CBDT extends last date for obtaining tax audit report u/s 44AB to Dec 31 for flood-affected Bihar;

More live star tortoises crawl into Chennai Airport; Customs seizes another lot of 599 from pax heading for Malaysia;

RBI hikes CRR by half percent; Other key rates remain the same;

FM says India facing problems of huge capital inflows; needs to regulate portfolio investments by foreign entities;

Winter Session of Parliament to begin from Nov 15;

2007-TIOL-626-HC-DEL-IT.doc + loss story.doc

Income Tax - Assessee inducts two new Directors who make advance payments for purchase of a building premise for expansion of the organisation - Concerned Directors resigned and the seller requested to refund the advance but same was not done - Assessee writes off the sum as busninss loss - AO disallows but Tribunal allows - Tribunal erred as the first letter sent by the assessee to the AO admitted that the payment was towards the purchase of the capital asset and any loss arising out of such transactions has to be capital in nature - Revenue's appeal upheld: DELHI HIGH COURT;

2007-TIOL-625-HC-MUM-IT.doc

Income Tax - Search u/s 132 - Incriminating documents - Settlement petition filed offering undisclosed income, including unexplained investment made in the flats of one of the Directors of the company - Even as the settlement petition was pending, the AO completed the assessment by making additions of a part of unexplained investment in the flats - CIT invokes Sec 263 and argues that a part of the amount disclosed was taxable on substantive basis and holds the security deposit received by the assessee for letting out the flats was deemed income u/s 2(22)(e) - Tribunal sets aside the CIT order - Since the settlement petition has been allowed and the Revenue has accepted that, it cannot tax the unexplained investment which is already included in the sume disclosed before the Settlement Commission for the second time - Tribunal's order upheld - Revenue's appeal dismissed: BOMBAY HIGH COURT;

2007-TIOL-624-HC-DEL-IT.doc

Income Tax - Assessee is a partner in a partnership firm - Search u/s 132 on the partner in Delhi and Bombay - Silver bars seized from a bank in Delhi - Assessment order passed and the silver bars released to the partnership firm - After six years, the firm makes a represenatation before Bombay Income Tax for interests on the seized assets - Revenue informs the firm that no interest can be paid on seized assets as they were not cash as per the provisions of Sec 132B - As far back as 1979 the assessment was completed and the firm had become entitled to release of the silver bars but it did not demand any interest or compensation till 1990 and they have no explanation for the same, and secondly, they appeared to be non-serious by filing a claim in Bombay when the seizure was made in Delhi - Assessee is not entitled to interest under Section 132B of the Act on seizure of assets - Assessee's appeal dismissed: DELHI HIGH COURT;

2007-TIOL-623-HC-MAD-IT.doc

Income Tax - Nil return filed after claiming deductions for carry forward losses - Assessee computed income u/s 115JA and worked out tax liability - AO processes return u/s 143(1) and issues notice - Assessment revised u/s 154 to tax government subsidy on generator - a part of the same was received by the assessee but not reduced from the cost of machinery on which claim of depreciation in excess of eligible limit was allowed - CIT(A) allows the AO's order - Tribunal reverses it - Issue settled by the Apex Court in Apollo Tyres case - Once the P & L account is certified by Auditors under the Companies Act, AO has limited power of making changes as he does not have jurisdiction to go behind the net profit shown in the account except to the extent provided in the Explanation to Section 115J - No question of law as law is already settled - Revenue's appeal dismissed: MADRAS HIGH COURT;

2007-TIOL-622-HC-P&H-IT.doc

Income Tax - Assessee is a PSU - Wage revision - Interim payment made - Assessee claims recoverable advance salary paid which is not subject to TDS - AO refers to Sec 17(1)(v) and treats advance salary as part of arrears of salary and TDS is deductible - Sec 201 and Sec 201(1A) invoked and duty demand raised - Assessee pleads for stay and also moves CIT(A) - Stay denied and appeal filed before the Tribunal after CoD clearance - Tax recovery process initiated - High Court moved - Tribunal based on High Court interim stay rejects stay application of the assessee - Tribunal asked to apply its mind independently and hear the petition on merit - Recovery of arrears stayed: P&H HIGH COURT;

order279_2007.doc

CBEC issues transfer order of four Commissioners;

CENTRAL EXCISE SECTION

2007-TIOL-186-SC-CX.doc + waste story.doc

Excisability of waste and scrap of paper board - CEGAT has abruptly come to an abrupt conclusion - matter remanded: SUPREME COURT;

2007-TIOL-621-HC-P&H-CX.doc

Central Excise - Suppression of production - Duty demand and equaly amount of penalty under Rule 173Q levied - Commissioner(A) dismisses appeal as it was filed beyond 90 days - Commissioner(A) directed to examine the delay within the meaning of Sec 5 of Limitation Act, 1963 and if finds sufficient cause for delay, the issue may be decided on merits - Assessee's appeal allowed: P&H HIGH COURT;

Goods cleared for export without payment of duty under bond - no proof submitted hence duty confirmed - Appeal against such order does not lie before Tribunal in view of Section 35B(1) of the CEA'44, first proviso clause (c) thereto: MUMBAI CESTAT;

2007-TIOL-1669-CESTAT-MUM.doc

Rule 57Q - Modvat - TMT bars used in manufacture of Silo Tank - if items on which credit is taken are assembled into an immovable property, credit cannot be denied on the ground of the immovable property being non-excisable goods - Tribunal decision in Nava Bharat Ferro Alloys 2004-TIOL-817-CESTAT-BANG followed - Revenue appeal rejected: MUMBAI CESTAT;

2007-TIOL-1668-CESTAT-BANG.doc

Duty paid before issue of SCN ­ Penalty and interest set aside: BANGALORE CESTAT;

SERVICE TAX SECTION

2007-TIOL-1666-CESTAT-DEL.doc

ST - Cargo Handling Service - Service tax demand raised and penalty imposed - Commissioner(A) upholds demand but sets aside penalty - Commissioner reviews the order of the lower authorities and enhances penalty - Since the order levying penalty was already set aside by the Commissioner (A), there is no question of enhancing the same by the Commissioner - Assessee's appeal sustained: DELHICESTAT;

2007-TIOL-1665-CESTAT-BANG.doc

ST - AC cannot enhance penalty by rectifying his own order on directions of Commissioner: BANGALORE CESTAT;

CUSTOMS SECTION

CIRCULAR

cuscir07_40.doc

Import of New trim Cutting Waste for use in manufacture of Chindi rugs;

CASELAW

2007-TIOL-1667-CESTAT-AHM.doc

Section 125 of the Customs Act not made applicable by Section 12 of the Central Excise Act, 1944 for the purpose of excise duty levy - The findings that excise duty becomes demandable at the time of redemption of the goods which have been confiscated in terms of Section 125 (2) of the Customs Act, is therefore not legally correct: AHMEDABAD CESTAT;

ddt 30 oct.doc

Intellectual Property Rights (Imported Goods) Enforcement Rules, 2007 – CBEC instructions;

icecube.doc

Coal shortages must not slow down India's growth caravan;

2007-TIOL-187-SC-STATE CX.doc + alcohol story.doc

Can the States legislate on industrial alcohol? To be decided by a Larger Bench: SUPREME COURT;

postlundering.pdf

Adjudicating Authority under Prevention of Money Laundering;

rbi07cir015.doc

RBI liberalises booking of forward contracts;

mbuzz003.doc

Jet Airways connects New Delhi to Kennedy Airport;

mbuzz002.doc

HCL Technologies to host Quest Diagnostics's India data centre;

mbuzz001.doc

Ordinance issued to give effect to amendments in Bonus Act; Ceiling hiked to Rs 10,000 from April 1, 2006;