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Vizag CBI Court sentences Income Tax Officer to two years RI in a bribery case; Salary hike for CJI, Judges of SC and HCs: President gives assent to Ordinance; TRAI proposes to closely monitor bandwidth speed by ISPs as promised to users; CCEA approves expert panel recommendation on methodologies used for fixing MSP + Cabinet sanctions one JS level post in Dept of Pharmaceuticals; Inflation comes down to 5.24%; Another leading MNC - Nortel Networks - files bankruptcy papers in Canada; India and Syria sign MoU for cooperation in Oil and Gas Sector; Amendment in Cable TV Network Rules - TV News Channels protest - PM says Govt to consult all segments before finalisation; |
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| Dear Member, Sending the following files: |
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Determination of Assessable Value by units availing VAT remission in J & K; A-Satyam saga exposes 'satyam' holes in our regulatory mechanisms! Let radar of probe go beyond Raju! CCEA approves expert panel recommendation on methodologies used for fixing Minimum Support Price; Cabinet sanctions one JS-level post for Dept of Pharmaceuticals; TRAI proposes to closely monitor bandwidth speed by ISPs as promised to users; Good news for law students: Govt to allow internship with Central Aency Section; |
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NOTIFICATION Tax-free bonds of IFCL notified; DTAA between India and Serbia notified; DTAA between India and Montenegro notified ; CASE LAWS 2009-TIOL-38-ITAT-DEL-SB.pdf + sb story.pdf Kuber Tobacco Products (P) Ltd Vs DCIT, Delhi (Dated: January 14, 2009) Income tax - block assessment - notice u/s 143(2) mandatory; New Sec 292BB inserted vide Finance Act 2008, even if it is procedural, creates disability and extinguishes substantive right of assessee - cannot be applied retrospectively Prior to 1.4.2008 i.e., upto 31st March, 2008, as per Section 292BB, the assessee is not precluded from taking any objection regarding invalidity of assessment/re-assessment on the ground of improper/invalid issuance/service of a notice. Section 292BB is applicable to assessment year 2008-09 and subsequent years. And the assessee is precluded from taking such objection for and from assessment year 2008-09.:DELHI ITAT(SPECIAL BENCH); 2009-TIOL-37-ITAT-DEL-SB.pdf + sb 2story.pdf Maruti Countrywide Auto Financial Services Limited Vs ITO, Delhi (Dated: December 29, 2008 ) Income tax - assessee is a motor vehicle financing company - earns lease rental - AO treats income chargeable under Sec 2(7) of Interest Tax Act - assessee argues that financing transactions fall short loan and advances as defined in the Act and such an income cannot be charged to tax u/s 2(7) - CIT(A) agrees with the AO and enhances the sum taxable on the basis of CA's certificates - Held, it is not the nomenclature but the substance which determines the actual character of a transaction - there is no dispute that interest income earned out of financing / loan transactions in the form of lease rental is chargeable to tax under Interest Tax Act The Ahmedabad Special Bench had held that the definition of “interest” as given in Section 2(7) of the Interest Tax Act is exhaustive definition as it defined by using the word ‘means'. Thus, it was held that even though interest is taxable event and basis for levy of interest tax, it can be assessed only if it were an interest on loans and advances as stated in the definition and not otherwise. It was held that to consider a question whether a receipt is interest or not is required to be judged on the facts and circumstances of each case and if in substance the receipt is interest on loans and advances, it has to have that character irrespective of the name or a form given to it, otherwise in the documents evidencing the transaction:DELHI ITAT(SPECIAL BENCH); ACIT, Ahmedabad Vs Ashima Syntex Ltd (Dated: October 17, 2008 ) Income Tax - Assessee files return u/s 115JA and claims deferred revenue expenditure with respect to certain expenditures - AO disallows - CIT(A) deletes disallowance - Held, in cases where the nature of the revenue expenditure is such that the same can be clearly and unambiguously identified over specified future time periods proportionately, applying the matching principle, deferred revenue expenditure principle can be applied - In other cases where the expenditure is not allocable over defined future time periods there can be no case for amortizing the same W.r.t. payment of interest on borrowing, sec 36(1)(iii) will apply and it does not matter whether the capital is borrowed in order to acquire a revenue asset or a capital asset, because all that the section requires is that the assessee must borrow the capital for the purpose of his business - As regards default to pay advance tax within the meaning of sections 234B and 234C, the levy of interest is mandatory even where the income of the assessee is computed under section 115JA - Revenue's appeals partly allowed for statistical purposes: AHMEDABAD ITAT (SPECIAL BENCH); DIT,Delhi Vs Japan Chamber Of Commerce And Industry In India (Dated : November 25, 2008 ) Income tax - assessee is a registered society for promotion of commerce between India and Japan - Revenue denies exemption u/s 12A on the ground that some of the objects mentioned in the memorandum are not linked to the main objects of the society - Tribunal holds that all the objects are interlinked and some of them, objected by the Revenue, are incidental to the main objects and it cannot be said that the benefits would not accure to Indian public - Tribunal order is well reasoned and does not call for any interfernce - Revenue's appeal rejected:DELHI HIGH COURT; Krishan Kumar Jhamb Vs ITO (Dated : December 8, 2008 ) Income tax - assessee declares certain value of construction of property - AO makes addition on the basis of the DVO's report and also disallows certan cash credits - Tribunal agrees with the AO - held, no infirmity in Tribunal's order as it had found serious errors in registered valuer's report submitted by the assessee and since the assessee had failed to produce the purchaser of shops who had paid huge cash towards purchase of shops, addition is sustainable - Assessee's appeal dismissed:PUNJAB AND HARYANA HIGH COURT; |
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| SERVICE TAX SECTION CCE, Indore Vs M/s Gayatri Enterprises (Dated: December 2, 2008) ST - Tour Operator Service - assessee transports employees of a company - Revenue raises demand - Commissioner (A) sets aside the adjudication order - In view of the fact that the assessee's vehicle is registered under the category of private bus under Sec 76 of Motor Vehicles Act, the demand is not sustainable and the Commissioner(A) rightly set aside the order. :DELHI CESTAT; M/s K P Automobiles Pvt Ltd Vs CCE, Jaipur (Dated: November 21, 2008) ST - Authorised Service Station - Assessee provides free service to vehicles during warranty period on behalf of the manufacturer of vehicles - issue is no longer res integra as service tax cannot be levied on free services provided during the warranty period:DELHI CESTAT; M/s Sood Studios Pvt Ltd Vs CCE, Ludhiana (Dated: November 25, 2008) ST - Photography Service - Assessee is a registered taxpayer - claims deduction of materials used in relation to rendering this service - Original authority allows the same but Commissioner uses revisionary powers and includes the value of materials in the gross amount chargeable to tax - Held, in view of Tribunal's decision in Deluxe Colour Lab case, such an order by the Commissioner is not sustainable as non-inclusion of value of photography materials in the taxable value is as per the laws:DELHI CESTAT;
2009-TIOL-25-HC-P&H-CX.pdf + input story.pdf Green Aloys Pvt Ltd Vs UoI (Dated : October 31, 2008) CENVAT Credit – shortage of inputs – seizure - Mere allegation or mere initiation of investigation does not justify detention of goods . Not completing the investigation after seizure does not rule out malafides on the part of the officers – Finance Secretary directed to file an affidavit: It could not be held that there was strong prima facie case for confiscation of goods which would justify continued detention of goods or demand of security for the value of goods. Procedure for seizure has to be reasonable and fair and there has to be some basis for continuing to detain the goods. Mere allegation or mere initiation of investigation does not justify detention of goods. The terms imposed for release of goods have to have nexus with safe-guarding possible demand of duty. :PUNJAB AND HARYANA HIGH COURT; 2009-TIOL-94-CESTAT-MUM.pdf + Supreme Petrochem Story.pdf CCE, CC & ST, Raigad Vs Supreme Petrochem Ltd (Dated: November 18, 2008) Whether the expenses of loading of goods within the factory for clearance to a buyer are includable in the assessable value of the goods where such expenses are incurred by, or on behalf of, the buyer – matter referred to Larger Bench Tribunal's observations – …in the case of Indian Oxygen Limited [ 2002-TIOL-263-SC-CX ] , their Lordships were apparently laying down a principle which is discernible from para 5 of the judgement, the relevant portion of which is reproduced below:- “…It is necessary to reiterate the principle upon which the assessable-value will have to be determined in this. The cost of transportation from factory at Visakhapatnam and the depot at Vijayawada cannot be included normally in computation of the value. The value has to be computed under Section 4(1)(a) read with Section 4(4)(d)(i) of the Act, where the wholesale price is ascertainable at the factory gate, the question of transportation charges becomes entirely irrelevant. The cost of transportation from the factory gate to the place of delivery and transit expenses were not to be added to the wholesale price at factory gate for purposes of duty under the Act. In this case the price of the goods at the factory gate Visakhapatnam is known. It is clear from Section 4 that the delivery and collection charges have nothing to do with the manufacture as they are for delivery of the filled cylinders and collection of the empty cylinders. These charges have to be excluded from the assessable-value. Insofar as the loading charges Incurred for loading the goods within the factory are concerned, they are to be included in the assessable-value, irrespective of who has paid for the same but the loading expenses incurred outside the factory gate are excludible ….” Going by the above ruling of the Apex Court, we doubt the correctness of the distinction drawn by the Tribunal in the case of Albright & Wilson Chemicals India Limited . [ 2007-TIOL-858-CESTAT-MUM ] .Finding that there is conflict of judicial opinion on the substantive issue , the matter is referred to the President for being resolved by a Larger Bench.:MUMBAI CESTAT; CCE, Chennai Vs M/s Calcutta Chemical Co Ltd (Dated: August 20, 2008) Central Excise – Classification – Suds Neem Dog Soap – The soap in question contained silicate which was not present in toilet soaps. Neem oil present in the soap could act as an insecticide to get rid of insects from a dog's skin. As per trade parlance toilet soaps used by human beings did not have insecticidal property whereas dog soaps had this property. A soap used for cleaning the skin of dogs cannot be accepted as ‘toilet soap' to be used by human beings. The dog soap can only be classified as “soap other than for toilet use,” under SH 3401.11. It cannot be classified as “soap for toilet use,” under SH 3401.19. Revenue's appeal is dismissed. (Para 2) :CHENNAI CESTAT; CCE, Chennai Vs Mag Torq Powder Clutches Pvt Ltd (Dated: August 20, 2008) Central Excise – Valuation – Dealer – The sale of the goods by the respondents to M/s.DIS was one of a ‘dealer', which transaction was on principal-to-principal basis, and, therefore, the payment of duty made by the respondents on the assessable value of the goods determined on the basis of the discounted price is in order. Revenue appeal dismissed. (Para 3):CHENNAI CESTAT;
CUSTOMS SECTION NOTIFICATION DEPB rates of a few engineering products revised; CASE LAWS M/s Sri Nataraja Trading Company, Sivakasi Vs CC, Chennai (Dated: November 21, 2008) Customs – Import- Barium Nitrate – Barium Nitrate being a hazardous chemical confiscated under Section 111(d) of the Customs Act, 1962 without giving an option for redeeming the goods under Section 125 of the Act. Import of Barium Nitrate is neither prohibited nor restricted under the relevant EXIM Policy or by provisions of any other law. The MS & IHCR also does not prohibit import of Barium Nitrate. Rule 19 of MS & IHCR provides that the concerned authority could issue orders to the importer to remedy any contravention. Hence, the absolute confiscation of the consignment does not appear appropriate and the goods are ordered to be released to the appellant on submission of necessary clearance from the JDGFT. Appeal allowed. (Para 5) :CHENNAI CESTAT; CC, Trichy Vs Hindustan Lever Ltd (Dated: December 5, 2008) Customs – refund – unjust enrichment – the respondents established that they had not passed on the excess duty paid to their customers and qualified for cash refund of this excess duty as rightly held by the lower authorities – revenue appeal has no merit. :MUMBAI CESTAT; |
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