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By Vijay Kumar

Income Tax

100% depreciation on energy-saving device is given by wisdom of Legislature and there cannot be a grievance against that; expenditure for maintaining guest house cannot be claimed as deduction : ITAT

THESE are three appeals from Revenue and assessee and the order runs into more than 10,000 words of legal wisdom.

The assessee is a Public Limited Company, engaged in the business of manufacture and sale of cables and filed its return of income, for the impugned assessment year 1996-97 on a income of Rs. 22,61,28,600. Thereafter the return was revised by reducing the total income to Rs. 19,33,26,400. In the course of assessment proceedings, the Assessing Officer made a number of additions and disallowances and finally determined the total income at Rs. 43,96,97,124.

One of the disallowances made by the Assessing Authority related to the depreciation allowance claimed by the assessee-company on its assets leased out to Andhra Pradesh State Electricity Board (APSEB). The assets leased out by the assessee-company to APSEB were Automatic Electrical Load Monitoring System. This is an energy saving device, and therefore, entitled for depreciation at 100%. The assessee-company, accordingly, claimed a depreciation allowance of Rs. 4,57,88,388.

Customs

Delhi High Court refuses to quash prosecution though CESTAT had set aside adjudication order for lack of evidence

WHAT happens to the fate of prosecution proceedings when the Adjudication order itself was set aside by the CESTAT and the Tribunal order reached finality? Should the prosecution proceedings also be quashed? This interesting issue has been already decided by the Apex Court, but the Delhi High Court had an occasion to deal with the issue again in a recent petition under Section 482 of the CrPC.

The petitioner was alleged to have smuggled goods from Nepal. The petitioner admitted the recovery, seizure and other incriminating facts. He stated that the seized goods were smuggled from Nepal and he had engaged himself in the business of smuggling.

Central Excise

Commissioner(A) remanding matter back on a finding which was not even alleged against appellant - Holding that order is devoid of any reasoning, Tribunal sets aside the same and remands the matter

STRANGE it may seem, but such instances do occur. The causes may vary - "over-worked", "under-staffed" or plain bored!

In an interesting case that came before the Tribunal, the appellant was aggrieved with a remand order passed by the Commissioner(Appeals). For the Commr(A), it is shown as disposal thanks to the power of remand which he still continues to possess courtesy the Gujarat High Court decision in the case of Medico Labs [2004-TIOL-39-HC-AHM-CX]. Usually Revenue accepts such remand orders simply because they feel it is not worth going in appeal but rather dispose of the matter at the earliest after taking care of the short comings pointed out!

Incidentally, vexed with an erroneous ruling passed by the Additional Sessions Judge, the Delhi High Court rebuked the lower court judge for lacking 'elementary knowledge of criminal law and procedure' and directed the district and sessions judge to recommend the ASJ's name for an intensive three-month refresher course at Delhi Judicial Academy. This news made headlines.

See our columns tomorrow for the judgements