Walk out by Income Tax employees (See 'DDT')

Inflation jumps into two digit; crosses 11 percent mark;

Doha talks: Prospects of ministerial meet improve;

BSE Chairman Shekhar Datta and Director J Godrej resign;

Govt appoints 1972 batch IAS officer P I Suvrathan as first chairperson of Food Safety and Standards Authority of India;

ddt 20 june.pdf

Negative list of Input services- SEMINAR QUESTIONS & ANSWERS;

stgst.pdf

Landmark ruling from Guwahati High Court delivers a punch on Service Tax Department;

mbuzz729.pdf

Govt decides to distribute edible oil through PDS;

mbuzz728.pdf

Domestic Airlines register 9.01 % passenger growth;

mbuzz727.pdf

Japanese Govt. allots 20 additional slots at Narita Intl. Airport for Indian air carriers ;

mbuzz726.pdf

Bonanza for SCI employees - DA merger approved by Union Minister ;

NOTIFICATION

it08not070.pdf

CBDT notifies DTAA with Botswana;

CASE LAWS

2008-TIOL-320-HC-ALL-IT.pdf + coloniser story.pdf

CIT Vs M/s Kanpur Colonisers Pvt Ltd (Dated: May 23, 2008)

Income Tax - Assessee deals in sale and purchase of land - purchases land but not sold to prospective buyers - opts for plantation of eucalyptus trees - claims it as revenue expenditure - AO treats it as capital in nature - Tribunal treats it as stock in trade and allows it - Since the assessee was not engaged in the business of agriculture or agricultural products and the planation was only till the land was developed for onward sale, the expenditure was for bringing into existence a new asset - Revenue's appeal allowed : ALLAHABAD HIGH COURT;

2008-TIOL-262-ITAT-DEL.pdf

M/s Escorts Mahle Limited Vs DCIT, New Delhi ( Dated : March 28, 2008 )

Income Tax Act – Section 139 and Section 80 – Loss return - assessee filed a return of income on 31.1.0.2001 (return was filed in time) at a loss of Rs. 34,83,64,480/- the return was accompanied by unaudited accounts - on 27.3.2003 assessee filed another return of income in which the loss was enhanced to Rs.37,91,62,339/- same was accompanied by audited accounts -AO took the view that the return filed on 31.10.2001 was not a valid return because it was not accompanied by the accounts and consequently held that it was only the return filed on 27.3.2003, accompanied by the accounts, was the first valid return filed by the assessee – Held, return filed on 31.10.2001 was a valid return as the AO did not issue any defect notice under section 139(9) but proceeded to process the return under section 143(1) of the Act – Held further, The revised return takes the place of the original return and the original return having been admittedly filed within the time allowed under section 139(1), the loss, will have to be carried forward :DELHI ITAT;

2008-TIOL-261-ITAT-DEL.pdf

M/s Cushman & Wakefield (India) Pvt Ltd Vs ACIT, New Delhi ( Dated : April 8, 2008 )

Income Tax - Assessee is into consultancy business - fails to pay service tax before filing of the return - AO adds the same to income - CIT(A) agrees with the AO - Since the assessee's view point that untile the tax is collected it remains an outstanding and cannot be added back to the income has not been examined in proper legal perspective, the matter is remanded for fresh examination :DELHI ITAT;

2008-TIOL-260-ITAT-HYD.pdf

ACIT, Hyderabad Vs M/s Lakshmi Finance & Industrial Corporation Ltd ( Dated : April 17, 2008 )

When two parties to a contract are working with cross purposes, the transaction loses its real sheen and assumes a colour which can be described to be sham. No depreciation when there was no intent to transfer the property and no depreciation to two parties for the same asset -  It is the assertion of the revenue in its grounds of appeal that SBL had already claimed depreciation at 100% and this assertion remains uncontroverted by the assessee. Thus, this fact also disentitles the assessee to claim depreciation on the same asset. Accordingly, the order of the CIT(A) is reversed and that of the Assessing Officer is restored. :HYDERABAD ITAT;

cbecorder145_2008.pdf

CBEC issues 4th transfer order of Commissioners;

CENTRAL EXCISE SECTION

2008-TIOL-964-CESTAT-MUM.pdf + input story.pdf

CE & CC, Aurangabad Vs M/s Gajlaxmi Steel Pvt Ltd (Dated : May 9, 2008)

Inputs burnt in fire – No appeal filed against order of Insurance authorities rejecting claim on the ground that “fire insurance” not taken by company – No cause for reversal of Cenvat credit . : MUMBAI CESTAT;

2008-TIOL-963-CESTAT-MUM.pdf

CE & CC, Nashik Vs General Mills India Pvt Ltd (Dated : April 2, 2008)

Cenvat Credit of service tax paid on the rent-a-cab service to employees, consultant and other persons – although amount involved is less than Rs.50 thousand since issue is of recurring nature, appeal admitted. : MUMBAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-321-HC-GUW-ST.pdf + st hc story

Service Tax - Sale of flats – no service and so no Service Tax; the circular, dated August 1 ,2006 , is binding on the department and this circular makes it more than abundantly clear that when a builder, promoter or developer undertakes construction activity for its own self, then, in such cases, in the absence of relationship of “ service provider ” and “service recipient , the question of providing taxable service to any person by any other person does not arise at all. In the present case too, the materials placed by the writ petitioners clearly show that the construction activities, which the petitioners have been undertaking, are in respect of the petitioners' own work and it is only the completed construction work, which is sold by the petitioner-company to the buyers, who may have made agreements for sale before the construction had actually started or during the progress of the construction activity or at the end or completion of the construction activity. Any advance, made by a prospective buyer, or deposit received by the petitioner-company, is against consideration of sale of the flat/building to such prospective buyer and not for the purpose of obtaining service from the petitioner-company. :GAUHATI HIGH COURT;

2008-TIOL-960-CESTAT-DEL.pdf

M/s Industrial Security Agency Vs CCE, Allahabad (Dated: May 12, 2007)

Service tax – penalty under Sections 76, 77 and 78 of the Finance Act – penalties modified keeping in view of the facts and circumstances of the case.

Penalty under Section 76: Penalty has been imposed on the appellant @ Rs . 100/- per day for the period from April 2000 to June 2002. Penalty, no doubt, can be quantified and imposed in that manner in terms of Section 76 of the Act, but it does not mean that penalty must necessarily be worked out at the rate and in the manner provided in Section 76. Quantification of penalty depends on discretion of the authorities. It does not mean that lower penalty should be imposed arbitrarily, but in an appropriate case, a lesser penalty can be imposed – Penalty reduced to Rs 1 lakh ( Para 10)

Penalty under Section 77: Penalty under Section 77 has been imposed on the appellant for its failure to obtain registration. It is a common ground that no penalty is separately provided for failure to obtain registration and in the absence of any dispute that the appellant was rendering taxable service, there is no difficulty in holding that the penalty under Section 77 requires no modification.(Para 8)

Penalty under Section 78: No case of fraud, collusion or wilful mis -statement or even contravention of the statutory provisions with intent to evade payment of Tax is made out. Non-submission of the return was the result and concomitant of non-registration for which penalty has already been imposed under Section 77 of the Act. The clause "suppression of facts" can be applied where return is filed or some statement or declaration concealing material facts having bearing on the tax liability of the person. Merely because the appellant did not submit return, he cannot be penalized under Section 78 ( Para 9): DELHI CESTAT;

2008-TIOL-959-CESTAT-MAD.pdf

M/s Diebold Systems (P) Ltd Vs CST, Chennai (Dated: April 15, 2007)

Service tax – Stay / dispensation of pre-deposit – demand of service tax in respect of Automated Teller Machines leased out – prima facie case for waiver of pre-deposit. : CHENNAI CESTAT;

CUSTOMS SECTION

2008-TIOL-962-CESTAT-AHM.pdf

M/s Dadri Inorganics Pvt Ltd Vs CC, Kandla (Dated : May 07, 2008)

Exporters were clearly aware that the description in the drawback schedule was "heat resistant rubber tension tape (strip elastic rubber)" and not 'Heat Resistant Rubber Tape' - Once the goods do not answer the description, the claim for drawback fails.

Exporters were clearly aware that the description in the drawback schedule was "heat resistant rubber tension tape (strip elastic rubber)" and not 'Heat Resistant Rubber Tape' - Appellant fairly agrees that he is not able to show any technical literature or evidence in support of this contention that both the tapes are one & the same whereas the adjudicating authority has recorded that both are different products & have different characteristics - Once the goods do not answer the description, the claim for drawback fails.

Order for recovery of Rs.64,80,000/- being drawback wrongly disbursed under Rule 16 of the Drawback Rules is upheld since it is clearly established that the drawback was not admissible.

Since the Drawback Rules are self-contained and framed under Section 75 of the Customs Act & no limitation in terms of time-limit has been laid down, the order relating to this portion is held valid.

M/s DIPL , Shri V.M. Jain, Director and Shri C.P. Gupta, Director of M/s RALCO being involved in the fraud to show that the goods have been manufactured by RALCO when they were not so manufactured and have filed false documents like AR-4 , invoices, etc.; they have also given false information by claiming that the goods were manufactured in a factory and exported - goods which were actually purchased from the open market - thus they have wrongly claimed draw back of central excise duty portion - total central excise portion is Rs.17 out of Rs.60 per kg of drawback allowed – in this situation some reduction in the penalty has to be considered - Penalty on M/s DIPL is reduced to Rs.3 lakhs, penalty on the Director Shri V.M. Jain is reduced to Rs.1 lakh and penalty on Shri C.P. Gupta, Director of M/s RALCO is reduced to Rs.50,000/-. : AHMEDABAD CESTAT;

2008-TIOL-961-CESTAT-MUM.pdf

Shri Dhananjay Kumar Vs CC, Nhavasheva (Dated : February 21, 2008)

Provisional release of goods – Decision of Commissioner passed under section 110A, and intimated by the Jt. Commissioner, though of interlocutory nature is an order passed by an adjudicating authority – Appeal lies before the Tribunal in terms of s.129A of the Customs Act, 1962. : MUMBAI CESTAT;