From our Legal Corner - Monday's cases

By Vijay Kumar

Income Tax

Pre-emptive purchase of property by Income Tax - Appropriate Authority's order quashed; bad SCN, improper order : Bombay HC

They entered into an agreement to purchase a property in Mumbai for Rs. 64 Lakhs in 1992. The Income Tax entered and sought to purchase the property. After 14 years the party won the case in the High Court.

++ unless the difference in the apparent effective consideration and the market value is more than 15%, the Appropriate Authority cannot assume jurisdiction under section 269-UD of the Act.

++ The same does not mean that the mere fact that such difference is more than 15% will, automatically, lead to the conclusion that there has been undervaluation of property with the motive of evading tax.

++ right of pre-emptive purchase under section 269UD is not a right of pre-emption simpliciter but is a right which can be exercised only in the cases where there is significant under valuation in agreement of sale with a view to evade tax.

Central Excise

An assessee cannot be faulted for taking a lesser amount of credit than is due to him under the law : CESTAT

Supposeyou take an amount of credit less than what is due; what happens? Revenue denies the entire credit. Ingenuity of Revenue to come up with Show Cause Notices for such unimaginable offences is remarkable.

Refund - Demand for recovery of erroneous refund has to be made under Sec 11A within prescribed time limit - No unjust enrichment in refund of pre-deposit - Board circulars are binding on department : Tribunal

See our columns on Monday for the judgements