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By Vijay Kumar

Income Tax

If two reasonable constructions of taxing provisions are possible, that construction which favours assessee must be adopted - deduction allowable on ESI fees paid before filing return; fee for placement of shares is capital expenditure; no interest while computing income u/s 115J : ITAT

Fee paid to the Registrar of the Companies for expansion of the capital base of a company is directly related to the capital expenditure incurred by the company and although incidentally that would certainly help in the business of the company and may also help in profit making, it still retains the character of capital expenditure since the expenditure is directly related to the expansion of the capital base of the company.

Foreign travel expenses - in spite of giving opportunity at the assessment stage, and also at the appellate stage, the assessee has not been able to give corroborative evidence

ESI contribution - delayed? since the payment have been made towards ESI before the due date for filing the return under section 139(1) of the Act, the same is allowable deduction.

if two reasonable constructions of a taxing provisions are possible, that construction which favours the assessee must be adopted.

No interest u/s 234B and 234C is chargeable while computing the income of the assessee in terms of Section 115J of the Act.

FERA

While evidentiary value of a retracted statement u/s 40 of FERA may prima facie appear to be weak, there is no thumb rule which prevents Court from relying upon it as a material during charge-framing stage : Delhi HC

"While the evidentiary value of a retracted statement under Section 40, FERA, may prima facie appear to be weak, it must be remembered that there is no thumb rule which prevents a Court from relying upon it as a material during the charge framing stage. Here, the trial Court did not rely on that statement alone; statements of other prosecution witnesses (duly cross examined by the Petitioner) were also considered by it. The trial Court also had the benefit of other evidence such as bank account statements, expert opinion etc. Thus, the argument about inadmissibility of Section 40 FERA statements pales into insignificance."

Central Excise

Remission of duty - Amount of insurance claim received cannot, by any stretch of imagination, be called as transaction value under Sec 4 of Central Excise for demand of duty : Tribunal

THEY never fall short of ideas. Giving is usually an excruciating process. We are referring to remission claims filed by an assessee whose excisable goods have been lost or destroyed by natural causes or by unavoidable accident etc. That 'poor man' has already suffered financial loss and trudging the steps of the insurance office and the surveyor's office has caused him great anguish. He also has to satisfy the excise authorities that the excisable goods have certainly been lost or destroyed by natural causes/unavoidable accident and then seek remission of duty in terms of rule 21 of the CER, 2002.

Usually such applications lie amongst the dusty files of the department and are resurrected only after the range Superintendent, as a measure of abundant caution & in order to safeguard revenue issues the assessee with a notice demanding Central Excise duty on the goods now shown "missing" in the statutory excise records.

See our columns Monday for the judgements