Jurispruden tiol– Tomorrow's cases

By Vijay Kumar

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

Sale of jewellery declared under VDIS– AO is not only competent to go into the genuineness of the transaction, but duty bound to do so to ensure that the scheme is not misused – ITAT Special Bench

In an order running into 185 paras in 141 pages containing more than 61000 words, the FIVE Member Special Bench of the ITAT held that the immunity given by Section 68 of the Finance Act, 1997 incorporating VDIS is limited to the extent that the existence of jewellery stands accepted and the amount credited in the books of the declarant to the extent of value of the jewellery so declared cannot be assessed as income of the declarant for any assessment year under any provision of the Income-tax Act including the provisions of Section 68. This immunity, however, stops there and there is no provision in the scheme to extent the same further, either expressly or even by implication, to cover the sale of jewellery declared under VDIS also.

The AO is not only empowered to go into the genuineness of the transaction of sale of jewellery declared under VDIS. but he is duty bound to do so in order to ensure that the scheme is not misused by the declarants for any more benefits than what were intended to be given under the scheme;

it is thus open to the department to go into the genuineness of the transactions of sale of jewellery declared under VDIS and examine the same in accordance with the relevant provisions of Income-tax Act.

Customs

Discharge of export obligation certified by DGFT - Bond and bank guarantee cancelled by Customs - Commissioner's order for demand of duty, confiscation and penalty not sustainable: CESTAT

THE story continues. DGFT certifies the export obligation, Deputy Commissioner of Customs cancels the bond and bank guarantee as a token of fulfilling the export obligation by the assessee but the Commissioner of Customs is not impressed. The appellants were issued a show cause notice by the Commissioner alleging that they have not fulfilled the export obligation.

Central Excise

When issue concerns valuation of goods, it is not proper on part of adjudicating authority to shirk from dealing with excisability of product – Commissioner(A) has rightly decided this primary issue – O-in-A does not travel beyond SCN: Tribunal

Revenue is aggrieved with the Order passed by the Commissioner(Appeals) who, as per Revenue's say has travelled beyond the demand notice inasmuch as he had mis -directed himself in deciding the excisability issue, when the fact remains that the demand notice was issued alleging undervaluation.

The short facts are that the assessee is pulverizing polyethylene into powder form and clearing the same to their Madras Unit on payment of Central Excise duty. It is the department's contention that the said pulverized powder has been undervalued and hence differential duty was demanded.

See our columns Tomorrow for the judgements