India, Hong Kong sign revised air services agreement;

CBDT Placement Committee gears up to issue promotion order of 51 CCITs; may go for in-situ order soon;

PM says education remains favoured sector of UPA Govt;

Govt decides to remove 24% FDI cap on SSI Sector;

Broadcasters Association says no to Delhi HC suggestion to take Govt permission before airing sting operations;

2007-TIOL-737-HC-DEL-IT.doc + property story.doc

Income Tax - Assessee lets out property on rent against refundable interest-free deposit - AO adds notional interest on interest-free deposit u/s 28(iv) - CIT(A) deletes and Tribunal uphlds it - Section 28(iv) can be invoked only where the benefit or perquisite is other than cash - Sec 23(1)(a) which is the relevant Section for determining income from house property contemplates only rent and certainly not the interest on refunable deposits that may be placed by the tenant with the landlord for letting out the property - In a taxing statute it would be unsafe for the Court to go beyond the letter of the law and try to read into the provision more than what is already provided for - Revenue's appeal dismissed:DELHI HIGH COURT;

2007-TIOL-736-HC-ALL-IT.doc

AY 1984-85 - Income Tax - Land acquisition by the State u/s 17(4) - Part compensation awarded in 1984 and the rest in 1987 - Capital gains tax - Since the AY is before the 1991 amendment in the Act, no capital gain was exigible to tax - Revenue's appeal dismissed:ALLAHABAD HIGH COURT;

2007-TIOL-735-HC-MAD-IT.doc

Income Tax - Assessee claims 100% depreciation on energy-saving equipment - In fact the same was enhanced in proportion to the number of months in the transitional year - Also claimed deduction for rental income and interest income u/s 32AB - AO allowed but CIT invoked revisionary powers u/s 263 and the same was allowed by the Tribunal which directed the AO to limit the depreciation to the written down value of the asset - As regards the rental income the Tribunal allowed the deduction for being concessional rent collected from the employee for the premises let out - The correctness of the invocation of Sec 263 was never an issue for consideration before the authorities, and besides even on merit, if the depreciation is allowed at more than 100% of the actual cost on the basis of the number of months in the previous year, that would give a negative figure for the written down value and that would not have been the intention of the Legislature, if one considers the concept of depreciation with reference to Section 32(1)(ii), which provided that depreciation would be allowed in the case of block of assets such percentage on the written down value, as prescribed in Rule 5 of the Income-tax Rules - However, the tribunal' order allowing deduction for rental and interest income does not call for interference: MADRAS HIGH COURT;

2007-TIOL-443-ITAT-AHM-TM.doc

Income Tax - Pre-operative expenses - Assessee is in the process of setting up a port project - acquires technical knowhow from overseas company - Earns income by supplying the same technical knowhow to two different parties, also engaged in the development of ports in the State - AO treats contract receipts paid by both the parties for the consultancy services as revenue receipts - Also disallows deduction on interest income earned on LC and FDRs - CIT (A) agrees with the AO on disallowance of interest income but allows contract receipts as the assessee claimed the same as reimbursement of expenses - Both Members of the Tribunal agree that the technical knowhow acquired by the assessee was capital asset, qualifying as 'plant' and eligible for deprecition u/s 32 and the contract receipt was revenue in nature and not reimbursement of expenditure - However, the Members disagreed on allowability of expenditure incurred for providing the consultancy services which are allowable deduction - Third Member observes that there was no difference of opinion as both had agreement on the main issue and so far as working out the expenditure incurred for providing the service to both the subscribers of services goes, the matter is remanded to the AO for fresh computation: AHMEDABAD ITAT THIRD MEMBER;

CENTRAL EXCISE SECTION

2007-TIOL-232-SC-CX.doc + sc story.doc

Central Excise - Valuation - Cum duty price - Department invokes Sri Chakra tyres - Court reminds that the Revenue appeal was dismissed long ago: SUPREME COURT;

2007-TIOL-734-HC-P&H-CX.doc

Central Excise - application under Section 35 H to High Court - inclusion of cost of packing material in the assessable value of the aerated waters - there in no question of law which would emerge for reference - prayer of revenue denied: P & H HIGH COURT;

2007-TIOL-1941-CESTAT-MUM.doc + freight story.doc

Even when the freight actually paid was less than the amount collected by way of freight, and the difference was retained by the appellant, it would still not form part of the assessable value - Tribunal by Majority following SC decision in Baroda Electric Meters [2002-TIOL-96-SC-CX]. Revenue appeal rejected: MUMBAI CESTAT;

2007-TIOL-1940-CESTAT-MUM.doc

Cenvat Credit - Inputs lost in fire - Once remission has been disallowed, there is no question of reversal of credit - Moreover, in the case of Grasim Industries, 2007-TIOL-135-CESTAT-DEL-LB , LB has held that even if remission is granted, there is no need to reverse Cenvat credit on inputs - Revenue appeal dismissed: MUMBAI CESTAT;

2007-TIOL-1939-CESTAT-MUM.doc

Refund - Goods cleared on payment of duty subsequently rejected & received under rule 16(2) of CER 2002 - Having chosen to remove the goods from the factory premises, the argument that the goods were non-marketable gets totally demolished - Appeal rejected.

Refund of the amount of duty paid by the appellant on the final products cleared by them which was subsequently rejected and received by them under the provisions of Rule 16(2) of CER - Removal of the goods from the factory after discharging the duty liability indicates that the appellant themselves accepted that the goods are marketable - Having chosen to remove the goods from the factory premises, the argument that the goods were non-marketable gets totally demolished - Appeal rejected: MUMBAI CESTAT;

SERVICE TAX SECTION

2007-TIOL-1943-CESTAT-AHM.doc + Jyoti Story.doc

Execution of the work is not included under the words, 'advice', 'consultancy' or 'technical assistance' in the definition of Consulting Engineer - whether the amounts realized towards execution of work will be covered under Service Tax - Difference of opinion - Matter referred to Third Member: AHMEDABAD CESTAT;

2007-TIOL-1942-CESTAT-DEL.doc

ST - Authorised Service Station - Period 2001-04 - Assessee pays no service tax on service provided against free coupon but payment collected from the automobile company - Tax with interest paid and registration taken - Revenue further checked at the automobile company's end and found that higher sum was paid to the assessee - Fresh shown cause notice issued and penalty imposed - Tax with interest paid but penalty under various Sections contested - Given that the mala fide intention of the assessee to evade tax stands proven, penalty equal to the tax amount and under other sections upheld but penalty under Sec 78 partly reduced.:DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff07_118.doc

SEZ - Exemption to Castor Oil cake;

CASE LAWS

2007-TIOL-1938-CESTAT-MUM.doc

CDMA WLL telephones are Cellular Phones eligible to the benefit of exemption Notification No.6/2002-CE, 21/2002-Cus, 21/2005-Cus dated 1.3.05.

Commissioner has concluded that CDMA WLL phone does not work on cellular technology and hence, the benefit of various exemption notifications are not available to the appellants; that CDMA WLL phones are "basic phones without wires" and they are not cellular phones & this finding of the Commissioner is not based on any technical material, but based on advertisements of BSNL, website information, orders passed by Telecom Regulatory Authority of India (TRAI) and Telecom Dispute Settlement Appellate Tribunal (TDSAT).

GSM or CDMA or TDMA - all the standards are based on digital cellular technology & CDMA is one of the standards of digital cellular communication technology. Board has acknowledged in Circular 57/03 dt. 27.6.03 that the CDMA WLL fixed wireless telephones are working on cellular technology & also clarified in para 4, that CDMA WLL using CDMA is a recent advancement in cellular technology. The Tribunal in Bhagyanagar Metals Ltd. vs. CCE, Goa - 2005 (180) ELT 370 (Tri) has held that so long as the phones operate on cellular technology, they are cellular phones and hence entitled to the exemption. Supreme Court in Tata Teleservices Ltd. vs. CC - 2006 (194) ELT 11 (SC)) held that fixed wireless telephones are indeed cellular phones and entitled to the exemption. After holding so, the Supreme Court affirmed the decision of Mumbai Bench of the Tribunal in Bhagyanagar Metals, Andhra High Court's decision in Surana Telecom and set aside tine decision of the Delhi Bench of the Tribunal in Tata Teleservices Ltd.

Board vide circular No. 15/06-Cus dated 20.4.06 had modified its earlier circular dated 27.6.03 and clarified that the exemption is available to CDMA WLL fixed wireless phones.:MUMBAI CESTAT;

ddt 18 dec.doc + cbecinstruct.doc

Exemption from excise duty - NHAI Member can sign;

SEZ - Exemption to Castor Oil cake + Import of new motor cycles - DGFT amends + Exemption from excise duty - NHAI Member can sign;

spl down.doc

Border protection and Civil Societies;

mbuzz161.doc

FM lauds States' efforts in containing consolidated fiscal deficit at 2.4%; 26 States enact Fiscal Responsibility legislation;

mbuzz160.doc

Gitanjali Gems signs MoU with Mariella Bitrani Fashion Group, Italy;

mbuzz159.doc

L&T bags Rs 287 Cr Mumbai International Airport contract;

mbuzz158.doc

OECD advises Brazil to strengthen corporate liability laws on foreign bribery;

mbuzz157.doc

WIPO recognises India as International Searching Authority;