Getting through US Customs – Very difficult if you have a wrong name (See 'DDT')

King Fisher promises 'king-size' cut in air fare from January 1, 2009;

Income Tax – Acquisition of Immovable Property – Government appoints Competent Authority;

Pressure again builds up on RBI to cut repo and reverse repo rates;

J & K polls: Fractured verdict - National Conference finally turns out to be single largest party;

Lucknow CBN seizes 207 kg of Acetic Anhydride from Ghaziabad;

No addl troops movement on border, says India;

ddt 29 dec.pdf

Income Tax – Acquisition of Immovable Property – Government appoints Competent Authority;

tiol spl guest.pdf

Customs's role in India's coastal security;

guest column.pdf

SEZs: Are these Special (or Sick) Economic Zones?

INSIDER.pdf

Grant of financial upgradation under ACP Scheme to Group B, C & D: CBEC delegates work to CCs;

car import story.pdf

Racket in foreign make cars and SUVs: DRI finally manages to 'choke' elusive Haren Choksey;

mbuzz1314.pdf

Year of achievement for DoP&T: SC, ST backlog cleared; Six addl CBI courts created;

mbuzz1313.pdf

RBI Study reveals improvement in fiscal position of State Govts;

mbuzz1312.pdf

1500 delegates to attend PBD Convention in Chennai;

mbuzz1311.pdf

Disposal of bio-medical waste as per rules: More awareness required;

mbuzz1310.pdf

Agri Ministry to set up National Agri Bio-security System;

2008-TIOL-652-ITAT-MUM.pdf + essar story.pdf

M/s Essar Shipping Limited Vs DCIT, Mumbai (Dated: November 21, 2008)

Income tax - assessee company hires charter a ship from its own subsidiary company registered outside India - AO refers the case to TPO under Sec 92CA - TPO makes adjustment in determining the arm's length price (ALP) - assessee argues since the Associated Enterpise also pays dividend, any addition made by the TPO would amount to double taxation - Held, such an inference cannot be made as it is not intended by the Legislature. TP provisions come into force only in cases of transactions with AEs and the payment of dividend by the AEs gets no treatment under TP provisions. If the assessee's contention is accepted, then it would mean that in all cases where an enterprise gets dividend from the AEs, then to that extent the provisions of TP shall be rendered redundant. Whereas the fact is that there is no provision under the Chapter VI-A to allow deduction towards such addition made to the income on account of determination of Arm's Length Price (ALP). The intention of the legislature becomes further clear when one views the second proviso to section 92C(3), which also applies to section 92CA by virtue of sub-section (4), providing for not allowing deduction u/s 10A or 10AA or 10B or under Chapter VI-A in respect of the amount of income by which the total income of the assessee is enhanced after computation of income under this sub-section.

Selection of comparable uncontrolled transaction - assessee relies on Clarkson Report which refers to the modern ships which are more than ten years old and the average one year time charter rate for such vessel has been given at 12582 US Dollars per day for the year in question. The assessee has computed the charter hire payment made to EIL at the rate of around 25% of the rate as prescribed in Clarkson Report on the ground that the ship hire by it was 22 years old. Such a calculation is not capable of acceptance. : MUMBAI ITAT;

2008-TIOL-651-ITAT-DEL.pdf

Vaidik Bhakti Sadan Asram Vs CIT, Rohtak (Dated: October 24, 2008)

Income tax - assessee is a charitable trust, duly registered u/s 12A - applies for renewal of registration - Revenue denies it on the ground that the amount received by the assessee under will was chargeable to tax u/s 12 as no specific direction in the will to treat the same as corpus, and the amount received as water and electricity charges by inmates of the Ashram is not voluntary  contribution – Both the issues were decided in favor of the Appellant as amount is exempted from tax u/s 11(1)(a) - Accordingly the assessee's appeal was allowed. : DELHI ITAT;

2008-TIOL-650-ITAT-BANG.pdf

M/s Nikhat Leather Garments Vs ITO, Bangalore (Dated: September 19, 2008)

Income tax – Cash payments made for purchase of raw skin and machinery - Section 40A(3) will not apply to repayment of loans or payment towards the purchase price of capital assets such as plant and machinery not for re-sale – No bar for making cash payments for purchase of raw skin as per Rule 6DD(e)(ii) - Other aspects remanded to the original authority for re-examining the issues : BANGALORE ITAT;

2008-TIOL-649-ITAT-MAD.pdf

M/s Mourya Vegetarian Restaurant Vs ACIT, Chennai (Dated: April 10, 2008)

Seized materials proved sale suppression – Income to be estimated for the period for which seized materials available

Manager of the hotel admitted that the computer system deployed by the assessee had a software to erase any number of transactions from the data recorder so that the assessee could manipulate its sales and other income generating account to its convenience. Incriminating material in the form of collection sheets pertaining to assessee, were seized during the course of search in the premises of a sister concern. Managing Partner of assessee also confirmed the statement given by the manager.

On appeal Tribunal held that AO recorded reasons before issuing notice under sec. 158BD and hence initiation of proceedings, is valid. It was further held that the seized materials proved the suppression of sales made by assessee and CIT(A) correctly restricted the addition to the profit element of such turnover for the period to which the seized materials pertain to.:CHENNAI ITAT;

2008-TIOL-648-ITAT-BANG.pdf

ITO, Mangalore Vs Dr B Manjunath Kini (Dated: August 29, 2008)

Income Tax Act – Section 68 – Cash Credit - AO noticed that an amount of Rs.6,50,000 was shown to have been received by assessee HUF from Karkala Medical Stores owned by the assessee as an individual – Assessee took various contradictory stands before lower authorities in this regard pertaining to proprietorship of Karkala Medical Stores – before ITAT assessee reiterated that the amount of Rs.6,50,000 was received by the HUF from Karkala Nursing Home and not from the assessee in his individual status and that the accountant committed a mistake in not properly recording the name of the person from whom the HUF received the money. It was submitted that the accountant had wrongly shown the amount against the individual name of the assessee whereas in truth it was received by the HUF from Karkala Nursing Home belonging to the wife of the assessee – Held, no evidence produced by assessee to support the stand taken by it, claim of assessee rejected.

Also held, that AO made a rough estimate of the assessee's drawings without any basis and without pointing out any extravagant expenditure incurred by the assessee during the year. In the absence of any evidence to show that the assessee incurred any specific expenditure which was huge, the estimate made by the AO of the drawings of the assessee can't be upheld.

Income Tax Rules – Rule 46A – Held, that when details were produced before the CIT(A), they were additional evidence and it was incumbent upon the CIT(A) to follow the procedure prescribed by Rule 46A of the Income-tax Rules. He ought to have recorded reasons for admitting the additional evidence and thereafter he should have given an opportunity to the AO of rebutting the evidence in terms of the said rule. This procedure has not been followed by the CIT(A). Order of CIT(A) set aside.: BANGALORE ITAT;

2008-TIOL-647-ITAT-MUM.pdf

M/s Skyline India Vs ITO,Mumbai (Dated: May 14, 2008)

Income Tax - Re-opening of assessment after four years - AO doubts full disclosure of income and makes additions u/s 2(22)(e) on account of assets purchased by assessee from a sister concern without making any payment and disclosing the amount under the head ''loans and advances'' in the balance sheet - CIT(A) agrees with the AO - Held, there is no reference of sec 143(1) in proviso to sec 147, therefore, conditions laid down in proviso cannot be imposed for reopening the assessment framed u/s. 143(1), and for the purposes of sec 2(22)(e), it is not necessary that the payer or the payee must have share holdings in other company, even if the loans and advances are given by one company to other company in which the share holder is common having sufficient holding or has a beneficial interest in both the companies, provisions of section 2 (22) (e) can be invoked - Assessee's appeal dismissed. : MUMBAI ITAT;

acp_cbec.pdf

Grant of financial upgradation under ACP Scheme to Group B, C & D: CBEC delegates work to CCs;

CENTRAL EXCISE SECTION

2008-TIOL-659-HC-AHM-CX.pdf + cenvat story.pdf

CCE Vs Ashima Dyecot Ltd (Dated : September 8, 2008)

Central Excise – CENVAT Credit - reversal of credit amounts to non-taking of credit on the inputs – the issue is well settled - the Court saw no reason that why the assessee should not make a debit entry in the credit account before removal of the exempted final product and hence, it cannot be said that the assessee has taken credit for the duty paid on the inputs utilised in the manufacture of the final exempted product under Rule 57A . The Court, therefore, took the view that the claim for exemption of duty on the disputed goods cannot be denied on the plea that the assessee has taken the credit of the duty paid in the inputs used in manufacture of these goods. Since the Tribunal has correctly applied the law laid down by the Supreme Court and the issue is well settled, Departmental appeal dismissed. : GUJARAT HIGH COURT;

2008-TIOL-2135-CESTAT-MAD.pdf

CCE, Chennai Vs Sigma Scientific Co Ltd (Dated: August 19, 2008)

Central Excise – manufacture - Section 2(f) of the Central Excise Act, 1944 - the activity of transferring chemicals from tanker-lorry to small containers cannot be accepted as repacking from bulk back inasmuch as the tank mounted on the lorry is not a ‘bulk pack' within the meaning of this expression used in Chapter Note 11 to Chapter 29.:CHENNAI CESTAT;

2008-TIOL-2134-CESTAT-MAD.pdf

M/s Madras Cements Ltd Vs CCE, Trichy (Dated: August 13, 2008)

Central Excise – CENVAT Credit on lubricants used in machinery employed for mining at off-factory site – credit is admissible as inputs – however, since the credit was taken beyond the statutory period of six months as required under the rules during the material time, credit is not allowed on the ground of limitation. : CHENNAI CESTAT;

2008-TIOL-2133-CESTAT-MAD.pdf

M/s Madras Cements Ltd Vs CCE, Trichy (Dated: August 13, 2008)

Central Excise – ROM – error apparent on record - when a decision rendered by the apex Court is not considered by the Tribunal at the time of final disposal of an appeal, the same would constitute an error apparent on the face of the record – final orders recalled. : CHENNAI CESTAT;

2008-TIOL-2132-CESTAT-BANG.pdf + Zodiac Clothing Co Ltd story.pdf

M/s Zodiac Clothing Co Ltd Vs CCE, Bangalore (Dated:August 26, 2008)

Central Excise – Notification 20/2001-CE (NT) applicable only when goods are sold in retail – Goods sold to schools are bulk sales - Liable to be assessed under See 4 and not Sec 3(2) – When assessee under bonafide belief with regard to interpretation of Notification penalty not imposable : BANGALORE CESTAT;

2008-TIOL-2131-CESTAT-AHM.pdf

CCE, Ahmedabad Vs M/s AIA Engineering Pvt Ltd (Dated: November 24, 2008)

Central Excise - Penalty under Sec 11AC - In view of Apex Court decision in the case Dharmendra Textiles it is mandatory - case remanded : AHMEDABAD CESTAT;

SERVICE TAX SECTION

2008-TIOL-2139-CESTAT-AHM.pdf + st order story.pdf

M/s Larson & Tubro Ltd Vs CST, Ahemadabad (Dated: December 2, 2008)

Service Tax - Stay order – Subsequent decision can be basis of modification – pre-deposit order modified: any subsequent decisions rendered by the Courts deciding disputed issue should be made basis of modifications as held by the Larger Bench of Tribunal in the case of Hindustan Lever Ltd. vs. CCE (2006-TIOL-1111-CESTAT-MUM-LB) . Further, it stands recorded in judgment of Bombay High Court in the case of Sarla Performance Fibers Ltd. vs. UOI (2008-TIOL-516-HC-MUM- CX) that modification of stay order is an inherent power of the Tribunal. : AHMEDABAD CESTAT;

2008-TIOL-2138-CESTAT-AHM.pdf

CST, Ahemadabad Vs M/s Somani Exports (Dated: November 19, 2008)

ST - Business Auxiliary Service - assessee claims they are commission agent - also promotes the products to earn more commission - Since the assessee is mainly providing commission agent service, they are not liable to pay service tax : AHMEDABAD CESTAT;

2008-TIOL-2137-CESTAT-BANG.pdf

M/s MSPL Ltd Vs CCE, Belgaum (Dated: September 25, 2008)

ST - GTA service - assessee is a manufacturer of oxygen and nitrogen - transports cylinders in its own vehicles to buyer's premises and collects charges - Revenue raises demand - assessee argues that they are not providing any service as the they are the truck owners and the same are used to transport their own goods - held, in terms of Rule 2(1) (d) (v) the liability to pay service tax is cast on the person who pays the freight. In this case the person who pays the freight is the buyer. Therefore, the appellant has no liability to pay the service tax. : BANGALORE CESTAT;

2008-TIOL-2130-CESTAT-BANG.pdf

Ridhi Sidhi Transport Vs CCE, Belgaum (Dated:August 28, 2008)

Service tax - Cargo Handling Service - appellant filed an application form for spot registration on 27-10-2004 in terms of "Extraordinary Tax Payer Friendly Scheme" and discharged the Service tax liability with interest - When the Government is introducing a series of friendly schemes, it is not correct to deny the benefit on the ground that only after the visit of the Superintendent, the appellant availed the scheme - Revenue officers should not have such an unfriendly approach – Penalties set aside – Tribunal decision in CCE, Bhopal v. Bharat Security Services and Worker's Cant. - (2005-TIOL-1463-CESTAT-DEL) , relied upon. : BANGALORE CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08pn119.pdf

DGFT fixes June 30, 2009 as deadline for SFIS of last FY; For current year SFIS, last date to be 12 months from end of application frequency period;

ctariff08_137.pdf

Definitive anti-dumping duty on caustic soda imposed for five years;

CASE LAWS

2008-TIOL-2136-CESTAT-MUM.pdf

Shri P Kumar Vs CC, Mumbai (Dated: Octocter 21, 2008)

Customs - confiscation under Section 111(l) and Section 111(m) - provisions of Section 111 of the Customs Act, 1962 are not applicable to the goods, which arrived through post parcel - supplier of the goods informed customs that the postal parcel was wrongly consigned to the Indian buyer and requested return of the goods - confiscation and penalty set aside. : MUMBAI CESTAT;

2008-TIOL-2129-CESTAT-BANG.pdf

M/s Ravi Rocks Pvt Ltd Vs CC & CCE, Hyderabad (Dated: July 21, 2008)

Customs – 100% EOU – Non-fulfillment of export obligation – personal penalty on Managing Director for non-fulfillment of export obligation – pre-deposit of penalty on Managing Director waived & recovery stayed : BANGALORE CESTAT;