Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Rebate - Interest payable for delayed rebate on expiry of three months from date of receipt of the application: HC

IT is now a settled position in law that the liability of the Revenue to pay interest under Section 11BB commences from the expiry of three months from the date of receipt of the application for refund under Section 11B(1) and not on the expiry of the said period from the date on which an order for refund is made.

Income Tax

Whether when developer is not willing to perform terms of agreement, even then provisions of Transfer of Property Act will apply and transaction would fall within scope of deemed transfer u/s 2(47)(v) to attract capital gains tax - NO, rules ITAT

‘K' and remaining three co-owners had specified shares in immovable property - land which was the subject matter of the Development Agreement. A search was conducted on the residential premises of the co-owners. The co-owners did not disclose any income prior to the date of search as the Development Agreement to develop the property was executed after search and became the subject matter of post search proceedings. As per the development agreement, the co-owners were to get 45% of the property and the balance 55% was in favour of developer. The developers were to develop land as well as construct dwelling units. AO held that the entire capital gain accrues on the date of execution of Development Agreement.

Service Tax

Board's Circular No. 137/2007-ST clarifying section 73(3) incorrect in as much as this provision only prohibits issue/service of SCN under sub-section (1) in r/o payment made by party – There is no bar to issue SCN for imposing a penalty under section 76: CESTAT

SINCE default in payment of service tax is an admitted fact in the instant case, such default would per se invite section 76 as rightly decided by the original authority. There was no argument put forth that section 76 is not applicable to cases involving default in payment of service tax. In view of this, the decision to set aside penalty under section 76 by lower appellate authority is not correct and the said order is set aside. The order of original authority to impose penalty at the rate of Rs. 100 per day under section 76 is upheld as valid under law.

See our columns Tomorrow for the judgements