Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Whether MRP on footwear was marked with indelible ink - Superintendent 'scratching' print made and concluding that marking was not 'indelible' - appellant producing certificates from National Test House & Indian Institute of Packaging to certify that printing of MRP was indelible & therefore they are entitled for exemption in terms of notification 5/2006-CE - Matter remanded: CESTAT

THE two certificates indicated that the printing done by the appellant on the footwear was indelible and, therefore, the appellant was entitled to the benefit of the said exemption. However, since these certificates were not produced before the adjudicating authority and the appellate authority, the CESTAT found it prudent to remand the matter to the adjudicating authority for reconsidering the matter afresh and accordingly directed the appellant to submit the test results to the said authority. And since the matter was being remanded no pre-deposit was ordered.

Income Tax

Whether if person sells his investment on an enhanced price, excess over his purchase price is to be considered as profit assessable to tax as income in every case - YES: HC

THE assessee is an individual. In the return of income filed, it had claimed that Rs. 65,45,321/- had to be treated as short term capital gain, on account of sale of shares. During assessment, AO had noted that the assessee provided the funds to M/s Vimgi Investments Pvt. Ltd to trade in shares on his behalf, which was supported by the brokers notes and confirmed copy of the account of the broker filed by the assessee. Since the broker had traded on behalf of the assessee, practically on day-to-day basis, AO observed that the assessee was engaged in the activity of sale/purchase of share. Therefore, the AO show caused the assessee why the profit of Rs. 65,45,321/- should not be assessed as business income against the income shown as short term capital gain.

The issues before the Bench are - Whether if a person sells his investment on an enhanced price, the excess over his purchase price is to be considered as profit assessable to tax as income in every case and Whether when the main line of business or commercial activity of the assessee is not share trading and the assessee did not have a separate infrastructure or expenditure to support such trade, it can be presumed that the intention behind these transactions is to derive business income or profit, and not to invest the amounts. And the verdict goes against the assessee.

Central Excise

Shortage of inputs - Pre-deposit - Matter referred to Third Member by CESTAT

THE issue involved is demand of CENVAT Credit on inputs found short during the verification by the officers of the department. It is the contention of the assessee that the officers did not take into account the stock of inputs lying adjacent to the factory during the stock taking which is sufficient to hold that the appellant has a prima facie case in their favour.

See our Columns Monday for the judgements