Committee of Speakers from seven States recommend Parliament should work for at least 100 days and State Assemblies for 60 days;

FM approves 34 FDI proposals worth Rs 2288 Cr, including that of UTV Software Communications Ltd (Rs 400 Cr) + Global Assets Holding Corp (Rs 580 Cr); Hindustan Coca-cola proposal goes to CCEA;

ACC promotes two IAS officers as Secretary; K Mohandas goes to Ministry of Overseas Indian Affairs & Dinesh Rai from DDA to Small & Medium Enterprises;

Union Cabinet grants six-month extension to Second Administrative Reforms Commission + nod to CPWD to float tender for construction of Afghanistan's Parliament Building and Indian Chancery Complex + merger of 50% of DA with basic pay in CPSEs;

Last known urn containing ashes of Bapu immersed in Arabian Sea today;

DRI (DZU) seizes 4 kg heroin and arrests two persons in Amritsar;

Calcutta HC Additional Judges Justice P S Datta & Justice P Mandal appointed as full-time Judges;

Should FM abolish Wealth Tax? (See 'Budget Run-Up 2008);

Budget Session to begin on Feb 25;

Frivolous PILs : SC says time to impose penalty of Rs one lakh to curb 'nuisance';

Chennai Airport Customs seizes gold jewellery worth Rs 12.5 lakh; Pax coming from Kuala Lumpur arrested;

Bankers may cut interest rate by 0.5% in coming weeks;

2008-TIOL-52-ITAT-DEL.pdf + assessment story.pdf

Whether initiation of reassessment proceedings is justified? The requirement of the law for initiation of re-assessment proceedings are that if the Assessing Officer has reason to belief that any income chargeable to tax has escaped assessment for any year, he may subject to provision of section 148 to 153 assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which come to his notice subsequently in the course of the proceedings under this section. Considering the facts of the case in the light of the judicial decisions, it is clear that there was no basis whatsoever for initiating reassessment proceedings in these assessment years under appeals.

Whether assessee was served of the noticed under section 148 of the IT Act? - though it is a condition president for validity of the re-assessment proceedings that notice under section 148 shall have to be served. However in the peculiar facts and circumstances of the case, we are unable to hold that reassessment proceedings can be invalidated in that ground. We may also mention that assessee has joined the reassessment proceedings. We therefore, do not find any merit in the contention of the ld. Counsel for the assessee. This issue is therefore decided in favour of the Revenue and against the assessee. “

Whether assessee has used Mumbai Flat for business or professional purposes and whether assessee is entitled for deduction on account of depreciation and maintenance charges? Whether the purchase value of Mumbai Flat is to be charged to Wealth Tax under section 2 (ea) of the Wealth Tax Act? It is clear that if the assessee occupied any house or any building for the purpose of any business or profession carried on by him, the same shall not be subjected to tax under section 22 of the IT Act and under the section 2(ea) (3) of the Wealth Tax Act. These provisions only specify the language "any house" and "any building". The language in both these sections did not specify whether it should be the residential property or the commercial property. The language of the section provides that any house or any building as may be occupied by the assessee for the purpose of any business or profession carried on by him shall not be subjected to income tax or Wealth Tax.

Whether notional rent is chargeable under section 22 and 23 of the IT Act? - Since assessee used and occupied Mumbai Flat for business purposes and carried on business from the said premises, therefore, no notional interest can be charged under section 22/23 of the IT Act. As well as no wealth tax could be levied. This issue is therefore decided in favour of the assessee and against the Revenue. :DELHI ITAT;

2008-TIOL-51-ITAT-DEL.pdf

Income Tax - Assessee claims deduction u/s 80IB and 80HHC which is allowed by A.O. on the same amount - CIT initiates proceedings u/s 263 and cancels the assessment on the ground that profits which are claimed under Sec.80IB should have been reduced from total profits before allowing deduction u/s 80HHC - As per provisions of Sec.80IA(9)/80IB(13) any deduction allowed under these sections is to be reduced from the eligible profits before allowing deduction u/s 80HHC - A.O., in the instant case, failed to reduce the amount claimed u/s 80IB from the amount of profits of business before allowing claim u/s 80HHC thus the order is erroneous to the extent of being prejudicial to the interest of revenue and rightly cancelled u/s 263 - Assessee's appeal disallowed on this count :DELHI ITAT;

2008-TIOL-50-ITAT-DEL.pdf

Income Tax - Assessee claims deduction of cost of acquisition of shares in computation of long term capital gains - Revenue computes cost of acquisition in terms of Rule 1D of Wealth Tax Act - Assessee objects on the ground that cost of acquisition of same asset has to be same for same purpose even if in different hands and revenue can't have an inconsistent approach - Revenue has to have a consistent approach and can't value same asset differently for same purposes, and rule 1D of Wealth Tax is inapplicable in case of Income Tax Act wherein fair market value is to be determined in terms of 55(2)(b)(ii) read with section 2(22B) - In the instant case cost of acquisition of shares of same Co. for same purpose as already determined in case of other persons is also to to be appllied in the case of asessees - Assessee's appeals allowed :DELHI ITAT;

2008-TIOL-49-ITAT-DEL.pdf

Income Tax - Assessee pays interest on borrowed funds - also makes interest-free advances to some parties - AO disallows proportionate interest paid by the assessee in relation to the interest free advances made to others – Following judgment of Punjab & Haryana High Court in Abhishek Industries Ltd. ( 2006-TIOL-314-HC-P&H-IT ), Tribunal holds disallowance of interest justified notwithstanding the fact that no disallowance had been made in the earlier year :DELHI ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-159-CESTAT-AHM.pdf + reliance story.pdf

Assessee raises doubt – no suppression: we find that it was the appellant who raised the doubt about the availability of notification on that portion of the fuel used in the manufacture of electricity, supplied to GEB grid and township, vide their above referred letter. In spite of the doubt having been raised by the appellant themselves, show cause notice for the period July '99 to July '00 was raised only on 4.9.01. In such circumstances, it cannot be said that there was any suppression or malafide intention on the part of the appellant so as to justifiably invoke the longer period of limitation.

When judicial opinion was in assessee's favour, intent to evade cannot be sustained: Apart from the above, we find that the Hon'ble Gujarat High Court in case of CCE Vs. Gujarat Narmada Fertilizers Co. Ltd. 2006 (193) ELT 136 ( Guj .), has held that the fuel used in the dutiable as well as exempted final product is entitled for the benefit of modvat credit. In fact, in the appellant's own case, being order No.A / 1514-1515/ WZB / AHD / 2007, dt . 19.6.07, it was held by following the Larger Bench's decision of the Tribunal in case of Gujarat Narmada Fertilizers Co. Ltd. 2007 (208) ELT 342 (Tri-LB) = ( 2007-TIOL-104-CESTAT-MUM-LB ) that such fuel used in the manufacture of exempted final product is entitled to modvat credit, As such, we note that the belief which the appellant entertained was also found favour with by the Tribunal as well as by Hon'ble Gujarat High Court and the law to the contrary was only declared by the Hon'ble Supreme Court in 2007 in the above mentioned case of Solaris Chemtech Ltd. As such, we find that there was justifiable reasons for the assessee to entertain reasonable belief that such fuel would be attracting Nil rate of duty in terms of notification No.67 /95-CE, dt. 16.3.95. It is well settled that when the quasi-judicial or judicial bodies has held the view which the assessee has also adopted, it cannot be said that such adoption was with an intent to evade payment of duty. In any case, the appellant themselves entertained the doubt about such exemption as detailed in their letter of Aug.'00 and has intimated the Revenue about the same. It is well settled by catena of judgments that some positive action to suppress or misstatement with an intention to evade payment of duty is required to involve the longer period of limitation.

Revenue was undoubtedly aware of the fact of supply of electricity by the appellant to GEB grid and residential colonies. No objection was ever raised by them to availment of benefit of captive consumption notification in respect of such fuel so used. On the contrary, appellant themselves approached the Revenue and expressed doubt about such availment and also requested for provisional assessment till the issue is decided. Can they be held guilty of any suppression or mis -statement, in such circumstances? The answer would be a clear and emphatic 'No' : AHMEDABAD CESTAT;

2008-TIOL-158-CESTAT-MUM.pdf

Valuation – Deduction - Appellants collecting transportation charges from customers without indicating the same in the invoice – no contrary evidence that the said charges are in excess of the cost of transportation – Prima facie case for complete waiver – Stay granted. : MUMBAI CESTAT;

2008-TIOL-157-CESTAT-AHM.pdf

Charges of clandestine removal cannot be confirmed on the basis of surmises and conjectures and require positive and tangible evidence – nothing prevented the department from taking investigation up to the buyer's end whose names figure in transport slips – no corroborative evidence adduced – benefit of doubt extended to appellant : AHMEDABAD CESTAT;

SERVICE TAX SECTION

2008-TIOL-155-CESTAT-DEL.pdf

ST - Commercial Training - Assessee argues no tax to be paid on a contract of service prior to imposition of the tax - Board Circular referred by the assessee is applicable only in the case of maintenance and repair service and since the service was provided after the levy came into force, the tax is prima facie payable - Pre-deposit ordered : DELHI CESTAT;

2008-TIOL-154-CESTAT-DEL.pdf

ST - Credit availed on security services - Revenue objects to bills raised by the service provider without the name and address of the service recipient - Assessee produces certificate before Commissioner (A) as regards the service provided - Since the certificate was only to establish that the service was provided, no fault can be found with the Commissioner (A) order

Penalty - Rule 15(1) - Revenue argues penalty cannot be less than Rs 10,000/- - It is not Rule 15(1) but 15(3) which deals with taking of credit on input services and it states that penalty cannot be in excess of Rs 10,000/- - Besides it was not Revenue but the assessee who should be the aggrieved party as the penalty exceeded Rs 10,000/- : DELHI CESTAT;

CUSTOMS SECTION

2008-TIOL-09-SC-CUS.pdf + sc cus story.pdf

Customs - Compounding of offences: The machinery created under the Act is not for the purpose of investigating the crimes, but for enforcement of the provisions of the Act and the prevention of evasion of duty under the Customs Act. Compounding of offences is based on the principle of Disclosure. For purposes of Section 137(3), that disclosure has to be in relation to the facts of the case.

Disclosure in compounding: There is a difference between Disclosure in Judicial Review Proceedings and Disclosure in cases relating to Compounding of Offences. In the case of disclosure in judicial review proceedings, Courts are not concerned with factual findings, however, in cases of compounding of offences it would be the duty of the Compounding Authority to find out existence of material, outside the evidence, which suggests that disclosure is inaccurate, misleading or incomplete, particularly, when there are contradictions in the stand taken by the applicant earlier when statements are recorded under Section 108 of the 1962 Act and the averments made in the Application for Compounding of Offences. In compounding cases, we have Merit Review vis-`- vis Judicial Review.

The basic rule of disclosure , underlying Section 137(3), is that if there are demonstrable contradictions or inconsistencies or incompleteness in the case of the applicant then application for compounding cannot be entertained. Applications for compounding ought to be disallowed if there are such contradictions, inconsistencies or incompleteness. The reason is obvious. If the applicant is trying to hoodwink the Authority such applications would not be maintainable. That aspect is required to be kept in mind by the Compounding Authority.

The test is “Is the applicant candid in the matter of placing of materials and facts before the Compounding Authority without in any way trying to hoodwink the Authority to escape his criminal liability?” Equally, the Compounding Authority is bound to discharge the statutory duty of making proper enquiry by examining with care and caution the materials that have been made available. The said Compounding Authority must be satisfied that the applicant has done all he could or need to do in the matter. The applicant has to be One-Time Evader. He has to make clean breast of his affairs. He has to give exhaustive account of the circumstances in which he came to Delhi, how he came in possession of the diamond earrings, whether he had knowledge of the said earrings to be smuggled into India, he has to disclose the name, address and telephone number of the person who gave him the diamond earrings, whether the applicant knew that the earrings were meant to be smuggled into India etc.

compounding mechanism in Section 137(3) is to be allowed only in cases of doubtful benefit to the Revenue and to prevent needlessly proliferating litigation and holding up of collections. Compounding cannot be allowed if there are apparent contradictions, inconsistencies or incompleteness in the case of the applicant before the Compounding Authority. It is the duty of the Compounding Authority to ascertain such contradictions before compounding is ordered. In the present case, different versions given by Anil in his statement under Section 108, in his first bail Application and in his Application for compounding itself disqualifies Anil from claiming the benefit of compounding under Section 137(3) of the 1962 Act.: SUPREME COURT ;

2008-TIOL-156-CESTAT-MAD.pdf

The appellant through counsel has limited his prayer to grant of option for redemption of the currency against payment of a reasonable fine as also to reduction of penalty to a reasonable level.

Export of foreign exchange and currency was restricted under Regulation 7 of the Foreign Exchange Management (Export & Import of Currency) Regulation, 2000. Such restriction amounted to ‘prohibition' under Section 113 of the Customs Act.

The appellant was entitled to redeem the confiscated currency under Section 125 of the Customs Act. (Abida Ali Vs Commissioner of Customs, Chennai). The tribunal has set aside the absolute confiscation of foreign currencies and entertained the claim of the party for redemption of the currencies against payment of fine.The quantum of penalty to be imposed on the appellant may also be determined afresh after personal hearing : CHENNAI CESTAT;

ddt 29 jan.pdf

Importability of Restricted Goods under the Served from India Scheme ( SFIS ) and other Schemes under Chapter 3 of the Foreign Trade Policy (FTP)  - CBEC clarifies;

brunup.pdf

Should FM abolish Wealth Tax?

spl down.pdf

Realisation of arrears – Govt is sincere but what about implementing agency?

deputations.pdf

Mazagon Dock looking for Dir (Fin);

mbuzz289.pdf

Cabinet okays changes in FDI in civil aviation sector ;

mbuzz288.pdf

CCEA gives nod for Rs 600 Cr aid to Project Tiger during XI Plan ;

mbuzz287.pdf

TCS subsidiary Diligenta wins £100 million BPO contract ;

mbuzz286.pdf

US imports pick up slightly by 1.2% in 3rd quarter : OECD;