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ACC approval finally comes for Mr P C Jha and Mr P K Mishra as Chairmen of CBEC & CBDT respectively; Mr Vijay Singh is new CBEC Member; CST rate reduction Notification : Uncertainty continues as North Block fails to resolve differences with States; Anti-China temper rising; Fernandes calls for boycott of Chinese goods; Service Tax for month of March to be paid latest by today; US not happy with India's new Merger & Acquisition regulations; Power Grid signs two loan pacts with WB & ADB for USD 1000 mn; Net Direct Tax mop-up crosses Rs three trillion on March 28, 2008; |
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| Dear Member, Sending the following files: |
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ORDER CBDT issues addl charge order for CCITs; CBDT notifies new income tax return forms for AY 2008-09; CBDT closely monitoring quality of homework done to defend cases; goes for fresh allocation of work among CIT (DRs) and hiring of special counsels; CASE LAWS 2008-TIOL-182-HC-DEL-IT.pdf + hc it story.pdf Rohitasava Chand Vs CIT, Delhi (Dated: March 20, 2008) Income Tax- Receipt under non-compete agreement Capital receipt - the law is quite well settled that where an amount is received by way of compensation under a restrictive covenant or under a non-compete agreement, it would amount to a capital receipt in the hands of the recipient but a lot would depend on the agreement entered into between the parties. There is no doubt that the non-compete agreement incorporates a restrictive covenant on the right of the Assessee to carry on his activity of development of software. It may not alter the structure of his activity, in the sense that he could carry on the same activity in an organization in which he had a small stake, but it certainly impairs the carrying on of his activity. To that extent it is a loss of a source of income for him and it is of an enduring nature, as contrasted with a transitory or ephemeral loss. During the currency of the non-compete agreement, the Assessee was restrained from soliciting, interfering, engaging in or endeavouring to carry on any activity, including supply or services or goods concerning software development. The non-compete agreement was independent of the first agreement whereby the Assessee agreed to transfer his shares to the foreign company. Under the circumstances, looking to the case law on the subject and the terms of the non-compete agreement, particularly the restrictive covenant, it is difficult to agree with the view taken by the Tribunal. The receipt in the hands of the Assessee was certainly a capital receipt in as much as it dented his profit-making capabilities .: DELHI HIGH COURT; M/s Sterlite Industries India Ltd Vs ACIT (Dated: March 12, 2008) Income Tax - Reassessment u/s 147 - Assessee challenges the invocation of Sec 147 on the ground that there was no mention of 'reasons to believe' and it is a mere change of opinion - Revenue pleads that they have initiated reassessment as they have information from the Enforcement Directorate, indicating possible inflation of some of the purchase bills - Going by the facts, there is no ground to reject the invocation of powers u/s 147 at this stage - Assessee's petition rejected: MADRAS HIGH COURT; CIT, Udaipur Vs M/s Kanhaiyalal (Dated: December 13, 2007) Whether on the face of the statement given by the assessee under Section 132(4), any liability of penalty is attracted, on account of the assessee filing revised returns for the assessment years 1984-85 to 1988-89, showing the income disclosed under Section 132(4) by spreading it over the aforesaid assessment years. The assessing authority, accepting the revised returns, has made the assessment, though by changing the figures. For the present purposes, it would suffice to say, that out of the amount of Rs. 3 ,50,000 /- disclosed under Section 132(4), income of Rs.1,05,000 /- has been assessed for the assessment year 1987-88, and another sum of Rs.1,25,000 /- has been assessed for the assessment year 1988-89, and the remaining amount of Rs.1,20,000 /- has been assessed in the other three assessment years. Assessing Authority has made assessment for the 5 assessment years, and instead of believing the returns filed by the assessee, the Assessing Authority, as a fact, had found the income to be relating to different assessment years, in different volumes, as contra-distinguished to the one submitted by the assessee, and has accordingly made the assessments, which assessments had become final, and are not subject matter of challenge. That being the position, in our view, it cannot be said, that the immunity conferred by clause (2) of Explanation 5, consequent upon the assessee giving statement under Section 132(4), was at all taken away, or even watered down.: RAJASTHAN HIGH COURT; J K Kashyap Vs ACIT, New Delhi (Dated: March 11, 2008) Income Tax - Assessee receives a sum for relinquishing his rights in a property but does not show it in the return filed - A.O. charges the consideration to tax under 'capital gains' on the ground that what is material in a transaction for attracting capital gains tax is relinquishment of interest in the property for a consideration and the transfer takes place as per Sec.2(47) of the Act and it is immaterial whether agreement is completed or not or vendee takes the possession of the property or not - Assessee contends that there is no transfer in terms of Sec.2(47) as he is not the owner but only a confirming party and the amount he received is only an advance which will have to be refunded if the agreement is not executed - The word 'transfer' u/s 2(47) has a wide meaning and includes extinguishment of rights in a property and from the facts it is clear that assessee acquired interest in the said property which was subsequently relinquished by him for consideration leading to transfer within the terms of Sec.2(47) thus attracting the liability of capital gains tax: DELHI HIGH COURT; CIT, Bhathinda Vs M/s Khalsa Rural Hospital & Nursing Training Insitute (Dated: February 4, 2008 ) Income Tax - Assessee, running an educational trust, claims exemption of u/s 11 - A.O. disallows and instead makes addition on account of capitation fee - CIT(A) allows exemption holding that entire income of the trust is exempted u/s 10(22) being run for educational purpose and deletes addition on account of capitation fee for lack of evidence on record which is upheld by Tribunal - There is no evidence on record to show that assessee's trust was charging capitation fees or running the trust for purposes of profit thus no interference is called with the findings of lower authorities - Revenue's appeal dismissed - (Para 7,8).: P & H HIGH COURT; |
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2008-TIOL-183-HC-MAD-CX.pdf + k credit story.pdf M/s Sri Kalaivani Spinners Pvt Ltd Vs CCE, Coimbatore (Dated: February 20, 2008) Central Excise credit capital goods: Supplier paid only 50% of amount of duty paid on goods by its manufacturer - Appellants entitled to credit of duty shown as paid by supplier and not the credit of full amount of duty paid by manufacturer of capital goods: MADRAS HIGH COURT; Karnata Ginning & Pressing Factory Vs CCE, Thane II (Dated: January 9, 2008) Matter remanded by the Tribunal in 2005 specifically directing the adjudicating authority to provide the appellant with a copy of investigation/examination report same provided to the applicant on 16th July 2007 & immediately a hearing was fixed on 24th July although the applicant had sought a month's time to file a reply however the adjudicating authority rejected their request & confirmed the demand of Rs.1.37 crores Clear violation of principles of natural justice Matter remanded once again. When the fact is that the remand was ordered in 2005 & the assessee had sought a month time to file their reply on the investigation report handed over to them in July 2007, the adjudicating authority ought to have considered their request before passing an order on 30.07.2007 Matter remanded.: MUMBAI CESTAT; M/s Honda Motor Cycle & Scooter Vs CCE, Delhi III (Dated: October 8, 2007) Case relating to rebate of duty on export - Order passed by the Commr (A) under Section 35 A of the Act - Therefore, Tribunal has no jurisdiction to decide the matter: DELHI CESTAT; M/s German Remedies Ltd Vs CCE (Dated: January 17, 2008) Pasting of stickers & affixing MRP on imported goods does not amount to manufacture Issue no longer res integra in view of Supreme Court decision in Johnson & Johnson 2005-TIOL-132-SC-CX : MUMBAI CESTAT; M/s Birla Corporation Ltd Vs CCE, Jaipur II (Dated: January 9, 2008) Central Excise - Cenvat credit - Revenue disputes receipt of inputs - Since the supplier has admitted the supply of goods and transporter GRs have also been submitted besides making payment through banking channel, credit cannot be denied: DELHI CESTAT; CCE, Chennai Vs M/s Meridian Pharmaceuticals (Dated: January 22, 2008) P or P Medicines abatement for breakages, interest on receivables allowed .: CHENNAI CESTAT; M/s K G Naidu Mills Vs CCE, Coimbatore (Dated: November 13, 2007) When the original authority had dropped the proposal to demand differential duty after revising the assessable value of the yarn cleared in terms of Rule 9 of CEVR and the show cause notice did not contain a proposal to demand duty on any other ground, it is not open to the appellate authority to order for working out the assemble value, under new ground that, it was incorrect to abate the proceeds of waste that arose in the process of manufacture. The impugned order was set aside and appeal allowed: CHENNAI CESTAT;
SERVICE TAX SECTION 2008-TIOL-489-CESTAT-MAD.pdf + ATM story.pdf Diebold Systems (P) Ltd Vs CST, Chennai (Dated: November 28, 2007) Service Tax supply, installation and commissioning of ATMs for Banks works contract is a taxable service only with effect from 1.6.2007 - there could be no levy of service tax on the works contracts prior to 1.6.2007 - during the period of dispute, the subject events were not taxable in the absence of the requisite charging provision.: CHENNAI CESTAT; M/s Karvy Consultants Ltd Vs CC & CE, Hyderabad (Dated: January 7, 2008) ST Share Transfer Agency not taxable before 1.5.2006: BANGALORE CESTAT;
CUSTOMS SECTION NOTIFICATION DGFT issues clarification related to ad hoc authorisations for readymade garments of textiles and leather; DEPB to continue till further orders; DGFT amends PN 17/2007 to replace the word 'till March 31, 2008' to 'till further orders'; After VKGUY Product Code No. 10.29, contained in Table 10 of Appendix 37A, more entry added; SION amended for various product groups; CASE LAWS M/s Osram India Ltd Vs CC, Nhava Sheva (Exp) (Dated: October 3, 2007) Whether imported machinery was old and used or brand new - If a machinery is a tailor made machinery, and is not available off the shelf, then the question of that machinery being used by somebody else does not arise - No prudent buyer of machinery of such a high cost, will accept the said machinery unless it has been put to trial runs, more so when the said machinery is a tailor made one and imported from a foreign country - The so called wear and tear is only on the movable parts which must have been taken place during the trial runs conducted at the manufacturer's premises: MUMBAI CESTAT; M/s Yokogawa India Ltd Vs CC, Bangalore (Dated: January 4, 2008) Customs when the software is imported, it remains packed software when it is supplied to a Customer, It is customized software: BANGALORE CESTAT; M/s Basil Rubber Factory (P) Ltd Vs CC, Cochin (Dated: December 3, 2008) Customs exemption from Countervailing duty in terms of Notification 6/2002 CE claimed by the appellants after the assessment of bill of entry by challenging the same Prima facie, the contention of the appellant appears to be correct matter remanded to the original authority for examining the issue.: BANGALORE CESTAT; |
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Mathematician in Board; Area Based exemptions PLA: Cenvat ratio Vs Value addition; 'The Product is licensed, not sold' - Income from licensing is royalty, taxable under domestic law as well DTAA; CIT (A) enhances income by Rs 1340 Cr; Pay Commission is not about pay alone! CEIB looking for DDG; Power Grid signs two loan pacts with WB & ADB for USD 1000 mn; India's debt up by USD 10.3 bn over a quarter; 33 Photovoltaic Power Plants to produce 2.55 mn units of power per annum; Mahindra to invest Rs 1500 Cr more in Chakan project; BORL files Draft Herring Prospectus with SEBI; |
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