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By Vijay Kumar

Income Tax

Sale of house property - capital gains tax - Deduction u/s 48 to be allowed first before allowing deductions under Ss 53 & 54: Delhi HC

IN an important decision the Delhi High Court has held that while computing capital gains tax the Revenue must allow deduction u/s 48(2) of the Act on the amount computed u/s 48(1)(a) and before allowing deduction under Sections 53 and 54 as per the scheme of the Act. Thus the final verdict which had gone in favour of the Revenue at the Tribunal stage was turned in favour of the assessee .

UP Sales Tax

Classification - only because charcoal contains the word `coal', the same would not mean to be a species of coal. - If an entry had been interpreted consistently in a particular manner for several assessment years, ordinarily it would not be permissible for the Revenue to depart therefrom , unless there is any material change

If there is no meaning attributed to the expressions used in the particular enacted statute then the items in the customs entries should be judged and analysed on the basis of how these expressions are used in the trade or industry or in the market or, in other words, how these are dealt with by the people who deal in them, provided that there is a market for these types of goods. This principle is well known as classification on the basis of trade parlance. This is an accepted form of construction. It is a well known principle that if the definition of a particular expression is not given, it must be understood in its popular or common sense viz. in the sense how that expression is used everyday by those who use or deal with those goods.

The meaning of drug is very wide and same has been held to be so in a large number of cases. So the appeals are allowed with costs. Counsel's fee assessed at Rs.50 ,000 /-.

Central Excise

Manufacture of micronutrient compounds – classification - It is the "method of manufacture" which has a strong bearing on the question whether the product(s) needs to be classified under CSH 3808.20 or under CSH 3105.00. Matter remanded. It is well-settled that mere non-declaration is not sufficient to invoke the larger period but some positive act of suppression is required- Supreme Court

Manufacture of micronutrient compounds – classification -

It is the "method of manufacture" which has a strong bearing on the question whether the product(s) needs to be classified under CSH 3808.20 or under CSH 3105.00. – Matter remanded.

Limitation: three Circulars have been issued by the Department. Till today, the controversy regarding the classification of "micronutrient fertilizers" was not settled. There is even a conflict of views between Ministry of Finance and Ministry of Agriculture. In the circumstances, question of invoking extended period of limitation does not arise. It is well-settled that mere non-declaration is not sufficient to invoke the larger period but some positive act of suppression is required for invoking larger period of limitation under Section 11A of the Central Excise Act, 1944

See our columns tomorrow for the judgements