Jurisprudentiol – Wednesday's cases
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Delayed payment of Refund - Department bound to pay Interest - High Court
EVEN though the claim of the petitioner for the payment of interest on the belated payment of the refund amount may not arise, based on Section 27A of the Customs Act, 1962, the petitioner would be entitled to the same, as per the decision of the Supreme Court, in Sandvik Asia Ltd. Vs. Commissioner of Income Tax and others, - ().
Income Tax
Whether when assessee leases out plant and machinery, installation costs incurred to bring assets into working conditions can be claimed as revenue expenditure - NO: High Court
ASSESSEE engages itself in the promotion and establishing telecom services and allied activities, including mobile and cellular services. Pursuant to its main object it leased to M/s. BhartiTelenet certain plant and machinery. BhartiTelenet had obtained licence for the purpose of providing cellular services in Himachal Pradesh. The lease arrangement entered into between the assessee and BhartiTelenet was scrutinized. The assessing officer noticed that the cost of plant and machinery given on lease by the assessee was Rs. 10,57,25,094/- which was reflected in the balance sheet of the assessee under the head “plant and machinery given on lease”. That apart the assessee had incurred an expenditure to the tune of Rs. 1,35,05,869/- towards installation of these plant and machinery; in addition to it had incurred a sum of Rs. 2,69,35,669/- towards software expenses. The assessee claimed the installation expenses as a deduction, debiting it to the profit and loss account. The software expenses on the other hand were treated in the accounts as deferred revenue expenditure and a sum of Rs. 15,05,446/- was written off in the previous order. In the computation of income accompanying the return the software expenses of Rs. 2,69,35,669/- were claimed as a deduction.
The assessing officer disallowed both these amounts. The assessee carried the matter unsuccessfully in appeal. As far as the first issue i.e. installation expenses were concerned, the CIT (Appeals) confirmed the assessing officer's order holding that the expenditure fell properly in the capital field. The Tribunal confirmed the same.
Service Tax
Wilful disobedience of directions of CESTAT, WZB, Mumbai - Dy. Commissioner directed to show cause as to why contempt proceedings should not be initiated against him for non-compliance of CESTAT order:CESTAT
Dy. Commissioner (Review), Central Excise, Raigad stating that they have not received a certified copy of the order till date and a photo copy of the above order was received by them as enclosure to the letter from the Commissioner (AR) office dated 19.11.2012 and the same is under process for acceptance by the Commissioner of Central Excise, Raigad and the order is to be implemented only after acceptance by the Commissioner of Central Excise, Raigad and prayed for four weeks time.
This is wilful disobedience of the directions of this Tribunal. Accordingly, the Dy. Commissioner, Service Tax Division, Raigad Commissionerate is hereby directed to show cause as to why contempt proceedings shall not be initiated against him for non-compliance of the direction of this Tribunal.
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