Jurispruden tiol – Tomorrow ' s cases

By Vijay Kumar

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

For debts to be classified as 'bad', assessee has only to write it off as irrecoverable, if subsequently any part of written off debt is recovered, same to be charged to tax; primary power, rather obligation of Tribunal, is to dispose of appeal on merits & incidental power to remand is only an exception and should be sparingly used: Third Member

THE following question has been referred to the third Member as there was difference of opinion between the AM and JM of the ITAT.

Whether on the facts and in the circumstances of the case, the addition with regard to bad debts should be deleted or the issue is required to be restored to be restored to the file of AO for further verification of facts?

The facts: The assessee was a limited company engaged in the business of leasing and hire purchase of equipment, financing, bill discounting, loan placement etc. In the return of income for the assessment year under consideration, the assessee claimed bad debt written off at Rs.85,69,350/-. The total income declared was a negative figure of loss of Rs.64,17,960/-. The Assessing Officer took up the assessment and issued notice u/s 143(2) on 29.10.2002. During the course of assessment proceedings, the assessee, as per letter dated 21.10.2003 claimed that the Bombay High Court vide order dated 4.7.2003 directed amalgamation of the assessee company with its holding company M/s Zuari Industries Ltd., Goa. According to the assessee, the Assessing Officer thereafter was not sure whether assessment was to be made by him or by the Assessing Officer at Goa assessing the holding company.

FERA

Discrimination on the ground of valid classification does not attract the wrath of Article 14 – Constitutional validity Sections 18 of FERA upheld – Supreme Court

Constitutionality of Sub-sections (2) and (3) of Section 18 of the Foreign Exchange Regulation Act, 1973 is in question in this appeal against a judgment and order dated 30.07.2007 passed by the High Court of Bombay.

Incidentally, the Act finds place in the Ninth Schedule of the Constitution of India. In terms of Article 31B of the Constitution of India inter alia none of the Acts specified in the Ninth Schedule is ultra vires even if it is inconsistent with or takes away or abridges any of the rights conferred by any provisions of Part III of the Constitution of India.

Customs

Kar Vivad Samadhan Scheme does not grant immunity from prosecution under IPC or PCA – Supreme Court

Fourteen years ago, one Dr.S. Balakrishnan, purchased the Toyota Lexus Car which was sent by Ship to Madras Port in July, 1994. His son Yogesh Balakrishnan presented certain documents for getting clearance of the said car from the Customs Department. One such document was a letter dated 8.9.1994 authored by the appellant herein Shri M. Natarajan who is the publisher of a magazine called "Tamilarasi" which publication had commenced in the year 1992. He is also the author of bi-monthly magazine " Pudiya Paarvai " which surfaced in the year 1993.

A First Information Report came to be lodged at the instance of Central Bureau of Investigation, Chennai for offences under Sections 120B read with Section 420, 468, 471 IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act. In that First Information Report, four accused were arrayed, they being,

(i) Shri S. Senthivel , Commissioner of Customs , Chennai,

(ii) Shri Hariharan , former Asstt. Collector Customs, Chennai,

(iii) Shri Raja Manoharan, Former Apprising Officer, Customs, Chennai and

(iv) Shri Balakrishnan .

See our columns Tomorrow for the judgements