Don't Visit North Block For Transfers - CBEC Tells Officers (See 'DDT')

FIPB gives nod to 31 proposals worth Rs 1277 Cr, includes Rs 320 Cr Ramky Enviro Engg Ltd proposal (See"Common Basket")

FM, Pranab Mukherjee, to meet heads of PSU banks on Feb 2, for review of credit flow and other packages;

State mourning leads to cancellation of Beating Retreat Ceremony; Refund of tickets being facilitated;

With hint coming from Sonia, CCEA likely to cut fuel prices today;

OECD Chief urges govts not to succumb to lure of protectionism and petty nationalism;

CII calls for 15% hike in infrastructure spending to stimulate growth;

ddt 28 Jan.pdf

Utilization of Accumulated CENVAT credit restricted in terms of Erstwhile Rule 6 (3) (c) CENVAT Credit Rules – Board Clarifies

spl down.pdf

Credit for tax paid abroad: Is it a case of India subsidising other's treasuries?

rbi08cir048.pdf

Exim Bank's Line of Credit of USD 25 million to the Government of the  Republic of Senegal;

FDI.pdf

FIPB gives nod to 31 proposals worth Rs 1277 Cr, includes Rs 320 Cr Ramky Enviro Engg Ltd proposal;

mbuzz0092.pdf

Q3 trade flows show weakening trend in OECD countries ;

mbuzz0091.pdf

CII calls for 15% hike in infrastructure spending to stimulate growth;

mbuzz0090.pdf

OECD Chief urges govts not to succumb to lure of protectionism and petty nationalism;

2009-TIOL-48-HC-MAD-IT.pdf + HC story.pdf

CIT, Erode Vs K Thangamani (Dated: December 5, 2008)

Income tax - Search u/s 132 - assessee is a tax consultant - Revenue conducts a search - finds papers related to bogus TDS certificates and refund collected from Revenue - Reassessment u/s 147 - income earned by fraud added to the assessee's professional income returned in previous years - CIT(A) took the view that only 60% of refund could be added and the income be treated under Residuary head rather than 'professional' - Tribunal takes the view that it is a case of unjust enrichment and since the income was earned by fraudulent means it cannot be assessed - held,

++ The Income Tax Act treats legally earned and tainted income alike. So far as the taxman is concerned, there is nothing like an illegal income. Even if the assessee is prosecuted for committing an offence, the income of the offender is liable for assessment. And it cannot be considered as a defence that the State is becoming a party to the illegal act by sharing the ill-gotten wealth.

++ the primary function of the Income Tax Act is to bring the income of various kinds into the tax net. The Income Tax authorities are not concerned about the manner or means of acquiring income. The income might have been earned illegally or by resorting to unlawful means. Illegality tainted with the earning has no bearing on its taxability.

++ It is not possible for the income tax authorities to act like police to prevent the commission of unlawful acts but it is possible for the tax machinery to tax such income. During such process strict rules of evidence are not applicable to the income tax authorities. Those pieces of evidence which are not sufficient in ordinary legal proceedings to prove a particular fact would be sufficient for the tax officials to assess the income of an individual.:MADRAS HIGH COURT;

2009-TIOL-47-HC- KERALA-IT.pdf

Smt Visalakshy Kumaran Vs CIT (Dated: December 1, 2008)

Income tax - Sec 56 - assessee was a partner in a firm - Firm reconstituted after the death of one of the partners - assessee continued to be a partner in the new firm - differences among partners - civil suits - firm dissolved as per court decree - however, lease right continued with the dissolved firm - sale of land on which firm was situated - to buy peace with the assessee, other two rightful owners of the land paid a sum to the assessee - payments are made in two assessment years - AO for taxing the sum under head 'income from other sources' u/s 56 in the year in which the land was sold - CIT (A) and Tribunal apportion a minimal amount towards the defunct firm's assets and rest of the sum treated as gratuitous payment taxable as 'income from other sources' - held, the payment received by the assessee is not in the nature of gratuitous payment as it was towards the settlement of disputes and giving up whatever rights the assessee had in the firm - assessee's appeal dismissed:KERALA HIGH COURT;

2009-TIOL-46-HC-DEL-IT.pdf

CIT, Delhi Vs Triveni Engineering And Industries Limited (Dated: January 23, 2009)

Income tax - Revenue vs capital expenditure - Assessee modernises two of its sugar mills and claims the expenses as revenue in nature - AO disallows on the ground that the benefits were of long-term nature and the assessee had capitalised the same in its books - Held, it is not the entry in books that will decide the nature of expenditure but its actual character - since the assessee had other similar sugar mills running and there was unity of command for all the companies in the Group, and a major part was towards administrative expenses, such an expenditure is revenue in nature - Revenue's appeal dismissed:DELHI HIGH COURT;

2009-TIOL-45-HC-MAD-IT.pdf

CIT, Madurai Vs M/s Industries Ltd (Dated: November 21, 2008)

Income tax - assessee is engaged in offset printing business - collects sales tax from buyers and treats the same as contingency deposit for possible tax liability and not a part of trading receipt - Revenue treats the same as part of trading receipt - CIT(A) and Tribunal disagree with the AO - held, it is already settled that since the tax has been collected from buyers who are not going to be refunded the sum if the tax dispute is settled in favour of the assessee, it is to be treated as part of trading receipt and if a refund is made by the assessee, the same can be claimed as deduction in the year of refund - Revenue's appeal allowed:MADRAS HIGH COURT;

2009-TIOL-44-HC-MAD-IT.pdf

CIT, Chennai Vs M/s Fal Industries Ltd (Dated: November 12, 2008)

Income tax - Sec 80 HH benefits - assessee commences a new industrial undertaking from the previous year relevant to the AY 1982-83 - The initial year for deduction under Section 80HH for 10 AYs was 1982-83 - assessee changes the accounting year from from December to June - thus, there was no assessment for AY 1984-85 - So, the assessee claims that his 10th year for benefit was 1992-93 - Revenue says the natural sequence of assessment years should be followed - held, the assessment year as defined under Section 2(9), would not depend upon one or the other assessee - a change in accounting year not to change the manner in which the ten assessment years should be calculated. Naturally, sequence of ten years must be followed - Revenue's appeal allowed:MADRAS HIGH COURT;

AGT.pdf

Annual General Transfer, 2009-reg

SERVICE TAX SECTION

file_137.pdf

Utilization of accumulated CENVAT credit restricted in terms of Erstwhile Rule 6 (3) (c) CENVAT Credit Rules, 2004 - reg;

CASE LAWS

2009-TIOL-49-HC-P&H-ST.pdf

CIT, Erode Vs K Thangamani (Dated: December 5, 2008)

Service Tax – Penalty set aside by Tribunal – High Court not to interfere; further the amount involved is very meagre.:PUNJAB AND HARYANA HIGH COURT;

2009-TIOL-170-CESTAT-MAD.pdf + manpower story.pdf

M/s Future Focus Infotech (P) Ltd Vs CCE & ST, Chennai (Dated: December 10, 2008)

Service Tax – Stay / Dispensation of pre-deposit – Manpower Supply and recruitment service vis-à-vis Consulting Engineer Service – Manpower supplied for execution of software projects – prima facie amounts to rendering ‘ consulting engineer' service which is not taxable in respect of computer software engineering – stay granted.:CHENNAI CESTAT;

2009-TIOL-169-CESTAT-AHM.pdf

M/s Sterlite Optical Technologies Ltd Vs CCE, Vapi (Dated: December 11, 2008)

Service Tax – Taking over/Purchase of a manufacturing entity and management of such entity - Management fee of 2% on turnover of purchased entity collected for providing managerial services in the areas of General Management, Marketing Technical and Commercial in addition to the charges for deputation of technical man power etc not liable to service tax – Management of company different from Management Consultancy service – No evidence put forth by Revenue to prove that the activity amounted to consultancy service:AHMEDBAD CESTAT;

2009-TIOL-168-CESTAT-DEL.pdf

M/s Sharda Udyog Vs CCE, Ghaziabad (Dated: December 30, 2008)

ST - Maintenance and Repair service - assessee undertakens 'reconditioning' of worn out sugar mill rollers - Demand raised and penalty imposes - The process undertaken by the assessee clearly amounts to 'reconditions' and is covered under the notified taxable service from 16.5.2005 and since the assessee took registration on its own, it cannot be said that it had any intention of evading tax - waiver from pre-deposit of penalty granted:DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-50-HC-HP-CX.pdf

CCE Vs M/s Fermenta Pharma Biodil Ltd (Dated: September 3, 2008)

Mere failure to pay duty and/or take out a licence which is not due to any fraud, collusion or willful misstatement or suppression of fact or contravention of any provision is not sufficient to attract the extended period of limitation - the Department has failed to point out any positive act on the part of the manufacturer which could be said to be fraudulent, collusive or amounted to making a willful mis -statement etc. In the present case the Company had not hidden or mis -stated the product which it was manufacturing. It had clearly given the name of the product. Its claim was that it fell under item 3002.00. This list was accepted by the Department. The assessee had not made any misstatement of facts nor had done any positive act to mis -lead the Department. This statement may have been wrong but it cannot be said to have been made with an intention to defraud the State. It would be difficult to hold that such a mistake was a willful misstatement or suppression of facts.

Limitation – one year, not six months - It is thus obvious that when the Department has given its approval the main provision of Section 11-A will apply and the limitation will be one year. The period of limitation for which recovery can be made would be one year and not six months as held by the CEGAT.:HIMACHAL PRADESH HIGH COURT;

2009-TIOL-167-CESTAT-BANG.pdf + pipe story.pdf

CCE, CC & ST, Hyderabad Vs M/s IVRCL Infrastructures & Projects Ltd (Dated: December 24, 2008)

CE – Exemption - Supply of pipes to Water Supply Project – exemption not restricted to the first storage point; available to subsequent points; in the impugned notification, pipes needed for delivery of water from its source to the plant and from there to the storage facilities have been exempted; the Notification merely talks about the storage facilities and there is not restriction that the water should be delivered only to the first storage point, as has been provided in the amended notification with effect from 01.03.2007; It is obvious that the unamended notification would have to be interpreted to cover the impugned pipes which were needed to deliver water not only to the first storage point but also to the second and subsequent storage point, such as elevated storage reservoirs where the water was further treated for chlorination. If it was the intention of the government to restrict the exemption for pipes up to first storage point, the notification should have been accordingly worded from the beginning.:BANGALORE CESTAT;

2009-TIOL-166-CESTAT-DEL.pdf

M/s ICS Systems (P) Ltd Vs CCE, Delhi II (Dated: October 23, 2008)

Central Excise – Manufacture and clearance of ‘split flap display board' claiming SSI benefit – Duty demand confirmed by Commr (A) excluding value of bought out items and job charges – Allegation of violation of principles of natural justice not sustainable – Pre-deposit of Rs. 7 lakhs ordered:DELHI CESTAT;

2009-TIOL-165-CESTAT-MUM.pdf

Ace Glass Containers Ltd Vs CCE, Nashik (Dated: September 8, 2008)

Central Excise – Duty liability on sales tax amount collected from customers and not deposited with state government – Matter covered in favour of appellants – Pre-deposit waived and stay granted:MUMBAI CESTAT;

CUSTOMS SECTION

CIRCULAR + NOTIFICATION

cuscir09_004.pdf

CBEC clarifies on quantum of Bond and BG under EPCG and Advance Authorisation Scheme;

dgft08not083.pdf

Export of Basmati Rice – DGFT changes MEP;

CASE LAWS

2009-TIOL-164-CESTAT-MUM.pdf

M/s Chamunda Jewellers Vs CC, Mumbai (Dated: November 14, 2008)

Customs - machinery imported under Notification 159/86 Cus under concessional rate of duty used in the manufacture of gem and jewelery for both domestic and export clearances - the same is in violation of the condition of the Notification - demand of duty and confiscation under Section 111(o) upheld - However there is no violation for the period prior to 1.3.87, before the condition of exclusive use was inserted in the Notification.:MUMBAI CESTAT;