Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

Limitation - Initial burden is on Department to prove that there is short levy of duty on account of fraud, collusionetc,- Limitation on taking Credit twice on same invoice - Matter remanded: HC

THE initial burden is on the Department to prove that there is short levy of duty on account of fraud, collusion or any wilfulmis-statement or suppression of facts, or any of the conditions mentioned in the provision and thereafter the burden shifts on the assessee, once the Department can produce to show material that the appellant is guilty of.

Income Tax

Whether when assessee transfers distribution business against commission which is allowed as business expenditure, Revenue is right in treating same commission income as income from other sources in case of assessee - NO, says High Court

THE assessee was carrying on business of distribution of Acer products, such as computers, laptops, desktops, etc for about two years. It incurred heavy losses. The assessee company decided to transfer the distribution to M/s. “SIL”, for which M/s. Acer India Pvt. Ltd. had also consented, by virtue of a written agreement between the assessee and SIL. The distribution of the products was to be taken over by SIL on certain terms and conditions, including payment of commission on sale at the rate of one per cent. The assessee offered the commission income gained from its business as ”business income” and set off the same against the business losses incurred in the same business. The AO treated the income of the assessee from commission as income from other sources and declined to set off against the brought forward business losses. The CIT called for the comments of the AO under Rule 46A. The CIT(A) allowed the Assessee's appeal. The Tribunal dismissed the Revenue's Appeal.

Customs

Provisional release of seized goods - The guideline that value of bank guarantee shall not exceed twice amount of duty not to apply to a case involving a serious fraud: High Court

THE Petitioner, obviously, cannot rely on the guidelines contained in the Manual to the effect that the value of the bank guarantee shall not exceed twice the amount of duty since that part of the guidelines is not to apply to a case involving a serious fraud. In this view of the matter, the basis on which the Petitioner has claimed a benefit under the guidelines contained in the Manual is without any foundation. No case for interference under Article 226 of the Constitution is made out.

See our columns Tomorrow for the judgements