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Computer software–revenue or capital expenditure? Tests of ownership, enduring benefits to be satisfied before functional test; if the life of the software is less than two years, it may be treated as revenue expenditure – ITAT SB (Look for decision tomorrow) Cabinet approves proposal to increase number of judges in Supreme Court from 25 to 30; Cabinet approves DTAA with Luxembourg and bilateral pact with Russia for combating drug trafficking (See details in 'Common Basket') US not very keen to puruse FTA talks with India for now; Agri goods a major bone of contention; Foreign postings: CBEC reconstitutes DG-level panel; DG (NACEN) is new Member; India, China FTA: MoC to hold talks in April; I & B Ministry issues guidelines for State & District level monitoring panels of TV channels; |
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| Dear Member, Sending you the following files: |
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Income Tax - Deduction u/s 43B - Assessee claims deduction for contribution to PF - Revenue disallows on the ground that it was not deposited within the due date - Assessee refers to other High Courts' contrary decisions and dismissal of Revenue's SLP by the Apex Court - Mere dismissal of SLP does not mean anything as per the SC's decisions - Following this court decision in the case of Godaveri (Mannar) Sahakari Sakhar Karkhana Ltd ( 2007-TIOL-580-HC-MUM-IT ) the appeal of Revenue is allowed: BOMBAY HIGH COURT; Income Tax - Assessee claims expenditure incurred for issue of debentures and fixed deposits and also depreciation on stanby machinery - Revenue disallows - CIT(A) and Tribunal allow -Since the expenses related to the raising of fixed deposits and debentures are directly linked to the business requirement of the assessee, they are allowable expenses, and as regards the standby machinery which was kept ready for the user, a state of 'forced idleness', depreciation cannot be denied: MADRAS HIGH COURT; 2008-TIOL-94-ITAT-DEL.pdf + cargill story.pdf Income Tax - Assessee is a wholly-owned Indian subsidiary of a non-resident company - does large-scale international transactions with its Associated Enterprises (AEs) - files return with audit report in Form 3CEB - AO refers the case to Transfer Pricing Office (TPO) to determine Arm's Lenght Price (ALP) - Book value rejected and the TPO proposes adjustments of a good sum - Since TPO did not find the information furnished in response to its notices very satisfactory and the fact that there was slight delay in furnishing information as the taxpayer's financial controller was out of station, penalty proceedings u/s 271G were initiated - A penalty of Rs 40 Cr imposed - CIT(A) upholds the AO's Order - Issue goes to the Tribunal only on the penalty ground Unlike penalty under Sec 271(1), the law does not mandate the AO to 'record satisfaction' under the TP Section before initiating penalty u/s 271G but it also puts the onus on that tax authorities that before levying penalty they resort to proper application of mind to the facts and circumstances of the case in hand which was however not done in this case and thus penalty is set aside - Since there was a reasonable cause explained by the assessee, the AO and the CIT(A) should have examined the same and applied Sec 273B which overrides Sec 271G There are major differences between the circumstances under which notices can be issued under u/s 92CA(2) and Sec 92D(3). It cannot be simply an omnibus notice as Sec 92D(3) mandates that only prescribed and specific information can be sought by the TPO to study the specified points during the course of assessment. If non-prescribed information is sought under this Section, infirmities would creep in and vitiate the aura of legality sourrouding the notices. The notice u/s 92D(3) is different from other statutory notices. The AO or CIT (Appeals) are empowered to require from the taxpayer or any person who has entered into an international transaction to furnish any prescribed information or document . Notice u/s 92D(3) has to be confined to the furnishing of information or document as may be “prescribed” - It is unauthorized to require the noticee to furnish non-prescribed information. If in the notice non-prescribed information is also called for, it would not be treated as notice under section 92D(3) but under section 92CA(3) . Relevant information can be sought under notice u/s 92CA(3) also. Further, there is no restriction of furnishing prescribed information in response to notice u/s 92CA(2) of the Act to support the computation of ALP by the taxpayer - No authority u/s 92D(3) with the T.P.O. to require the taxpayer to furnish non-specified information or such information or document already filed by the taxpayer or use of the provision without asking the taxpayer to support first its ALP of International transactions. The case of any person other than the taxpayer for notice u/s 92D(3) stands on a different footing than of the taxpayer to whom notice u/s 92CA(2) has been issued.: MUMBAI ITAT; Income Tax - A search is conducted on the firm in the course of which incriminating material is found against the assessee and consequently proceedings u/s 158BD initiated - Assessee offers a sum as undisclosed income which is accepted as per return - A.O. initiates penalty proceedings u/s 271D treating the amount as loan - Once assessee's return is accepted treating the amount as undisclosed income, the same cannot be treated as loan for penalty purposes - Assessee's appeal allowed. : MUMBAI ITAT; |
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NOTIFICATION Chief Commissioners' panel for review of excise cases in Pune & Goa; CASE LAWS 2008-TIOL-105-HC-MAD-CX.pdf + jobwork story.pdf Goods cleared for job work - any activity which is incidental or ancillary to the manufacture of the final product would be regarded as a manufacturing activity – no question of law, much less a substantial question of law arises in revenue appeal: MADRAS HIGH COURT; CE – Cenvat Credit – reversal of credit means no credit was taken: CHENNAI CESTAT; Central Excise – SSI exemption – brand name of another person – use of the word “Goldhofer” is a part of the name of the appellant-company - it is also a part of the name of the foreign company - the appellants were in collaboration with the German company and did not necessarily indicate any connection between their product and the German company. The Revenue also has not established that “Goldhofer” was the brand name of the German company – SSI exemption not to be denied.: CHENNAI CESTAT; Central Excise – valuation – arranging insurance and transportation from the factory - once the sale was effected at the factory gate on the basis of purchase order, the additional responsibility of arranging transport and physical delivery at a different place cannot make any difference – demand of duty by treating the buyer's premises as place of removal set aside.: AHMEDABAD CESTAT;
SERVICE TAX SECTION 2008-TIOL-277-CESTAT-MUM.pdf + st story.pdf Appellant, a State Finance Corporation having paid their Service tax liability along with interest before issuance of show cause notice - provisions of Section 80 of Finance Act, 1994 can be invoked – No cause for imposition of penalty: MUMBAI CESTAT; Service Tax – CHA – no service tax on other activities of the CHA: BANGALORE CESTAT;
CUSTOMS SECTION NOTIFICATION Chief Commissioners' panel for review of Customs cases in Pune & Goa; CBEC vests power to summon persons in all gazetted officers of Customs under Sec 108 of Customs Act; CASE LAWS Customs - Demand for anti-dumping duty on CFL imported from China - Bonds executed - Provisional assessment - Bonds expire after six months - No renewal by the assessee nor any intimation by the Revenue - Revenue sends a letter to the importer for finalisation of assessment - Anti-dumping duty demanded - Appeal - Commissioner (A) asks for pre-deposit - Assessee goes to the Tribunal which directs the Comm (A) to here the case on pre-deposit - 75% deposit demanded as pre-deposit by Commissioner (A) - Matter goes back to the Tribunal which directs the Commission to hear the case without the pre-deposit - Revenue is in appeal before the High Court - Since the Tribunal had found a strong prima facie case, it had valid reasons to waive off the pre-deposit - Had Revenue cared for collection of taxes, it would have heard and disposed of the case - Revenue's appeal dismissed: MADRAS HIGH COURT; 2008-TIOL-275-CESTAT-MAD.pdf + Clarion Power Story.pdf Advance Ruling not binding on tribunal: Insofar as this Tribunal is concerned, the final order passed in Ind Bharath Energies case is final and binding on the Commissioner of Customs save otherwise provided in Sections 130 and 130E of the Act. Nobody has claimed that our final order in Ind Bharath Energies case was taken in appeal to the High Court or the Supreme Court. In the circumstances, the said decision of this Bench is binding on the Commissioner of Customs concerned. However, the question whether the advance ruling given by the above authority on a similar set of facts can have persuasive effect on this Tribunal can be agitated at an appropriate stage later in this case.: CHENNAI CESTAT; |
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Joint Commissioner = Additional Commissioner: Central Excise adjudication: What about Service Tax? Suggestions for Budget: Duty-free liquor for children? Mr FM, can you afford to ignore tax elasticity of FDI against slowdown in economy? Berger Colour Bank Dispensing System – Assessment of White Base paint packed in tin containers – whether proper under Section 4 of the CEA '44? FERA/Preventive Detention - Petitioner is arrested under Sec.35 of FERA and subsequently released on bail - A detention order is passed after a passage of 5 months - Whenever there is unexplained and unjustified delay in passing of detention order or its execution, it casts doubt on the satisfaction of the detainting authority and leads to an inference that the detaining authority is not genuinely satisfied about the need of detaining the detenue to prevent him from acting in a prejudicial manner - In the instant case there is no valid explanation for delay in passing of detention order nor has the material on which the respondents relied suplied to the petitioner thus handicapping his right to representation resulting in non-compliance of formalities by detaining authority enjoined by Article 22(5) - Detention order set aside: DELHI HIGH COURT; Cabinet approves DTAA with Luxembourg and bilateral pact with Russia for combating drug trafficking; Cabinet okays constitution of Financial Inclusion Fund; chips in Rs 200 Cr ; More relief for exporters: CCEA approves interest subvention; L & T bags another oil & gas pipeline project from Cairn India; |
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