Jurisprudentiol– Tomorrow's cases
Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax
Jewellery business - Customs seizes smuggled gold bars - AO makes addition u/s 69A for undisclosed income - Assessee claims deduction - Since assessee was into lawful trade, loss arising out of violation of law is not incidental to his business: Bombay High Court
LET's all travel back in time zone for about three decades. To be precise - May, 1980. Let's now recall the Apex Court famous ruling in the Piara Singh case (). Piara Singh was a smuggler. He used to carry currency notes to Pakistan and buy gold biscuits for smuggling that into the country for making profits. Since he used to pay income tax on profits generated out of his illegal trade, when the Customs seized the currency notes he was trying to smuggle out to Pakistan for purchase of gold biscuits, he claimed deduction under the Income Tax Act for the same. And the same was allowed as a seizure by the Customs was incidental to his illegal trade. Citing the same line of argument, an assessee tries to claim deduction in the latest case decided by the Bombay High Court. However, his efforts failed him as he was into a legal vocation to which loss arising out of seizure of smuggled gold can be directly linked as a business loss or incidental to such a trade. And the final verdict has gone in favour of the Revenue.
Central Excise
Appeals – not using the phrase “not legal or proper” and instead using “bad in law” – Commissioner's Review order is not bad in law – High Court
THE phrase 'bad in law' really means something which may be inapt or which cannot be sustained or held to be valid. Surely, this term is interchangeable with the words of the Statute 'not legal or proper.' It would have been an entirely different matter if the order of the Commissioner directing an appeal to be filed would have been passed without any application of mind and had merely said that the order is bad in law or for that matter not legal or proper. But the Commissioner has clearly given his reasons for directing that an appeal be filed and that in his opinion, the Commissioner (Appeals) has wrongly allowed the benefit of Modvat credit on inadmissible items by applying a notification retrospectively. No fault could have been found with the Commissioner for describing the finding of the Commissioner (Appeals) as bad in law for the purpose of Section 35B ( 2) of the Central Excise Act.
Service Tax
SIM cards imported on payment of Customs duty and Sales tax also paid on sale thereof - SIM card value not addable in Assessable value of service provided – Tribunal
THE contention of the appellant is that the SIM cards were imported on payment of Custom duty and they were also paying Sale Tax on sale of SIM cards; in respect of activation charges appellants are paying Service Tax; as regards Revenue's contention the issue is settled by the Tribunal in the case of M/s RPG Cellular Services Ltd. Vs. CCE().
Until Tomorrow with more DDT
Have a nice Day.
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