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By Vijay Kumar

Income Tax

Income Tax - It is now too late in the day, after 17 years, for Revenue to raise contention that interest is liable to be taxed on receipt basis: Delhi High Court

THIS case has all the masala that a Bollywood director can never dream of. The cause of action had the India – Pakistan war of 1965 as the background. The action started in Pakistan , most of the drama took place in England and it is tax dispute in India .

In 1990 when the assessee wanted interest to be taxed on receipt basis, the Income Tax Department wanted it to be taxed on accrual basis. In 1990, the assessee accepted before the High Court to get taxed on accrual basis. Now in 2007, the Department wants it to be taxed on receipt basis. Heads you lose, tails, I win!

The question under reference to the High Court was, “Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the Income by way of outstanding price, contractual interest and interest as per the awards upto 20.7.77 arose in the assessment year 1978-79 and therefore the question of taxability of the amount computed on that basis could not arise for consideration in the assessment year 1980- 81 in question?”

The sum and substance is whether the amount of interest in terms of the awards which were eventually upheld by the House of Lords by dismissing the Special Leave to Appeal filed by the National Bank of Pakistan on 20th July, 1977 could be taxed on accrual basis or on receipt basis.

Central excise – SSI Exemption

SSI exemption – use of a geometrical design that belongs to nobody – no bar for denying exemption : Supreme Court

THE appellant Nirlex Spares Pvt. Ltd. was and/or is engaged in the business of manufacture and sale of Riderless Steel Healds and Flat Steel Healds . These goods were manufactured and sold by the company under its own brand names/trade names viz. " Intatex " and " Intaco " which were affixed/ printed on its corrugated boxes. However, since it is a company registered as a Small Scale Industrial Unit, it was availing the benefit of exemption from payment of central excise duty under the SSI notification.

Central Excise

Valuation of Physician Samples – Board's Circular dated 01.07.2002 is to be applied retrospectively for the period from 01.07.2000 – Beneficial Circular to operate with retrospective effect : CESTAT Larger Bench

PHYSICIAN Samples continue to hog the limelight even after the ailment has been cured. We are talking about the valuation of these samples.

Even though the new concept of Transaction Value made its appearance on 01.07.2000 & the Determination Rules followed suit, the first comprehensive Circular under the new regime clarifying the doubts under the Valuation Rules made its appearance only on 01.07.2002.

See our columns Tomorrow for the judgements