Core sector logs 3.6% growth rate in April, 2008; Down from 5.9% last April;

Sahara public deposits issue: RBI puts caps and asks for 50% independent Directors in 30 days;

COFEPOSA and SAFEMA – Heirs cannot challenge action under SAFEMA if detention under COFEPOSA was not challenged - It is alarming that such a senior officer, as the Competent Authority, possesses this warped understanding of law. – High Court ( Tomorrow case )

Requirement of minimum NOF of Rs. 200 lakh for all deposit taking NBFCs – RBI instructions (See 'DDT')

Service Tax Revenue up by 40% in the first month of new fiscal (See 'DDT')

ddt 18 june.pdf

Service Tax on fore-closure of bank loan accounts – CBEC clarifies;

spl down.pdf

U, Me Aur Hum !

RBI Notification For RBI Act.pdf

Section 45-IA, 45K and 45L of the RBI Act – Grant of CoR – Requirement of minimum NOF of Rs. 200 lakh for all deposit taking NBFCs;

mbuzz720.pdf

India, Syria sign revised DTAA today;

mbuzz719.pdf

Govt to notify petro & natural gas safety in offshore operations rules;

mbuzz718.pdf

Core Sector registers 3.6% growth in April;

mbuzz717.pdf

Sahara public deposits issue: RBI puts caps and asks for 50% independent Directors in 30 days;

mbuzz715.pdf

Govt to notify Bharat Stage III emission norms for four-wheeled in 11 cities;

2008-TIOL-255-ITAT-BANG.pdf + nike story.pdf

Nike Inc Vs ACIT ( Dated : May 28, 2008 )

Income Tax - Assessee is an American company - a well known brand of sports apparels and accessories - sets up Liaison Office - Main job of the LO is to exercise quality control of goods manufactured in India for exports to various affiliates of the assessee located in different parts of the world - AO treats LO as PE and treats 6.5% of global income as income arising in India - CIT(A) finds the LO exceeded the brief furnished to RBI and did earn some income - Since assessee merely acted as a buyer's agent and as a window of technical and quality control of goods and for placing purchase orders on behalf of various affiliates of the non-resident company, the purchase was for exports eligible for exemption u/s 9(1)(i) and no income was generated by the LO in India - Assessee's appeals allowed : BANGALORE ITAT;

2008-TIOL-254-ITAT-MUM.pdf

DCIT, Mumbai Vs M/s Vakrangee Softwares Ltd ( Dated : April 10, 2008 )

Income Tax - Assessee claims deduction for software development expenses - AO disallows but CIT(A) allows - Only after the test of ownership and enduring benefits is satisfied as held in the Amway India Enterprise case ( 2008-TIOL-97-ITAT-DEL-SB ) the AO should determine whether it is revenue or capital expenditure - matter reman : MUMBAI ITAT;

2008-TIOL-253-ITAT-HYD.pdf

Solaris Chemtech Ltd Secun Derabad Vs ACIT, Hyderabad ( Dated : May 29, 2007 )

Wage revision not a contingent liability: The undisputed facts are that the earlier wage agreement had expired in March, 2000 and the new agreement was to take effect from 1-4-2000. Thus, the liability was already incurred and had accrued. What remained was mere quantification of the liability which should not come in the way for making provision during the year under consideration. If such a provision is not made, then the profit and loss account for the year will show a distorted picture and it will also defeat the matching cost concept of accountancy. It cannot be called a contingent liability. A liability is contingent only when the accrual of such liability is dependent on the happening or non-happening of some event in future. In the present case, it cannot be the case of the revenue that wage revision may not take place at all. It is a fate accompli and what remains is mere quantification of the liability. Therefore, the assessee was justified in making the provision on estimated basis and the disallowance is deleted.   

Club membership enables the directors and executives to socialize and develop contacts with various persons for promoting company's business interests:  In the case before the Delhi Bench, it has been observed that several High Courts and various Benches of the Tribunal have taken a uniform view that such membership enables the directors and executives to socialize and develop contacts with various persons for promoting company's business interests.  Several judgment (s)  were relied upon by the Delhi Bench. Thus, respectfully following the aforesaid decisions, we direct the Assessing Officer to delete the disallowance of Rs.75,000/-. :HYDERABAD ITAT;

2008-TIOL-252-ITAT-MUM.pdf

Taj Lands End Ltd Vs ACIT, Mumbai ( Dated : May 29, 2007 )

Income Tax - Depreciation u/s 32 - Can depreciation not claimed be thrust on assessee while computing total income? - Revenue argues it has to be allowed even if not claimed - Issue is no longer res integra as depreciation cannot be forced on if the assessee does not wish to avail the same - Assessee's appeal allowed : MUMBAI ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-948-CESTAT-MAD.pdf

M/s E I D Parry (India) Ltd Vs CCE, Chennai-III (Dated : May 2, 2008 )

Central Excise – remission of duty on the goods damaged – no need to reverse the credit relatable to inputs used in relation to manufacture of such goods – issue settled in the appellant's favour by the Larger Bench. : CHENNAI CESTAT;

2008-TIOL-946-CESTAT-DEL.pdf

M/s Box & Carton India Pvt Ltd Vs CCE, Delhi-IV (Dated : April 24, 2008 )

Clubbing of clearances - Though on paper BCI and SFP bear the label of separate corporate identity, one a proprietor concern and the other a limited company, behind this corporate veil, the two concerns are being run as one unit by S.K.Gandhi.

The absence of machinery for printing cartons in SFP and there being no power connection in it coupled with the letters of BCI to its customers offering to supply the corrugated boxes through SFP are a clear indication that SFP is just an extension of BCI and two units were being run as one unit only and the goods actually manufactured in BCI were being cleared through SFP claiming SSI exemption.

BCI and SFP are being run as one unit and SFP was being used by BCI for clearance of its goods without payment of duty, the clearances of SFP have rightly been clubbed with the clearances of BCI and duty has been rightly demanded from BCI on this basis – BCI does not avail SSI exemption - Invoking clauses 2(vi) & 2(vii) of notification 8/99-CE does not vitiate the demand.

Limitation - date of knowledge of the departmental officers in respect of clandestine removal of goods/suppression of facts is not relevant for the purpose of computing the period of five years and the date for this purpose is the "relevant date" as defined in Section 11A(3).

Reduction in duty demand - inspite of being asked, BCI have neither furnished the documents showing the procurement of raw material by SFP nor have furnished any documents in support of their claim that SFP made export sales and therefore, their claim for reduction in duty demand was rightly rejected. : DELHI CESTAT;

2008-TIOL-945-CESTAT-DEL.pdf

M/s KEC International Ltd Vs CCE, Jaipur (Dated : May 14, 2008 )

Central Excise - Sec 11AB - Demand for interest and penalty on payment of differential duty on the basis of supplementary invoice - In view of Tribunal's decision 2008-TIOL-81-CESTAT-MUM waiver of pre-deposit granted : DELHI CESTAT;

SERVICE TAX SECTION

tru letter.pdf

Service Tax on service charges for fore-closure of loans - clarification;

CASE LAWS

2008-TIOL-951-CESTAT-AHM.pdf + ST US Bengali story.pdf

M/s U S Bengali Vs CCE & C, Vadodara-II (Dated : April 25, 2008 )

Section 11D of CEA – Service tax recovered from customers but not deposited – Once fact remains that appellant is registered with SEBI as ‘stock broker' and this registration is not cancelled, even if they act as ‘sub broker' in some cases it will not make any difference : AHMEDABAD CESTAT;

2008-TIOL-950-CESTAT-AHM.pdf

CC & CE, Vapi Vs M/s Shree Soap & Chemical Ind (Dated : May 13, 2008 )

ST - Penalty - Since the assessee was not aware of the fact that it was liable to service tax, penalising it for not taking registration and filing retun is not justifiable - Commissioner(A)'s order invoking Sec 80 is upheld : AHMEDABAD CESTAT;

CUSTOMS SECTION

2008-TIOL-318-HC-DEL-CUS.pdf + bail story.pdf

Entire case is based on documentary evidence and the petitioner can be subjected to interrogation without being arrested – anticipatory bail granted; True, investigation is yet on but it is not a case where custodial interrogation shall be essential as the entire case is based on documentary evidence and the petitioner can be subjected to interrogation without being given custody to the respondent, therefore, it is a fit case where petitioner is entitled to anticipatory bail. : DELHI HIGH COURT ;

2008-TIOL-949-CESTAT-MAD.pdf

M/s Joy's The Beach Resorts (P) Ltd Vs CC, Chennai (Dated : April 24, 2008 )

Customs – Stay / dispensation of pre-deposit – Mercedes Benz Car imported under EPCG licence, but not registered as a tourist taxi – since the clearance of vehicle was allowed on production of bank guarantee for Rs 40 lakhs, there will be waiver of pre-deposit. : CHENNAI CESTAT;

2008-TIOL-947-CESTAT-AHM.pdf

M/s Cosmos Trading Co Vs CC, Kandla (Dated : May 6, 2008 )

Penalty imposed u/s 112 of Customs Act for aiding and abetting M/s Systematic Corporation in illegal diversion of duty free goods in open market - In as much as the principal exporter has indicated that they intend to get the goods manufactured from another job worker and not through the job workers endorsed on the advance licences, the appellant cannot be held to be suspicious of the intention of the principal manufacturer – Benefit of doubt extended and penalties set aside. : AHMEDABAD CESTAT;