Jurisprudentiol –Monday's cases

By Vijay Kumar

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

Income tax - Are forward contracts covered u/s 43A - Can losses arising from such contracts be claimed as deduction for computing taxable income - YES, says ITAT

THE issue before the Tribunal is - Whether forwards contracts are covered under section 43A and whether losses arising from such contracts can be claimed as deductions in computing taxable income. The second issue is that whether an assessee can be held liable for a deferred tax liability on a retrospective basis by reason of amendment u/s 115JB and be subject to interest u/s 234B. And the third issue is - Whether the payments made towards creation of a reserve set aside for ascertained capital expenditure can be deducted while computing book profits u/s 115JB.

Central Excise/Customs/Service Tax

Issuance of an addendum after passing O-in-A by Commissioner (Appeals) – Board Circular dated 16.12.1999 prohibits issuance of corrigendum/addendum by adjudicating authority and is not relevant in the present context – Revenue appeal rejected: CESTAT

THE Commissioner (Appeals) passed some Orders-in-Appeal on 31.08.2007. After more than five months of issuance of this order, he issued an Addendum on 21.02.2008. Revenue is appalled with such an addendum issued by the Commissioner (Appeals). Their main concern is that since the appeal period in respect of O-in-A dated 31.08.2007 received on 30.10.2007 got over on 29.01.2008, the Commissioner (A) had erred in passing such an addendum.

Central Excise

Inputs found short between physical stock taking and book stocks – Demand of CENVAT Credit - Case not hit by proviso clause (a) to s.35B(1) of the CEA, 1944 – Appeal maintainable: CESTAT

A show-cause notice was issued to the appellant for contravention of the provisions of Rule 10 of the Central Excise Rules, 2002 and Rules 3 and 9(5) of the CENVAT Credit Rules, 2004 alleging that they have failed to maintain proper accounts of the finished products and of the CENVAT inputs resulting in the short payment and in availing of inadmissible CENVAT credit in respect of the quantity of the finished products and CENVAT inputs respectively found short at the time of the stock-taking conducted by the appellant.

See our columns Monday for the judgements