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Pawar says Govt not considering any proposal for FDI in retail sector; Rural India's tele-density up from 2% to 8%; Cabinet gives nod to new National Mineral Policy; DTAA with Tajikistan; Rs 300 Cr for modernisation of patent offices and removal of sourcing and port conditions for import of garments from Lanka and Bangladesh (See 'Common Basket'); UK tax on individuals with non-domicile status driving high net worth taxpayers to move to tax havens; CCEA gives nod to support scheme for coffee, tea and spices during 11th Plan; Govt mulling legislation to regulate real estate sector in Delhi; to be model Act for States to follow: Jaipal Reddy; |
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| Dear Member, Sending the following files: |
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CLARIFICATION Clarification on amendment to section 271 of IT-ACT; CIRCULAR CBDT elaborates budgetary changes in comprehensive Circular; CASE LAWS Income Tax - Assessee is alleged to overinvoice purchases of raw materials from cobblers cooperative societies - AO reduces cost by a uniform rate of 60% and makes additions - CIT(A) finds uniform rate cannot be used and applies 48% GPR - Tribunal examines large matrix of facts and fixes 43.57% GPR, consistent with GPRs of earlier years when irregularities were not alleged - Since it's a matter of facts, no substantial question of law arises - Revenue's appeal dismissed: BOMBAY HIGH COURT; Income Tax - Sec 80HHC benefits - Assessee treats interests on FDs as business income and also claims deduction for exports benefits - AO disallows and also includes CST and sales tax in total turnover for computing Sec 80HHC benefits - Issue is no longer res integra as Sales Tax and CST are not includible in the total turnover and interest on FDs has no direct nexus with exporters and thus cannot be allowed benefits u/s 80HHC - Revenue's appeal partly allowed : P & H HIGH COURT; 2008-TIOL-123-ITAT-BANG.pdf + project story.pdf Income Tax – expenditure on abandoned project - disallowed since there is no corresponding credit either by way of contract receipts or in the least equivalent amount of work in progress. - The contractor can be taxed either on the project completed or on billing method. In respect of this particular contract the assessee has followed neither of the methods. The true profits of the assessee in respect of this project cannot be ascertained as the assessee has not disclosed any receipts or work in progress from this contract and has only debited the expenditure. More so, since the assessee has made claim from MPEB in regard to the contract work done and in regard to the invocation of the bank guarantee on termination of the contract, the assessee ought to have shown the expenditure as work in progress.: BANGALORE ITAT; Income Tax - Assessee is searched and consequently block assessment made on undisclosed income - Assessee appeals to Tribunal on the ground that most of the additions made to undisclosed income consists of amount already declared in returns filed before the search or entered in regular books of accounts and thus beyond the scope of assessment for block period - Tribunal sets aside the assessment with a direction to verify assessee's claim - A.O. reframes the assessment for block period de-novo at a higher undisclosed income - Assessee objects and appeals on the ground that A.O. has gone beyond the scope of set aside proceedings by not restricting itself to the subject matter of appeal and direction given by the Tribunal - In case of setting aside of assessment by the Tribunal and remanding the matter to the file of A.O., the latter's power and scope in remanded proceedings is limited to the subject matter of appeal even if there are no directions by the Tribunal and where specific directions are given, the power is further restricted to such directions - In the instant case Tribunal had given specific direction to A.O. while setting aside the assessment to ascertain the claim of assessee whether any part of addition was already declared in the regular returns filed before the search or entered in the regular books of accounts and the A.O. should have restricted its enquiry to the same instead of framing the assessment denovo which was invalidly done - Moreover additions disputed by assessee consists of amount already declared in returns and entered in books of accounts thus beyond the scope of assessment for block period as the same can be made only in case of undisclosed income on the basis of material found incourse of search and not for income and loss of a previous year which is to be made in regular assessment - Assessee's appeal allowed : DELHI ITAT; |
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CE - Refund - Duty paid twice on the same good first by the manufacturer and then by the merchant exporter - Respondent assessee seeks refund which was granted - Revenue goes in appeal and the same was dismissed - Revenue now pleads it had pointed out the issue of time bar but tribunal ignored it - Since the time bar aspect of the issue was not raised before the first appellate authority it cannot be traised in the second stage - Revenue's appeal dismissed: P & H HIGH COURT; 2008-TIOL-387-CESTAT-AHM.pdf + remission story.pdf Central Excise – remission of duty on goods destroyed in fire – Commissioner finding in denying the remission on the ground that the fire was not due to short circuit is set aside.: AHMEDABAD CESTAT; Aluminium Dross and skimming, which arises during the course of manufacture would not amount to manufactured Product and hence not eligible to tax - SC decision in Indian Aluminium Co, Ltd. 2006-TIOL-129-SC-CX followed.: MUMBAI CESTAT; Portion of credit attributable to LDO fuel used in the manufacture of exempted products need not be reversed even if separate accounts are not maintained – LB Tribunal decision in GNFC ( 2007-TIOL-104-CESTAT-MUM-LB) followed – Revenue appeal rejected.: MUMBAI CESTAT;
SERVICE TAX SECTION Cenvat Credit on input services - the certainty of uncertainty! CASE LAWS ST - Cenvat Credit - CHA service is covered in the definition of input service as the manufacturer continues to remain the owner of the goods in question till the same are exported - Revenue's appeal rejected: AHMEDABAD CESTAT; Service Tax -GTA-Outward transport –eligibility for Credit-Stay granted : CHENNAI CESTAT; Service Tax – GTA – outward transport not input service: I have to follow the considered view taken by the Division Bench at Chennai in the case of India Japan Lighting (P) Ltd., ( 2007-TIOL-1755-CESTAT-MAD ), wherein it was held that transportation of finished goods from factory (place of removal) to buyer's premises was not an “input service” within the scope of its definition under Rule 2 of the CCR 2004. It was without taking into account the decision in India Japan Lighting case that the issue was referred to Larger Bench. Had the decision in India Japan Lighting case been considered by the referring Bench, there would, perhaps, have been no conflict.: CHENNAI CESTAT;
CUSTOMS SECTION NOTIFICATION CBEC imposes anti-dumping duty on recordable CDs; Jurisdictions of CCCE of Cochin & CC of Customs, Bangalore amended; CASE LAWS 2008-TIOL-44-SC-NDPS.pdf + sc ndps story.pdf NDPS – Conviction – small quantity and the accused is only a carrier and not a kingpin - quantity of the narcotic drug or psychotropic substance found in the mixture, relevant for the purpose of imposition of punishment – sentence reduced to six years: SUPREME COURT ; Diamond studded jewellery was not re-imported within the statutory time limit prescribed as per the FTP – there is violation of the provisions of Section 111(o) of the Customs Act, 1962 – no relaxation obtained from DGFT or Development Commissioner - goods are liable to confiscation and penalty is also imposable. :MUMBAI CESTAT; |
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ddt 14 mar.pdf + rbi_notification.pdf E-payment of Central Excise duty – drop down menu; Service Tax - Illegal Publication of names still continues! WB, India to jointly launch probe into alleged fraud in head sector projects; 2008-TIOL-45-SC-CT.pdf + sc story.pdf Is amortisation cost of tooling includible in the sale price of auto components as in the case of excise duty under Central Excise Act, 1944? In other words, whether the Department was right in equating sales tax to excise duty. The expression "amortisation", in accountancy parlance is a general expression, which basically means the writing off of the cost of an asset over a period of time. As a matter of usage, "depreciation" is the expression used in relation to tangible assets, "depletion" to natural assets, which are subject to exhaustion, for example, oil deposits or mineral deposits, an "amortisation" to intangible assets, such as, patents, copyrights, trade marks etc. Thus, depreciation is a form of amortisation. The Accounting Standard (AS 28) relating to impairment of assets uses the following expression: "Depreciation (amortisation) is a systematic allocation of the depreciable amount of an asset over its useful life." The question is whether the concept of amortisation known to Central Excise Valuation can be applied to U.P. Trade Tax Act, 1948.? Valuation is a matter of principle. Under Section 4 of the Central Excise Act, the basis of valuation is the transaction value for each removal. Section 4 lays down the method for arriving at the assessable value for levying excise duty. It refers to taxing the value. Therefore, Section 3 of the Act is the charging section which creates the liability to pay excise duty whereas Section 4 deals with assessment or quantification of liability ad valorem. Under Section 4, duty of excise is chargeable with reference to the value of excisable goods and "value" is defined by Section 4. The price charged by the manufacturer on sale by him represents the measure of that value, therefore, prices and sale are related concepts. Therefore, Section 4 of the 1944 Act requires the Department to find out the real value of the excisable article. Excise is a tax on value. This is the most important distinction between the excise law and the sales tax law. Rule 6 of Excise Valuation Rules, 2000 creates the deeming fiction only for the purposes of Section 4(1 )( b) of the 1944 Act and for laying down the measure for levy of excise duty. It provides for items which constitute additional consideration. There is no such provision in Section 3 of the 1948 Act. Therefore, one cannot borrow and automatically apply the concept of amortised cost to Section 3 of the 1948 Act. The aggregate amount for which these auto parts/components are sold constitutes the turnover relating to such sales within the meaning of turnover in Section 2( i ). Therefore, it is on such turnover that liability of tax under Section 3 of the 1948 Act has to be determined. Therefore, sales-tax or trade-tax under the 1948 Act is leviable on sale, whether actual or deemed, and for every sale there has to be a consideration. On the other hand, excise duty is a levy on a taxable event of "manufacture" and it is calculated on the "value" of manufactured goods. Excise duty is not concerned with ownership or sale. In the present case, moulds were manufactured by the buyer/customer so that the auto components could be manufactured by the appellant in terms of the specifications given by the buyer. Therefore, the cost of manufacture of these moulds was incurred by the buyer/customer and not by the appellant. The High Court had erred in holding that the amortization cost calculated in terms of Rule 6 of the Excise Valuation Rules, 2000 is includible in the sale price of auto components sold by the appellant to its customer, M/s Honda Siel Cars India Ltd.: SUPREME COURT ; Cabinet gives nod to new National Mineral Policy; DTAA with Tajikistan; Rs 300 Cr for modernisation of patent offices and removal of sourcing and port conditions for import of garments from Lanka and Bangladesh; FM approves 18 FDI proposals worth Rs 1553 Cr; Females enjoy longer life expectancy in India; Gender Testing Kits: Alert issued; Customs asked to take action; Railways GPS-based pilot project to be over by month-end; WB, India to jointly launch probe into alleged fraud in head sector projects; |
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