realization of export proceeds. In the meanwhile they repaid the drawback amount with interest @ 24% per annum totaling Rs. 22,15,103/- (inclusive of drawback amount) on 16.06.1999.

See our columns Tomorrow for the judgements