Jurisprudentiol – Friday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Kerala GST

Order passed by Deputy Commissioner without giving enough time to assessee to reply – matter remanded: SC

DEPUTY Commissioner ought to have given some more time to the appellant to file his reply and explain in detail as to why the order passed by the assessing authority should not be modified. The right to file a reply has been considered to be an indispensible facet of right to proper hearing. The maxim of audialterampartem is an epitome of general principles governing fair hearing. The principle of fair hearing has two justiciable elements. The first is that an opportunity of hearing must be given and the second is that the opportunity must be reasonable and adequate. The opportunity of hearing requires to be tested on the anvil of reasonableness and adequacy of such opportunity. The right to file an adequate reply and represent one's case before the decision-making authority shelters under the second limb. In a case where huge tax liability is being imposed on an assessee, he has a right to file a reply and represent his case before the adjudicating authority. Should such sufficient opportunity not be afforded to the assessee, he would be deprived of his valuable right. Case remanded to the Deputy Commissioner.

Income Tax

Whether single transaction can be construed as business transaction when motive behind such transaction was to make Investment - NO: ITAT

THE assessee wrote off a sum of Rs.15 lakh in its Profit and loss account. The AO observed that the assessee was earlier engaged in the trading of suiting & shirting and thereafter, it started trading in shares and securities. According to the AO, the assessee was not engaged in the business of purchase and sale of land. The AO held that the said amount of Rs.15 lakh was not bad debt as the same was not incidental to the assessee's business. No relief was allowed in the first appeal.

The issues before the Bench are - Whether a single transaction can be considered as business transaction when the motive behind such a transaction was to make Investment; Whether the amount received on sale of shares can be considered as LTCG when the period of holding of shares was more than two years and the valuation of such shares was at the cost price in the respective balance-sheets from the date of purchase and Whether disallowance u/s 14A is attracted even when the securities fetching exempt income are held as stock in trade. And the verdict partly goes in favour of Revenue.

Customs

Tribunal, being an appellate body, has no authority to control functioning of Customs officer in particular Commissionerate - if Adjudicating authority has not followed direction of Commr(A), remedy lies in taking up matter with Executive Commissioner: CESTAT

IN this Customs case, the appellant was directed by the lower appellate authority to approach the adjudicating authority, who was required to pass a speaking order as per Section 17(5) [Assessment of duty] of the Customs Act, 1962.

The grievance of the appellant is that in spite of the said direction, the adjudicating authority has not passed the speaking order and hence, they are before the CESTAT with an early hearing application and an appeal.

See our Columns Tomorrow for the judgements