CIT vs. Raychem RPG Ltd (Bombay High Court) – When we apply this functional test suggested by the Special Bench of the Tribunal, we find that impugned software does not form part of the profit making apparatus of the assessee and hence the same is to be disallowed a revenue expenditure. We hold so because we find that the business of the assessee company is that of manufacturing of telecommunication and power cable accessories and trading in oil retracing system and other products and impugned software is an Enterprises Resources Planning (ERP) package and hence it facilitate the assessee’s trading operations or enabling the management to conduct the assessee’s business more efficiently or more profitably but it is not in the nature of profit making apparatus. We, therefore, decide this issue also in favour of the assessee and we hold that this expenditure of Rs.20.60 lakhs is of revenue expenditure. We hold so by following the judgment of the Special Bench of the Tribunal relied upon by the LD AR of the assessee.
CIT v Loknete Balasaheb Desai S.S.K. Ltd. (Bombay HC)- ITAT was justified in holding that in respect of unsold sugar lying in stock, central excise liability was not incurred and consequently the addition of excise duty made by the assessing officer to the value of the excisable goods was liable to be deleted.
Titanor Components Ltd Vs ACIT, Panaji -(High Court of Bombay at Goa) – The power conferred by Section 147 does not provide a fresh opportunity to the AO to correct an incorrect assessment made earlier unless the mistake in the assessment so made is the result of a failure of the assessee to fully and truly disclose all material facts necessary for assessment. Indeed, where the assessee has fully disclosed all the material facts, it is not open for the AO to re-open the assessment on the ground that there is a mistake in assessment. Moreover, it is necessary for the AO to first observe whether there is a failure to disclose fully and truly all material facts necessary for assessment and having observed that there is such a failure to proceed under Section 147. It must follow that where the AO does not record such a failure he would not be entitled to proceed under Section 147.
CIT vs. Gopal Purohit – (Supreme Court) – The Supreme Court vide order dated 15.11.2010 dismissed the Department’s Special Leave Petition against the judgment of the Bombay High Court in CIT vs. Gopal Purohit 228 CTR 582 (Bom). The Tribunal has achieved a pure finding of fact that the assessee was engaged in two different types of transactions. The first set of transactions involved investment in shares. The second set of transactions involved dealing in shares for the purpose of business. The tribunal has correctly applied the principle of law in accepting the position that it is open to an assessee maintaining two separate portfolios: one relating to investment in shares and another relating to business activities involving dealing in shares. The tribunal held that delivery based transactions in the present case should be treated as those in the nature of investment transactions, and the profit received thereof should be treated either as short-term or, as the case may be, long-term capital gain, depending on the period of holding.
Shroff United Chemicals Limited. versus The Union of India – The Bombay high court last week described the denial of interest on refund of service tax by the deputy commissioner as ‘specious’ in the case, Shroff United Chemicals Ltd vs Union of India. It asked the revenue authorities to pay interest for the delayed refund. The firm, in anticipation of import of intellectual property services, had obtained service tax registration.
CIT v Tata SSL Ltd (Mumbai High Court) – by paying the impugned charges to Mahanagar Gas Ltd., the assessee did not acquire any right or control over the gas facility. The Tribunal held that the facilities served the sole purpose of supplying the gas to the assessee’s work and, therefore, it was an integral part of the profit earning process and facilitated in carrying on the assessee’s business more efficiently without giving any enduring benefit to the assessee.
The unit in question is situated at Nashik, Maharashtra within the jurisdiction of this Court. The said unit was initially administered by the LTU at Delhi and it is only as an afterthought the revenue is contending that the unit in question would not be governed by the LTU scheme for the period where there was no specific approval. If mere forwarding of the consent letter entitles the large tax payer to avail the benefits of the LTU scheme then the benefits of the LTU cannot be denied where the consent is impliedly given by submitting ER-1 returns regularly. The show cause noticed is issued by the LTU, Delhi to the petitioner’s unit at Nashik. Thus, in the facts of the present case, it cannot be said that this Court has no jurisdiction to entertain the Writ Petition filed by the petitioner to challenge the show cause notice issued by the LTU, Delhi to the unit of the petitioner set up at Nashik.
Joseph Vilangadan. v. Phenomenal Health Care Services Ltd. & Anr. – As per the said contract, Contractors deposited the sum of Rs. 10 lacs by undated cheque no.027840 drawn against South Indian Bank Ltd., Palarivattom Branch, Cochin branch with the respondent no.1 as refundable security deposit for the due performance of the agreement. The said undated cheque was in custody of the respondent 2 no.1 and it appears that the respondent no.1 filled in the date on undated cheque as 4.6.2008. The cheque was presented to the drawee bank through the banker of the respondent no.1. Cheque was returned unpaid on the ground that the drawer had stopped the payment. Therefore, notice was issued by the respondent to the contractor as well as its managing partner for the payment of the cheque amount. In spite of notice, payment was not made.
Mr.Vinoskumar Ramachandran vs The State Of Maharashtra – The Bombay high court has ruled that when a bank account is sought to be seized during criminal investigation, the account-holder need not be given prior notice. In this case, Essar Logistics vs Vinoskumar, the account holder argued that natural justice demanded that he should be given notice before freezing his account. The division bench of the high court rejected his contention and remarked: It would indeed be absurd to suggest that a person must be told that his bank account, which is suspected of having been used in the commission of an offence by himself or even by another, is being frozen to allow him to have it closed or to have its proceeds withdrawn or transferred upon such notice.
There is no justification on the part of the revenue in retaining the amount of interest earned on the seized amount especially, on the touchstone of the doctrine of accretion.
