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By Vijay Kumar

Income Tax

Rs two Crore cash seized from IAS officer - 25 Cr income tax demanded - money seized belongs to TN Basketball Assn - many of charges not proved : Madras HC

The assessee is an officer of the Indian Administrative Service. At the time of search and seizure, he was the Chairman Cum Managing Director of Tamil Nadu Minerals Limited ("TAMIN"), a Tamil Nadu Government Undertaking, which is engaged in mining and export of granites. Earlier to his posting in TAMIN, he had been Additional Collector of Salem District, District Collector of Periyar District, Managing Director of SIPCOT and Additional Secretary to Government of Tamil Nadu. The assessee had been a basket-ball player of considerable repute and he represented the Indian Team. Also he is the Chief Patron Chairman of Tamil Nadu Basket Ball Association.

The assessee's mother, late Dr.Dharmambal Namasivayam was the first woman graduate in Medicine and Surgery in Trichy. She served in many capacities at various stations of Tamil Nadu and retired as a Civil Surgeon.

Assessee is into legal business - indulges in illegal activity - gold confiscated in search - Deduction not allowable on losses as illegal activity is not part of assessee's regular business : ITAT

IT may sound a little bizarre but there is a rationale and structured thinking behind it. A claim of loss suffered by way of penalty or confiscation of goods due to infraction of law is allowed to a person engaged in illegal business but not to a person who is engaged in lawful business. The basic logic underlying this is that a person who is engaged in illegal activity and suffers loss due to infraction of law will be allowed claim of loss because it is incidental to his illegal activity whereas a person engaged in legal activity suffering loss for infraction of law on account of some illegal activity cannot be allowed deduction on such loss as such illegal activity is not his regular and normal business.

A tale of 'poor' investor, Income Tax and UTI - Apex Court orders UTI to compensate investor and also pay dividend

THIS is a triangular dispute which involves the UTI, the investor and the Income Tax Department which has to recover tax arrears from the investor-assessee. Hopefully, this decision of the Apex Court which has gone in favour of the assessee would also serve as a guideline for all those financial institutions who use market stratagems to attract the fund to their coffers and then treat the investors as sundry item in their decision-making.

Service Tax

Since Service Tax on Scientific or Technical Consultancy services was levied only on July 16, 2001, no tax payable for earlier period under Consulting Engineer's Services : Tribunal

IN the present case, an Audit was conducted in August 2001 on the records of a 15 year-old bulk drug manufacturer who also had a research and development department recognized by the Department of Scientific & Industrial Research, Govt. of India.

The Audit officers raised an objection that the company is required to pay Service tax on the Consultancy Services provided by them under the category - Consulting Engineer's Services.

Succumbing to the pressure tactics adopted by the officers, the assessee paid Service Tax of Rs.72,784/-, but registered his protest.

See our columns on tomorrow for the judgements