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By Vijay Kumar

Income Tax

Change in method of accounting - Sale-cum-lease back transactions treated as finance transactions - Profits to be deducted from total income for levying tax : ITAT

WHEN sale-cum-lease back transactions are treated as finance transactions on account of change in method of accounting, are profits on sale under sale cum lease back transaction to be deducted from total income for purpose of assessment of tax? This was the moot point in this case which was answered in affirmative by the Tribunal.

Central Excise

Director of Pvt Ltd Company not filing appeal before Commr(A) against imposition of penalty - appeal by company not sufficient - In absence of such appeal, adjudication order attains finality : Tribunal

THE appellant is a Director of private limited company and show cause notices were issued independently to the company as well as to the director for violation of the provisions of Central Excise law. The adjudication order was passed holding company and the director separately liable for violation of provisions of Central Excise law. The adjudicating authority imposed penalty on the current appellant under the provisions of Rule 209A of the Central Excise Rules, 1944.

While filing an appeal to first appellate authority, the appellant company preferred an appeal, while the current appellant did not file any separate appeal. The appellate authority did not accept the contention of the appellant that it was a joint appeal before him and upheld order-in-original for imposition of penalty on the current appellant.

Bail in economic offence cases - unscrupulous elements on a prowl to maximise material gains by unlawful means, needs to be placed in shackles - By diverting imported non-edible palm oil to ghee industry, he not only caused loss to Revenue but also played with public health - Plea rejected by Delhi HC

The Delhi High Court did not take kindly to economic offences and to add fuel to the fire there was illicit palm oil clandestinely removed to ghee manufacturers! The High Court observed,

++ Ever growing materialistic outlook setting unscrupulous elements on a prowl to maximise material gains by unlawful means, needs to be placed in shackles by appropriate legislative measures and judicial intervention if the interest of the public at large and the State are to be safeguarded.

++ Personal liberty of an individual though precious, is of little value if the larger interest of the people and the Nation are at stake.

++ Period of detention in jail may though continue to be a ground for consideration in deciding the question of grant of bail, societal and/or National interest must outweigh such consideration.

++ National interest must reign supreme in all situations and sacrificing individual interest of a person posing threat to it can never be a bad bargain.

Service Tax

Appellate authority has not given any reasoning to set aside penalties imposed u/s 78 of Finance Act, 1994 - Point of limitation can be taken at any time - Matter remanded by Tribunal

THE brief facts of the case are that the respondents are provider of services as "Stock Broker". The respondents got registered and were paying Service Tax on the stock broking activities till June 96.

For reasons best known to the assessee, they stopped paying Service Tax on the brokerage activities during the period July 1996 to August 1997.

See our columns tomorrow for the judgements