Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

CENVAT Credit – Inputs used for repair and maintenance of plant and machinery – Entitled: High Court

THE substantial question of law raised by the Revenue before the High Court:

Whether the Hon'ble CESTAT is correct in allowing the benefit of input credit in respect of goods which were used for repair and maintenance of plant and machinery when the said issue was already decided by the Larger Bench of the Tribunal, New Delhi and the Hon'ble Supreme Court as inadmissible.

Income Tax

Can AO reject books of assessee on failure to reconcile entries of seized papers with books of account? - YES, says ITAT

ASSESSEE company is engaged in the business of catering; surrenders certain sum during Survey by department but fails to include the surrender income at the time of filing return. After scrutinizing the books of the assessee AO found that receipt as present on Annexure A-1 (5) is not recorded by the assessee in its books. Thereafter observing other anomalies in the books, the AO rejected the books. AO further observes that getting the accounts audited u/s. 44AB or under the Companies Act, would not mean that the assessee has recorded all the receipts and the payments in his books of accounts as the auditor can only audit the entries, which were entered into the books of accounts, and are not supposed to know about the entries which are not recorded in the books.

Service Tax

Penalty - Section 80 – Is bona fide belief consideration for setting aside penalty - Tribunal has not assigned any reason – matter remanded: High Court

WHEN it came to the question of imposing of penalty the tribunal has merely stated that the appellants were under a bonafide belief that they would not be liable to pay service tax penalty under Section 80 of the Finance Act, 1994 and therefore, set aside the said penalty. We find that in arriving at such a conclusion, the tribunal has not assigned any reason and as to whether a bonafide belief on the part of the assessee in regard to the payment of tax would be consideration for setting aside the order imposing penalty.

See our columns TOMORROW for the judgements