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Service Tax - Valuation - Photography Service is Works Contract (Look for latest decision tomorrow) India-Japan Comprehensive Economic pact unlikely to be wrapped up by UPA Govt; 20 crew killed in Russian nuke submarine designed for India; Probe ordered; PM's Economic Council lowers growth projection to 7%; Montek says it may be down between 1.5 - 2.5%; PM says India will achieve 7-7.5% growth next fiscal; Chandrayaan-1 is successfully placed in lunar orbit; 5 killed in Meerut scrapyard blast; Police rule out terror attack; |
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| Dear Member, Sending the following files: |
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ddt 10 nov.pdf + circular_dopt1.pdf + dopt_circular.pdf + handling_cargo.pdf Iron Ore Fines to attract 8% Export Duty ; SEZ Scheme: A glaring distortion in export promotion paradigm? Treatment of unexplained cash credit under Sec 68 of Income Tax Act : A tale of fallacies! 2008-TIOL-548-HC-DEL-FEMA.pdf + writ story.pdf Union of India Vs Kartik K Parek ( Dated: October 20, 2008 ) FEMA - a writ petition against an order of pre-deposit under Section 35 of the Act is clearly maintainable. - The relief under Article 226 can be refused on the ground of existence of alternative remedy only if that alternative remedy is effective and equally efficacious. Evaluation of circumstances which warrant waiver of pre-deposit would fall within the purview of Article 226 of the Constitution of India :DELHI HIGH COURT; Pre-paid payment instruments: RBI proposes to issue detailed guidelines; Only banks and NBFCs to be allowed open system; EGoM gives nod to setting up Unique Identity Authority; Gupta lays down foundation stone of Indian Institute of Corporate Affairs; DRI seizes record cash of IC worth Rs one crore plus FC worth Rs 60 lakh from two pax heading for Sharjah ; DRI seizes record cash of IC worth Rs one crore plus FC worth Rs 60 lakh from two pax boarding Sharjah flight from Lucknow; OECD data indicates weakening outlook for all major seven economies plus China, Russia and India; HP farmers to get free counselling through video-conferencing ; |
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2008-TIOL-206-SC-IT.pdf + sc it story.pdf PNB Finance Ltd Vs CIT-I, New Delhi ( Dated: November 6, 2008 ) Income tax - AY 1970-71 - slump sale - capital gains tax - Sec 45 - assessee gets compensation on nationalisation - computation of capital gains - assessee claims capital loss in its return, having exercised the option of calculating the value of the banking undertakings as on 1.1.1954 - AO rejected the calculation and proceeded to hold on the basis of capitalization of last 5 years profits capital gains taxable - CIT(A) holds since it was not possible to allocate item-wise value of full consideration of the undertaking, sec 45 is not invocable - HC relied upon the Sec 41(2) and dismissed the assessee's appeal Held, Section 41(2) stands attracted only in the case of a sale of building, machinery, plant or furniture in the previous year. It applies only to a sale of depreciable assets. Section 41(2) and Section 45 operate in different domains . In the case of CIT v. Mugneeram Bangur & Co. the apex Court held that where the entire business of the undertaking together with its assets including the depreciable assets and liabilities was sold for a composite price without any item-wise earmarking, Section 41(2) was not attracted. But, where the transfer of the entire business as a going concern is involved and the contract indicates item-wise consideration, Section 41(2) would stand attracted with regard to the amount of surplus to the extent of the difference between the written down value of the depreciable asset(s) so transferred and the actual cost thereof. Applicability of Section 45: three tests are required to be applied. The first test is that the charging section and the computation provisions are inextricably linked. The charging section and the computation provisions together constituted an integrated Code. Therefore, where the computation provisions cannot apply, it is evident that such a case was not intended to fall within the charging section, which, in the present case, is Section 45. That section contemplates that any surplus accruing on transfer of capital assets is chargeable to tax in the previous year in which transfer took place. In this case, transfer took place on 18.7.1969. The second test which needs to be applied is the test of allocation/attribution. The third test is that there is a conceptual difference between an undertaking and its components. Plant, machinery and dead stock are individual items of an Undertaking. Business Undertaking can consist of not only tangible items but also intangible items like, goodwill, man power, tenancy rights and value of banking licence. However, the cost of such items (intangibles) is not determinable. Since in the present case, item-wise earmarking was not possible. And the compensation was not allocable item- wise. Thus it was not possible to compute capital gains and, therefore, the said compensation was not taxable under Section 45 of the 1961 Act. Assessee's appeal allowed: SUPREME COURT; 2008-TIOL-548-HC-DEL-FEMA.pdf + writ story.pdf Union of India Vs Kartik K Parek ( Dated: October 20, 2008 ) FEMA - a writ petition against an order of pre-deposit under Section 35 of the Act is clearly maintainable. - The relief under Article 226 can be refused on the ground of existence of alternative remedy only if that alternative remedy is effective and equally efficacious. Evaluation of circumstances which warrant waiver of pre-deposit would fall within the purview of Article 226 of the Constitution of India :DELHI HIGH COURT; DCIT Vs Official Liquidator ( Dated : June 11, 2008 ) Income tax Escalation in the cost of acquisition of assets and deduction claimed towards investment allowance - Assessee entitled to the investment allowance on the additional amount subsequent to installation - Finding given by Tribunal is based on valid materials and evidence - Revenue has not adduced any evidence to take a contrary view - No error or illegality in the order of the Tribunal : MADRAS HIGH COURT; Krishnadas Govinddas Parikh Vs Wealth Tax Officer & Another ( Dated : June 17, 2008 ) Wealth tax - Revenue for reopening of assessment by issuance of notice u/s 17 of the Wealth Tax Act 1957 and a reference made to Valuation Cell u/s 16A - Both issues go in favor of the petitioner as the reasons recorded for re-opening have not been made available and the reference to the Valuation Cell is not maintainable without any assessment proceedings pending before the AO since proceedings for only A.Y. 1993-94 were pending, reference can be made to the Valuation Cell for that year - Assessee's appeal allowed accordingly : GUJARAT HIGH COURT; CIT Vs Late N Kasi Vishwanathan (Dated: July 16, 2008) Income tax Section 54 EA does not prevent assessee from investing out of the available compensation even before receipt of enhanced compensation Finding of the Tribunal is a factual finding about the investments made from and out of the compensation received - Revenue appeal has not adduced any evidence to prove the contrary: MADRAS HIGH COURT; ACIT, New Delhi Vs Late Smt Krishna Kumar ( Dated : September 12, 2008 ) Income Tax Section 158BD Search assessment of a Person other than Searched Notice u/s 158BD issued On basis of search on Friends Portfolio and statement of Manoj Aggarwal In block assessment order of assessee, AO made addition of sale price of shares sold alleging the same as undisclosed income Assessee recorded in regular books said sale transaction of shares, prior to search on Friends Portfolio and paid advance capital gains tax on said transaction and disclosed in regular return said transaction of sale of shares where capital gains was offered to taxation CIT-A deleted the same as A) statement of Manoj Aggarwal was never confronted nor cross examination of Manoj Aggarwal was offered On account of violation of natural justice and B) since transaction has been well disclosed to department in income tax return etc On revenue's appeal before ITAT Assessee relied on Rule 27 of ITAT rules To defend CIT-A order on jurisdictional pleas A) Since notice u/s 158BD gave only 15 days time and do not provide clear 15 days notice (that is more than 15 days time) Notice is bad in law and B) Since notice u/s 158BD do not contain satisfaction recorded u/s 158BD or relevant search details etc on searched person Notice is bad in Law - ITAT allowed assessee's reliance on Rule 27 to defend CIT-A order on jurisdictional legal pleas Further ITAT held notice issued u/s 158BD as bad in law on aforesaid two counts Followed Del ITAT SB Ruling in Manoj Aggarwal case and DHC ruling in New Delhi Auto Finance etc. - HENCE BLOCK ASSESMENT MADE U/S 158BD READ WITH SECTION 158BC QASHED ON LEGAL GROUNDS : DELHI ITAT; EFund International (P) Ltd Vs DCIT, New Delhi ( Dated : April 17, 2008 ) Interest income from the housing loans advanced to employees does not form part of the profits - not eligible for deduction under section 10A : the interest income earned by the assessee from the housing loans advanced to its employees does not form part of the profits of the business of the assessee undertakings hence, the same is not eligible for deduction under section 10A of the Act and, therefore, the orders of tax authorities below, in this regard, are upheld and ground of the appeal of the assessee is rejected. : DELHI ITAT; |
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2008-TIOL-548-HC-DEL-FEMA.pdf + writ story.pdf Union of India Vs Kartik K Parek ( Dated: October 20, 2008 ) FEMA - a writ petition against an order of pre-deposit under Section 35 of the Act is clearly maintainable. - The relief under Article 226 can be refused on the ground of existence of alternative remedy only if that alternative remedy is effective and equally efficacious. Evaluation of circumstances which warrant waiver of pre-deposit would fall within the purview of Article 226 of the Constitution of India :DELHI HIGH COURT; M/s National Steel & Agro Lnds Ltd Vs CCE, Indore (Dated: September 2, 2008) Central Excise - rebate of education cess prior to 6.9.2004 - rebate is allowed in view of the decision of Rajasthan High Court in case of M/s Banswara Syntex Ltd case. : DELHI CESTAT; 2008-TIOL-1833-CESTAT-BANG.pdf M/s Dr Reddy's Laboratories Ltd Vs CCE, Visakhapatnam (Dated: July 17, 2008) Central Excise Duty initially paid on physician samples in terms of Rule 8 of Valuation Rules and later revised it to pay duty under Rule 4 following Bombay High Court Judgment in Indian Drugs Manufacturer's Association Duty paid with interest No deliberate intention to violate provisions Penalty not imposable : BANGALORE CESTAT; 2008-TIOL-1832-CESTAT-BANG.pdf CCE, Bangalore Vs M/s Cadbury India Limited (Dated: July 18, 2008) Central Excise CENVAT Credit availed on hangers as packing materials Hangers are inputs within the meaning of rule 2(k) of CCR, 2004 Credit not deniable : BANGALORE CESTAT; M/s Modern Cotton Yarn Spinners Ltd Vs CCE, Trichy (Dated: July 28, 2008) Central Excise cotton yarn manufactured and removed to job worker under Rule 96 E of the Central Excise Rules 1944 fabrics manufactured by the job worker exported without payment of duty demand of duty on the fabrics on the ground that the facility under rule 96 E is available only if the fabrics are cleared on payment of duty is not sustainable. : CHENNAI CESTAT; 2008-TIOL-1828-CESTAT-BANG.pdf M/s Sri Nagasai Polymers Vs CC & CE, Guntur (Dated: June 27, 2008) Central Excise Tribunal issued specific directions to the original authority in the earlier order to re-examine the issue on merits and limitation Directions not followed by lower authorities Matter remanded once again : BANGALORE CESTAT;
SERVICE TAX SECTION 2008-TIOL-548-HC-DEL-FEMA.pdf + writ story.pdf Union of India Vs Kartik K Parek ( Dated: October 20, 2008 ) FEMA - a writ petition against an order of pre-deposit under Section 35 of the Act is clearly maintainable. - The relief under Article 226 can be refused on the ground of existence of alternative remedy only if that alternative remedy is effective and equally efficacious. Evaluation of circumstances which warrant waiver of pre-deposit would fall within the purview of Article 226 of the Constitution of India :DELHI HIGH COURT; M/s TATA Steel Ltd Vs CCE, Vapi (Dated: October 16, 2008) ST - GTA service - assessee availed GTA service for periods in the years 1997 and 1998 - tax paid even before issue of SCN - Revenue demands interest and imposes penalty - Since the tax was upheld by the Apex Court and there were retrospective amendments to give effect to the same, interest is to be paid. However, since there was confusion about the liability and the tax was paid before the issue of SCN, it is a fit case for invocation of Sec 80 : AHMEDABAD CESTAT ; M/s Lalooji Derawala Pvt Ltd Vs CCE, Allahabad (Dated: August 11, 2008) ST - Pandal and shamiyana contractor service - assessee enters into agreement with UP Jal Nigam and Police for supply of tent and furniture for Magh Mela - assessee informed the Police about service tax liability which was initially denied but later paid with delay - demand raised - tax with interest paid before issue of SCN - penalty - Since the liability to pay is on the assessee and the Revenue had reminded them about the same about a year prior to the payment, it is imposable but since it is not mandatory u/s 76, it is reduced : DELHI CESTAT ; M/s Solomon Foundry Vs CCE, Tiruchirapalli (Dated: September 5, 2008) Service Tax penalties under Section 76, 77 and 78 - revision under Section 80 - a revisional authority did not have powers to revise a decision of the competent authority, which had, in exercise of the discretion conferred on it under Section 80 of the Act, consciously refrained from imposing penalty on the assessee. : CHENNAI CESTAT ;
CUSTOMS SECTION NOTIFICATION Computation of Value under Section 14 for Levy of Export Duty; Import of vehicles of engine capacity of more than 3000cc: DGFT amends licensing note;
CASE LAWS 2008-TIOL-548-HC-DEL-FEMA.pdf + writ story.pdf Union of India Vs Kartik K Parek ( Dated: October 20, 2008 ) FEMA - a writ petition against an order of pre-deposit under Section 35 of the Act is clearly maintainable. - The relief under Article 226 can be refused on the ground of existence of alternative remedy only if that alternative remedy is effective and equally efficacious. Evaluation of circumstances which warrant waiver of pre-deposit would fall within the purview of Article 226 of the Constitution of India :DELHI HIGH COURT; 2008-TIOL-545-HC-DEL-COFEPOSA.pdf + smuggling story.pdf Pooja Batra Vs UoI (Dated: September 5, 2008) The scourge of smuggling affects the economic health of the country and therefore, cannot be taken lightly; Petition to quash detention dismissed; Commissioner directed to file criminal complaint against detenue: Section 39 of the Cr.P.C. casts a duty on the members of the general public to inform the police about the commission of certain specified offences or the intention thereof. This duty is all the more onerous on the Courts and especially the High Court which must do the complete justice under Section 482 Cr.P.C. not only to the petitioner but also against the Respondents/victim which in a case of this nature would be the society at large. It is also under a duty to pass orders to secure the ends of justice. :DELHI HIGH COURT; 2008-TIOL-1835-CESTAT-MUM.pdf + globe story.pdf M/s OM Book Service Vs CC (Import), Mumbai (Dated: September 26, 2008) Atlas and Globes showing incorrect external boundaries of India are prohibited goods and hence have to be absolutely confiscated without any option for re-export As revised instructions were not communicated through a Public Notice, importer cannot be saddled with penalty Tribunal. In terms of M.F. (D.R.& I.) Notification No.19-Cus., dated 6th March, 1976 the following import is prohibited absolutely - Any book, periodical, pamphlet, leaflet or other document containing any words, signs or visible representations which directly or indirectly question the frontiers of India as declared by the Government or the territorial integrity of the country. Board's instructions of 1997 allowed clearances of such maps after stamping the word the external boundaries of India as depicted in the maps are neither correct nor authentic . In view of above, the confiscation of maps could not be disputed and once the goods are prohibited they have to be absolutely confiscated and, therefore, re-export of the same cannot be permitted - Tribunal Since the appellants had imported consignment in the past on the basis of Board's 1997 instructions and the revised instructions were never in their knowledge as no Public Notice is issued to that effect, the importer cannot be saddled with any penalty Tribunal. Appeal partly allowed. :MUMBAI CESTAT; Kasim Mustafa Vs CC, Chennai (Dated: April 17, 2008) Customs Prosecution and Adjudication on same set of facts and evidences - It is settled law that adjudication and criminal proceedings are independent of each other - The degree of evidence required by the adjudicating authority for imposing penalty is much less than that required by criminal court for convicting the accused :CHENNAI CESTAT; |
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