Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Classification of add-on cards and motherboards - Tribunal is expected to understand the factual scenario – Matter Remanded: SC

THE Tribunal is expected to understand the factual scenario with regard to the goods whose classification has fallen for their consideration and decision, before applying the law on the issue. This exercise has not been undertaken by the Tribunal. The nature and character of the products in question (namely, add-on cards and motherboards) and their functions with regard to Automatic Data Processing Machine and other machines has not been scrutinized. Therefore, no other alternative but to remand the matter to the Tribunal to decide the issue after considering the nature and the functions of add-on cards and motherboards in the functioning of Automatic Data Processing Machines.

Classification of 'Tikki Exjo Filler' - Revenue has not challenged the order of the Commissioner (Appeals) setting aside the Order In Original - Further SCNs not valid: SC

SINCE the revenue has not questioned the correctness or otherwise of the findings on the conclusion reached by the first appellate authority vide its order dated 16.5.1997 in GS/132/B.III/97, it may not be open for the revenue to contend that the adjudicating authority was justified in issuing the impugned show cause notices and also the further confirmation of said notices vide orders passed by the adjudicating authority, the appellate authority and the Tribunal. Without questioning the orders passed by the appellate authority, the revenue would not be entitled for any relief, whatsoever.

Valuation - manipulation of price between group companies - No error in findings of Commissioner (Appeals) and Tribunal - Revenue Appeal Dismissed: SC

TRIBUNAL and the First Appellate Authority have not committed any error whatsoever; the findings and the conclusions reached by those Authorities cannot be characterized as perverse. In that view of the matter, no ground to interfere with the order passed by the Tribunal and accordingly, the appeals deserves to be dismissed.

Income Tax

Whether when assessee sells undertaking as going concern alongwith employees and various licences and cost of assets cannot be determined separately, no capital gain tax can be levied on sum received in excess of written down value of assets transferred - YES: Bombay HC

ASSESSEE was engaged in the business of manufacture and sale of liquor. An agreement was entered into by the assessee with IDPL by which the assessee agreed to sell to the purchaser the undertaking / business together with its assets and liabilities as a running business / going concern on as is where is basis. AO noted that in the notes to account, it was mentioned that the written down value of the assets transferred was shown as a deduction for the purpose of computing depreciation from the block of assets. The excess of the cost of IMFL business was stated as not taxable and was not deducted from the respective block of assets. AO while framing the assessment deducted from the total sale price the written down value of the fixed assets and the value of the stores, raw materials and finished goods and observing that the difference was held to be chargeable under the head of capital gains.

See our columns Tomorrow for the judgements