Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Simultaneous availment of CENVAT credit and depreciation on capital goods – revised IT return filed reducing depreciation amount by CENVAT Credit – adjudicating authority allowing credit and dropping demand – when demand gets dropped, penalty cannot survive: CESTAT

THE appellant availed CENVAT credit of Rs.2,24,400/- on capital goods and simultaneously claimed depreciation of the duty element paid on the capital goods under section 32 of the Income Tax Act, 1961 during the period 2004 -05. On being pointed by the Excise audit, the appellant subsequently filed revised Income Tax returns for the year 2005-06 and 2006-07 wherein they reduced the amount of depreciation claimed on account of capital goods to the extent of amount on which they have availed CENVAT credit.

Income Tax

Business expenditure - Whether necessity of supporting bills cannot be dispensed with even if payments are made by credit cards? - Yes, payment by credit card on its own does not prove genuineness of expenditure: ITAT

THE issue before the Tribunal is - Whether the necessity of the supporting vouchers/ bills cannot be dispensed with to prove the genuineness and purpose of the expenses even if the payment was made through the credit card. Whether the assessing officer was justified in disallowing the purchases done by the assessee as not genuine when the assessee has produced the evidence of payment of these purchase through cheques. The Tribunal says YES for the first question and NO for the second.

Central Excise

Whether the process of pickling and oiling of HR sheets/strips amounts to manufacture u/s 2(f) of CEA, 1944 and whether Cenvat Credit can be availed on HR steel sheets/strips – Issue of Recurring nature – Out-of-turn hearing granted: CESTAT

THIS application filed by the appellant seeks out-of-turn hearing of their appeal, mainly on the ground that the issue involved in this case is of recurring nature.

See our columns Tomorrow for the judgements