Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Notification 3/2004-CE - Machinery cleared for setting up of Water Supply plants - certificate from Chief Engineer, Kerala Water authority not acceptable for granting exemption – since duty involved is less than Rs.5 lakhs and appellant has already made a payment of Rs.5.90 lakhs at the time of investigation, waiver granted from pre-deposit of balance dues: CESTAT

THE excise duty in respect of the supplies made in respect of Water Supply Projects is less than Rs. 5 lakhs and the appellant has already made a payment of Rs.5,90,656/- at the time of investigation. In view of the above position, waiver from pre-deposit of the balance of dues adjudged against the appellants granted and stays recovery thereof during the pendency of these appeals.

Income Tax

Whether when purchases made by assessee are found to be inflated, and revised returns are filed twice after case is selected for scrutiny and assessee finally surrenders inflated amount to buy peace, such case cannot be accepted as a bona fide mistake - YES, rules HC

THE assessee declared a total income of Rs.18,860/-. As per the said return, the total purchases were shown as Rs.29,00778/- and sales as Rs.31,93,81/-. An order u/s 143(1)(a) accepting the return was passed. The assessment was re-opened. On scrutiny, the AO found that in the month of January, 1993 as per ledger, purchases were made to the tune of Rs.2,28,280/- while as per details furnished by the assessee, it was shown at Rs.3,28,280/-The return was again revised declaring the income of Rs.1,18,860/-. The assessee surrendered amount of Rs.1,00,000/- on account of inflation of purchases. Certain additions were made by the AO who framed the assessment order. The penalty proceedings giving rise to the present appeal was initiated on the ground that the assessee had inflated the purchases by Rs.1,00,000/- by showing wrong particulars and purchases. The CIT(A) set aside the penalty order on the finding that it was a case of mistake on the part of accountant and once the mistake came to the knowledge of assessee, he surrendered the said amount for being added with his income. The Tribunal accepted the appeal and restored the penalty.

Service Tax

Construction of Residential Complex- Construction of residential quarters for Indian Army and West Bengal Power Development Corporation Ltd - Not taxable since service meant for ‘personal use' of Government: CESTAT

THE Applicant is engaged in the construction of residential quarters for Indian Army and West Bengal Power Development Corporation Ltd (A West Bengal Govt. Undertaking). The contention of the applicant is that they are directly engaged for constructing residential complex for Army and West Bengal Power Development Corporation Ltd (WBPDCL). The applicant contended that Board, vide Circular No.332/16/2010-TRU dated 24/05/2010, clarified that in case Govt. of India is the service recipient and when service of construction of Residential Complex is provided directly to the Government for its personal use, then Service Tax is not leviable.

See our columns Tomorrow for the judgements