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By Vijay Kumar

Income Tax

Amounts exceeding twenty thousand rupees, paid otherwise than by crossed cheques disallowance of expenditure, not voilative of the constitution when the statute is clear, no need to peruse the purpose of enactment ITAT Sp Bench

General applicability and scope of Sec. 40A(3). Admittedly, Central Govt. enjoys the constitutional right to levy tax on income. The Income-tax Act also provides the levy of tax upon the income of the assessee. However, such income has to be computed in accordance with the provisions prescribed under the Income-tax Act which includes the disallowance under certain circumstances. The arguments that disallowance of expenditure u/s.40A(3) would amount to violation of Article 265 of the Constitution of India , rejected .

Purpose behind enactment not relevant: From the plain reading of the section itself it is evident that it would be applicable where the assessee incurs any expenditure exceeding Rs.20,000/- otherwise than by a cross cheque or by a crossed bank draft. In such circumstances, 20% of such expenditure shall be disallowed. There is no ambiguity in the language of Sec. 40A(3) and, therefore, relying upon the decisions of Apex Court in the cases of Tara Agencies and Anjum M.H.. Ghaswala, we hold that the section is to be interpreted by giving literal meaning to the language used in the section itself

Central Excise

Clearances made to Advance licence holders – additional discounts given – includible in AV, but whether benefit of Notification 44/2001-CE(N.T) can be claimed after clearance – matter referred to Third Member

• The appellant is a manufacturer of products falling under chapter 25, 26, 27, 28, 29, 38, 39, 73, 84; they are selling their products to various categories of customers including advance licence holders.

• The appellants have been offering to their customers different types of discounts such as trade discount, cash discount, quantity discount; in particular to the category of 'deemed export customers' they have granted additional discounts varying from 20 to 30% and these buyers were required to invalidate the advance license held by them in favour of the appellant.

Notification 108/95-CE, rule 6 of CCRs and an 'un-updated' MEA site – Asian Development Bank is an International Organization, says Tribunal and sets aside Rs 1.83 Cr demand

It is to be held that Asian Development Bank is an international organization covered by Notification No.108/95-CE and if that be so, the provisions of Rule 6, sub-rule (1), (2), (3) of Cenvat Credit Rules are not applicable to the goods supplied to such projects.

Asian Development Bank stands mentioned against the Sl.No.21 below Section 3 of the Act, United Nations (Privileges and Immunities) Act, 1947 as an international organization

Adjudicating Authority could have sought more clarification from the Min. of External Affairs instead of rejecting the appellants' claim of the Asian Development Bank being one of the specified bank to which the provisions of Section 3 of the United Nations (Privileges and Immunities) Act, 1947 stand extended.

See our columns tomorrow for the judgements