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By Vijay Kumar

FEMA

Can a Special Director of ED prefer appeal before HC against order passed by FERA Board? No, says Supreme Court

THE short but interesting question before the Supreme Court was whether a Special Director appointed under the Foreign Exchange Regulation Act, 1973 himself can prefer an appeal before the High Court against an order passed by the Foreign Exchange Regulation Appellate Board.

Central Excise

Appeal to High Court only on a question of law, not fact - Supreme Court

This is an appeal by an assessee against the fixation of the Annual Capacity of Production.

The Supreme Court held that High Court can hear an appeal only if there was a substantial question of law.

Income Tax

Income admitted during search - Depreciation claimed from such income - no particulars of plant, machinery and furniture submitted - depreciation cannot be allowed : ITAT by majority

ON account of difference between the Members of Pune Bench, the following question has been referred to the president as Third Member

"Whether on the facts and in the circumstances of the case, the assessee is entitled to depreciation on plant and machinery and furniture and fixtures."

The President was a little surprised at the JM's findings that amount disclosed represented enhanced value of existing plant and machinery, furniture and fixtures and that after the search, the value was modified and changed in the books of account as per declaration u/s 132(4) of the Income Tax Act. This, he says, is an afterthought.

Service Tax

Whether a contract for construction is works contract on a turnkey basis and not a consultancy contract - conflicting decisions - matter referred to Larger Bench of Tribunal

Contracting work!

By the way, the Finance Act, 2007 enacted on 11.05.2007 has brought the services of "Works contract" under the ambit of Service Tax and the levy is effective from 1 st June 2007. Incidentally, as a trade facilitation measure and also for ease of administrative convenience an Optional Composition Scheme for Works contract was notified vide Notification No. 32/2007-Service Tax, dated 22-5-07 (w.e.f 01.06.07), whereby the service provider has been given an option to pay service tax equivalent to 2% of the total value of the works contract instead of paying service tax at the rate specified in section 66. So, the Larger Bench decision, if & when it comes would probably be another academic exercise.

See our columns tomorrow for the judgements