Jurisprudentiol- Tomorrow's cases

By Vijay Kumar

Central Excise

Amount paid by the EOU after de-bonding is Cenvatable , rules Tribunal

TO add to the long list of frivolous appeals being filed by the Revenue throwing to the wind the Board clarifications, and which, but naturally, are dumped by the Tribunal, here is a classic example.

The issue involved is whether the appellant after de-bonding himself from EOU to DTA is eligible to avail the credit of the amount of duty paid on indigenously procured capital goods or not.

Income Tax

Deductions - Transfer to reserve to be worked out on gross total income before making deduction u/s 36 as well as under Chapter VI-A of Act : Rajasthan HC Larger Bench

THE issue before the High Court of Rajasthan was

"Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the Commissioner of Income-tax (Appeals)' view that deduction under section 36(1) (viii) of transfer of reserve at 40 per cent, was to be worked out on the gross total income before making deduction under this section as well as under Chapter VI-A of the Income-tax Act, 1961 ?"

It is the legal owner who is liable to the wealth-tax levy on the value of specified assets licensed/leased by him for a term of less than twelve years as laid down in section 269UA (f) : ITAT Special Bench .

THE issues before the Special Bench:

1. Whether the value of the immovable asset owned by an assessee is includible in the net wealth of the owner/assessee or the lessee in terms of section 4(8 )( b) of the Wealth Tax Act read with section 269UA (f) of the IT Act where the term of the lease is ( i ) exceeding 12 months but less than 12 years; and / or (ii) exceeding 12 years.

2. Whether the words in parenthesis in section 4(8)(b) of the W.T. Act "(excluding any rights by way of lease from month to month or for a period not exceeding one year)" in fact relate to the nature of the lease agreement, which will not qualify for applying the provisions of section 4(8)(b) of the W.T. Act.

3. Whether lease agreement for a period for less than one year with an extension clause which is normally an agreement of Leave and Licence, will not be covered by section 4(8)(b) of the W-T Act and section 269UA (f) of the I.T. Act.

See our columns tomorrow for the judgements