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Cabinet gives nod to amendment of Sec 20 in Indian Trusts Act + amendment in Air Service Agreement with Jordan + ex-post facto approval to agreement with Cyprus for combating terrorism; Ministry of Corporate Affairs ask investors to check trackrecord of promoters with them before investing in IPOs; Modi to be sworn in as Gujarat CM tomorrow; Spectrum conundrum: GSM lobby moves HC against Tribunal's order; UB bags distribution rights for Dalmore Single Malt; |
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| Dear Member, Also sending you the following files: |
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INSTRUCTION e-TDS returns - default cases involving demand upto an amount of Rs 100 to be ignored; CASE LAWS 2007-TIOL-235-SC-IT.doc + sc it story.doc Income Tax - Sec 10(20) - Assessee claims to be a local authority - AO rejects it and makes additions and disallows certain deductions - CIT(A) agrees with the assessee - Tribunal sets aside the order of CIT (A) - HC says the assessee is a local authority - HC order set aside with the observation that the Income Tax Act does not define local authority, but Section 3(31) of the General Clauses Act, 1897 defines the said expression and it was held that the assessee was not a local authority - On the question whether the assessee was to get registered under Sec 12A for invoking provisions of the Sec 11(1)(a) to claim exemption as charitable institution the Apex Court ruled that since this question was raised earlier before any lower authorities the HC should have remanded it back - AO directed to consider the appellant's plea - Assessee files application u/s 12A and the same was rejected after nine years - Assessee files fresh application - AO meanwhile passes assessment order - Meanwhile, a pertinent question comes up whether for claiming benefit under section 11(1)(a), registration under section 12A is a condition precedent ? - Registration u/s 12A is a condition precedent for availing benefits u/s 11 - Tribunal directed to expedite the cases pending before it and decide them on merits:
SUPREME COURT; Income Tax - Assessee is a Cooperative Labour Contract Society - claims deduction u/s 80-P on interest income earned from members of the society - AO disallows but CIT(A) for taxing only net interest income by allowing interest paid to outside agency for lending money - Tribunal dismisses the appeal on the ground of low tax effect - Since it is a settled law that the Board Circular is a binding on the Revenue and then the case not falling under the detailed stipulations in the Circular, the Revenue's appeal is dismissed: MADRAS HIGH COURT; Income Tax - Condonation of delay - Revenue argues that since the processing of judicial matters was shifted from the Ministry of Law to the Income Tax Department in December 2005 but all documents were not received, the filing of appeal was delayed - Delay of 173 delays condoned but a cost of Rs 5000 was ordered to be paid to the assessee and the same was ordered to be recovered from the officer responsible for causing the delay - Revenue's appeal allowed: MUMBAI HIGH COURT; 2007-TIOL-450-ITAT-DEL.doc + british story.doc Satisfaction should be apparent from the assessment order and there cannot be any presumption about such satisfaction, merely on initiation of penalty proceedings without there being any satisfaction recorded in the assessment order specifically. ++ The satisfaction required to be recorded by the AO before validly initiating the penalty proceedings, the findings/observations recorded by the AO in the assessment orders passed originally as pointed out and relied upon , cannot be said to be sufficient compliance of the statutory requirement and the requisite satisfaction cannot be said to be spelt out by the AO in the said orders on the basis of the said findings/observations. Why it was just and proper to initiate penalty proceedings or at least to show as to why he was satisfied that the assessee had concealed the particulars of his income or had furnished inaccurate particulars of such income, has to be spelt out. ++ The requisite satisfaction about the assessee having concealed the particulars of his income or having furnished inaccurate particulars of such income was not recorded by the AO in the relevant assessment orders before initiating the penalty proceedings u/s 271(1 )( c) and in the absence thereof, the initiation of penalty proceedings itself was bad in law and consequently the penalties imposed by him in pursuance of the said initiation are liable to be cancelled. ++ In view of the above, the tribunal has aside the impugned order of the ld. Commissioner of Income Tax (Appeals ) ( A) confirming the penalties imposed by the AO u/s 271(1)(c) for all the six years under consideration and cancel the penalties so imposed.: DELHI ITAT; 2007-TIOL-449-ITAT-JODHPUR.doc Since the closing stock has to be valued at the end of the year, the natural corollary that follows is that the NRV is also be considered as at the end of the year and not the average selling price prevailing throughout the year. nature of mill lining expenses has been established to be a recurring cost, which falls upon the assessee from time to time and hence cannot be treated a capital expenditure. Once this conclusion is reached, there is no justification for making disallowance for the expenditure incurred in this year notwithstanding the fact that in the books of account a different treatment has been given, if the expenditure is of Revenue nature, the same would call for deduction in the year in which it is incurred. the advantage resulting from the incurring of the expenditure may extend beyond the year in question. It would be treated as capital expenditure only if it enhances the capital structure by way of addition to the assets, if, however, the fixed capital remains unchanged, the incurring of expenditure would be taken as Revenue if it simply facilitates the carrying on of business more efficiently and profitably. By making payments for obtaining ISO 9002 certification, the fixed capital of the company has not enhanced in any manner. It rather created a positive image of the products of the assessee for the smooth conduct of the business. The principle of consistency does not empower the Assessing Officer to deviate from the stand taken by him in the previous year unless factual or legal position justifies departure in the instant year.: JODHPUR ITAT; |
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2007-TIOL-1966-CESTAT-BANG.doc + ssi story.doc CE - SSI exemption - rural area - the Tahsildar of Paravoor Taluk has certified that the appellant's factory is situated in Survey No. 88/4D of Kadungallur Village of Paravur Taluk. Hence it is abundantly clear that the disputed area is indeed a village and therefore, it should be considered only as rural area. In any case there is no justification in holding that the disputed area has been notified as an Urban area either by the Central Government or State Government. The disputed area is also included in GCDA which is Grater Cochin Development Authority. This authority is constituted by Government of Kerala in the interest of planning and development in the Greater Cochin. The Secretary, GCDA also issued a certificate stating that GCDA is not an Urban Area Committee. In these circumstances, we cannot hold that the disputed area whether it is Kodungallur or Kadungallur is an Urban Area. Hence the SSI exemption cannot be denied for the appellants: BANGALORE CESTAT; 2007-TIOL-1965-CESTAT-MUM.doc + electrodes story.doc Cenvat Credit not available on Welding Electrodes used for repairs and maintenance - judicial propriety requires that Bench follows law declared by the Larger Bench and not to adjudge the correctness or otherwise of the same - Tribunal. LB decision in Jaypee Rewa Plant 2003-TIOL-246-CESTAT-DEL-LB & Triveni Engg 2005-TIOL-595-CESTAT-DEL-LB followed: MUMBAI CESTAT; Central Excise - Cenvat Credit - Assessee takes credit on capital goods - After using the machine for eight years the assessee disposes off the same and reverses part of the credit availed at the time of purchase - Revenue demands full reversal of credit taken - Going by the Tribunal's decision in the case of Madura Coats Ltd ( 2005-TIOL-591-CESTAT-BANG ) and the fact that the capital goods were not removed 'as such' rather used machine was cleared, no need to reverse credit - Revenue's demand set aside: CHENNAI CESTAT; Applicability of Notification No 14/2002- CE - Benefit of said exemption denied on the ground that the fabrics have been manufactured in continuous process from the spinning stage and hence no duty has been paid on the base fabric or the yarn - CBEC Circular No 680/71/2002 - CX dated 10-12-2002 clarifies that the exemption under Notification no 14/2002 -CE is applicable to the composite Textile Mills even though they are exempted from payment of duty under Notification no 22/96 - CE in respect of captively consumed yarn and base fabrics - Other Commissioners have allowed the duty benefit to other manufacturers similarly situated - Issue settled by the judgment in case of Simplex Mills Co Ltd - Impugned order set aside: MUMBAI CESTAT; Once additional duty is paid by the assessee, the burden to show that the duty incidence has not been passed on to the customers lies on the assessee-This burden has been discharged by producing Chartered Accountant certificate - Merely because the amount has been shown as expenditure in the Profit and Loss Account does not establish that it has been recovered as duty from the customers especially in a case where inputs were cleared as such, without any further manufacturing, whereby the cost of production could have been increased- Revenue's appeal against sanction of refund dismissed: MUMBAI CESTAT;
2007-TIOL-1962-CESTAT-BANG.doc ST - Port Services - Assessee owns a Port Railway Yard - Railways collects user fee from its users and passes on the same to the assessee - Revenue argues Railway Siding Charges collected by the assessee is a part of port services and is taxable to service tax - Commissioner(A) says railway siding charges are different from railway haulage charges which is a taxable service but it is included in the port services - Since the assessee itseld does not provide any service but gets receipts from the Railway which collects the user charges, the demand is not sustainable: BANGALORE CESTAT; ST - Consulting Engineer Service - Assessee is recipient of technical consultancy provided by foreign company - pleads it only got transferred rights to use technical knowhow and no service - Going by the terms and conditions of the agreement and also the reply to the SCN where the assessee has admitted receiving technical consultancy, it is not a fit case of waiver of pre-deposit: DELHI CESTAT; ST - Penalty - Commissioner (A) directs for deposit of tax and 25% of penalty - Modification application filed - Appeal and modificaiton plea dismissed by the Commissioner(A) by a single order - It is not proper for the adjudicating authority to pass a single order - Case remanded to pass proper and separate orders on merits: AHMEDABAD CESTAT;
CUSTOMS SECTION Custom House Agent's Licence - licence was suspended due to irregularities by one of the partners of the firm - after the demise of the partner, the firm was reconstituted with a new partner who had qualified himself under regulation 9 of CHALR - Commissioner's order revoking the suspension upheld - but the condition attached that the CHA should comply with the requirement of regulation 8 is set aside as one of the partners had already been qualified under Regulation 8 of the CHALR:CHENNAI CESTAT; |
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ddt 24 dec.doc + J&K ST clarification.doc Service Tax - Total Confusion! J & K becomes epicentre of chaos! Duty on aluminium utensil manufacturers - What is justification & revenue yield? The Mirror and the Vanity Bag! Duty on aluminium utensil manufacturers - What is justification & revenue yield? 2007-TIOL-739-HC-DEL-RTI.doc + rti story.doc Right to Information is a fundamental right - Income Tax Department to furnish information sought within two weeks - serious note taken of the lackadaisical approach of the Department in releasing the information:DELHI HIGH COURT; IFFCO signs MoU with Senegal to revive phosphoric acid plant; Railways earnings grow by 13.5%; carries 187 mn pax in one year; Dena Bank raises Rs 150 Cr capital through hybrid & perpetual bonds; |
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