Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Time limit for demand of interest - Principle adopted by Supreme Court was that period of limitation, which applies to a claim for principal amount, should also apply to claim for interest thereon - Demand of interest beyond normal period of one year is barred by limitation: HC

THE issue involved in the Writ Petition filed by the assessee is whether the demand letters for payment of interest issued in 2005/2006 pertaining to the demand of duty confirmed by the Order-in-Original passed in the year 2000. It is important to note that neither the Order-in-Original nor the Order-in-Appeal contained any directions for payment of interest.

Income Tax

Whether when dividend income is incidental to business of sale of shares, which remained unsold, it cannot be said that expenditure incurred in acquiring shares is to be apportioned to extent of dividend income and should be disallowed - NO: HC

THE issues before the Bench are - Whether when dividend income is incidental to the business of sale of shares, which remained unsold with the assessee, it cannot be said that expenditure incurred in acquiring shares is to be apportioned to the extent of dividend income and should be disallowed and Whether when the assessee takes loan and purchases shares and earns dividend income on unsold shares, any notional interest expenditure is to be disallowed ...

Service Tax

Rent a cab service provided to ONGC by land losers - Penalty Quashed: High Court

BELIEVING it for a moment that the appellants were unable to pay the amount on the ground of dispute with the ONGC though they were aware of the levy of service tax in absence of any fraud, misrepresentation, collusion or wilful mis-statement or suppression, there is no justification in levying the penalty. Moreover, when the entire issue for levying of the tax was debatable, that also would surely provide legitimate ground not to impose the penalty. Adjudicating authorities could also have considered the fact that this was a society of persons, which was created in the interest of land losers, who had lost their lands with the ONGC setting up its plant in the area and operating without any profit model. In such circumstances also submissions of the appellant ought to have been appreciated in light of overall circumstances.

See our columns Tomorrow for the judgements