Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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Statement might be fictitious creation of Enforcement Directorate - Statements not to believed unless there is independent corroboration: SC

TWENTY five years ago, the officers of the Enforcement Directorate recovered an amount of Rs. 8,24,900/-; must be quite a huge amount of money at that time. The Supreme Court on 10th October 2014 ordered release of the amount.

Statements: "The statements can under no circumstances constitute the sole basis for recording the finding of guilt against the appellant. If findings could be returned by exclusively relying on such oral statements, such statements could easily be thrust upon the persons who were being proceeded against on account of their actions in conflict with the provisions of the 1973 Act. Such statements ought not to be readily believable, unless there is independent corroboration of certain material aspects of the said statements, through independent sources. The nature of the corroboration required, would depend on the facts of each case.

Income Tax

Whether sovereign power of State to levy tax can be extended to level of regulating conduct of citizen to such an extent of verification that is equivalent to one which is made by police against an accused - NO: HC

THE assessees are the members of the Hindu Undivided Family, with Karta of the family being also an independent assessee. All the assessees had availed the benefit under Voluntary Disclosure of Income Scheme (VDIS) by declaring their items, which were mostly of jewellery, namely gold and diamonds and received certificates of disclosure. In the meanwhile, the assesses sold away the jewellery declared by them under the VDIS and the sale proceeds of the jewellery were shown in the respective returns, as capital gains. Subsequently, an enquiry was conducted against the genuinity of sale of diamonds at Surat, and dissatisfied, the AO held that the sale proceeds of diamonds as unexplained cash credit. On appeal, the CIT(A) confirmed the order of the AO. On further appeal, the Tribunal however allowing the appeal of the assessees, set aside the order of the CIT(A).

THE issue before the Bench is - Whether the sovereign power of a State to levy tax can be extended to the level of regulating the conduct of a citizen to such an extent of verification that is equivalent to the one which is made by the police officials vis-a-vis a person, who committed the crime. NO is the answer.

Service Tax

Applicant is required to pay service tax as service recipient is located in India and service has been provided in India by applicant - Pre-deposit ordered of Rs.6 crores: CESTAT

FOR Courier received in India, the remuneration towards service rendered received in India and they are paying the service tax on whole of the amount. Therefore, whatever amount they paid to the foreign entity, the applicant is not required to pay service tax.

When foreign entity is receiving courier to be delivered in India and the same has been given to the applicant to deliver in India: In that case, the service although performed in India but rendered to foreign entity therefore, relying on the decision in the case of Paul Merchants, v. CCE - 2012-TIOL-1877-CESTAT-Del. Prima facie on this activity, the applicant is not required to pay the service tax….

See our Columns Tomorrow for the judgements