Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

'Intended for use' - subject to different kinds of interpretation - Larger period of limitation not invokable: CESTAT

IT is a question of interpretation of notifications and whether the term “intended for use” can cover the quantity of LSHS/LSWR consumed in the generation of electricity for internal use is subject to different kinds of interpretation. Therefore, it cannot be said that the appellants have willfully misdeclared the details relating to consumption of LSHS/LSWR. The very fact that NLC had also availed exemption would also support the case of TPCL. Therefore, following the decision of the Tribunal in the case of NLC held that the demand with regard to the extended period beyond the period of normal limitation cannot be sustained.

Income Tax

Whether penalty can be imposed when annual rent mentioned in Lease Agreement is found to be suppressed - Yes, rules Delhi HC

THE assessee entered into a Memorandum of Intent with the Bank to let out its property. Thereafter, the prescribed Form No.37-I was filed u/s 269UC, and the appropriate authority issued a certificate u/s 269UL(3) giving no objection. Thereafter, the appellant by a Lease Agreement had leased out its aforesaid property to the Bank at rental Rs.1,00,000 per annum. As per the aforesaid Lease Agreement, the property admeasuring 11,499 sq. yds together with five existing buildings or structure standing thereon was let out on rent to Bank. The assessee had leased out the said premises having aggregate constructed area of 1,23,490 sq. ft. for a term of 25. The assessee had received a sum of Rs.67,00,00,000/- as interest free deposit from the lessee i.e. Bank. For the A.Y 2006-07, the assessee filed a return of income, declaring loss of Rs.3,87,912/- along with computation of income and annual audited accounts. The assessee had shown rental income of Rs.1,00,000/- per annum based on the aforesaid Agreement dated 06.08.2001 entered into with Bank. The said return of income filed by the assessee company was accepted in intimation u/s 143(1). Thereafter, the case was selected for scrutiny. The AO by an order of assessment u/s 143(3) assessed the income of the assessee at Rs.52,94,352.

Customs

Imposition of a penalty on partnership firm as well as on partners under Section 112 of Customs Act is permissible and justified: HC

FOR the purpose of imposing a penalty, the adjudicating authority under the Customs Act, 1962 may in an appropriate case impose a penalty both upon a partnership firm as well as on its partners. Whether the facts and circumstances of a case warrant the imposition of a penalty both on a firm and its partners should be decided upon the facts of each case.

See our columns Tomorrow for the judgements