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

By Vijay Kumar

Income Tax

“business profits" under Section 80HHC(3) would include Cash Compensatory Allowance and Duty Drawback – Supreme Court

By Finance Act, 1990, the Parliament had clarified that Cash Compensatory Support and Duty Drawback shall be taxable under Section 28 of the Income Tax Act, 1961. By the said Finance Act, 1990, clause (iiib) came to be inserted as one of the incomes chargeable to income tax under the head "business profits" vide Section 28. Clause (iiib) covers cash assistance (by whatever name called) `received or receivable' by any person against exports under any scheme of the Government of India . At the relevant time an issue arose as to whether cash assistance though includible in business profits under Section 28(iiib) would or would not constitute eligible income for the purposes of deduction under Section 80HHC. Since there was some doubt, CBDT had issued a Circular. By the said Circular, CBDT clarified that export incentives, namely, Cash Compensatory Support and Duty Drawback have to be included in the profits of the business for computing the deduction under Section 80HHC.

Central Excise

Tribunal's power of rectifying any mistake cannot be used as a tool by a disgruntled unsuccessful party to prolong the proceeding - ROM application rejected by Tribunal

AN appeal filed by the assessee in the year 1995 was dismissed by the Tribunal in the month of August 2000 the order of the CCE confirming a demand of Rs.40,519/- penalty of Rs.5000/- was upheld.

A ROM application was filed matter came to be listed for the first time in February 2007. The Tribunal was astonished a ROM application against a final order of the year 2000 coming up seven years later! Noticing that the provisions of Section 35C warrant the Tribunal to rectify any mistake apparent on record within six months meaning to say that the application in this behalf has to be necessarily made within the period of six months, the Tribunal made enquiries as to whether the ROM was indeed filed within the said period.

Finding that there still remained some unanswered questions about the whole “filing episode, the Tribunal found it prudent to proceed and decide whether the ROM was maintainable.

Income Tax

Depreciation - entitlement to higher rate - it's not income from hiring of lorries but the fact that whether assessee was into business of giving trucks on hire would decide issue

Depreciation u/s 32 - Assessee imports timber and sells the same in the market - claims 40% depreciation on trailers and loaders - AO disallows on the ground that the assessee was not into the business of giving lorries on hire - CIT (A) goes by the business income declared from the hiring business and allows the assessee's appeal - Tribunal & High Court both allow the CIT (A) order - Normally, concurrent findings of the lower authories need not be disturbed but in this case a vital issue was ignored that what would decide the entitlement to higher depreciation to the assessee is not the income from the lorry-hiring business but the fact that whether giving lorries on hire was a regular business of the assessee or not? - Matter remanded to the CIT (A) for fresh examination

See our columns tomorrow for the judgements