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What is the meaning of -deferred' ? Cabinet Secretary Clarifies (See 'DDT') Ban on smoking in public place: Govt clarifies 'club' is also public place; Govt de-reserves 14 more items from SSI list; RBI offers liquidity adjustment facility: Special fixed rate repo; Indian post offices now offering 24 carat gold coins from 100 outlets; Aravind Adiga gets Man Booker prize 2008 for his novel 'The White Tiger'; Rajkot Central Excise arrests Directors of two cement factories in Cenvat credit misuse case; PM, FM, RBI Governor and Montek review liquidity crunch in economy; Minor blast in Kanpur; Four hurt but Police do not suspect it as terrorist handiwork; |
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| Dear Member, Sending the following files: |
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Pan Masala and Gutkha put Up in Tin Packages – Applicability of Section 3A - Board corrects its earlier letter; Global financial crisis and key risks: Impact on India and Asia; Clarification regarding terms used while recording the proceedings of the Cabinet/Cabinet Committees.; Ban on smoking in public place: Govt clarifies 'club' is also public place; RBI offers liquidity adjustment facility: Special fixed rate repo; Indian post offices now offering 24 carat gold coins from 100 outlets; Govt de-reserves 14 more items from SSI list; Liquidity crunch - RBI Governor to announce more measures today: FM; WTO creates Task Force on global financial crisis ; |
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M/s Areva T & D India Ltd Vs ACIT, Chennai (Dated: September 24, 2008) Income Tax – capital gains invested in Bonds – investment limit of Rs. 50 Lakhs fixed by Notification No. 380/2006 challenged as ultravires of Section 54EC – During pendency of writ petition, Section 54EC amended to fix the limit of Rs. 50 lakhs . Writ petition infructuous. : MADRAS HIGH COURT; CIT Vs Mihir Textiles Ltd (Dated: May 5, 2008) Income tax – Deduction of commitment charges paid for issuing debentures - M oney borrowed by issuance of debentures is in the nature of loan and cannot assume characteristic of investment - Assessee under a liability to return such borrowed funds upon maturity of debentures or earlier, if the term of the debentures so provide - Expenditure in the nature of commitment charges at the time of issuing such debentures would be on revenue account only, considering the fact that the expenditure had been incurred in an existing business - Position of law well settled and expenditure incurred even on capital account would be allowable under sec. 36(1) of the Act as the said provision nowhere draws distinction between borrowings made on capital account and revenue account Income tax – Deduction in r/o repairs and replacement expenditure for machinery – Lower a ppellate authorities examined the evidence on record and concluded that the quantum of expenditure is not substantial when compared to gross block of assets – Powers of the first appellate authority are co-extensive and co-terminus with that of the assessing authority - Once the appellate authority finds that the facts recorded by the Assessing Officer are not correct there should be no suggestion to the contrary by the Revenue while framing the questions : GUJARAT HIGH COURT; Sanchayita Mercantile Pvt Ltd Vs ACIT, Mumbai (Dated: July 29, 2008) Income Tax - Sec 14A - Assessee is into the business of trading, investment and finance - also earns badala income and dividend - incures interest expenditure on loans taken for investment - Since dividend income is exempt u/s 10(33), AO disallows interest expenditure u/s 14A - Assessee argues that no part of interest expenditure is attributable to dividend income and pleads that such an income is incidental to investment and finance business and such an expenditure be allowed u/s 36(1)(iii) or Sec 37 - Assessee pleads if at all AO wants to attribute it to dividend income, it should be prorated - AO rules out attribution on prorated basis and attributes entire expenditure to earning of dividend income and holds expenditure incurred can be even more than the dividend income earned - CIT(A) justifies AO's action - Held, going by the facts, the AO has made the disallowance after making proper appropriation between total income and the dividend income. This is not a case where the Assessing Officer had made any ad hoc disallowance. There is nothing in the provisions of section 14A of the Act to affect that the expenditure disallowed are not to exceed the income, which is not chargeable to Tax. So long as there is identification of the income of which does not form part of the total income, the amount so identified has to be disallowed - CIT(A) order upheld and assessee's appeal dismissed: MUMBAI ITAT; ITO Vs M/s Millenium Infocom Ltd (Dated: May 23, 2008) Product Development expenditure is capital in nature. Assessee is in the business of software development. Assessee got developed a software by paying Rs. 1 crore. Apart from this, it purchased two divisions that developed software. By doing so the assessee has acquired the absolute ownership and other rights regarding software. Since the assessee is engaged in the business of software development, the acquisition of the software is either for using the software and the facility provided for developing other software as per specific demand and requirement of clients or to sell copies to the clients with limited right of use by retaining the master copy and all other rights. Thus the acquired software has enduring benefit to assessee and hence a capital expenditure. : CHENNAI ITAT; 2008-TIOL-15-ARA-IT.pdf + golf story.pdf Golf In Dubai LLC (Dated: October 13, 2008) Income Tax - India-UAE DTAA - Applicant is Dubai-based company - specialises in organising golf tournament - organises two events in India - raises funds from sponsorship and management fees - taxability - Advance Ruling sought - Held, the key phrase used in Artilce 5(1) of the Treaty for defining PE is the business 'carried on' which means continuum, frequency, regularity and a series of separate acts in conducting business in India even if there is no permanent place of business for the applicant - income is not taxable as business income; the receipt arising out of management fee could have been taxed as fee for technical services but the treaty is silent on FTS - Ruling goes in favour of the applicant Fixed place of business - Applicant contends no fixed place PE, service PE and agency PE exists in terms of Article 5 of DTAA – Revenue contended contra – AAR holds that no service PE exists as applicant not providing any services at first place much less to any second party – Further, employee of applicant present in India for less than 9 months in 12 month period as required to constitute service PE under subject DTAA - Further - "other personnel" in Article 5(2)(i) dealing with service PE will include only personnel dependent on applicant - No agency PE exists since independent/third party contractors involved – No fixed place PE exists since ingredient of regularity, continuity and repetitiveness missing in applicant's Indian activities - Indispensable to satisfy condition of "business carried on" under Article 5(1) of subject DTAA : ADVANCE RULING AUTHORITY; |
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Gutkha manufacture with aid of machine - dutiability ; Levy u/s 3A on pan gutkha in tin packages; CASE LAWS 2008-TIOL-492-HC-KERALA-CX.pdf Malabar Cements Ltd Vs CCE, Kzd ( Dated : September 22, 2008 ) Central Excise – Original ground plan which included mines misplaced by the Department – Evidence in the form of Jurisdictional Asst. Commissioner's letter accepting the original ground plan available – Assessee cannot be directed to submit a new ground plan by excluding the mines – Letter issued to the assessee seeking to modify the ground plan quashed – Writ of Certiorari issued to authorities for accepting the ground plan based on the originally approved plan for the purpose of record to govern all future transactions in Excise matters : KERALA HIGH COURT; CCE, Coimbatore Vs Jayashree Tea & Indus Ltd (Dated: May 7, 2008) Excise – Levy of Cess on packaged tea – Cess on tea can be levied only once at the stage of production from tea leaves – Cess cannot be levied again when cess paid bulk packs are converted into retail packs :CHENNAI CESTAT; M/s ITC, Ltd Vs CCE, Salem (Dated: July 23, 2008) Central Excise – valuation – related person – whether the relationship has influenced the price is a question of fact which was not even attempted by the Commissioner – matter remanded for de novo adjudication. :CHENNAI CESTAT; CCE, Chennai Vs Ennore Foundries Ltd (Dated: July 16, 2008) Central Excise – Valuation – interest on advances received – unless it is shown that the sale price is influenced by the advances, notional interest is not includable in the value. :CHENNAI CESTAT;
SERVICE TAX SECTION 2008-TIOL-1683-CESTAT-DEL.pdf + MF story.pdf CST, Delhi Vs M/s P N Vijay Financial Services Pvt Ltd (Dated: September 25, 2008) Service Tax- Sale and Purchase of Mutual Fund Units – Units are goods – not liable for Service Tax - The mutual fund units being 'goods' as per the definition under Section 65(50) of the Finance Act, 1994 read with Section 2(7) of the Sale of Goods Act, 1930, would fall under clause ( i ) of Section 65(19), namely, promotion or marketing or sale of goods. But as the 'Business Auxiliary Service' provided by a commission agent by way of sale and purchase of "goods" stands exempted under Notification No. 13/2003-ST, the conclusion is irresistible that the respondent were not liable to pay any service tax for service rendered as commission agent in connection with sale and purchase of units of mutual fund schemes during the relevant period. :DELHI CESTAT; 2008-TIOL-1682-CESTAT-DEL.pdf + cc story.pdf CCE, Panchkula Vs M/s Amarnath Aggarwal Investment Pvt Ltd (Dated:August 8, 2008 Service Tax - Appeal - condonation of delay - the order-in-original was accepted by the Chief Commissioner under Section 86(2) of the Finance Act 1994, whereas the same needs to be done by the Board, but not the Chief Commissioner - delay condoned as the interest of revenue cannot suffer due to Chief Commissioner's mistake. :DELHI CESTAT; M/s SKM EGG Products Exports (I) Ltd Vs CCE (ST), Salem (Dated: July 18, 2008) Service Tax – Stay/Dispensation of pre-deposit – liability to pay service tax on the receipt of services from abroad – prior to introduction of Section 66A, there was no charging section – prima facie demand not sustainable – pre-deposit waived. :CHENNAI CESTAT;
CUSTOMS SECTION NOTIFICATION Para 6.5.2 in FTP: words and figure “3 working days” shall be substituted by the words and figure “7 working days”; CASE LAWS M/s BATA India Ltd Vs CC, Chennai (Dated: July 11, 2008) Customs – exemption under Notification 5/2006 CE for footwear of RSP between Rs 250/- and Rs 750 – the importer instead of marking RSP with indelible ink as required, had only stuck a sticker – no case of mis-declaration to render the goods liable for confiscation under Section 111(m) and for imposing penalty under Sec 112(a) : CHENNAI CESTAT; |
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