Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Input Credit - No set off without any tax being received into Government Treasury: HC

THE legislature did not contemplate the grant of a set off without any tax being received into the Government Treasury. The grant of a set off without the receipt of tax into the treasury would result in a loss of revenue, a consequence, which the provision for set off, does not contemplate.

Actually Paid – Meaning of: In the context in which the words “actually paid” are used in the MVAT Act, “actually paid” means what has been as a matter of fact deposited in the treasury.

Income Tax

Whether, for purpose of computing capital gains, day on which an asset is acquired or day on which an asset is transferred, is to be added or excluded - NO, rules Delhi HC

THE appellant is an individual and had income from salary and other sources. The appellant had made investments and had also earned income as long term and short-term capital gains on mutual fund instruments and securities. The appellant had sold two mutual fund instruments and had shown the income earned as long term capital gains. The appellant treated gain of Rs.18,31,241/- as exempt u/s 10(38) as STT was paid. The gain of Rs.2,72,386/- was also treated as long term capital gain and claimed to be exempt u/s 54EC. The AO treated the two gains as short term capital gains on the ground that the instruments had not been held for a period of more than 12 months immediately preceding the date of transfer. The CIT(A) held that the instruments were held for 12 months and the gains were, therefore, not short term capital gains. The Revenue succeeded before the tribunal.

On Appeal before the High Court, the Revenue contended that the asset must be held for a period of more than 36 months or 12 months plus one day i.e. the date when the transfer was made. The date on which the transfer was made had to be excluded. The aforesaid submission was made on the basis of the language of Section 2(42A) and the words “more than” used therein along with the expression “immediately preceding the date of transfer”.

Central Excise

Exports - Refund of CENVAT Credit - Relevant date is date on which final products are cleared for export: HC

A reading of the Rule, though there is no specific relevant date prescribed in the notification, the relevant date must be the date on which the final products are cleared for export. If any other conclusion is arrived, it will result in disentitling any person to make a claim of refund of CENVAT Credit.

See our columns Tomorrow for the judgements