Cabinet hikes retirement age of teaching specialist doctors of Central Health Service to 65 years + gives nod to East-West Metro Corridor in Kolkata + JV of EIL and Tecnimont, Italy + financing of certain education exchange programmes;

Cabinet okays amendments in Prevention of Money Laundering Act, 2002;

CBDT on verge of issuing Addl CITs' transfer order;

Petro price hike: PM asks Ministers to be austere;

Oil Cos trim ATF price by 4.3% but will it bring down cost of air fare?

Fuel price hike inevitable, says PM;

Government notifies Service Tax Dispute Resolution Scheme Rules, 2008 and issues detailed guidelines (See 'DDT')

BoA gives nod to 23 more SEZs plus conversion of two proposals (See 'Common Basket')

High Powered Panel set up to look into financial position of Oil Cos (See 'Common Basket')

RBI prohibits Sahara India Financial Corp from accepting public deposits (See 'Common Basket')

Anti Dumping Duty on import of Nylon Tyre Cord Fabrics (See 'DDT')

ddt 5 june.pdf

Customs and Excise Duties reduction for petro;

cobweb.pdf

Liechtenstein black money database - How should India respond to it?

Last Week: Liechtenstein - A beleaguered tax haven - Taxing time lie ahead!

mbuzz675.pdf

RBI prohibits Sahara India Financial Corp from accepting public deposits ;

mbuzz674.pdf

BoA gives nod to 23 more SEZs plus conversion of two proposals ;

mbuzz673.pdf

Today is World Environment Day - 'Kick the Habit! Towards a low-carbon economy';

mbuzz672.pdf

TRAI finalises comments on draft Satellite Radio policy;

mbuzz671.pdf

High Powered Panel set up to look into financial position of Oil Cos ;

2008-TIOL-224-ITAT-AHM-SB.pdf + Gujarat Credit story.pdf

Gujarat Credit Corp Ltd Vs ACIT , Ahmedabad (Dated: May 9, 2008 )

The words "no action" are wide enough to include in its sweep "assuming jurisdiction by formation of belief as well as to complete the reassessment. For making an assessment for escaped income, there are various stages. Initially an opinion is to be formed vis a vis Explanation 2, then a notice for reopening the assessment is to be issued u/s 148, and a time limit is to be seen as provided in section 149 for issuing the notice, section 150 deals with "provisions for cases where assessment is in pursuance of an order of the appeals etc.", section 151 'deals with "sanction for issue of notice", section 152 deals with rates of tax to be charged on escaped the assessment and certain other specific provisions and lastly, the assessment is to be made within time limit provided under section 153 for completion of assessment or reassessment. The words "No action is to be taken" in section 147 are stated to be not only related to initiation of proceedings, because that is provided under Sections 148 and 149, but also for computation of assessment. However, such an eventuality is for completion of assessment which is also provided in section 153(2) of the Act.

The Special Bench accordingly held that the Proviso to section 147 does not have the effect of curtailing the limitation period for passing the order u/s 147 as prescribed u/s 153(2).

Speculative loss : The assessee being a company its loss as relates to purchase and sale of shares would be on speculation account because of the specific provision of Expl. to Section 73 of the Act unless it falls in the exception provided in the Explanation to section 73 of the Act. The loss arising from the purchase and sale of shares was therefore rightly held to be speculation loss.

Penalty: It is a trite law that concealment proceedings are penal in character and under the substantive provisions of section 271(1)(c), it is for the department to prove that the assessee had concealed the particulars of his income or furnished inaccurate particulars thereof to bring the case of the assessee within the mischief of the main provisions of section 271(1)(c) of the Act. Mere rejection of assessee's claim would not be sufficient to hold the assessee to be guilty of concealment. If there is no evidence on record except the explanation of the assessee which explanation is either found to be false or is unacceptable, it does not follow that concealment has been established.

Penalty cannot be levied by AO on a new ground discovered by CIT (A): penalty proceedings u/s.271 are to be initiated in the course of any proceedings under the Act, either by Assessing Officer or CIT (A) or the CIT . Here in the present case they were initiated by the Assessing Officer and were initiated in the cause of reassessment proceedings for the disallowance of loss as capital loss. That ground of disallowance was not accepted by the CIT (A) as correct and therefore the entire edifice crumbles and falls down. The penalty initiated on that ground cannot fructify and, therefore, cannot also be levied. The CIT (A) upheld the disallowance on a different ground but penalty cannot be levied or justified on this new ground, as for that, the initiation has to be on that ground and that too by the CIT (A) who made the order of disallowance by upholding the disallowance on a different ground. : AHMEDABAD ITAT (Special Bench ) ;

2008-TIOL-223-ITAT-DEL.pdf + income story.pdf

Bumi Hiway (M) Sdn Bhd Vs DCIT, New Delhi (Dated: Janaury 25, 2008 )

What can be assessed as income under Income-tax Act is income. If there is an existence of income then only it can be estimated – arbitrary application of 10 percent net profit rate not permissible It has been shown that the assessee has never shown any profit out of the contract for which assessment has been made. This fact is also recorded in the order of CIT ( A) at and the said loss is accepted by the revenue in the immediately preceding year and succeeding year. Thus it is a matter of fact that according to the accounts of the assessee, the assessee has never earned profit from this contract. The accounts of the assessee are audited and it is not the case of the revenue that assessee did not furnish details regarding accounts maintained by it. No defects whatsoever have been found in the account books maintained by the assessee. No material has been brought on record by the Assessing Officer that such contention of the assessee was contrary to the facts.

Addition has been made without indicating any material or basis on which it could be decided that application of net profit rate of 10 per cent was appropriate. On the contrary, material is on the record to show that the assessee has incurred loss in performing such a contract. Assessing Officer was not justified in rejecting the books of account without bringing on record any cogent reasons and infirmities in the maintenance of books of account of the assessee. :DELHI ITAT;

2008-TIOL-222-ITAT-HYD.pdf

Shri C Dayakar Reddy Vs ACIT, Hyderabad (Dated: March 28, 2008 )

It is well established that income or wealth which has been disclosed in the regular returns cannot form part of the undisclosed income of the block assessment: By now it is well established that income or wealth which has been disclosed in the regular returns cannot form part of the undisclosed income of the block assessment as envisaged in clause (b) of sec. 158B of the Act. In the instant case, no material is brought on record to doubt the existence of HUF nor is it controverted by any material that the income or wealth declared by the HUF belongs to the assessee individually. Further, the regular returns have been filed way back in 1992 when neither the assessee nor the department could have envisaged search which took place in 1996. It does not matter even if the returns were filed together on the same day. Once they were valid returns, the department is expected to have acted on those returns. Thus, no income can be added in respect of returns which were duly filed. Accordingly, we delete these three additions. : HYDERABAD ITAT;

2008-TIOL-221-ITAT-HYD.pdf

ACIT, Hyderabad Vs Alloy Nitrides Ltd (Dated: April 25, 2008 )

Estimated liability- Deduction: - certain observations of the Assessing Officer make an interesting reading. The assessee had pleaded before the Assessing Officer by placing reliance on certain judgment (reference not given) to argue that where a liability clearly exists, the difficulty in estimation or quantification should not stand in the way of the assessee debiting it and before claiming deduction, it must have been valued or quantified at least provisionally. To this, the Assessing Officer's response is that the assessee can very much quantity such a liability and make a provision for the same accordingly. In the same breath he observes that however such a provision is not allowable as expenditure as per the provisions of the Income tax Act. Firstly, it is factually incorrect to say that the assessee has not provisionally quantified the liability. The liability has been provided for on the basis of the claims made by the customers. In our opinion, till final quantification is made, it is not unreasonable for the assessee to make the provision on the basis of the claims made by the customers. Further, the ratio advocated by the assessee is the law. The Assessing Officer almost accepts this in his first observation but denies in the very next observation. Thus, there is an apparent contradiction in his order.

Concession by authorized representative – no estoppel against LAW :   Though no evidence has been placed on record that the authorised representative of the assessee had conceded on this issue, assuming that he did concede, there cannot be any estoppel against law and in such a case, the concession by the authorised representative will not bind the assessee. It has been held by the Delhi High Court that it is the end user of the asset which is relevant for determining the percentage of depreciation.

ESI paid within grace period – deduction allowed : ground in the appeal is against the allowance of delayed payments of ESI, PF etc. The Assessing Officer made the impugned disallowance amounting to Rs.2,21,561 on the ground that they were paid belatedly. The CIT(A) allowed it on finding that the payments were made within the grace period. The relevant details have been placed on record and we find the observations of the CIT (A) to be true. Keeping in view the consistent stand of the Tribunal, payments made within grace period are allowed as deduction. : HYDERABAD ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-880-CESTAT-AHM.pdf + cadila story.pdf

M/s Cadila Pharmaceuticals Ltd Vs CCE, Ahmedabad-II ( Dated: April 25, 2008 )

Central Excise – valuation – physician samples – whether the ratio of Larger Bench in case of Blue Cross Laboratories Ltd rendered with reference to Section 4 is applicable for the period from January 2005, as medicaments have been notified for assessment under Section 4A of the Central Excise Act – matter placed before the Larger Bench. : AHMEDABAD CESTAT;

2008-TIOL-879-CESTAT-DEL.pdf + remedy story.pdf

Bhagwati Gases Ltd Vs CCE, Jaipur-I ( Dated: January 9, 2008 )

Law does not countenance a situation where the person is rendered remediless – Matter remanded, to Commissioner(A) for passing fresh order on merits in accordance with law, by Tribunal :DELHI CESTAT;

2008-TIOL-878-CESTAT-MAD.pdf

M/s Goyal Ispat Ltd Vs CCE, Pondicherry ( Dated: Febuary 27, 2008 )

Valuation – Determination of assessable value of goods -'burning loss' to be included in the cost of raw material – CESTAT orders for predeposit of Rs.1 Crore for apparent suppression of fact. : CHENNAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-875-CESTAT-BANG.pdf

M/s Prakash Air Freight Private Limited Vs CST, Bangalore ( Dated: January 29, 2008 )

Service tax – courier service – export of service rules – as per the export of service rules at the relevant time, courier service partly performed outside India is export of service and no service tax is leviable. : BANGALORE CESTAT;

2008-TIOL-874-CESTAT-BANG.pdf

M/s VBC Exports Ltd Vs CCE, Visakhapatnam ( Dated: Febuary 14, 2008 )

Service tax – stevedoring within port area is cargo handling service but not port service – No service tax is leviable on cargo handling service provided for export cargo – in respect of import cargo, matter remanded to recomputed the tax liability after taking into account the service tax paid to Dock Labour Board and Port Trust. : BANGALORE CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08pn026.pdf

DGFT clarifies if any ban on export of any product is imposed, exports obligation period under EPCG would automatically get extended;

dgft08cir009.pdf

Payment of interest on delayed refund of Deemed Export DBK/ TED/ CST- clarification;

CASE LAWS

2008-TIOL-877-CESTAT-MUM.pdf

M/s Krishna International Vs CC, Mumbai ( Dated: Febuary 8, 2008 )

Refund claim rejected on ground of unjust enrichment – Appellant producing CA certificate certifying that excess duty paid was not included in expenses and the same has been shown as current assets, as receivable from the Government – Revenue not having produced any contrary evidence refund admissible in view of Tribunal decision in Corning SA 2005-TIOL-622-CESTAT-Del – order set aside & appeal allowed with consequential relief.

Value declared for the imported consignment was enhanced by the authorities - Appellant reserving the right of appeal against such enhancement discharged duty liability worked out after enhancement & on appeal succeeded before Tribunal – Refund claim rejected on ground of unjust enrichment – Appellant producing CA certificate certifying that excess duty paid was not included in expenses and the same has been shown as current assets, as receivable from the Government – Revenue not having produced any contrary evidence refund admissible in view of Tribunal decision in Corning SA 2005-TIOL-622-CESTAT-Del – order set aside & appeal allowed with consequential relief. : MUMBAI CESTAT;

2008-TIOL-876-CESTAT-BANG.pdf

The CCE, Visakhapatnam Vs M/s Kedia Overseas Ltd ( Dated: Febuary 6, 2008 )

Customs - liquid bulk cargo – shore tank receipt quantity should be the basis for levy of customs duty – Board Circular is effective from the date of issue of the circular but not from the date on which instructions were issued by the Commissionerate on the basis of such circular. : BANGALORE CESTAT;