30. S. 36(1)(iii) : Interest on borrowed capital – Enhancement of lease rental – Question of fact [Ss. 37(1), 260A]
High Court dismissed the appeal of revenue in respect of allowability of interest paid on intercorporate deposits and enhancement of lease rental by holding the same as questions of fact. On appeal by revenue the same was dismissed by holding that the questions decided by Tribunal and High Court were purely on facts. (From the Judgment of Bombay High Court in ITA No. 452 of 2000 dated 28-1-2013) (A.Y. 1998-99)
CIT v. Essar Projects Ltd (2014) 365 ITR 363 / 223 Taxman 344 (SC)
31. S. 37(1) : Business expenditure – Guarantee commission – Matter remanded to High Court [S. 260A]
High Court refused to admit the question on allowability of guarantee commission on the ground that same question for earlier year has not been admitted. On appeal Supreme Court remanded the matter to High Court for disposal on merits, following the earlier year (A.Y. 1998-99)
CIT v. Essar Projects Ltd. (2014) 365 ITR 363 / 223 Taxman 344 (SC)
32. S. 132 : Search and seizure – Reason to believe – High Court appointed an advocate Commissioner to take inventory of goods – No reason was given the search and seizure action was illegal – Order passed by High Court was set aside
Court observed that how the High Court appointed an advocate Commissioner to take inventory of Goods in respect of which restraint order was passed by Revenue. Court also observed that High Court had not even remotely tried to see the reasons. Reasons, needless to say, can be recorded on the file and the Court can scrutinise the file and find out whether the authority has appropriately recorded the reasons for forming of an opinion that there are reasons to believe to conduct search and seizure. As is evident the High Court has totally misdirected itself in quashing the search and seizure action on the basis of the principles on non-traverse. Order of High Court was set aside matter remanded to the High Court to decide in accordance with law.
UOI v. Agarwal Iron Industries (2014) 272 CTR 313/ 112 DTR 137/(2015) 370 ITR 180 (SC)
Editorial: Decision in Ravi Iron Industries v Director of Investigation (2003) 264 ITR 28 (All.)(HC) is set aside.
33. S. 254(1) : Appellate Tribunal – Orders – Dismissal for default – No power to dismiss the appeal for want of prosecution even if the appellant therein or its counsel has not appeared when the appeal was taken up for hearing. CESTAT has to decide the appeal on merits. [Income-tax (Appellate Tribunal) Rules, 1963, R. 24, Central Excise Act, 1944 S. 35C(1)]
Question of law which arises for consideration in the present case was whether the Customs Excise and Service-Tax Appellate Tribunal has the power to dismiss the appeal for want of prosecution or not. Court held that Central Excise, Act 1944 enjoins upon CESTAT to pass order on appeal confirming modifying or annulling the decision or order appealed against or may remand the matter. It does not give any power to CESTAT to dismiss the appeal for default or for want of prosecution in case the appellant is not present when the appeal is taken up for hearing. Therefore CESTAT could not have dismissed the appeal filed by the assessee for want of prosecution and it ought to have decided the appeal on merits even if the assessee or its counsel was not present when the appeal was taken up for hearing. Matter was setaside and was directed to be decided on merit.
Balaji Steel Re-Rolling Mills v. CIT (2014) 272 CTR 205 (SC)