Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Income tax - Whether when expenses are incurred for carrying out existing business more efficiently, and no new source of income is created, even then expenditure can be considered as capital in nature - NO, rules ITAT

THE two issues before the Bench are - Whether where the expenses are incurred for carrying on the existing business more efficiently, and which did not result in acquisition of any new assets or in any new source of income, the expenditure can still be considered as capital expenditure and whether where the foreign party has no permanent establishment in India, payments made for mere printing of research reports abroad can be treated as fees for technical services. And the verdict goes in favour of the assessee.

Sales Tax

High Court cannot direct the subordinate legislation to substitute wordings in a particular manner, by assuming to itself role of a supervisory authority, which is not a power vested in the High Court: SC

THE State of Uttar Pradesh is in appeal against the High Court order in favour of the respondent assessee relating to exemption from sales tax to Tractors. The Government of Uttar Pradesh, for the purpose of levy of sales tax issued a notification on 12th September, 1986 in which it was stated that under Section 4 of the Uttar Pradesh Sales Tax Act, 1948, Tractors with Power Take-off Horse Power not exceeding 25 would stand exempted from payment of tax under the Sales Tax Act, subject, however, to the condition that the said tractors are exempted from payment of Central Excise Duty.

Central Excise

ROM application - CESTAT order directing Commissioner to return pre-deposit amount along with interest @12% from October, 2005 to date of actual refund modified – Interest to be NOW paid at @6%: CESTAT

AN appeal filed by the assessee was allowed by the CESTAT by way of remand vide order dated 19.07.2005. In the said order, the Commissioner was directed to undertake de novo adjudication of the dispute inasmuch as re-quantify the duty demand.

See our columns tomorrow for the judgements