Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Renting of Immovable Property Service - Prima facie, Service Tax cannot be levied on 'deposit' received by applicant towards renting of immovable property - Pre-deposit waived and Stay granted: CESTAT

THE applicant is Agricultural Produce Market Committee, Sangli. They are before the CESTAT with an application for waiver of pre-deposit of Service tax dues of Rs.91,82,801/-, interest and penalty.

The demand arose because - the CCE, Kolhapur is of the view that the applicant is required to pay Service Tax on the "deposit” received in respect of shops given out on rent by them.

Income Tax

Whether when assessee has paid advance tax in certain FYs but chooses not to file returns for many years, income of the years for which no returns were filed, partakes character of undisclosed income - YES: HC

THE assessee is an individual, whose premises was searched for the preceding ten years. During block assessment, it was found that the assessees had paid advance tax for some assessment years, but did not file returns. The AO held the income for the corresponding years for which the returns were not filed partakes the character of undisclosed income and accordingly tax was levied. On appeal against the orders of AO, the Tribunal accepted the contention of the assessees that failure to file a return by the assessee, who paid the advance tax, cannot lead to a situation of treating the income as the undisclosed one.

Whether when the assessee has paid advance tax in certain financial years but chooses not to file returns for many years, the income of the years for which no returns were filed, partakes the character of undisclosed income. And the answer is YES.

Central Excise

Shocked with order of Commissioner (Appeals), Tribunal requests CDR to mark copy to Member (L&J) - Restores demand of duty on shortage of goods.

THE Tribunal held:

It is shocking to read the order passed by ld. Commissioner (Appeals) who worked hard to grant relief on pulpable grounds making suppositions and assumption with total disregard to the law and statutory records. The goods manufactured when did not find place in statutory records and incidence of manufacture being event of levy, non-accountal of the goods imputes the respondent to the charge of clandestine removal. It is not necessary for the investigation to prove its case with mathematical precision. Burden of proof was not discharged by the respondent to explain when the goods found their destination. Not only the physical verification result but also other evidence gathered by investigation as stated here in before lend credence to the case of Revenue demonstrating premeditated design of evasion of duty made by the respondent.

See our Columns Tomorrow for the judgements