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Infosys Chief Mentor Murthy says possible recession in US economy is an opportunity for cost-effective Indian IT companies; Mr A N Pahuja, CIT and D Karunakar Rao, Addl CIT, go to ITAT as Accountant Member; China under pressure to continue ban on trade in tiger; 15-yr moratorium coming to an end this year; Indian Ambassador to US Ronen Sen decides to hang up his diplomatic boots ; Japan sets up USD 10 bn fund to aid developing nations to combat global warming; Kamal Nath initiates India, EFTA joint negotiations for greater economic ties; Security beefed up as Indian High Commissioner in Pakistan comes under suicide attack threat; |
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| Dear Member, Also sending you the following files: |
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Income Tax - Assessee files an appeal along with cross-objection before Tribunal - Appeal dismisses both and communicates to the assessee - Misc application filed - It was also dismissed and communicated - Appeal before the High Court, pleading there were bonafidely prosecuting the cross-objection in appeal filed by the Revenue and time taken in those proceedings be excluded - Since the assessee was bonafidely prosecuting the cross-objection and the same being sufficiently explained, the period between when the first order was communicated by the Tribunal and the time when the Misc application was dismissed and communicated be excluded - Revenue may be compensated Rs 5000 - Delay condoned: BOMBAY HIGH COURT ; 2008-TIOL-48-ITAT-DEL.pdf + bank story.pdf Depreciation on investment and amortization of securities. The issue for consideration relates to allowance of depreciation on investments kept in permanent category. These investments are held till the maturity date. Therefore, the investments are not held by the bank as stock-in-trade which should be valued as per market price or cost price. The assessee has valued the permanent investments at a lower price as per guidelines issued by RBI . The investment held not as stock in trade cannot be valued at the yearend for the purposes of Income tax. When the investments are sold whatever may be capital gain or loss will be determined as per the provisions of Income Tax Act. Madras High Court in the case of TN Power Financial & Infrastructure Development Corporation Ltd. v Joint CIT held that RBI guidelines cannot over-ride statutory provisions of Income Tax Act. Therefore, contention of assessee that assessee's case is covered by ITAT order for assessment year 1975-76 is no longer applicable. Moreover, in assessment year 1975-76 it was held that change in the method of valuation of stock and security to comply with the directive of the Reserve Bank of India could not be said that the change was not bonafide. The valuation of stocks and securities held as stock in trade has to be valued on market price or cost price which ever is lower. However, where stocks & securities are held as investments, the valuation cannot be made for the purposes of income tax as per RBI guidelines. As regards amortization of premium paid cannot be treated as expenditure. For example if assessee purchases a security of face value Rs. 100/- for a sum of Rs.125 /-, Rs.25 /- cannot be amortized over the life of the security. As already observed that the securities are held as investments and therefore whenever such securities are sold or en-cashed at the time of maturity, the profit or loss arising thereon is to be considered under the head capital gains. Since RBI guidelines as held by Madras High Court in the case of TN Power Finance and Infrastructure Development Corporation Ltd. cannot override the mandatory provisions of Income Tax Act, 1961, the depreciation and amortization claimed by assessee on investments held in the permanent category cannot be allowed to be deducted while computing the taxable income. We may also like to state that income is to be computed as per the mandatory provisions of section 145 of the Act and not in accordance with guidelines issued by RBI . In view of above facts, we do not find any infirmity in the order passed by ld CIT (A) for both the years. Inclusion of interest on accrual basis on the investments made in 2.5% Bihar Jamindari Abolition Compensation Bonds, 1973. Respectfully following the precedent we set aside this issue to the file of Assessing Officer with the similar directions. disallowance of depreciation on steel furniture, counters and electric fitting treating them as plant & machinery of the bank merely on the ground that the details were not available. The facts of the case are identical to the facts of the case before us. No decision contrary to what has been held in the case of the assessee has been brought to our notice. Therefore, assessee's case is covered by order of ITAT referred to above. Respectfully following the same, we allow the claim of the assessee. Interest tax Act liability. Under Income tax Act while computing taxable income of the assessee, the interest tax liability is allowable as deduction. For assessment year 1996-97 the actual interest tax liability is at Rs.8,64,34,460 /- which is allowable as deduction and not the amount of provision made at Rs.9,24,00,000 /-. The contention of assessee that the difference between two has been admitted as income for assessment year 1997-98 and therefore, the entire amount should be allowed as deduction, cannot be accepted. The assessee is entitled for deduction to the extent of Rs.8 ,64,34,460 /-. However, since the assessee had admitted income of Rs.59 ,65,540 /- in assessment year 1997-98, the Assessing Officer will reduce the income to this extent in assessment year 1997-98 after verifying the facts. As regards for assessment year 1997-98, the actual interest tax liability is to be allowed as deduction. The Assessing Officer is directed to allow the interest tax liability as determined under the interest tax act, 1974. The Assessing Officer is directed accordingly. Entertainment expenditure. It is a fact that tax audit report in respect of certain branches were not received and tax auditors have not included the expenditure incurred on entertainment in respect of those branches. Nothing has been brought on record by the assessee that expenditure incurred in respect of those branches was less than Rs.5 lakhs. In the absence of such details we do not find any reason to interfere in the matter. Therefore, the authorities below were justified in recomputing the disallowance on account of entertainment expenditure. As regards the disallowance for assessment year 1997-98 at Rs.6,28,391 /- is concerned, we find that assessee himself has added Rs.5,04,891 /- while computing the total income for the assessment year 1997-98. Therefore, the addition of Rs.5 ,04,891 /- has been made twice. We, accordingly, direct the Assessing Officer to delete the addition of Rs.5 ,04,891 /- for assessment year 1997-98. computation of deduction u/s 80M of the Act. Respectfully following the precedent, it is held that the assessee should be allowed deduction u/s 80M on 75% of gross amount of dividend received by the assessee. The Assessing Officer is directed accordingly.:DELHI ITAT; Income Tax - Assessee files miscellaneous application for recall of Tribunal's earlier order to rectify apparent mistakes - Sec.254(2) only allows for rectification of mistakes apparent from record and not to recall and review the entire order in the garb of exercising powers u/s 254(2) - Tribunal has not been granted power of review under Income Tax Act 1961 - Application disallowed :DELHI ITAT; Income Tax - Assessee, engaged in the businesss of engineering design service, claims deduction on account of royalty payment to its parent Co. for use of specific software - A.O. disallows treating it as capital expenditure - Assessee made payment for licensed use of software and not for its acquisition thus no proprietory rights passed to the assessee nor any advantage of enduring nature accrued to it and therefore expenditure is revenue in nature - Revenue's appeal dismissed on this ground:DELHI ITAT; Income Tax - Assessee, engaged in the business of hire purchase and financing - claims depreciation on certain equipment leased - A.O. disallows on the ground that the transaction is not a genuine lease transaction but only financial arrangement - Assessee objects on the ground that reasonable opportunity of being heard not given - Claim of depreciation is allowed only on proof that lease transaction was genuine; assets were in existence and used in the lease transaction which was the business of the assessee but assessee failed to discharge and moreover, opportunity is not to be given at every stage of proceeding but a reasonable opportunity is to be given which was provided - Assessee's appeal dismissed:CHENNAI ITAT; |
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NOTIFICATION CBEC amends rule 11 of Central Excise Rules, 2002 to insert proviso for mentioning name of HUF / proprietor in invoice; CASE LAWS 2008-TIOL-55-HC-MAD-CX.pdf + excise hc story.pdf Central Excise – Show cause Notice – High Court not to interfere: There could be no doubt that in matters of taxation, it is inappropriate for the High Court to interfere in exercise of jurisdiction under article 226 of the Constitution of India either at the stage of show cause notice or at the stage of assessment where alternative remedy by way of filing a reply or appeal, as the case may be, is available but these are limitations imposed by the Courts themselves in the exercise of their jurisdiction. Writ Court cannot decided issues of facts on affidavits: In this case, as already stated, so many violations, which are factual in issue, have been alleged against the appellant and the appellant was only required to submit his explanation to the alleged violations, it is not expected a writ Court on the basis of an affidavit and counter affidavit, resolve the disputed questions of fact. The Adjudication Authority could have dropped proceedings: Furthermore, what is impugned is only a show cause notice calling upon the petitioner to submit its reply. It is not a final determination. The respondent would have very well dropped the proceedings, if the cause to be shown by the petitioner are well founded.: MADRAS HIGH COURT ; 2008-TIOL-146-CESTAT-MUM.pdf + hawkins story.pdf Cenvatted Master cartons cleared from factory to depots for packing excisable goods cleared from factory in primary cartons eligible for Credit after 14.05.2003 when “depot” was notified as the place of removal: MUMBAI CESTAT; CENTRAL EXCISE - Benefit of the exemption Notification No. 64/95 CE DATED: 16.3.1995 cannot be extended to ship stores for consumption “on board a vessel ”, to the ship builders who are still constructing the vessel. The impugned order set aside. Matter remanded back to the Commissioner for a decision and quantifying the duty liability in accordance with law. Revenue Appeal allowed by way of remand: BANGALORE CESTAT; CE – manufacture – mere relabeling not amounts to manufacture: The assessee had labeled their name, address and brandname on the barrels containing the goods imported by them. This was done to meet the requirements of Rule 33 of the Standards of Weights and Measures (Packaged Commodities) Rules, 1997 under the Standards of Weights and Measures Act and not to render the goods marketable so as to attract Note 5 to Chapter 38, identical to Note 5 to Chapter 30. Hence the principle laid down by the Board for the period prior to 16.5.2001 in relation to Note 5 to Chapter 30 must be applicable to the present case and, accordingly, we hold that the respondents' activity of adding their name, address, brandname etc. to the label on the imported goods in compliance with Rule 33 of the aforesaid Rules did not attract the mischief of Note 5 to Chapter 38. Further, it is not in dispute that that goods imported in barrels were sold as such in India after the above labeling etc. This process did not involve any repacking from bulk to retail pack. The ratio of the apex court's decision in Johnson & Johnson is squarely applicable to this factual situation inasmuch as, in that case, Note 5 to Chapter 30 was held to be inapplicable for want of repacking from bulk pack to retail pack. We hold that the respondents' activity in question did not attract the first part of Note 5 to Chapter 38 inasmuch as the labeling/relabelling of the barrels was done only to meet statutory requirements under the Standards of Weights and Measures Act and there was no repacking from bulk to retail pack.: CHENNAI CESTAT;
SERVICE TAX SECTION ST - GTA Service - Can Cenvat credit be utilised for payment of ST by service recipient? - Revenue says no as assessee did not provide any output service - Issue already settled in favour of the assessee: DELHI CESTAT; ST - Franchisee Service or Business Auxiliary Service - Assessee has an agreement with the home loan giving bank for verification of credentials of applicants - bank pays commission for the service - Revenue says the assessee is a frachisee of the franchisor bank - Since the franchisor does not receive anything from the franchisee, such a service is covered under the BAS and not franchisee service - Penalty set aside: KOLKATA CESTAT; ST - Maintenance & Repair Service - Tax with interest deposited - Payment of tax before issue of SCN not to absolve the assessee of liability to pay penalty: DELHI CESTAT; ST - Payment of tax with interest before issue of show cause notice not to absove the assessee of the liability to pay penalty : DELHI CESTAT;
CUSTOMS SECTION 2008-TIOL-56-HC-MUM-CUS.pdf + cha story.pdf While considering the difficulties that a business house may suffer the proviso permits the Commissioner of Customs in the circumstances set out therein to permit the company or firm to carry on the business of a Customs House Agent inspite of the fact that no qualified person is available as long as a "G" card holder is available. The licence once validly issued can only be revoked or forfeited in the circumstances set out therein. In the instant case it is not the case of the Appellants that they have cancelled or forfeited the licence. Therefore, the case is not covered by the Regulation 20. Yet another provision which would be relevant would be Regulation 11. The regulation, sets out, that the license would be valid for a period of 10 years from the date of issue and shall be renewed from time to time in accordance with the procedure provided in sub-regulation (2). A reading, therefore, of all these regulations would lead to the conclusion that the license so issued would continue to be in force for the period of its term, unless it is cancelled or revoked in terms of Regulation 20. On failure to have a qualified person at the highest, it merely becomes inoperative for the time being, but the moment a qualified person is available, then it is open to the holder of the licence to operate the license. The license being personnel to the person, on his death, it cannot be operated. The expression ceasing to be in force must be so read. Once the petitioner had communicated to the Appellants by letter that a qualified license holder was being appointed from 1st week of October, 2006 the Appellants were bound to permit the respondents to operate the license. Though the Tribunal addressed itself to the wrong question which really would not be relevant, the question of law as framed considering the discussions as now discussed would not arise: BOMBAY HIGH COURT ; Customs – 100% EOU – benefit on Notification 133/94 Cus denied to the goods cleared in DTA on the ground that the goods are not manufactured goods - Adjudicating Commissioner has held that the impugned goods namely, silk fabrics made into curtains, powdered toners and re-sized audio cassettes are considered to be 'manufactured product' for the purpose of Notification No. 2/95 -CE. - Hence, his holding otherwise in respect of the material used in the production of such goods and denying benefit of Notification No.133/94 to such inputs is contradictory – The expression, ' manufacture' has to be given a liberal interpretation - demand confirmed under the impugned Order is not sustainable. : KOLKATA CESTAT; CUSTOMS: Barge brought into the Indian Customs waters without declaring in the Import Manifest-- when the goods have not been confiscated- held penalty is not leviable on the Master of the vessel under Section 112 of the Customs Act, 1962: BANGALORE CESTAT; |
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Non-payment of service tax on the international travel in any class other than the economy class – Board wants report; Education Cess on automobile Cess – yet another view; Redefine Budget preparation with five issues in mind! Revenue Mindedness! Is BCCI an arm of 'State'? CIC decides it is not public authority, covered under RTI Act; Chief Vigilance Officer - Vacancies during 2008; Income Tax Investigation looking for name-matching software; Glenmark Pharma receives FDA nod for semi-solids manufacturing plant at Baddi; IRDA approves HDFC equity sale of 26% to ERGO International AG; DGCEI raids tile manufacturers at Madi; Rs 20 cr evasion detected; Manufacturers clash with excise officers - a few injured; |
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