Jurisprudentiol-Friday's cases

By Vijay Kumar

CESTAT

Not considering precedent orders by CESTAT - Cryptic orders lacking in reasoning and precision are passed day in and day out - Fault lies either in process of selection and appointment or because there is no review and appraisal of performance of Tribunal Members from time to time: HC

WE have also cautioned the Tribunal in number of cases that the process of adjudication and in Revenue matters requires an early finality to vexed issues. If the issues are raised repeatedly then all more there ought to be certainty and end to the litigation. In Revenue matters none is benefited by delays. If the delays are caused by repeated remand of proceedings then that has to be avoided. If its earlier orders have been brought to the notice of the Tribunal, then, the least that is expected is that they are dealt with and considered seriously and a conclusion is reached about their applicability to the facts and circumstances of a given case. The Tribunal, which is manned by experienced members drawn from the Revenue or Technical Services and Judiciary, is expected to perform this task efficiently. They are selected and appointed on account of their merit and not just their experience. They may not have dealt with matters which required them delivering judgments and passing binding orders after hearing both sides and on questions of law, but, their learning knowledge and experience as Members of the Tribunal would improve their performance by passage of time. This minimal expectation is not fulfilled nowadays and cryptic orders lacking in reasoning and precision are passed day in and day out.

Income Tax

Whether when except advances shown against current asset for fiscal, there is no other evidence to prove that land was purchased for purpose of business, sale of such land attracts tax on capital gains - YES: ITAT

A survey was carried out. On scrutiny it revealed that assessee had claimed a loss of Rs. 98.62 lacs on sale of a property. Assessee entered into an agreement on 31.12.2005 to purchase a property with ‘N', for a total consideration of Rs. 4.25 crores. He made a payment of Rs. 15 lacs in Dec. 2005. Assessee sold the said plot in three pieces. Total consideration received in three pieces was less by Rs. 98.62 from its purchase price and thus, assessee claimed loss. AO observed that the guidance value of this property for this purpose was Rs.1400 per sft, whereas, as per the sale value consideration shown by the assessee, the rate worked out to Rs.902/- per sft. AO worked out the cost of acquisition at Rs. 1085 per sq. ft. being the proportionate cost of the property as on the date of agreement. On the basis of the same, AO disallowed the loss and made an addition of Rs. 1.65 crores. CIT (A) rejected the claim of the assessee.

The issue before the Bench is - Whether when except the advances shown against the current asset for the fiscal, there is no other evidence to prove that land was purchased for purpose of business, sale of such land attracts tax on capital gains. YES is the answer.

Central Excise

Too late in day for Revenue to urge that refund application was not maintainable - Interest u/s 11AB of CEA, 1944 is payable only in respect of clearances post 28.09.1996 irrespective of date of passing of the adjudication order - Revenue appeal dismissed: HC

THE application of the Assessee was to seek refund of a sum erroneously recovered as interest and for the period prior to 28th September, 1996. Since the demand was for a period from February, 1995 to December, 1999, till 28th September, 1996, no interest could have been levied on the unpaid duty amount. In these circumstances, the application for refund could not have been rejected only on the ground that it was not maintainable.

The provisions of section 11AB inserted w.e.f. 28th September, 1996 are in the nature of penal interest and would apply only to those cases where clearances were affected after 28th September, 1996, irrespective of the date of passing of the adjudication order.

See our Columns Tomorrow for the judgements