National Consumer Commission rules stock exchange is a service provider and it will have to compensate investors if a broker defaults;

China promises to diversify import basket to bridge trade deficit with India; PM says both countries to work together to remove NTBs and IPR protection;

Left again at its best - opposes imminent petro price hike;

ICAI concerned about fake CAs spoiling image of professionals;

PM asks Indian industry to think big, learn to compete and not to get worried about invasion of market by cheap Chinese goods

US President says Iran is major state sponsor of terror;

PM is in Beijing on three-day state visit to China;

2008-TIOL-27-ITAT-DEL.doc + lg story.doc

Interest on deposits made compulsorily to get bank guarantee is not income -  this is not a case where the assessee had made deposit of surplus money lying idle with him in order to earn interest. This is a case where the amount of interest earned from fixed deposit was due to compulsorily keeping the funds with the bank as margin money against the letter of credit issued for import of capital goods and for bank guarantee. This issue is squarely covered by the decision in the case of Karnal Cooperative Sugar Mills Ltd. Revenue was not justified to make the impugned addition.

Preliminary expenses pertaining to fee paid by the appellant to Registrar of Companies for increase in the Authorised Capital. The issue is covered against the assessee by the decision of jurisdictional High Court in the case of CIT Vs Hindustan Insecticides Ltd wherein it was held that the expenditure on account of fees paid by the assessee to the Registrar of Companies for increasing the authorized share capital of the company was capital expenditure and so the appeal is rejected on this ground.

Loss on account of exchange fluctuations: this issue is covered in favour of the assessee by the decision of Special Bench of ITAT, Delhi in the case of ONGC vs. DCIT and also in the case of DCIT vs. Maruti Udyog Ltd. wherein it has been held that the additional liability incurred by the assessee on account of variation in foreign exchange rate was an allowable trading liability where borrowed fund was utilized to meet the needs of the working capital. In that view of the matter this ground of appeal of the assessee is allowed.

Disallowance of Rs.22 ,91,288 /- being the expenses claimed by the appellant as revenue and relating to its trading activities. The Assessing Officer appears to have merely presumed the involvement of GM Production in manufacturing facilities in assessee's factory. The said presumption is not based on any material on record. Thus, the action of the Assessing Officer is merely based on surmises and conjectures. In the case of Vinay Kumar Modi, the Delhi High Court has held that addition made on mere conjectures and surmises are not sustainable . Therefore this addition is deleted.

Addition of excise duty to total turnover for computing the deduction under Section 80 HHC: One cannot interpret the words "total turnover" with reference to the, definition of the word "turnover" in other laws like the central sales tax or as defined in accounting principles. Excise duty and sales tax are indirect taxes. They are recovered by the assessee on behalf of the Government.: DELHI ITAT;

2008-TIOL-26-ITAT-DEL.doc

Income Tax - Block assessment - Assessee seeks dismissal of case on ground of limitation - Revenue argues the limitation period should be counted from the date of last execution - Since no asset was seized during the last execution exercise and the same was later revoked, the same cannot be taken into reckoning as a successful search for calcualting limitation period - Assessee's appeal allowed: DELHI ITAT;

2008-TIOL-25-ITAT-MAD.doc

Income Tax - Deduction u/s 80IA & 80IB - Assessee claims deduction for erection, testing site acceptance test and commissioning of LPG Filing Machine - AO disallows on the ground that erection and maintenance charges are separable from regular manufacturing activity - CIT (A) allows it - Assessee argues it is a composite contract and the same cannot be vivisected for different service charges - Since the assessee failed to produce the contract documents and the issue is covered in a Third Member decision that service charges for erection and commission are not entitled to avail deduction u/s 80IB - Revenue's appeal allowed : CHENNAI ITAT;

2008-TIOL-24-ITAT-DEL.doc + ansal story.doc

Disallowance of Rs. 34,000/- out of expenses incurred on Annual General Meeting of the Company. Coffee, tea at AGM ! The issue is squarely covered by the order of the ITAT for the assessment year 1998-99 to 1991-92 wherein similar disallowance made by the lower authorities were deleted by the ITAT. As the facts and circumstances during the years under consideration are in pari-materia , following the decision of the Co-ordinate Bench in assessee's own case, appeal allowed.

Disallowance of Rs.20 ,000 /- incurred on tea, snacks, meals etc. for the staff while on duty. During the year, the assessee company incurred expenses of Rs. 2,31,300/- on account of staff welfare expenses which mainly comprised of expenses incurred on refreshment, lunch and dinner etc. provided to the staff during the late hours working. The Assessing Officer made an ad hoc disallowance of Rs.50,000 /- on the plea that part of expenses were in the nature of entertainment, whereas the CIT (Appeals) restricted the same to Rs. 20,000/-. The assessee company still aggrieved and is in further appeal before ITAT. It was argued by the assessee that the entire expenditure was incurred for the purpose of the business, the Assessing Officer was not justified in treating part of the expenses as falling within the purview of sec. 37( 2A ) of the Income Tax Act, 1961. He further submitted that the issue is covered by the order of the ITAT for the assessment years 1988-89, 1989-90 and 1991- 92 in favour of the assessee. The CIT ( A)'s order appears to be very fair and reasonable, and the same do not require any interference. Appeal dismissed.

Disallowance of Rs.5 ,000 /- out of the amount billed by the auditors towards reimbursement of out of pocket expenses.

The Assessing Officer has made an ad hoc disallowance of out of expenditure incurred on account of reimbursement of travelling and other expenses incurred by the auditors while conducting the audits. The plea of the Assessing Officer was that some part of the expenses were in the nature of entertainment. Out of total disallowance of Rs.50 ,000 /- made by the Assessing Officer, the CIT (Appeals) restricted the disallowance to the extent of Rs.5,000 /-. The ITAT in assessee's own case for the assessment years 1990-91 and 1991-92 dealt with similar disallowances and the same were deleted by observing that expenditure incurred on refreshment to the auditor was initially for the purpose of business, no disallowance is warranted. As the facts and circumstances during the year under consideration are the same, respectfully following the order of the ITAT, the disallowance deleted.

Decline of deduction of Rs. 53,742/- being payment of PF for the month of March. There is no dispute for allowing the deduction if the same is made within the grace period of 5 days. In the interest of justice and fair play, matter restored to the file of the Assessing Officer with a direction to find out the date of actual payment and allow the same if the cheque is paid/deposited before 20.4.1992, its clearance even after 20.4.1992 will not disentitle the assessee to claim payment of dues.

Disallowance of Rs.44.06 lacs in respect of Apartment Project. There is no dispute to the fact that in the assessment year 1992-93, the demand was disputed by the assessee and the same was also not claimed as an expenditure . As the due was crystallized in the assessment year 1993-94, under consideration, the same was correctly claimed by the assessee as project expenditure and the proportionate cost of project on the basis of project completed was also increased. ITAT therefore, directed the Assessing Officer to allow assessee's claim for additional stamp duty paid during the assessment year 1993-94 under consideration.: DELHI ITAT;

rlt083-Part6.pdf + rlt083-Part7.pdf

RLT Case Laws Headnotes;

CENTRAL EXCISE SECTION

2008-TIOL-70-CESTAT-DEL.doc + mrp story.doc

Valuation – MRP mentioned but scored out - Torches cleared for free supply by manufacturers as advertisement propaganda to be assessed in terms of Section 4 of the CEA'44 : DELHI CESTAT;

2008-TIOL-69-CESTAT-MAD.doc

Central Excise – Fortnightly payment of duty - An assessee could discharge duty liability either out of ‘the account current' or by utilising CENVAT credit during the period of forfeiture of the facility of fortnightly payment of duty and that neither any interest could be levied nor any penalty could be imposed on the ground of duty not having been paid out of PLA.: CHENNAI CESTAT;

2008-TIOL-68-CESTAT-DEL.doc

Central Excise - Valuation - recorded CDs - Assessee includes royalty charges paid for copyright in assessable value only after Board Circular dated 19.2.02 clarified so - Revenue raises demand - Assessee argues the Circular is prospective - Given that the Circular merely reiterates that there has been no departure from the principles laid in Ujagar Prints case, it is clarificatory in nature - Not a fit case for waiver from pre-deposit: DELHI CESTAT;

2008-TIOL-67-CESTAT-MAD.doc

Central Excise - Penalty – Appellant failed to pay duty by due date. Outstanding duty paid but interest payable as per sub-rule 3 of Rule 8 of the CER not paid within 30 days. Penalty of Rs. 10,000/- imposed under Rule 25 (1) of CER 2001. Penalty of Rs. 10,000/- excessive in the facts and circumstances of the case. Penalty reduced to Rs.2,000/-. (Para 5) .: CHENNAI CESTAT;

2008-TIOL-66-CESTAT-MAD.doc

Central Excise – SSI exemption – exemption denied by the lower authorities by adding the value of semi finished goods manufactured on job work and cleared to the principal manufacturer who cleared the final products on payment of duty – the appellant is eligible for exemption under Notification 214/86 and these clearances are not to be added to deny the SSI exemption – when the substantive conditions were fulfilled the subject had to be allowed the benefit of the exemption Notification and failure to follow technical and procedural conditions could be condoned: CHENNAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-72-CESTAT-DEL.doc

ST - GTA Service - Assessee avails credit on the basis of TR-6 challan prior to 15.6.2005 - Revenue objects - Issue was decided by the Tribunal in the Essel Propack case 2007-TIOL-1643-CESTAT-MUM - Assessee's appeal allowed: DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff08_007.doc

Sri Lanka notification added to the list of notifications ineligible for exemption under Notification 20/2006;

CASE LAWS

2008-TIOL-71-CESTAT-MAD.doc

Customs – Import – Penalty & Fine – Investigation by department revealed that appellant indulged in clandestine clearance of bonded goods. Duty paid before issuance of show cause notice. Penalty equivalent to duty evaded imposable as mens rea established. Section 114A of the Customs Act, 1962. (Para 6)

Interest - Duty liability arose prior to 11.5.2001. Interest under Section 28AB (1) cannot be levied. (Para 6)

Redemption Fine - Redemption fine not to be imposed in lieu of confiscation of any goods where the goods are not physically available to be redeemed. (Para 6)

Personal Penalty - There is no finding that the Managing Director had personally indulged in any commission or omission rendering the goods liable for confiscation under Section 111 of the Act. Penalty under Section 112(a) not sustainable. .: CHENNAI CESTAT;

ddt 14 jan.doc

Classification of carpets and floor coverings having mixed composition in the Drawback Schedule – CBEC clarifies;

Central Excise officer found dead in Thiruvananthapuram;

tiol top.doc

Indian Customs 'canned' approach to 'customised software'

guest column.doc

Clash of titans - Rule 6 of CCR, 2004 and Notification 214/86-CE ;

uranium story.doc

Uranium mining project in Meghalaya gets green signal;

mbuzz233.doc

House of Pearl Fashions to acquire HK-based marketing company;

mbuzz232.doc

OM Metals bags Rs 600 Cr slum rehabilitation project;

mbuzz231.doc

India received 5 mn foreign tourists in 2007;

mbuzz230.doc

OECD Tax Administration Forum calls for 'enhanced relationships' with large taxpayers;