Sony India wins yet another case; this time it is Customs case in Supreme Court (Look for 'Breaking News' tomorrow)

SSI Exemption - Brand Name - SC Judgement and Board Instructions (See 'DDT')

Kolkata Central Excise gets a Grand Building (See 'DDT')

Govt recasts Central Direct Taxes Advisory Committee for 2008-10;

SAIL to set up 12 mn tonne greenfield plant in Jharkhand;

India committed to implement Indus Water Treaty: PM tells Pak President;

Mid-Term Review of Annual Policy: RBI Governor to meet bankers on Oct 24;

DRDO develops 'Laser Gun' for Indian Army;

Kandla Customs officials contribute one day salary and send blankets for Bihar flood victims;

Third runway at IGI Airport to be operational from today; likely to dilute congetion significantly;

ddt 25 Sept.pdf

Income Tax – Discrimination, DTAA and a path breaking judgement;

cobweb.pdf

Restrictions on cross media ownerships: A need of the hour, indeed!

mbuzz1004.pdf

Minister calls for improving data quality at grassroots-level;

mbuzz1003.pdf

Govt recasts Central Direct Taxes Advisory Committee for 2008-10;

mbuzz1002.pdf

SAIL to set up 12 mn tonne greenfield plant in Jharkhand;

mbuzz1001.pdf

Policies govern per capital pharma spend; USA spends the most - USD 792;

2008-TIOL-444-ITAT-AHM-SB.pdf +rent story.pdf

DCIT, Baroda Vs FAG Bearings India Ltd ( Dated : August 29, 2008 )

Income Tax - Assessee follows mercantile system of accounting - claims deduction for pre-paid lease rent relating to the next financial year - AO disallows it - Assessee argues that had they not paid the payment, they would have faced litigation as per the terms of lease agreement and the liability arose the day the payment was made - CIT(A) allows the appeal -

Held, a distinction is to be made between the date on which liability is incurred and the date on which the payment is made. The parties to the agreement may choose the dates of payment irrespective of the date of liability. Such date of payment may be the date prior to or subsequent to the date of liability or payment may be made on the same date on which liability is incurred. A liability can be said to be incurred on the date on which an enforceable debt is created against the assessee. A debt can be said to be enforceable when recovery of the same can be legally made. Under the mercantile system of accounting, the assessee is entitled to claim deduction on the basis of incurring the liability irrespective of the date of payment. Even such liability can be claimed on the basis of provisions where such liability is not qualified. On the other hand, under the cash system of accounting, the assessee is entitled to claim deduction on the basis of payment irrespective of the date of incurring of, liability. In the present case, the assessee was following the mercantile system of accounting and therefore, deduction can be claimed only if it is established that liability has been incurred in the years under consideration. However, since the payment was made against future liability which was not enfoceable debt in the current FY, such deduction is not allowable - Assessee's appeal dismissed: AHMEDABAD ITAT; (SPECIAL BENCH)

2008-TIOL-443-ITAT-PUNE.pdf + discrimination story.pdf

Automated Securities Clearance Inc Vs ITO, Pune ( Dated : September 10, 2008 )

Incentive deduction under section 80HHE in respect of profits of business of software exports – not eligible for foreign companies – no discrimination: A careful analysis of the scheme of Section 80HHE does show that the differentiation is on the basis of residential status of a taxpayer and not on the basis of place of incorporation of the company. Section is quite specific that so far as persons other than companies, i.e. non corporate taxpayers, are concerned only residents are eligible for deduction under section 80HHE, and that, by implication, non residents are not eligible for deduction under section 80HHE. Coming to the question of eligibility of the companies or corporate taxpayers, it is to be noted that the expression 'Indian company is also neatly defined under the Act, under Section 2 (26) of the Act, as a company formed and registered under the Companies Act' and includes certain other categories of other entities formed or incorporated in India. So far as the companies, i.e. corporate taxpayers, are concerned, this Section provides, that only Indian companies are eligible for deduction. By implication, it would appear that, while Indian companies are eligible for this deduction irrespective of their residential status, the foreign companies are not eligible for this deduction.

Question of Law can be raised at appellate stage: as no fresh investigation of facts is needed, this purely legal plea could have even been taken up for the first time before this Tribunal.:PUNE ITAT;

2008-TIOL-442-ITAT-MAD.pdf

M/s Kovai Sarala Vs ACIT, Chennai ( Dated : March 07, 2008 )

ITAT cannot adjudicate on legality of search – Even if search is illegal, material collected in search can be used – Filing of return in the name of some relatives subsequent to search action will not absolve liability of the searched person Tribunal held that it is not the authority to adjudicate upon legality of warrant of search. Further it was held that even if search is in contravention of the provisions of the I.T. Act still the materials seized can be used for the purpose of assessment following decision of Apex Court in the case of Pooran Mal ( 93 ITR 505 ). Since satisfaction was recorded by the AO before issue of notice under sec. 158BD, initiation of Block assessment proceedings was upheld. Addition towards unaccounted chit subscription in the name of relative upheld since evidence was found in the premises of assessee. Filing of return in the name of some other relative subsequent to search will not absolve the liability of assessee.

Since overall income from profession returned by assessee in the period covered under Block assessment is more than the income as per the seized records, addition on account of suppressed professional income for some years, was deleted.

Appeal by both assessee and revenue dismissed.:CHENNAI ITAT;

2008-TIOL-441-ITAT-MAD.pdf

M/s Malladi Drugs & Pharmaceuticals Ltd Vs DCIT, Chennai ( Dated : January 31, 2008 )

Non-compete fee paid – Capital expenditure – Cannot be spread over and allow as revenue expenditure – Not entitled to depreciation. Interest paid on account of delayed payment of non-compete fee is revenue expenditure. Non-compete fee of Rs. 2 crores paid to former director of assessee company. AO held it to be capital expenditure since assessee received enduring benefit. Assessee's claim to spread over the same as revenue expenditure during the period of benefit, was also rejected. On the claim of depreciation, it was held that the former director was not in possession of exclusive industrial information or technique and hence the payment and the benefit created does not fall under the category of intangible assets mentioned in sec. 32(1)(ii). On appeal, Tribunal held that the payment is clearly in capital field. Further on the claim of spreading over the expenditure over the period of non-competition relying on the decision of supreme Court in the case of Madras Industrial Investment Corporation Vs CIT ( 225 ITR 802 ), Tribunal held that the decision before the apex court was one of revenue expenditure vis-à-vis matching principle whereas the impugned expenditure in this case is purely capital in nature and hence there is no question of spreading it over a period of years and allowing as revenue expenditure. Regarding the claim of depreciation, ITAT agreed with AO that this benefit does not fall under the category of assets mentioned in sec. 32(1)(ii).

However interest paid for delayed payment of non-compete fee was held as allowable since it is a revenue expenditure.

Appeal by assessee partly allowed and appeal by revenue dismissed.:CHENNAI ITAT;

2008-TIOL-440-ITAT-MAD.pdf

M/s Medifield Equipments Corporation Vs ACIT, Chennai ( Dated : January 25, 2008 )

Remuneration to partners under sec. 40(b) – Cannot be enhanced when additional income is offered for assessment.

Sec. 40(b) is restrictive provision and not an enabling provision. It puts and upper ceiling to the availability of deduction. If the assessee and its partners settle this at a lower amount, it should not have any grievance. Only to the extent salary was paid or made provision in the accounts can be allowed as deduction.

Appeal by assessee dismissed.:CHENNAI ITAT;

CENTRAL EXCISE SECTION

NOTIFICATION

exnt08_35.pdf

Debonding of EoUs: CBEC amends CCRs, 2004 to allow credit equal to excise duty paid on capital goods;

notification.pdf

Instructions on implementation of changes carried out to notification No.8/2003-CE dated 1.3.2003-regarding.;

CASE LAWS

2008-TIOL-1563-CESTAT-MUM.pdf + sika story.pdf

M/s Sika India Pvt Ltd Vs CCE, Goa (Dated: June 26, 2008)

Very fact that the applicants indicate the “Manufacturing date” on 1kg pack, branded “Sika Noleek” shows that they themselves recognize the process undertaken by them as manufacture – No strong prima facie case – Tribunal orders pre-deposit.:MUMBAI CESTAT;

2008-TIOL-1562-CESTAT-MAD.pdf

Natesan Synchrocones Pvt Ltd Vs CCE, Chennai (Dated: July 1, 2008)

Central Excise – Stay/Dispensation of pre-deposit – interest on differential duty paid on supplementary invoices on account of price revision – since the matter is referred to the Larger Bench, pre-deposit waived.:CHENNAI CESTAT;

2008-TIOL-1561-CESTAT-MAD.pdf

M/s Mak Controls & Systems (P) Ltd Vs CCE, Coimbatore (Dated: July 1, 2008)

Central Excise – Stay/Dispensation of pre-deposit – control panels classified by the appellants under Heading No 88.03 as parts of aircraft which is disputed by the revenue – prima facie the appellants have made out a case for waiver of pre-deposit.:CHENNAI CESTAT;

SERVICE TAX SECTION

2008-TIOL-1566-CESTAT-DEL.pdf + computer story.pdf

M/s Doon Institute Of InformationTechnology Pvt Ltd Vs CCE, Meerut - I (Dated:My 7, 2008)

Service Tax - Computer training institute – Eligible for exemption prior to 16.6.2005 – “computer training institute is providing vocational training, it would become vocational training institute and covered under Explanation (1) of Notification No. 24/2004-ST. It is well settled that exemption notification is not only to be construed strictly but also reasonably having regard to the language employed therein. The notification shall be read as a whole, not in part.”

Notification not to have retrospective effect: It is well settled that unless it is specified otherwise, an exemption notification shall come into effect on the date of its issue.:DELHI CESTAT;

2008-TIOL-1565-CESTAT-MAD.pdf

M/s Moulis Advertising Services P Ltd Vs CST, Chennai (Dated: June 25, 2008)

Service Tax – Stay/Dispensation of pre-deposit – Advertising Agency Service –the service tax is payable only on the commission received from the media which was paid by the appellants – pre-deposit waived. :CHENNAI CESTAT;

2008-TIOL-1564-CESTAT-MAD.pdf

M/s Premier Polyweaves (P) Ltd Vs CCE, Coimbatore (Dated: June 20, 2008)

Service tax – Stay/Dispensation of pre-deposit – CENVAT credit on service tax paid on outward transportation – pre-deposit waived as the impugned service is covered under the definition of input service. :CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

cnt08_110.pdf

CBEC notifies new exchange rate for Japanese Yen + HK Dollar;

cnt08_108.pdf

CBEC extends jurisdiction of Vizag Customs Commissioner to Gangavaram Port ;

dgft08not046.pdf

Govt bans import of dairy products from China;

dgft08not044.pdf

Duty credit scrips allowed to all service providers (except hotels/ restaurants) for forex earned upto Rs 10 lakh

dgft08not043.pdf

VKGUY, FMS and FPS, benefits can be claimed either by the supporting manufacturer ;

dgft08pn084.pdf

DGFT amends Appendix 7 to notify Indore for exports of Soya Meal & Soya Products;

exportcotton.pdf

Export of Cotton-registration of contracts for exports with the textile Commissioner-reg.;

CASE LAWS

2008-TIOL-1560-CESTAT-MAD.pdf

Mr Sahul Hameed Vs CC, Tuticorin (Dated: June 25, 2008)

Customs – Stay/Dispensation of pre-deposit – misdeclaration / undervaluation of the goods imported - demand of duty based on the enhancement of value done by the Commissioner, prima facie, is without any legally sustainable basis and the appellants have made out a good case – pre-deposit waived. : CHENNAI CESTAT;