Refund of Terminal Excise Duty paid on fuel supplied from depot/warehouse of Domestic Oil Companies to EOUs – Board issues Draft Circular (See 'DDT')

Mumbai DRI seizes FICN worth Rs 20 lakh, coming through Nepal corridor; Two persons arrested;

Sec 10B exemption to EoUs: Nath says proposal to extend it by 3 years being pursued;

Interpol, World Anti-Doping Agency join hands to fight sports cheats ;

S S Khurana takes over as new Railway Board Chairman;

EC holding meet today with all political parties to discuss possible Lok Sabha dates;

CII for 'distinguished' liabilities of independent Directors; calls for clearer definition of 'relative' ;

DRI arrests South African female national with 16 kg Pak-origin heroin;

ddt 3 Feb.pdf

Wealth Tax Rules – Fees for Valuer - revised;

post_ao.pdf

Adjudicating Authority under PMLA looking for Administrative Officer;

mbuzz0114.pdf

Sec 10B exemption to EoUs: Nath says proposal to extend it by 3 years being pursued;

mbuzz0113.pdf

Interpol, World Anti-Doping Agency join hands to fight sports cheats ;

mbuzz0112.pdf

India, USA sign MoU in bio-fuel sector;

mbuzz0111.pdf

CII for 'distinguished' liabilities of independent Directors; calls for clearer definition of 'relative';

2009-TIOL-57-HC-DEL-IT.pdf + sheraton story.pdf

DIT, New Delhi Vs Sheraton International Inc (Dated: January 30, 2009)

Income tax - Indo-USA tax treaty - non-resident assessee enters into commercial service agreement with Indian hotels for advertising, publicity and promotion of their sales worldwide - also allows use of their trade name, trademark and stylised 'S' - in return, it receives 3% of room sales turnover - AO treats such payment as royalty under Section 9(1)(vi) read with explanation 2 and fee for technical services under Section 9(1)(vii) read with explanation 2 or under Article 12 of the DTAA - Tribunal disagrees with the Revenue and takes the view that providing commercial information and marketing advisory cannot be treated as technical services which are strictly meant for transfer of technological knowhow or other types of included services - payments made for marketing related services and use of trademark etc incidental to the main objective cannot be categorised as royalty or fees for technical services either under the Sec 9(1) or the DTAA - such payments are business income but since the assessee has no PE under Article 7 of the DTAA, it cannot be taxed in India - held, there is no fault with the findings of the Tribunal and moreover, these are findings of fact which could be gone into only if the Revenue alleges perversity in the Tribunal's order which is not the case in the instant order - Tribunal order upheld and Revenue's appeal dismissed:DELHI HIGH COURT;

2009-TIOL-78-ITAT-MUM.pdf + german story.pdf

JDIT, Mumbai Vs M/s Krupp Uhde Gmbh (Dated: January 7, 2009)

Income tax – Assessee Company is incorporated in Germany and engaged in providing (i) technical know-how / licence, (ii) basic engineering services and (iii) supervisory activities in connection with construction or installation of specified machineries / assembly provisions – Assessee offered tax on income @ 10% as per Article 12 and Article 11 of the DTAA

+ The AO taxed the income at 30% observing that as per Article 5(2)(i) ‘a building, site or construction, installation or assembly project or supervisory activities in connection therewith, where such site, project or activities continued for a period exceeding six months' would be treated as PE. Further, even if the technicians had not visited India individually for more than six months still it could be said that supervisory activities continued for a period exceeding six months as the assessee was under an obligation to supervise the installation for the project till the project was completed

+ CIT (A) accepted the contention of the assessee regarding technical knowhow fee and basic engineering services that both these activities were rendered from Germany and the question of any PE in India did not arise in respect of such services. However, regarding the income from supervision activities, the claim of the assessee was not accepted on the reason that it is not necessary for constituting PE on the basis of supervisory activities one should be engaged in both the construction, installation or assembly project as well as the supervisory activities. Further, for counting period for a construction PE starts from the preparatory work itself in the source state and ends when the project is tested and formally handed over – Moreover only in three projects, the period of 6 months exceeded and therefore only in these three cases the tax will be levied at 30% - In appeal before Tribunal, it was held -

+ that in clause (i) of Article 5(2), there is nothing to indicate that different sites on which work is carried on by the assessee can be considered together in determining the scope of PE. In DTAA, whenever the contracting parties intended that different sites should be taken together, they had expressly provided so. Therefore, other sites cannot be taken together for determining the scope of PE in India.

+ that in computing the minimum period of 6 months, various sites cannot be considered together particularly when different contracts had no effective interconnection with each other. Therefore, lower authorities were not justified in considering the various sites together while computing the minimum period of six months prescribed in Article 5(2)(i) of DTAA.

+ that in case of independent contracts, it would be absured to include that period also which is unconnected with the contract. The date of commencement of the threshold limit of six months would depend on the facts of each case considering the terms of contract. Moreover, the language of Article 5(2)(i) of the DTAA, “where such site, project or activities continue for a period excluding six months” would only mean that period of six months is to be counted for each site separately i.e. (i) building site or construction (ii) installation or assembly project and (iii) supervisory activity.

+ that intervening period of project cannot be excluded from the date of its continuation till its completion, and under Article 5 the period of six months has to be counted irrespective of the years involved otherwise it would defeat the object behind the provision.:MUMBAI ITAT;

2009-TIOL-77-ITAT-DEL.pdf

ITO, New Delhi Vs M/s Sfil Stock Broking Limited (Dated: October 17, 2008)

Income Tax Act – Section 68 – AO made an addition of Rs.82 lakhs u/s 68 which was deleted by CIT(A), inter alia, by accepting the contention raised on behalf of the assessee that the provisions of Section 68 were not applicable in the case of credits representing sale of shares as it was a kind of exchange of asset with one asset in the form of shares being replaced by other asset in the form of bank balance – Held, that the view adoptped by CIT(A) is untenable in light of special bench judgment in the case of Bishan Chand Mukesh Kumar and Others

Income Tax Rules- Rule 46A – Held, that when the assessment completed by the AO ex-parte u/s 144 was upheld by the learned CIT(A) and there was no comment offered by the AO on examination/verification of the additional evidence in his remand report apparently in view of his strong objection for the admission of the said additional evidence, one more opportunity should have been specifically afforded by the learned CIT(A) to the AO to examine/verify the additional evidence when the same was admitted by him overruling the objections raised by the AO for admission thereof.:DELHI ITAT;

2009-TIOL-76-ITAT-MUM.pdf

DCIT, Mumbai Vs M/s Ford Credit Kotak Mahindra Ltd (Dated: December 04, 2008)

Income tax - penalty u/s 271(1)(c) - assessee is a NBFC company - engaged in financing business - claims higher depreciation on leasing of motor cars and provision for bad debts based on judicial decisions - AO disallows and makes additions - assessee suo moto withdraws higher depreciation and provision for bad debts based on subsequent judicial pronouncements - CIT(A) deletes penalty - held, penalty is called for only when there is deliberate omission and submission of false information - since the AO has not arrived at any such findings, CIT(A) order is valid - Revenue's appeal dismissed:MUMBAI ITAT;

2009-TIOL-75-ITAT-BANG.pdf

Corporation Bank Vs ACIT, Mangalore (Dated: December 3, 2008)

Income Tax - Assessee Bank claimed deduction on account of loss on valuation of portfolio investment treating it as stock in trade - AO disallowed the loss holding that the method adopted by assessee Bank was defective and in violation of the guidelines of RBI master circular but allowed depreciation in the valuation of investment portfolio as provided for by the RBI guidelines - CIT(A) disallowed entire depreciation - Held, Assessee Bank is entitled to value all the investment at cost prices or market value whichever is lower by treating such investment as stock-in-trade - Assessee's appeal allowed.: BANGALORE ITAT;

SERVICE TAX SECTION

2009-TIOL-199-CESTAT-DEL.pdf + stgst.pdf

M/s Allengers Medical Systems Ltd Vs CCE, Chandigarh (Dated: October 29, 2008)

Appellants manufactured and sold medical equipment - Activity of installation, erection and commissioning were incidental to delivery of goods to the customers and, therefore, there was no reason for levy of service tax on the installation and commissioning of medical equipment - Tribunal.

Apex Court decision in State of Andhra Pradesh Vs Kone Elevators (India) Ltd 2005-TIOL-30-SC-CT-LB referred.

Service Tax demand and penalties set aside and appeal allowed with consequential relief.:DELHI CESTAT;

2009-TIOL-198-CESTAT-KOL.pdf

CCE, Dibrugarh Vs Devenchand Ramsaran Industries Pvt Ltd (Dated: December 15, 2008)

ST - Maintenance and Repair Service - assessee enters into a contract with ONGC for maintenance and repair of wells - demand raised - Adjudicating authority confirms tax with interest but does not impose penalty - Revenue in appeal for penalty and assessee raises objection on the ground that the adjudicating authority had called for a report from the Range Superintendent but the content of the report was not shared with the assessee - Since the reasons are the heartbeats of justice but not given in the order, case is remanded for sharing the report with the assessee and a passing off a speaking order:KOLKATA CESTAT;

2009-TIOL-197-CESTAT-AHM.pdf

CST, Ahmedabad Vs M/s Identity Communication Pvt Ltd (Dated: January 7, 2009)

ST - Advertising service - assessee prepares Tableau for the State Govt for its display on Republic Day - Revenue raises demand on the ground that it is for publicity and the definition of the advertising is inclusive in nature - assessee argues that a tableau is prepared not for any commercial purpose and it is only prepared by the assesse but the same is displayed by the State Govt - Since the assessee has done only the preparation of the tableau and the exhibition was done by the State Govt and the fact that after the preparation, the assessee has no role to play, it cannot be covered under advertising service - Revenue's appeal dismissed:AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-203-CESTAT-DEL.pdf + kol story.pdf

CCE, Bhubaneshwar-II Vs M/s Bhushan Ltd (Dated: October 21, 2008)

Appeal – A decision by a multi-member body is complete only when the last member of the body signs the proceedings – Decision taken by one member within one year only amounts to his opinion – To constitute a review order it should be assented by both members in time – Tribunal only legally competent to hear appeal against an order passed by Commissioner and has no jurisdiction to scrutinize the legality or otherwise of a review order – Tribunal's orders recalled and Revenues appeal held maintainable – Assessee at liberty to raise any objections in another form in accordance with law :DELHI CESTAT;

2009-TIOL-202-CESTAT-MAD.pdf

M/s Mohan Breweries & Distilleries Ltd Vs CCE, Pondicherry (Dated: November 24, 2008)

Central Excise – CENVAT Credit – CVD debited under DEPB under notification 34/97 Cus – credit is not allowed during the material period - At the material time, the scheme did not envisage extension of credit of additional duty of customs paid.:CHENNAI CESTAT;

2009-TIOL-201-CESTAT-MAD.pdf

CCE, Coimbatore Vs Veejay Lakshmi Engineering Works Ltd (Dated: December 2, 2008)

depreciation on the CENVAT credit amount and later filed revised return with Income Tax rectifying the mistake – credit cannot be disallowed – Rule 57T of the Central Excise Rules, 1944.:CHENNAI CESTAT;

CUSTOMS SECTION

M/s Tass Clearing Services Pvt Ltd Vs CC & CCE, Hyderabad (Dated: August 26, 2008)

Appeal – Executive order refusing license or rejecting renewal of application cannot be equated to adjudication order – Appeal under Sec. 129 (A) of Customs Act against such letter not maintainable: BANGALORE CESTAT;