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Additional Customs duty issue - USA wins wines dispute against India in WTO (See 'DDT') Cestat President is relieved; charge goes to Ms. Jyoti Balasundaram; Cabinet gives nod to Bill proposing 'Right to Eduction' for children between 6 & 14; Sahar Airport Customs arrests British-passport holding pax with hashish worth Rs 43 lakh in international market; Major dip in exports growth rate: Commerce Ministry working on fresh package to boost exports; US economy in recession; Q3 GDP logs 0.3% growth; PM condemns Assam bomb blasts and announces ex-gratia of Rs one lakh to each victim; IMF offers USD 100 bn aid to nations hit by global crisis; |
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| Dear Member, Sending the following files: |
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CBEC notifies exchange rates for November 2008; Income Tax Ombudsman: Slots falling vacant at Delhi, Kanpur, Mumbai and Ahmedabad; Applicants invited; FM approves 40 FDI proposals worth Rs.1498.50 Cr; Cabinet gives nod to introduce Insurance Bill; to revive dead fert units; Cabinet okays bill for setting up South Asian University; Gold coins through post offices: Mega success prompts Govt to extend scheme to more outlets; Govt approves air services pact between India and EU; |
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2008-TIOL-18-ARA-IT.pdf + ruling story ara.pdf LMN India Limited ( Dated: October 10, 2008 ) Advance Ruling Interest paid to foreign company on Convertible debenture is income of the foreign company and liable to be taxed in India: The payment made to LMCC in the form of interest up to the date of conversion of bonds into equity shares is nothing other than interest paid on the money advanced to the applicant or the debt incurred by the applicant and it satisfies the definition of interest' under Section 2( 28A ) of the Act as well as Article 11.4 of the India-US DTAA and it is accordingly liable to be taxed as income of LMCC under the Act and under Art.11.2 of DTAA . Liable for TDS; Under Section 195(1) of the Act, the applicant is liable to deduct tax at source at the applicable rates inasmuch as the interest paid to LMCC is chargeable to income tax in India. Interest payments cannot be construed as dividend income; It admits of no doubt that the interest payments cannot be construed as dividend income of LMCC . Dividend pre-supposes that the payee holds shares in a Company. The bondholder LMCC would become shareholder only upon conversion of the bonds into equity shares. Further, there are express provisions in the Agreement to the effect that the Bondholders will not have any rights as shareholders of the applicant-Company until and unless the conversion takes place. Moreover, dividend can only be paid out of profits (vide Sec.205 ( 1) of Companies Act) whereas in the present case, interest is payable to the bondholder irrespective of whether the applicant makes profit or not.: ADVANCE RULING AUTHORITY; 2008-TIOL-525-HC-DEL-LMT-LB.pdf + lb limit story.pdf M/s Jagannath Dudadhar Vs Sale Tax Officer & Others ( Dated : October 20, 2008 ) Limitation Act cannot be invoked for the condonation of delay in filing revision application under Section 47 of the Delhi Sales Act: Section 62 of the Delhi Sales Tax Act clearly indicates that only two provisions of Section 4 and 12 of the Limitation Act are attracted in proceedings under Section 47 of the Act and is intended to be a self-contained code in the matter for prescribing the period of limitation under the Act. Therefore the provisions of Section 5 of the Limitation Act have no application to proceedings under Section 47 of the Act. : DELHI HIGH COURT( Larger Bench); CIT, Tamil Nadu-I Vs M/s Carburandum Universal Ltd ( Dated : June 18, 2008 ) Income Tax - Is a payment made to a management consultant capital expenditure? - Held, it is well-settled that such an expenditure is necessary for any business to update its own knowledge and adopt better ways of organising its business, if it is to survive in the market. The expenditure incurred for such purposes cannot be regarded as capital expenditure, and it is only a revenue expenditure. :MADRAS HIGH COURT; CIT Vs Capital Tyres Mfg Unit ( Dated : April 9, 2008 ) Income Tax - Assessee inflates value of stock for availing overdraft facility from bank - AO makes addition based on the value declared to the bank - CIT(A) and Tribunal go by the difference between the opening stock and the difference between the value shown to the bank and the value declared in the balance-sheet - Held, Tribunal has rightly taken into account the opening and closing stock : DELHI HIGH COURT; Gujarat JHM Hotels Ltd Vs DGIT (Exemption) ( Dated : June 30, 2008 ) :Income Tax - Appellant is into hotel business - applies for benefits u/s 80-IA (4)(iii) with rule 18BBC - Revenue rejects it - Held, once the prescribed authorities grant certificates, if the respondent authority wants to reject the same, then valid and justifiable reasons must be given for the same. Rejecting the application on merely considering the fact whether Surat is a place which could be considered as requiring approval for notification for promotion of pilgrimage, is an extraneous consideration to the provisions of the Act and the Rules and the benefit cannot be refused to the petitioner on the aforesaid flimsy ground. The petitioner has fulfilled all the conditions laid down under the relevant provisions of the Act and the Rules, the order passed by the respondent is quashed and set aside. Petition allowed. : GUJARAT HIGH COURT; CIT, Ajmer Vs Shiv Charan Mathur ( Dated : August 28, 2008 ) Income tax - taxability of medical expenses - Assessee is a Member of Legislative Assembly - gets reimbursement of a sum incurred for open heart surgery abroad from State Govt - AO for taxing this sum u/s 17 - When argued that the remuneration received by the assessee is not taxable under the head ''income from salary'' the Revenue changed its stand before the CIT(A) and claimed it is taxable as ''Income from Other Sources'' - CIT(A) and Tribunal both disagree with the Revenue - Since the MLAs are not employed but elected and allowed to perform constitutional function on such election, they become entitled to certain reimbursements but it cannot be said to be salary, within the meaning of Sec. 15, and when Sec 15 is not attracted to remuneration there is no question of Sec 17 being attracted. Tribunal order upheld - Revenue's appeal dismissed : RAJASTHAN HIGH COURT; |
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CBEC issues transfer order of seven Commissioners;
2008-TIOL-525-HC-DEL-LMT-LB.pdf + lb limit story.pdf M/s Jagannath Dudadhar Vs Sale Tax Officer & Others ( Dated : October 20, 2008 ) Limitation Act cannot be invoked for the condonation of delay in filing revision application under Section 47 of the Delhi Sales Act: Section 62 of the Delhi Sales Tax Act clearly indicates that only two provisions of Section 4 and 12 of the Limitation Act are attracted in proceedings under Section 47 of the Act and is intended to be a self-contained code in the matter for prescribing the period of limitation under the Act. Therefore the provisions of Section 5 of the Limitation Act have no application to proceedings under Section 47 of the Act. : DELHI HIGH COURT ( Larger Bench); 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; 2008-TIOL-1777-CESTAT-DEL-LB.pdf + board lb story.pdf The ASSTT Engineering (Civil) Vs CCE, Raipur (Dated: September 30, 2008) Central Excise - Chhattisgarh State Electricity Board is not a Department of the State Government so as to be eligible for exemption in respect of PCC Poles manufactured in their factories: the Notification lays down twin conditions, and unless both the conditions are satisfied exemption cannot be claimed. Admittedly, Chhattisgarh State Electricity Board is not a Department of the Government. Merely because 100% capital is owned by State Government does not make it a body at par with the State Government. Hence the PCC poles manufactured in the factories which admittedly belong to the Electricity Board does not qualify for exemption. That apart, the intended or actual user of the poles also being the Board itself, and not any Department of the State Government, the other condition is also not fulfilled. In the result, the reference is answered in the negative and against the appellant. It is held that Chhattisgarh State Electricity Board is not a Department of the State Government so as to be eligible for exemption in respect of goods i.e PCC Poles manufactured in their factories. : DELHI CESTAT ( Larger Bench); CCE, Belapur Vs M/s Sun Coats & Chemicals (I) Ltd (Dated: July 2, 2008) Central Excise Classification of "sunsol 200" and "Sumex 90" distilled from Naptha Classifiable under Chapter 2710.90 - Test report of the Dy. Chief Chemist clearly indicates that the product has flash point of more than 25°C - Revenue has not adduced any evidence that the product either by themselves or in admixture with any other substance is suitable for use as fuel in spark-ignition engines : MUMBAI CESTAT; M/s Brakes India Limited Vs CCE, Chennai-II (Dated: May 2, 2008) CENVAT Credit Credit Rules do not provide for an assessee to take credit of duty paid on inputs not used in the manufacture of final products and are procured solely for export under bond No infirmity in the impugned order denying credit : CHENNAI CESTAT;
SERVICE TAX SECTION 2008-TIOL-525-HC-DEL-LMT-LB.pdf + lb limit story.pdf M/s Jagannath Dudadhar Vs Sale Tax Officer & Others ( Dated : October 20, 2008 ) Limitation Act cannot be invoked for the condonation of delay in filing revision application under Section 47 of the Delhi Sales Act: Section 62 of the Delhi Sales Tax Act clearly indicates that only two provisions of Section 4 and 12 of the Limitation Act are attracted in proceedings under Section 47 of the Act and is intended to be a self-contained code in the matter for prescribing the period of limitation under the Act. Therefore the provisions of Section 5 of the Limitation Act have no application to proceedings under Section 47 of the Act. : DELHI HIGH COURT ( Larger Bench); M/s Windex Tours & Travels Vs CCE, Vadodara (Dated: September 24, 2008) ST - Tour Operator service - Assessee paying ST by availing abatement of 90% allowed for bookign of accommodation - also availing credit on input services - with effect from 1.3.06 the law changed and disentitled the assessee from availing credit of input services - being unaware of the change the assessee continued to take credit - On being pointed out by the Revenue, the credit availed was reversed - Revenue denies abatement and confirms 100% tax - Assessee argues that since the credit was reversed, the net effect was that no credit was availed and they are entitled to the benefit of the Notification - Prima facie there is force in the contention of the assessee and pre-deposit waiver granted : AHMEDABAD CESTAT; M/s India Thermit Corporation Ltd Vs CCE, Kanpur (Dated: September 12, 2008) ST - exemption - Assessee pays service tax on gross amount of freight on some consignments and also pays tax on 25% of the freight charge in terms of Notification No 32/2004-ST - Revenue disallows simultaneous availment of two different types of policies - Held, there is prima facie no such restriction in the Notification and stay granted without pre-deposit : DELHI CESTAT;
CUSTOMS SECTION NOTIFICATION CBEC revises Customs exchange rates for export/import for November; Guidelines for import of Rough Marble Blocks/Slabs for the year 2008-09; DGFT amends norms realted to EPCG scheme; DGFT deletes Para 4.8 related to 'financial powers' and amends 'Application Form' under EPCG Scheme; CASE LAWS 2008-TIOL-525-HC-DEL-LMT-LB.pdf + lb limit story.pdf M/s Jagannath Dudadhar Vs Sale Tax Officer & Others ( Dated : October 20, 2008 ) Limitation Act cannot be invoked for the condonation of delay in filing revision application under Section 47 of the Delhi Sales Act: Section 62 of the Delhi Sales Tax Act clearly indicates that only two provisions of Section 4 and 12 of the Limitation Act are attracted in proceedings under Section 47 of the Act and is intended to be a self-contained code in the matter for prescribing the period of limitation under the Act. Therefore the provisions of Section 5 of the Limitation Act have no application to proceedings under Section 47 of the Act. : DELHI HIGH COURT ( Larger Bench); M/s DCW Ltd Vs CC, Trichy (Dated: August 8, 2008) Customs refund of Special Additional Duty matter remanded to the original authority to examine the aspect of unjust enrichment. : CHENNAI CESTAT; |
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