Jurisprudentiol – Monday's cases

By Vijay Kumar

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

When entire order which got issued was not relatable to matter under dispute, notwithstanding reference numbers in preamble of same, it has to be held as if entire order was a mistake - ROM application allowed, earlier order withdrawn and fresh order passed: CESTAT

AN order was passed by the CESTAT but the dictation, which was given in another case,got copied as order in this particular appeal, which got signed by both the Members and was issued. Anyway, the fact of the matter is that the appeal was allowed with consequential relief to the appellants. So, the appellant doesn't mind even if anything else appears in the order - he, obviously, is and should be concerned about the last paragraph of the order. But the Revenue is not at all happy. The Commissioner, Central Excise, Jaipur filed a ROM application.

The Revenue representative who was supposed to argue for the Revenue seemed not inclined to do so; He submitted that it is not a mistake apparent on record and the facts as carried out in the order and the decisions relied upon do not relate to appeal in question and, therefore, now if the ROM application has to be considered, the entire matter has to be reconsidered and such reconsideration of matter cannot be allowed in a ROM application and therefore, the Revenue's prayer should be rejected .

Income Tax

Whether when assessee makes investments in mutual fund from which income is tax exempt, whether assessee earns any dividend or not, expenses incurred for investments are to be disallowed u/s 14A - YES: ITAT

THE assessee had made investment of Rs.1,19,000/- in units of mutual fund from which income was exempt. The AO disallowed expenses relating to said income which was computed by him under provisions of Rule 8D at Rs.17,032/-. The CIT(A)held that expenses had to be disallowed as per Rule 8D. The assessee was engaged in the business of syndication activities and was also enjoying income from insurance business. The assessee claimed deduction of interest expenditure of Rs.59,51,911/-. The AO held that syndication activities were of the nature of liaison activity resulting into commission income. The AO disallowed the entire interest. The CIT(A) confirmed the disallowance.

On Appeal before the Tribunal the AR submitted that the assessee had not received any dividend income which was exempt from tax and, therefore, no expenses could be disallowed u/s 14A. The AR also argued that even if disallowance had to be made, Rule 8D could not be applied as the same was applicable from A.Y 2008-09.

Central Excise

J&K exemption - Delayed availment of CENVAT Credit would amount to violation of Notification No 56/2002 CE - CESTAT by majority orders pre-deposit

WHILE it is quite normal for the assessees to receive show cause notices for not paying Central Excise duty, it is not uncommon to receive notices also for "paying duty". Likewise, normally notices are issued for availing CENVAT Credit, but in this case, the assessee had to face the notice for "failing to avail CENVAT Credit". Confusing? Please wait till Monday.

See our columns Monday for the judgements