Jurispruden tiol – Today's/Tomorrow's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax

{Though fully submerged in the Budget, we could not desist from bringing you this important order today.}

Chit Fund Scheme: Revenue cannot insist on changing method of accounting until it proves assessee's method distorts profits, says Apex Court

IT is a well settled law that every assessee is entitled to arrange his affairs, and also follow the method of accounting of his choice. However, this can continue only till the Revenue establishes that a particular type of accounting method distorts the profits of the assessee and thus hurts the interest of Revenue. If the Revenue fails to do so, it cannot insist on changing the method of accounting as per its whims and fancies. This is what constitutued the core of the dispute which has been decided by the Apex Court in a chit fund case. Since the Bench found that the substitution of the completed contract method by the percentage of completion method was revenue neutral, and the AO had not recorded any findings indicating any sort of distortion of the profits, the Apex Court has dismissed the Revenue's appeal.

Tomorrow:

UP Trade Tax

Levy of tax is not on use of goods but on the transfer of the right to use goods : Supreme Court

It has been further held that Article 366(29-A )( d) shows that levy of tax is not on use of goods but on the transfer of the right to use goods. That, right to use arises only on the transfer of such a right under the contract and unless there is transfer of such right, the right to use does not arise. Therefore, it is the transfer which is sine qua non for the right to use any goods. If the goods are available, the transfer of the right to use takes place when the contract in respect thereof is executed. As soon as the contract is executed, the right is vested in the lessee.

Central Excise

When ground for rejecting appeal of appellant is totally non-existent on date of order, the order is required to be set aside with consequential relief : Tribunal

NOTWITHSTANDING the provisions of Section 11BB of the CEA '44 that requires interest to be paid in case of delay in granting refunds, the excise authorities come out with all sorts of revolutionary excuses to reject a refund claim are not afraid to even ink them in black white.

In fact, the Board had categorically mentioned in its Circular 572/9/2001- CX . Dated 22.02.2001 that where refund arises consequent to the decision of any authority, the first and foremost action ought to be to expeditiously file an appeal/stay application well before the expiry of stipulated period of three months (and not waiting for the last date of filing of appeal) that no refund/rebate claim should be withheld on the ground that an appeal has been filed against the order giving the relief, unless stay order has been obtained