Jurisprudentiol - Tuesday's cases

By Vijay Kumar

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

Application before Settlement Commission Meaning of "before adjudication" in Section 32 E Application filed by assessee before date of dispatch of order of adjudication is maintainable before Settlement Commission HC

AN adjudication cannot be regarded as being complete merely upon the signing of an order by the adjudicating authority - If the adjudicating authority were to keep the order in his own drawer without dispatching it to the assessee the latter would have no means of knowing of the making of the order. An order of adjudication must be placed by the adjudicating authority out of his control by dispatching it to the assessee. The Commissioner, without waiting for receipt of the documents of which disclosure was sought and without paying heed to the request of the assessee proceeded to pass an order of adjudication in haste on 13 January 2011. The order was actually dispatched to the assessee on 19 January 2011 when the assessee had already moved a settlement application on 14 January 2011.

Income Tax

Whether when assessee borrows funds from holding company on interest and participates in tender for land allotment it can be said that it has set up business even if it fails to get land allotted - YES: HC

THE assessee is engaged in the business of real estate development, including purchase and sale of land. It was a 100% subsidiary of DLF Ltd. In the return filed, the assessee declared a loss of Rs. 1,17,12,473/- under the head “business” which represented the difference between the interest of Rs. 62,28,333/- received from NGEF Ltd. of Bangalore on the earnest money of Rs. 186 crores deposited with it and the interest of Rs. 1,79,37,534/- paid to DLF Ltd. from whom the assessee had obtained a loan of Rs. 186 crores. Since this was the first year of the existence of the assessee, the AO examined as to when the assessee could be said to have set-up its business within the meaning of section 3. The AO was of the view that since the assessee was not successful in acquiring the land from NGEF Ltd., it cannot be said that the business was set-up in the relevant accounting year.

Service Tax

ST - s. 85 of FA, 1994 - Appellant's son participated in the adjudication proceedings as the Managing Partner of the firm - son receiving o-in-o passed by Jt. Commissioner on 07/02/2009 - son committing suicide on 23/06/2009 - appeal filed by appellant who is the father of the deceased son & a partner in the firm on 05/10/2009 which was dismissed as time barred by Commissioner(A) and order was upheld by CESTAT - knowledge of passing of O-in-O can be attributed to the appellant also who is a partner - therefore, it cannot be said the appellant was not aware of the order - explanation offered is unacceptable - appeal rightly held as time barred - Appeal dismissed: High Court

A SCN dated 02.01.2008 demanding service tax was issued to the partnership firm M/s Sangameshwar Trading Company .

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