Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Income tax - Can compensation received in lieu of future profits from abandoned project be taxed as business profits particularly when expenses attributable to the project were allowed as revenue expenditure? - YES, says Delhi HC

THE major issue before the High Court is - Whether compensation received by the assessee in lieu of future profits from the abandoned project is taxable as business profits particularly when the expenses attributable to the abandoned project were allowed as revenue expenses. YES is the HC's answer. The other issues are - Whether once revenue proves that a particular receipt is income, the burden to prove that such receipt is not income shifts on the assessee and Whether the restrictive covenant having life span of three years and the same can be withdrawn at any time during this period after the approval of the other party, changes the colour of the receipt from revenue to capital.

Service Tax

Service Tax - deputation of trained software personnel - Manpower supply or Software development - just because the assessee is registered under a service for a latter period, it cannot be presumed that they were providing the same service for the previous period - Pre-deposit ordered - CESTAT

THIS is an application filed in an appeal filed against the order passed by the Commissioner of Central Excise, Bangalore on 29/1/2010. By the said order, the Commissioner has confirmed a demand of Rs.66,26,506/- being the service tax and has appropriated an amount of Rs.32,16,436/- already paid by the appellants.

Central Excise

Allegation of forged signature is a serious allegation which is to be dealt with severely and expert opinion should have been obtained to corroborate the same but no efforts have been made and merely penalties were imposed on the appellants – Drugs and Cosmetics Act, 1940 does not deal with export of drugs - Order of confiscation and imposition of penalties set aside: CESTAT

THE facts of the case are that the exporter filed shipping bills through their CHA for export of the goods viz. ZOLEDRONATE. The Customs department insisted that to export the said goods the exporter required a NO Objection Certificate issued by the Asst. Drug Controller of India permitting such clearance. Consequently, the goods were brought to the export shed. On scrutiny of the documents of export submitted by the appellants, it was observed that the signature of the Asst. Drug Controller on the No Objection Certificate was forged. Accordingly, the goods were seized and confiscated. Redemption fine was imposed on the exporter and penalties were imposed on the exporter, CHA and other individuals by the Commissioner of Customs (Export), Mumbai.

See our columns Tomorrow for the judgements