Jurisprudentiol – Friday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.FEMA/FERA

Delay of 570 days in filing an appeal under Section 35 of FEMA, 1999 cannot be condoned: HC

AGAINST an order passed by the Appellate Tribunal, an appeal lies before the High Court under Section 35 of the FEMA, 1999. Section 35 stipulates that the appeal has to be filed within sixty days from the date of communication of the decision of the Appellate Tribunal. Under the proviso to Section 35, the High Court is empowered upon sufficient cause being shown to condone a delay not exceeding a period of sixty days. In other words, no appeal can be filed beyond the outer limit of 120 days from the date of communication of the order of the Tribunal, before the High Court. The High Court does not have any jurisdiction to condone a delay in excess of sixty days beyond the period of sixty days prescribed for the filing of an appeal. The delay of 570 days in filing an appeal before this Court under Section 35 of the FEMA, 1999 cannot be condoned.

Income Tax

Whether when assessee pays certain sum to developer of property which assessee was occupying as tenant, for repair and reconstruction, such expenditure is to be construed as capital in nature - NO, revenue expenditure: HC

IN the present case, the assessee had not incurred any expenditure of a capital nature. The expenditure did not result in the acquisition of a capital asset by the assessee. The assessee continued as before to be a tenant in respect of the premises. By contributing an amount of Rs.1.50 Crores towards the reconstruction or as the case may be renovation of the existing structure, the assessee obtained a commercial advantage of securing tenancy of an equivalent area of premises on the same rent as before. Since there was no acquisition of a capital asset and the occupation of the assessee continued in the character of a tenancy, the expenditure could not be regarded as being of a capital nature.

Service Tax

Appellant already paid Service Tax of about six Crores - Pre-deposit of 25 Lakhs ordered: HC

THE Tribunal observed that it was not concerned whether the Appellants had or not charged/collected service tax since it was their duty to file returns and pay service tax on time. The Tribunal did take notice of the fact that the Appellants had admitted their service tax liability of almost Rs. 5.71 crores. Taking note of the fact that the Appellants had paid an amount of Rs. 7 lakhs towards penalty, they were further directed to pay Rs. 50 lakhs towards the penalty. The Appellant shall deposit an amount of Rs. 25 lakhs within a period of four weeks instead and in substitution of the direction issued by the Tribunal. In the event, the Appellant fails to make deposit, as directed, necessary consequences under the law shall ensue.

See our columns Tomorrow for the judgements