Addl Judges in Kerala, P&H and MP High Courts promoted as full-time judges;

Montek projects 7% growth for next fiscal;

UK reduces VAT, hikes income tax for high income earners, to boost up sagging economy;

FM says no more oil bonds if prices remain stable;

Obama working on another USD 700 bn stimulus for economy;

Pakistan, Swiss Confederation sign Double Taxation Avoidance Treaty ;

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

ddt 25 nov.pdf

Duty Drawback on Steel is back;

stgst.pdf

Is CBEC's view on 'exempted services' legally sustainable?

Special Casual Leave.pdf

Special dispensation in the form of Special Casual Leave to Central Government Employees with disabilities;

mbuzz1200.pdf

Addl Judges in Kerala, P&H and MP High Courts promoted as full-time judges ;

mbuzz1199.pdf

UK reduces VAT, hikes income tax for high income earners, to boost up sagging economy;

mbuzz1198.pdf

Govt floats tender for granting licence for mobile number portability;

mbuzz1197.pdf

Major exporters pledge ongoing credit support for developing country imports ;

2008-TIOL-576-HC-DEL-IT.pdf + dcm story.pdf

CIT, Delhi-IV Vs M/s DCM Sriram Consolidated Ltd ( Dated : November 21, 2008 )

Income Tax Act – Section 115JA - Assessee had four divisions, in addition, the assessee also had four industrial undertakings which were engaged in captive power generation (CPP's). For the purposes of setting up CPPs the assessee had taken requisite permission from the Rajasthan State Electricity Board, as well as, the Gujarat State Electricity Board. In a note attached to the return the assessee had disclosed the profit and loss derived from each of the CPPs, and also, indicated the formula adopted for computation of the profit derived from the respective CPPs. Assessee claimed profits derived from CPP's being profits derived by an industrial undertaking and thus excludable from “book profits” while computing deduction u/s 115JA - Objections of Revenue before High Court to this claim of the assessee were:-

(i) firstly, there is no sale, inasmuch as, the transfer of power is not to a third party and consequently, no profits could have been earned by the assessee;

(ii) the generation of power by CPPs would not constitute business within the meaning of Explanation (iv) to Section 115JA of the Act as the main line of activity of the assessee is not the business of generation of power,

(iii) there was no mechanism for computing the sale price, and consequently, the profit which would be derived on transfer of energy from assessee's CPPs to its other units.

Held, that it is quite clear that the profit derived by the assessee on transfer of energy from its CPPs to its other units was “embedded” in the ultimate profit earned on sale of its final products

Held further, affirming ITAT order that the assessee had been authorized by the State Electricity Boards to generate electricity. The generation of electricity had been undertaken by the assessee by setting up a fully independent and identifiable industrial undertaking. These undertakings had separate and independent infrastructures, which were, managed independently and whose accounts were prepared and maintained separately and subjected to audit. The term “business” which prefixes generation of power in Clause (iv) of the Explanation to Section 115JA is not limited to one which is prosecuted only by engaging an outside third party. The meaning of the word ‘business' as defined in Section 2(b) of the Act includes any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture. The definition of ‘business', which is inclusive, clearly brings within its ambit the activity undertaken by the assessee, which is, captive generation of power for its own purposes. Held therefore, claim of assessee allowable.: DELHI HIGH COURT;

2008-TIOL-575-HC-DEL-IT.pdf

DIT Vs Jindal Drilling And Industries Ltd ( Dated : November 17, 2008 )

Income tax - Sec 44BB vs Expl 2 to Sec 9(1)(vii) - assessee is into exploration, prospecting and production of mineral oil - receives technical services from non-resident - tax deduction at source - CIT(A) and Tribunal hold that the assessee's case is covered under Sec 44BB - Held, since the activities undertaken by the assessee are clearly excluded from Expln 2 to Sec 9(1)(vii) which uses the words ''but does not include consideration for any construction, assembly, mining or like project undertaken by the resident'', the payment made to the non-resident is not subject to TDS - Revenue's appeal dismissed : DELHI HIGH COURT;

2008-TIOL-574-HC-KERALA-IT.pdf

CIT Vs M/s Kerala Financial Corporation ( Dated : October 7, 2008 )

Income tax - Creation of special reserve in terms of s. 36 (1)(viii) is a requirement but no express provision to continue the same prior to amendment inserted by Finance Act, 1997 - Issue decided in favour of assessee in their own case earlier : KERALA HIGH COURT;

2008-TIOL-573-HC-DEL-IT.pdf

CIT- II Vs Mantec Consultants (P) Ltd ( Dated : November 14, 2008 )

Income tax - Sec 10A benefits - assessee claims deduction u/s 80HHE - for the first time, files claim u/s 10A before the CIT(A) - AO's comment sought - AO verifies claim and sends detailed report - since the claim was filed without audit report, the issue goes to the Tribunal - since filing audit along with the return is only directory and not mandatory, the issue goes back to the CIT(A) for fresh examination - Revenue again comes back to the Tribunal against the CIT(A) order allowing Sec 10A benefits - Tribunal declines to entertain the Revenue's ground as it had accepted the order in the first order - No substantial question of law involved - Revenue's appeal dismissed : DELHI HIGH COURT;

2008-TIOL-572-HC-ALL-IT.pdf

Preet Leasing (P) Ltd Vs CIT, Lucknow ( Dated : October 18, 2008 )

Income tax – Disallowance of payment of lodging commission from P & L A/c in the absence of supporting documents – Taking into account business practice in hotel industry CIT(A) allowed 50% of claim made by assessee and Tribunal allowed further 10% - Tribunal being the last fact finding authority no reason to interfere in the Tribunal's order : ALLAHABAD HIGH COURT;

2008-TIOL-577-HC-DEL-SERVICE.pdf + cbec story.pdf

UoI Vs Shri S K Pandey ( Dated : November 11, 2008 )

Commissioner promotions in CBEC - New Year Gift to Appraiser Promotees – Commissioner DPC to be held by 31 st December – Good News for Direct recruits also – High Court directs Government to promote those already recommended by the DPC held on 23rd June, 2008 : DELHI HIGH COURT;

CENTRAL EXCISE SECTION

CIRCULAR

excircular878.pdf

e-payment of central excise & service tax: CBEC amends Instruction for Large Taxpayer units;

CASE LAWS

2008-TIOL-1924-CESTAT-MUM.pdf + aviat story.pdf

M/s Aviat Health Care Pvt Ltd Vs CC & CE, Belapur (Dated: August 13, 2008)

Allegations are purely conjectural and ipse dixit in nature - It is trite law that it is for the Revenue to substantiate its allegations and not for the assessee to prove the contrary - Revenue loses Rs.5.62 Crores Central Excise undervaluation case at the hands of the Tribunal. : MUMBAI CESTAT;

2008-TIOL-1923-CESTAT-BANG.pdf

Aurobindo Pharma Ltd Vs CCE, Hyderabad (Dated: July 25, 2008)

Central Excise – Manufacturer of dutiable and exempted final products availing CENVAT Credit on inputs after clearance of intermediate products on payment of duty – When l apse is technical substantive benefit like CENVAT credit cannot be denied on procedural irregularities : BANGALORE CESTAT;

2008-TIOL-1922-CESTAT-AHM.pdf

CCE, Vapi Vs M/s Advance Detchem Ltd (Dated: July 22, 2008)

Central Excise - Interest not payable when supplementary invoices are raised and increase in price not known at the time of clearance : AHMEDABAD CESTAT;

SERVICE TAX SECTION

2008-TIOL-1927-CESTAT-MAD.pdf + macro story.pdf

M/s Macro Marvel Projects Ltd Vs CST, Chennai (Dated: September 24, 2008)

Service tax – construction of complex service – construction of individual houses is not taxable under “construction of complex service” or under “works contract”. : CHENNAI CESTAT;

2008-TIOL-1926-CESTAT-AHM.pdf

Bisazza India Pvt Ltd Vs CCE, Ahmedabad (Dated: June 23, 2008)

CENVAT Credit – Refund of unutilized service tax credit eligible under Rule 5 even prior to issue of Notfn No. 5/2006 – Eligibility of cash refund in under Rule 5 in terms of Notfn No. 5/2006 to be decided by the original authority – Matter remanded : AHMEDABAD CESTAT;

2008-TIOL-1925-CESTAT-AHM.pdf

M/s Eimco Elecon (India) Ltd Vs CCE & CC, Vadodara (Dated: November 4, 2008)

ST - Consulting Engineering Service - No liability to pay tax if services are received prior to 1.1.2005 : AHMEDABAD CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08cir042.pdf

dgft08not064.pdf

DGFT brings in more items under Restricted Category;

CASE LAWS

2008-TIOL-1921-CESTAT-MAD.pdf

CC, Chennai Vs M/s Minerva Trade Links (P) Ltd (Dated: July 11, 2008)

Customs – refund of extra duty deposited at the instance of the Department – the refund of such duty is not regulated by the provisions of Section 27 of the Customs Act – Commissioner (Appeals) rightly ordered that the importer was eligible for refund. : CHENNAI CESTAT;