Does ship-breaking activity amount to 'production' eligible for Sec 80HH benefits? (Look for SC's decision tomorrow)

ACC extends tenure of Dhanendra Kumar, ED of World Bank, upto January 31, 2009;

India-Japan Free Trade Agreement possible by year-end: PM

PM clears appointment of Secy, PMO, Pulok Chatterji as ED to World Bank;

Paswan says Govt to take a decision on export duty on steels within a week;

Five patent applications filed in India for solar-based vehicles but just one granted so far: Minister;

ddt 21 Oct.pdf

Service Tax - Do Not Call the Assessee - CBEC;

mbuzz1087.pdf

India develops cyber forensics took kit; copies of kit being distributed to state agencies, CBI and others ;

mbuzz1086.pdf

Income inequality and poverty on rise in most OECD countries;

mbuzz1085.pdf

10th Plan focussed on only high-value minerals;

mbuzz1084.pdf

Dr V K Garg takes over as Chairman of JERC;

mbuzz1083.pdf

India finalises National Employment Policy in consultation with ILO;

mbuzz1082.pdf

Combined share of MTNL and BSNL in mobile domain shrink to 15%;

2008-TIOL-508-HC-MAD-IT .pdf

M/s Saktthi Footwear Vs ACIT ( Dated: August 6, 2008 )

Income tax – Deduction claimed towards duty drawback earned on exports under s. 80IB - M andate of law is that unless the source of the profit is the undertaking, the assessee is not eligible to claim deduction - Mere commercial connection between the income and the industrial undertaking would not be sufficient – Appellant not entitled to deduction claim of duty drawback: MADRAS HIGH COURT;

2008-TIOL-507-HC-ALL-IT.pdf

CIT, Faizabad Vs M/s Gupta Mills Stores ( Dated: October 1, 2008 )

Income tax – Initiation of penalty proceedings u/s 271E – Two proceedings initiated one by ITO and another by JC – Even if ITO's initiating the proceedings is taken into consideration, order is not time barred.

Income tax – Tribunal has not given its findings on the facts and circumstances surrounding default in terms of s. 269T – Tribunal's order vitiated and liable to be set aside – Matter remanded for fresh consideration by Tribunal: ALLAHABAD HIGH COURT;

2008-TIOL-505-ITAT-DEL.pdf + rent story.pdf

M/s KLM Royal Dutch Airlines Vs DCIT, New Delhi ( Dated : March 31, 2008 )

Rent received by aircraft operator payable to AAI – No income: “Profits from the operation of aircrafts will include transportation of passengers as well as cargo. For handling the cargo to be transported on its aircrafts, KLM was allotted space at Cargo Complex, Bombay by AAI. Instead of assessee itself handling the cargo by employing its own personnel, the activities are outsourced by assigning the same to CSC. Thus, the recovery of rent out of amount payable to CSC for handling cargo is directly and inextricably linked to the cargo handling business by transporting the same through its aircrafts. To the extent of recovery only the ultimate expense payable by assessee gets reduced. Recovery of rent is not in the course of separate business of leasing the premises. At no point of time even the AAI ever alleged that the premises are used for any purpose other than that for which the licence has been granted. At least this is not on record and the licence is being renewed from time to time.

Recovery of rent from CSC was treated as income from other sources. If that be the case, the assessee is entitled to deduction u/s 57(iii) being expenditure wholly and exclusively for the purpose of making or earning such income. But for payment of rent to AAI, the assessee could not have availed the space and but for availing the space, the assessee could not have authorized CSC to use the said space. In this way there is a direct nexus between two activities and hence, receipt from one will set off against the expenses on other. Therefore, it is incorrect to hold that expenses are incurred in the course of activities of operation of aircraft and receipt are de horse such activity. : DELHI ITAT;

2008-TIOL-504-ITAT-BANG.pdf

ACIT, Bangalore Vs M/s Hewlett Packard Global Soft Ltd ( Dated : September 19, 2008 )

Income Tax - Sec 10A - Assessee is into export of software - claims inclusion of expenses incurred in foreign currency in the total turnover - AO disallows - CIT(A) holds that since the assessee comes within the definition of computer software u/s 10 A and is engaged in the development, service and sale of computer software, such expenses incurred in foreign currency outside India cannot be excluded from the export turnover - Held, such expenses incurred for providing technical services can only be excluded as per Clause (iv) of Explanation 2 of section 10A but since it relates to exports of goods in this case, the expenses cannot be disallowed - CIT(A) order upheld - Revenue's appeal dismissed : BANGALORE ITAT;

2008-TIOL-503-ITAT-BANG.pdf

ACIT, Bangalore Vs M/s Himachal Joint Venture ( Dated : September 12, 2008 )

Income tax - Credit for TDS - Assessee files loss return but claims credit for TDS - AO as per provisions of Sec 199 proportionately allows TDS credit for income declared and disallows the rest as corresponding income not declared - CIT(A) holds the advance payment as exception to Sec 199 and allows appeal - Held, the TDS benefit as per Sec 199 has nothing to do with the system of accounting. The assessee is entitled to get refund of the tax so deducted at source as and when the income is generated by adjusting the loan amount on which such tax has been deducted by the tax deductor. The CIT(A) order is reversed and that of the Assessing Officer is restored. : BANGALORE ITAT;

CENTRAL EXCISE SECTION

NOTIFICATION

exnt08_45.pdf

CBEC again amends Paan Masala Packing Machines (Capacity Determination & Collection of Duty) Rules;

CASE LAWS

2008-TIOL-1719-CESTAT-MUM.pdf + lever story.pdf

Hindustan Lever Ltd Vs CCE, Belapur (Dated: July 21, 2008)

Once gate passes clearly shows that duty has been recovered from customers, there is no need of looking into balance sheet to find out as to whether duty so paid was considered as a receivable or not - Refund hit by unjust enrichment : MUMBAI CESTAT;

2008-TIOL-1718-CESTAT-DEL .pdf

CCE, Kanpur Vs M/s Rubber Complex ( India ) (Dated: May 23, 2008)

Central Excise – Excess raw materials and finished goods found during stock verification – SCN silent on the status of goods i.e. whether finished goods are in packed condition or not – Commr (A)'s findings that goods are not in packed condition not rebutted by original authority and also not disputed by Revenue in the appeal memo – Commr (A) lowered the imposition of penalty imposed by lower authority under Rule 13(1) of CCR and set aside confiscation / redemption fine – No infirmity in the order :DELHI CESTAT;

2008-TIOL-1717-CESTAT-MAD.pdf

CCE, Chennai Vs M/s Beacon Neyrpic Ltd (Dated: July 23, 2008)

Central Excise – Valuation – related person – merely because a holding company is related to its subsidiary company is not sufficient to invoke valuation rules – revenue has to establish that the relationship had influenced the price.:CHENNAI CESTAT;

2008-TIOL-1716-CESTAT-MAD.pdf

Aidees Electronics Pvt Ltd Vs CCE, Chennai (Dated: July 29, 2008)

Central Excise – condonation of delay – the signature of the person who receive the order by post does not seem to be that of an illiterate or uneducated person – the appeal was filed beyond the condonable period of delay – no infirmity in the order rejecting the Appeal by the Commissioner (Appeals) :CHENNAI CESTAT;

SERVICE TAX SECTION

CIRCULAR

st_letter_01.pdf

Scrutiny of ST-3 returns filed by Large Service Taxpayers – reg.

st_letter_02.pdf

Scrutiny of service tax returns – reg.;

CASE LAWS

2008-TIOL-509-HC-MAD-CT.pdf + infosys story.pdf

M/s Infosys Technologies LTD Vs Special Commissioner And Commissioner Of Commercial Taxes, Chennai ( Dated: July 25, 2008 )

Sales tax - if the software whether customized or non-customized satisfies the Rules as a 'goods', it will also be 'goods' for the purpose of Sales Tax - goods may be a tangible property or an intangible one. It would become goods provided it has the attributes thereof having regard to (a) its utility; (b) capable of being bought and sold; and (c) capable of being transmitted, transferred, delivered, stored and possessed. If a software whether customised or non-customised satisfies these attributes, the same would be goods. : MADRAS HIGH COURT;

2008-TIOL-1721-CESTAT-MUM.pdf + stgst story.pdf

Kumar Beheray Rathi Vs CCE, Pune III (Dated: September 25, 2008)

Builders/Contractors charging ‘one-time maintenance charges from their customers' liable to pay Service Tax under the category “Maintenance or Repair services” – Issue arguable – Tribunal orders pre-deposit as no prima facie case made in favour.

Tribunal's observation -

++We find that the applicants herein had collected the amount from their customers for the purpose of maintenance of the property. 

++ Emphasis (laid by applicant) on the provisions of the Maharashtra Ownership of Flats (Regulation of promotion of construction, sale, management and transfer) Act 1963 needs to be gone into detail. 

++ These provisions do cast an obligation on the builder/promoter to maintain separate account of the sums taken as advance deposit and the responsibility for payment of outgoings till the property is transferred to the proprietor.  

++ How far the provisions of the said Act, would apply to the provisions of the Finance Act, 1994, has to be gone to detail which can be done only at the time of final hearing. 

++ The issue in this case is an arguable one. 

++ Accordingly, we are of the considered view that the applicants have not made out a prima facie case for complete waiver of the pre-deposit of the amount involved. 

++ The applicants have not pleaded any financial hardship.:MUMBAI CESTAT;

2008-TIOL-1720-CESTAT-AHM.pdf

M/s Raj Auto Centre Vs CCE, Ahemadabad-II (Dated: September 26, 2008)

ST - Business Auxiliary Service - Assessee is a motor cycle dealer - Service tax demanded on commission earned from banks for facilitating loans - Assessee argues ignorance and confusion about the taxability - Since the tax is already paid, it is a fit case for benefit of Sec 80 - Penalties set aside : AHMEDABAD CESTAT;

CUSTOMS SECTION

CIRCULAR

cuscir08_17.pdf

Basis of levy of additional Customs duty (CVD) on import of Readymade Garments – Clarification - reg;

CASE LAWS

2008-TIOL-1715-CESTAT-MAD.pdf

M/s ACE Kargoways (P) Ltd Vs CC, Tuticorin (Dated: August 12, 2008)

Customs – Custom House Agent – penalty imposed on CHA for mis-declaration and over-valuation of goods in Shipping Bills – penalty imposed is set aside. : DELHI CESTAT;