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By Vijay Kumar

Income Tax

Expenses on convertible debentures - eligible for deduction till conversion : ITAT

THE assessee is in appeal before the ITAT against the order of CIT(A), C.III. Mumbai dated 16.11.98 passed for assessment year 1995-96. The first grievance of the assessee relates to confirmation of disallowance of debenture issue expenditure amounting to Rs. 5,21,22,533/- on the ground that it is capital in nature.

Income Tax - HUF - interest paid to coparceners - deduction allowed : ITAT

THE assessee HUF has been in existence for the last about 40 years and it is also regularly assessed to income tax. Previously there was a firm viz., M/s Kedar Nath Bishan Lal which was carrying on the business of pakka arhita of gur and khandsari. The assessee HUF had deposits with the said firm on which it was getting interest. Besides those deposits the assessee HUF had also immovable properties including agricultural lands. Partial partitions took place on 5th June, 1971, 31st March, 1970 about the deposits lying with the Partnership firm and of immovable property and agricultural land. Out of deposits of Rs. 3,03,895.14 deposits to the extent of Rs. 3,01,895.14 were apportioned by way of partial partition. These partial partitions were accepted by the AO vide his order dt. 25th January, 1973 and the effect of such partition was given by the AO in completing the assessment of assessee HUF in Income Tax as well as Wealth Tax Act for the years 1972-73. Thereafter in August, 1974 partial partition took place in smaller HUFs and the said partial partition was also accepted by the AO vide its order dated 1st June, 1976 u/s 171 of the Act. This order was cancelled by the CIT under the provisions of S.263. However the matter was carried on in appeals and ITAT as well as High Courts had accepted the partitions as valid partitions.

Customs

Let me not, to the marriage of true minds, admit impediment, Shakespeare's quote relied upon by Tribunal while allowing appeal

THERE is an almost equivalent Hindi saying that goes - Jab Miya - Biwi Razi, Toh Kya Karega Kazi. (When the bride and the groom agree, what can the pastor do?). The Tribunal chose to place reliance on Shakespeare's quote though.

The case was that the Commissioner of Customs, Mumbai imposed a redemption fine of Rs.15 lakhs in lieu of confiscation of 1540 cartons of 'Topaz' blades held liable to confiscation under Section 113(d) of the Customs Act, 1962 (and released in terms of Tribunal's order dated 16/02/1999) and also imposed a penalty of Rs. 2 lakhs on the appellants.

Central Excise

Duty paid before Show Cause Notice - penalty and interest liable : CESTAT

THE speed is catching up. The Tribunal has relied upon a decision of the High Court rendered on 25^th July, in an order made on 2^nd of August -because TIOL had reported the High Court order.

The Revenue is in appeal against the order dated 16.06.2005 made by the Commissioner (Appeals) setting-aside the penalty imposed on the appellant under the order-in-original and holding that no interest was chargeable as was held by the adjudicating authority.

The Appellate Commissioner, taking note of the fact that the respondent-assessee had deposited the entire amount of duty prior to the issue of the show cause notice, relying upon the Larger Bench decision of the Tribunal in the case of CCE, Delhi vs Machino Montell (I) Ltd., held that, neither penalty was imposable upon the noticees nor interest was chargeable from them.

See our columns Tomorrow for the judgements