Jurispruden tiol – Tomorrow ' s cases
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By Vijay Kumar

Income Tax

AO suspects cash deposit of Rs one lakh by an employee getting a salary of 12 lakhs per month – salary earned abroad not taxable in India – compulsory contribution to social security schemes not addable to income : ITAT

TAX for salary for foreigner working abroad: The assessee is a French Citizen. He is employee of Air France posted in India since 8.8.2000 ( Sri Eric Maurou ) and since 12.3.97 ( Ghorayeb Emile ). The status of both the assessees is Resident But Not Ordinary Resident. Mr. Eric Maurou worked as General Cargo Manager; Mr. Ghorayeb Emile worked as Finance and Administration Controller. They filed return of income in respect of salary received in India . As per the terms of employment between the assessee and Air France apart from rendering services in India they were also required to supervise Operations in France as well as South Asia . As per the terms of employment the assessees were required to spend 80% of the total time in managing Operations in India 5% in South Asia and 15% in France . In the computation of income Mr. E.Maurou excluded 19 days of salary from the taxable salary in India on the ground that 11 days of time was spent in Paris and 8 days in Bangkok to look after the Operations in those places. According to the assessee since the salary receivable in France is subject to tax in India only if the salary is in relation to services rendered in India and since during the 19 days period the assessee rendered services out of India for managing Operations in South Asia as well as France, the salary for the said period was excluded by the assessee in the computation of the income. In the case of Mr.G.Emile similar deduction was claimed but the period of salary excluded in this case also was 19 days.

According to the A.O. no proof of actual nature of work done by the assessee in France and South Asia had been rendered by the assessee; even if work had been done in France and South Asia that could only be mainly in relation to what is his principal jurisdiction viz., India unless proof of work done outside India is established to have no connection with his principal place of work viz., India.

On appeal by the assessee the CIT (A) deleted the addition made by the AO by following the decision of the ITAT Special Bench.

Customs

CHALR Rules - If somebody is forging signature he will do so as and when required and not sign the blank bill of entries and keep in stock – punishment meted out to CHA is sufficient and there is no need for enhancement : Tribunal

AN intelligence was received by the Revenue authorities that the CHA had continued to transact business even after death of the only qualified person holding requisite qualification under Regulation 9 of the CHALR.
The licence was suspended in terms of regulation 21(2) of the CHALR in August 1995 & in November 1995 the same was revoked without prejudice to any action that may be taken on the basis of investigation/inquiry contemplated against the CHA.
Pursuant to an investigation report of March 1998 an inquiry in terms of Regulation 23 of the CHALR, 1984 was initiated against the CHA by appointing Enquiry Officer and Presenting Officer & when the following two Article of Charges were framed against the licensees.

1. The CHA failed to intimate the fact of death of Shri N.T.Shetty, who is the only qualified person in terms of Regulation 9 of the Customs House Agents Licensing Regulations, 1984 in the CHA company and the company transacted the business without a person having the qualification as required under Regulation 9 of Customs House Agents Licensing Regulations, 1984 and thereby violated the provisions of the Regulation 18(2) CHALR, 1984.

2. The CHA has forged the signature of Shri N.T.Shetty and continued to operate even after the death of Shri N.T.Shetty and hence all the transactions made by the CHA after 12.04.1994 (date of expiry of the qualified person) resulting in contravention of the provisions of the CHA Licensing Regulations.

Central Excise

Zest Powder is a food product and not a medicament, zestfully says Tribunal

THE appellant is manufacturing Zest Powder & claims that the same are P & P medicaments classifiable under heading 3003.10 of the CETA’85 but the hungry Revenue says that it is a food product classifiable under 2108.99 & hence assessable under section 4A of the CEA’44. This led to a demand of Rs.5.36 lakhs & some penalties.

The appellant gulps a glassful of milk laced with Zest powder & argues & argues only to find that the Revenue stood its ground stronger than ever what with the Commissioner(Appeals) passing an order sprinkled with arguments that could not be dislodged by the assessee even before the Tribunal.

Medicine vs. Food

• In common parlance, food is any eatable or potable substance consumed by human beings or animals throughout their life for satisfying hunger or test and mainly for getting required energy for strength and healthy growth of body.

• Whereas, the medicine is a substance which is consumed for a limited and specified purpose of preventing or curing same disease or infirmity under the advice of a medical expert.

See our columns on Monday for the judgements