10.4 mn mobile phone subscribers added in Oct; Broadband subscribers reach 5 mn mark;

WTO talks: USA softens stand and hints at possible breakthrough this year;

China going to raise income tax threshold to boost economy + hikes exports tax rebate for textiles;

EEC is mutually beneficial engagement, says FM;

EC notifies dates for bye-elections to fill casual vacancies in WB, Manipur and Karnataka assemblies;

IMF Chief Economist says worst of financial crisis yet to come!

16 kg cocaine worth UK Pound 8 lakh seized at Edinburgh Airport ;

ddt 24 nov.pdf

CBEC, CBDT Members (to get Special Secretary Status): Chairman;

tiol special guest.pdf

The 'Great Depression' of 21st Century!

guest column.pdf

Anti-money laundering laws: Need to monitor changing contours of crime;

mbuzz1195.pdf

10.4 mn mobile phone subscribers added in Oct; Broadband subscribers reach 5 mn mark;

mbuzz1194.pdf

EEC is mutually beneficial engagement, says FM;

mbuzz1193.pdf

OECD area GDP down by 0.1% in Q3;

2008-TIOL-571-HC-MUM-IT.pdf + interest story.pdf

Vasantbhai Jethalal Lathiwala Vs CIT, Nagpur ( Dated : August 7, 2008 )

Income Tax – Power to waive/reduce interest and penalty - needs to be exercised judiciously, fairly, reasonably, objectively and not arbitrarily - Section 273A (1)(a) requires a disclosure of full and true income and not the filing of valid returns: The Commissioner, essentially after applying his mind to facts and circumstances of the case needs to pass speaking and reasoned order after taking into consideration the scheme and object of the Section 273A including the elements like; voluntary act of filing return in good faith; full and true disclosure of income; payment of the tax; and Cooperation.

Once the case is made out for waiver/reduction, the Commissioner needs to exercise the powers in favour of the assessee.

It is necessary for the commissioner to take into consideration all the material available on the record.: BOMBAY HIGH COURT;

2008-TIOL-570-HC-DEL-IT.pdf

CIT Vs Raghunath Murthy ( Dated : August 21, 2008 )

Income tax - assessee is a salaried taxpayer - revises his return to reduce his returned income on ground of refund of salary amount - AO dismisses the assessee's ground and passes the assessment order based on the pre-revised return - CIT(A) and Tribunal examine the facts and allow the assessee's appeal - Since the assessee was a Director in the company which had passed a resolution to fix his salary along with the conditions to comply with the restrictions laid down in the Companies Act and since the refund was made only to comply with the statutory requirements, there is no fault in the view taken by the Tribunal - Revenue's appeal dismissed: DELHI HIGH COURT;

2008-TIOL-569-HC-MUM-IT.pdf

CIT, Bombay Vs M/s Siemens Aktiongesellschaft ( Dated: November 19, 2008 )

Income tax - old DTAA with Germany notified in 1960 - AY 1979-80 - assessee enters into agreements with three Indian companies - provides patent rights for contracted products against royalty payment - AO for taxing such income - CIT(A) agrees with the AO - Tribunal holds that the payment is royalty under Section 9(1) (vi) of the Act but not royalty within DTAA but were part of commercial profits but as there was no PE, it would not be taxable.

Held, since the term royalty was not defined in the DTAA, it will have the meaning which it has under the ''Laws in force'' in that territory relating to the taxes which are the subject matter of this Agreement. By an unilateral amendment it is not possible for one nation which is party to an Agreement to tax income which otherwise was not subject to tax. Royalty other than royalty for mine, quarries, etc., constitute “industrial or commercial profits” and are not taxable under Article III(1) as the assessee has no PE in India

The sum received towards reimbursement of expenses can, under no circumstances, be regarded as a revenue Receipt and is not chargeable to income-tax.: BOMBAY HIGH COURT;

2008-TIOL-581-ITAT-DEL.pdf

ACIT, Faridabad Vs Smt Renu Mukerjee Prop ( Dated : August 29, 2008 )

Income Tax Act – Section 147 – CIT (A) had recorded that with the complaint, the complainant also produced certain copies from the books of account to support the case of evasion of tax. After considering those documents and after recording reasons, the A.O initiated re-assessment proceedings and issued notice u/s 148 of the Income-tax Act - Assessee could not challenge above finding of the CIT(A) with reference to any cogent material – Order of CIT(A) on this issue confirmed.

Income Tax Act – Sevtion 144 – Best Judgement Assessment – Held, that in the absence of books of accounts and other details, the A.O was justified in making best judgment assessment. But best judgment as per the settled law, has to be fair, reasonable and based on material although some guess work in such an assessment cannot be ruled out. Best judgment assessment cannot be adopted as a punishment to the assessee. Taxes are to be levied and recovered in accordance with law and law clearly enjoins that assessment should be fair and reasonable - Held further that, computation of profit at more than 50% of total receipt in the line of the business was totally uncalled for having regard to past history as also other comparable cases. Held also, that when the AO rejects the books of accounts then he can't rely upon some entries in those books of accounts to make separate additions. The AO cannot adopt contradictory and inconsistent approach : DELHI ITAT;

2008-TIOL-580-ITAT-DEL.pdf

Sh Kalp Nath Rai Vs DCIT, New Delhi (Dated : July 25, 2008)

Income Tax – Section 147 – Held, that after submission of return, in response to notice u/s 148, the assessee became entitled to have copy of reasons recorded before issue of notice u/s 148 of the Income-tax Act. However, those reasons were not supplied to the assessee and instead some gist of reasons showing some figure of investment was furnished to the assessee. Even record having reasons recorded by the A.O was not shown to ITAT – Held further, that CIT(A) was not right in relying on the report of the A.O. The pertinent question which arose was whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the two years under consideration. For determining above question, original assessment record was required to be considered to see whether there was such a failure on the part of the assessee. The material facts brought on record through the report of the Investigation Wing were also required to be considered. The reasons recorded by the A.O before initiation of proceedings u/s 148 were to be examined for resolving the controversy. It is necessary that in the reasons, the A.O should shown that there was failure on the part of the assessee to disclose fully and truly all material facts in the original assessment and, therefore, he has reason to believe that on account of above failure, income chargeable to tax had escaped assessment. Nexus between material and reasons recorded was required to be considered. However, CIT (A) did not make any reference to the reasons recorded or elaborated as to how income in the present case had escaped assessment.

Held further, that, at the stage of issuing of notice, prima facie case with reference to material available on record is required to be established. Reasons recorded nor the report of the Investigation Wing which is claimed to have been considered by the AO before initiation of re-assessment proceedings were not provided to assessee nor to ITAT. Without reasons recorded and without above material, it is not possible to record any finding on the application of conditions of proviso to section 147. Therefore, matter restored back to CIT(A).: DELHI ITAT;

CENTRAL EXCISE SECTION

2008-TIOL-1920-CESTAT-MUM.pdf + amit story.pdf

M/s Amit Weaving Mills (P) Ltd Vs CCE, Pune-I (Dated: October 23, 2008)

Deemed credit under notification 53/2001 CE(N.T), 6/2002 CE(N.T) is nothing but Cenvat credit and if the assessee has paid the duty amount after availing deemed credit benefit during the forfeiture period under rule 8(4) of the CER, 2001, there is no cause of recovery or imposition of penalty – Tribunal sets aside order of Commissioner and allows appeal with consequential relief.

Larger Bench decision in Noble Drugs Ltd .2007-TIOL-1097-CESTAT-Mum-LB squarely covers the issue, says Tribunal. :MUMBAI CESTAT;

2008-TIOL-1919-CESTAT-AHM.pdf

CCE & CC, Daman Vs M/s Tulsiani Builders & Textile P Ltd (Dated: August 4, 2008)

Central Excise - demand of differential duty by denying exemption under Notification 19/97 CE which is not available for composite mills - since the conversion of the unit from composite mill to single dyeing unit was within the knowledge of the department, extended period cannot be invoked.: AHMEDABAD CESTAT;

2008-TIOL-1918-CESTAT-BANG.pdf

M/s Sri Krishna Industries Vs CCE, Bangalore (Dated: July 23, 2008)

Central Excise – CENVAT Credit on furnace oil used in manufacture of dutiable & exempted goods – When the issue is well settled by a plethora of judgments denial of credit by disregarding such judgments is a clear case of judicial indiscipline – Impugned order set aside: BANGALORE CESTAT;

2008-TIOL-1917-CESTAT-BANG.pdf

M/s Bhagyalakshmi Poha Industries Vs CCE, Bangalore (Dated: August 5, 2008)

Central Excise – Classification of ‘Poha' – Processes involved in manufacture of poha does not go beyond Chapter 11 of CETA – Poha is not a pre-cooked or prepared food – Larger bench decision in Mahavir Food products [ 2007-TIOL-415-CESTAT-AHM-LB ] followed – Impugned order has no merits and liable to be set aside : BANGALORE CESTAT;

SERVICE TAX SECTION

2008-TIOL-1915-CESTAT-AHM.pdf

Bank Of Baroda Vs CST, Ahmedabad (Dated: October 27, 2008)

ST - Training and Coaching service - assessee is a PSU bank - has facility to provide training and coaching to its own employees and also others - Revenue for tax and imposes penalty - Assessee pleads that it has already paid the tax with interest and the error was bona fide as there was no intention to evade tax - Since the assessee agrees not to contest the demand and also claim refund on limition ground, the penalty is the only issue in this appeal and the same can be waived off by invoking Sec 80 as it was a bona fide mistake : AHMEDABAD CESTAT;

M/s Shriram Holographics Vs CCE, Noida (Dated: October 23, 2008)

ST - Consulting Engineer Service - assessee is a manufacturer - occasionally provides technical consultancy to some of the clients - Revenue raises demand for period 2001 to 2003 - Merely by hiring engineers a company cannot become a consultant of engineering service as 'engineering firm' used in the provisions of the Act mean a consulting company - Demand set aside : DELHI CESTAT;

2008-TIOL-1913-CESTAT-DEL.pdf

M/s Five Star Construction Co Vs CCE, Raipur (Dated: October 16, 2008)

ST - Construction service - Revenue for levying tax on gross amount, including materials supplied free by the recipient of the service - In view of Delhi HC decision on similar issue, pre-deposit waived and stay granted : DELHI CESTAT;

CUSTOMS SECTION

cnt08_129.pdf

CBEC amends Drawback (Amendment) Rules, 2008;

ctariff08_126.pdf

Govt imposes anti-dumping duty on CFL;

ctariff08_125.pdf

Amends various notifications related to export promotion schemes;

dgft08cir040.pdf

EPCG authorisation: DGFT dispenses with mandatory submission of drug licence by pharma units;

CASE LAWS

2008-TIOL-1916-CESTAT-MAD.pdf + Tanfac Industries Ltd story.pdf

M/s Tanfac Industries Ltd Vs CCE, Pondicherry (Dated: August 11, 2008)

Customs – interest on good cleared from a warehouse after expiry of the free period – interest is payable though the goods are cleared under DEPB – Section 61(2) of the Customs Act – Since CENVAT Credit is allowed on the duty debited in DEPB, the same is no longer in the nature of declaring the goods to be exempt from payment of duty. : CHENNAI CESTAT;