Jurispruden tiol - Monday's cases Legal Corner Icon — the image was hosted by the publisher and was not captured.

By Vijay Kumar

Income Tax

amount shown in books of account and Income Tax return cannot be treated as undisclosed income : Delhi HC

DURING a search of the office premises of the Assessee, a bill for an amount of Rs. 14 ,69,250 /- in respect of commission on sale of flats by M/s. Televista Electronics Limited was found. It appears that the books of accounts of the Assessee indicated payment of an amount of Rs.12 ,50,000 /- towards commission.

According to the Assessing Officer, post search inquiries revealed that the bill was bogus and in fact no commission was paid to M/s. Televista Electronics Limited. On this basis, the Assessing Officer added an amount of Rs.12 ,50,000 /- to the income of the Assessee as undisclosed income.

The view taken by the Assessing Officer was upheld by the Commissioner of Income Tax (Appeals). However, the Tribunal deleted the addition in the second appeal filed by the Assessee.

Customs

Import took place in Mumbai, Show cause Notice issued in Mumbai, appeal filed in Mumbai – prosecution launched in Delhi – no part of cause of action arose within Delhi - Delhi court has no jurisdiction to try the case : High Court

M/s Baron International Limited ( BIL ), a company registered in Mumbai, was at the relevant time marketing Akai Brand Colour Television sets. BIL entered into a contract with M/s. Akai Limited, Japan and Akai Electronic Corporation, Japan whereby the rebate would be paid to BIL based on the sales volume for the specific period. According to the complaint, information was received by the Directorate of Revenue Intelligence ( DRI ) that BIL and another firm, M/s. J.R. Electronics (which was later reconstituted as J.R. Consumer Electronics Private Limited) had been importing Akai brand colour TV sets in semi-knocked down ( SKD ) form through the port of Mumbai by misdeclaring the same as components of colour TVs. The factory premises of M/s. J.R. Electronics at Noida , U.P. , where the colour TVs were assembled, were searched by the Officers of the DRI , New Delhi on 17th October, 1995. The components of the colour TV and packages were found having a marking of Baron India .

PF

PF contribution- encashment of leave not to be included - Where the wage is universally, necessarily and ordinarily paid to all across the board such emoluments are basic wages : Supreme Court

THE dispute is whether the amount received by encashing the earned leave is a part of "basic wage" under Section 2(b) of the Employees ' Provident Funds and Miscellaneous Provisions Act, 1952 requiring pro rata employer 's contribution. Regional Provident Fund Commissioner held that the amount received on encashment of earned leave has to be reckoned for the purpose of Section 2(b) of the Act. Accordingly, demands were raised. Appeal was preferred before the Employees Provident Fund Appellate Tribunal which held that it is not a part of basic wages. However, it was observed that a different view was taken by the Bombay High Court and, therefore, the respondent in the appeals i.e. the Commissioner should take up the matter before the Karnataka High Court. Accordingly, Writ Petitions were filed before the Karnataka High Court which allowed the Writ Petitions and set aside the impugned orders. The present appellant preferred Writ Appeals before the Karnataka High Court which came to be dismissed by the common impugned judgment and so they are before the Supreme Court.