Jurisprudentiol - Monday's cases

By Vijay Kumar

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

In ER1 returns only duty payable amount, credit taken and duty paid are indicated - From details given, no one can make out whether credit of tax availed is correct or not and whether it is in respect of a dutiable or exempted product - prima facie it cannot be claimed that there is no suppression: Pre-deposit ordered: CESTAT

DUTY Drawback on Re-export of Industrial Enzymes - Petitioner claimed duty draw back under Section 74 of the Customs Act, 1962 - Department directs petitioner to produce non-availment of CENVAT Certificate/Declaration and Bank Realisation Certificate/GR Waiver. Petitioner produced CENVAT Certificate Vide letter dated 24.12.2009 and produced Bank Realisation Certification on 03.11.2010. Respondent returns claim treating it as “Claim not Filed”. Petitioner filed Writ Petition - High Court directs grant of duty draw back.

Income Tax

Whether profits from sale of plot can be included in income of assessee when neither sale deed has been registered nor possession has been handed over to purchasers - NO: ITAT

THE issues before the Tribunal are - Whether an accounting method followed by an assessee continuously for a given period of time can be presumed to be correct, untill the AO has reasons to believe that system does not reflect true and correct profit; Whether in terms of section 145, AO is required to establish any illegality or facts creating hurdles in computing the correct income, before rejecting the principle of accounting; Whether when res judicata not being applicable to income-tax proceedings, principle of consistency can still be followed unless there is material change in the fact; Whether the sale value of the plots/flats can be included in the revenue of the assessee, when the assessee has rightfully assigned the allotment rights of such flats/plots in favour of its sister concern and Whether expenses not claimed by the assessee can be added back during the computation of the income of the assessee. And answers to all these questions go in favour of the assessee.

Service Tax

Applicants have taken over activities of managing/running Hotel themselves - If they themselves are managing affairs of organization, prima facie , it does not fall under ‘Management Consultancy Service' - Pre-deposit of Rs. 8 Crores of adjudged dues waived and stay granted: CESTAT

ON going through the definition of ‘Management Consultancy Service', it is clear that a person who is engaged in providing any service in connection with the management of any organization which means he should provide a service for managing the day to day affairs of the organization. If he himself is managing the affairs of the organization, prima facie, it does not fall under the ‘Management Consultancy Service'. The issue was dealt by this Tribunal in the case of Basti Sugar Mills Co. Ltd. wherein this Tribunal has held that “the appellant engaged in sugar manufacture took over management of another sugar mill. The agreement was treated as management consultancy and service tax demanded.

See our columns Monday for the judgements