Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Petitioner blamed for 'killing small businessman and their business' and held liable for payment of ST without notice - Whether order in question has been passed in bonafide exercise of power under statutory provision or it is something else - notice issued to Additional Commissioner, CE, Ranchi for answer as he has right to be heard before any observation is made: HC

IT will be appropriate to give notice to the Assessing Officer-Rajiv Kumar Mishra, Additional Commissioner, Central Excise, Ranchi so that certain allegations may also be examined against the officers whether the order in question has been passed in bonafide exercise of power under the Statutory provision or it is something else, which would be adequately answered by the said officer himself, who has right to be heard before any observation. Therefore, issue notice to Rajiv Kumar Mishra, Additional Commissioner, Central Excise, Ranchi, who may meet with the allegation of the petitioner questioning the passing the order against petitioner without given opportunity of hearing to the petitioner and also passing stricture that too without factual finding of the said authority.

Income Tax

Whether expenditure incurred by assessee on borrowed funds for financing in respect to purchase and sell of shares on behalf of others can be denied, even if income earned from brokerage has been taxed: ITAT

THE assessee has borrowed huge funds from banks and also in the form of inter Corporate deposits etc. The AO has referred the matter to special audit u/s 142(2A), to study issue of utilization of the borrowed funds. The AO passed his order placing reliance on the findings of the Special Auditor, in which it was observed that the interest incurred by the assessee was in excess of the brokerage income. The issue before the Tribunal is - Whether the expenditure incurred by the assessee on borrowed funds for financing in respect to purchase and sell of shares on behalf of others cannot be allowed, although the income earned from brokerage has been taxed. And the answer goes against the Revenue.

Customs

It can be no defence to urge that Customs Act does not provide for payment of interest on balance of sale proceeds - order awarding payment of interest would be necessary: HC

THE Petitioner has been deprived of a refund of its monies legitimately due to him in pursuance of an order of the Settlement Commission. There is absolutely no reason or justification for the unexplained delay. Hence, in exercise of the jurisdiction of this Court under Article 226 of the Constitution, an order awarding the payment of interest would be necessary.

See our Columns Tuesday for the judgements