Satyam Saga - The Right Perspective (See'Common Basket')

Truckers' strike - Service Tax cases - CBEC to clarify status of pending show cause notices: Transport Secretary;

PM directs Petro Minister to take stern action against oil strikers; Govt to deploy para-military forces to ensure fuel supply;

Cabinet gives nod for Ordinance to set up Central Universities;

Cabinet okays move to address liquidity crunch of NBFCs;

Environmental Standards: Committee set up to review CPCB recommendations;

Inflation on a slide - comes down to 5.91%;

Govt directs Oil PSUs to sack striking leaders of associations; Petro supply crisis deepens; AP and Gujarat decide to invoke ESMA against truckers;

ddt 9 Jan.pdf

Import of Float Glass – Anti Dumping Duty – Re-imposed – Well Within Time;

TIOL Top.pdf

Satyam Saga - The Right Perspective;

legal potpurri.pdf

Understanding ratio of a Judgement;

mbuzz0031.pdf

Truckers' strike - Service Tax cases - CBEC to clarify status of pending show cause notices: Transport Secretary;

mbuzz0030.pdf

Cabinet gives nod for Ordinance to set up Central Universities;

mbuzz0029.pdf

Cabinet okays move to address liquidity crunch of NBFCs;

mbuzz0028.pdf

OECD calls for quick reform of pension systems in Asia;

2009-TIOL-21-ITAT-DEL.pdf + software story.pdf

M/s Infrasoft Limited Vs ACIT, New Delhi (Dated: December 19, 2008)

Income tax - assessee is a marketing and development company of an international group owned by a US-based holding company - the Group is a leader in civil engineering software - sets up a branch office in India to market software - markets software under licensing agreement and shows the receipt as business income - AO treats the same as royalty income u/s 9(1)(vi) and also under the DTAA - CIT(A) further distinguishes the Apex Court decision in TCS case and holds the definition of sale under AP Sales Tax Act cannot be imported into the Income Tax Act and agrees with the AO - Held,

++ the sum and substance of the relevant clauses material in this context of the agreement entered into by the assessee with the licensee in the present case thus were similar to that of the agreement analyzed and relied upon by the Special Bench in the case of Motorola Inc. to come to the conclusion that the payment made for transfer of right to use the software was not for any copyright in the software but only for the software as such as a copyrighted article and the same, therefore, could not be considered as royalty within the meaning of explanation (2) below Section 9(1) of the Income-tax Act or Article 13.3 of the relevant DTAA.

++ heavy reliance has been placed by the CIT(A) in support of his conclusion on the report of the high powered committee stated to be set up by Ministry of Finance, Government of India in the year 1999. This report has been relied upon by the learned CIT(A) for categorization of the software payment as royalty which is different from the revised OECD Commentary. As submitted by the learned counsel for the assessee in this regard, there is, however, nothing either in the order of the learned CIT(A) or even brought on record by the learned DR during the course of appellate proceedings before the Tribunal that the said report of the high powered committee has been accepted by the Government. In any case, the said report or more particularly the recommendation or suggestion of the high powered committee as contained in the said report have not been incorporated anywhere in the relevant provisions of the Income-tax Act. We also see no basis on which the said report can justifiably be preferred to the decision of Special Bench of the Tribunal in the case of Motorola Inc. (supra) which is directly on the point in issue and which is binding on us.

++ He, however, overlooked that in the case of Tata Consultancy Services (supra), Supreme Court had not only considered the issue from the angle of whether the software was goods for the purpose of Andhra Pradesh Sales Tax Act but the computer software was held to be goods by the Apex Court even under Article 366(12) of the Constitution of India. As held by the Supreme Court in this context, the term "goods" as used in Article 366(12) of the Constitution of India is very wide and includes all types of movable properties, whether those properties be tangible or intangible. :DELHI ITAT;

2009-TIOL-20-ITAT-BANG.pdf

Shri T Krishnamurthy Naidu Vs ITO, Bangalore (Dated: November 07, 2008 )

Income Tax - Assessee discloses income under different heads - During assessment AO comes across a business established by investing Rs five lakhs, which assessee claims to have received from his mother in gift - AO dismisses the contention as no evidence of gift was produced and added Rs. 5 lakhs to assessee's income under the head ‘Income from other sources' - CIT(A) further dismisses assessee's appeal - Held that evidence had to be judged by applying test of human probabilities - Saving 5 lakhs from agricultural income, keeping it at home in cash and gifting the same to assessee was not accepted - Assesee's appeal dismissed.:BANGALORE ITAT;

2009-TIOL-19-ITAT-BANG.pdf

ACIT, Bangalore Vs M/s Southern Herbals Ltd (Dated: November 07, 2008 )

Income tax - Penalty u/s 271(1)(c) - recording of satisfaction - Insertion of sub-section 1B in Sec 271 - Case remanded to CIT(A) to examine whethere there is deemed satisfaction as per section 271(1B) of the IT Act:BANGALORE ITAT;

2009-TIOL-18-ITAT-HYD.pdf

Foursoft Pvt Ltd Vs ACIT, Hyderabad (Dated: September 26, 2008 )

Income tax - Assessee is into export of technical services outside India - Expenses like overseas allowance, communication expenses and marketing staff expenses to be excluded from export turnover for allowing Sec 10A beneifts - since they are excluded from export turnover, they are also to be excluded from total turnover:HYDERABAD ITAT;

2009-TIOL-17-ITAT-DEL.pdf

M/s Amway India Enterprises Vs DCIT, New Delhi (Dated: November 20, 2008)

Income Tax Act – Section 37(1) – Expenditure incurred on leasehold improvement – assessee incures expenses on leased premises on flooring, partition, wiring, false ceiling, roofing, entire work of air-conditioning, duct, networking for computer purposes, electric wiring, etc and claimed it as revenue in nature – AO invokes provisions of explanation to section 37(1) and disallowed the claim made by assessee holding it to be capital in nature – Held that there is a fine distinction between expenditure incurred on ‘repairs' and ‘current  repairs'.  Under clause (1) of sub-section (a) of Section 30, assessee is eligible to claim expenditure on account of repairs if the premises are occupied as a tenant whereas under clause (ii) if the premises are occupied otherwise then as a tenant, meaning thereby as owner, the amount paid by him on account of only ‘current repairs' of the premises is to be allowed. Thus, in case of owner's occupied property only current repairs is to be allowed whereas in case of occupants other than owners, all repairs whether current or accumulated repairs, is to be allowed as deduction u/s 30.  There is a clear distinction between expression repairs and current repairs and the word ‘repair' is much wider than the expression current repairs.  What the assessee has done in the present case, can be construed to be repairs, it has not brought about any new asset nor advantage of enduring benefit.  The expenditure incurred by the assessee was towards repairing and upgradation of the premises taken on lease so as to make it more conducive to its business activities – Held, that the claim made by assessee thus allowable.:DELHI ITAT;

SERVICE TAX SECTION

2009-TIOL-52-CESTAT-AHM.pdf

M/s Vijay Travels Vs CST, Ahmedabad (Dated: November 24, 2008)

ST - Rent-a-Cab Service - Assessee pleads against invocation of longer period on the ground that when two show cause notices stand already issued, it cannot be done in the third notice issued later - held, in view of the SC decision in the case of Nizam Sugar Factory, the longer period cannot be invoked but pre-deposit ordered for the demand within the limitation as per the method adopted in earlier cases of the assessee by the Tribunal:AHMEDABAD CESTAT;

2009-TIOL-51-CESTAT-AHM.pdf

CCE, Vadodara Vs M/s Parekh Apparels (Dated: November 12, 2008)

ST - C & F Agent Service - Assessee stocks, displays and undertakes sale of goods owned by ITC Ltd - Revenue raises demand - Commissioner (A) allows appeal - held, since the assessee's contract with the manufacturer does not include execution of dispatch orders and also raises invoices on their own behalf, they are not covered under the C & F Service:AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-55-CESTAT-MUM.pdf

M/s Wox Coolers Pvt Ltd Vs CCE, Nagpur (Dated: November 25 2008)

Central Excise – Law does not envisage dismissal of appeal for default but only contemplates disposal on merits – Dismissed appeals restored:MUMBAI CESTAT;

2009-TIOL-54-CESTAT-MUM.pdf + wfc story.pdf

CCE, Belapur Vs Preeti Petrochem Industries (Dated: October 22, 2008)

Valuation - Waste Filter Cake (WFC) supplied free of cost for recovery of Calcium Petroleum Sulphonate which is returned on payment of duty – No question of including the value of WFC as same is non-excisable – Tribunal holds so and rejects Revenue appeal.

Tribunal decision in CCE, Belapur vs. Lubrizol India Pvt. Ltd [ 2006-TIOL-287-CESTAT-MUM ] relied upon.:MUMBAI CESTAT;

2009-TIOL-53-CESTAT-MUM.pdf + parksons story.pdf

CCE, Mumbai Vs Parksons Press Ltd (Dated: October 23, 2008)

Clearances to Kandla SEZ under exemption – though the status of KFTZ was changed into KSEZ by Ministry of Commerce and Industries , the provisions of Central Excise remained the same – Notfn. 12/2001-CE(N.T) is clarificatory in nature – No cause for payment of 8% amount under rule 57AD of CER, 1944 – Tribunal.

The Bench observed –

It can be seen that during the relevant period though the status of KFTZ was changed into KSEZ by Ministry of Commerce and Industries , the provisions of Central Excise remained the same i.e section 3 of Central Excise Act, 1944 and rule 2(8) of Central Excise Rules, 1944 indicated the KSEZ as KFTZ only.

It is undisputed that supplies were made to units located in the survey numbers as indicated in rule 2(8) of Central Excise Rules, 1944.

Holding that the order of the lower appellate authority was the correct exposition of law, the appeal filed by Revenue was rejected.:MUMBAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

cnt09_008.pdf

Adjudicating Authority notified for M/s Skipper Electricals India Ltd;

cnt09_007.pdf

Adjudicating Authority notified for M/s Bagsons International;

cnt09_006.pdf

Adjudicating Authority notified for Victory International;

cnt09_005.pdf

Adjudicating Authority notified for Haldex India Ltd;

CASE LAWS

2009-TIOL-50-CESTAT-MAD.pdf

Shri S Suresh Vs CC, Chennai (Dated: September 29, 2008)

Customs – misdeclaration of value and description to obtain higher draw back – the order passed by the Commissioner was based on reliable evidence – confiscation under Section 113 (i) and (ii) and penalty under Section 114 upheld. :CHENNAI CESTAT;

2009-TIOL-49-CESTAT-MUM.pdf

Midas Impex Vs CC, Nhava Sheva (Dated: October 20, 2008)

Customs – Commercial levels of contemporaneous imports must be same – Reliance on values for goods imported six months earlier and for lesser quantities in NIDB data not sustainable – Loading set aside and declared value accepted :MUMBAI CESTAT;