Cash Gift to Madame Mayawati - Can it be taxed as professional Income? (Look for latest ITAT decision on Monday)

Service Tax - Taxability of the Schools providing Buses - CBEC clarifies (See 'DDT')

Customs & Excise Settlement Commission looking for Members

Kolkata Income Tax (Inv) reports seizure of Rs 65 Cr cash so far this fiscal;

CBI Court sentences Vijaya Bank officials to 4-year RI;

India, Finland agree to deepen trade basket;

Corporate governance: SEBI Chairman calls for rotational auditors, external agency for internal audit;

ddt 6 Feb.pdf

Export of Edible Oil in branded packs of up to 5 Kg – Allowed - CBEC;

potpourri.pdf

The Roguery: Its Rewards and Remedies; Taxability of Proceeds of Crime;

mbuzz0128.pdf

Kolkata Income Tax (Inv) reports seizure of Rs 65 Cr cash so far this fiscal;

mbuzz0127.pdf

India, Finland agree to deepen trade basket;

mbuzz0126.pdf

CBI Court sentences Vijaya Bank officials to 4-year RI;

mbuzz0125.pdf

Corporate governance: SEBI Chairman calls for rotational auditors, external agency for internal audit;

2009-TIOL-64-HC-DEL-IT.pdf

CIT Vs M/s IKEA Trading Hong Kong Ltd (Dated: January 16, 2009)

Income tax - assessee is a non-resident - Survey u/s 133A - expatriate employees admit that part of their salary is paid in Japan, their native country - additional TDS liability - assessee deposits tax with interest - penalty proceedings initiated u/s 271 - CIT(A) deletes it on limitation ground - CIT(A) order upheld by the Tribunal - held, Tribunal was correct in deleting penalty on the ground that the penalty order was passed beyond the time prescribed by section 275(1)(c), the same having been passed after the lapse of six months from the end of the month in which the show cause notices were issued - Revenue's appeal dismissed:DELHI HIGH COURT;

2009-TIOL-86-ITAT-AGRA-TM.pdf + TM story.pdf

ITO, Shivpuri Vs Shri Laxman Das Makhija (Dated: November 21, 2008)

Income tax - The finding of the AO was not based on any material. It is not permissible to misread facts and then order a remand for the sake of remand. The A.O cannot be permitted to take advantage of his own wrong by not recording a clear finding with reference to material on record. It is no doubt true that the Tribunal has very wide powers. But such powers are to be exercised judicially and on the basis of material available on record. It is not permissible to misread facts and then order a remand for the sake of remand. The AO cannot be permitted to take advantage of his own wrong by not recording a clear finding with reference to material on record. His finding should have been based on the statement of the farmers who appeared as AO's witnesses. It was unnecessary to enter into realm of imagination. There is no need to allow any other inning to the revenue. The A.M has passed an elaborate order that amounts were advanced by the farmers for purchase of pumps. Identity or capacity of the farmers to advance loan had not been doubted. Ultimately pumps were sold to these farmers, after receipt of full consideration. The AO did doubt the genuineness of the credit entries but having regard to the criteria laid down by High Courts and Supreme Court to prove cash credit, it is without justification. The finding of the AO was not based on any material, much less the statement of the farmers produced at his instance and recorded by him on oath. The Judicial Member, in the proposed order, raised question which did not arise on the material on record

Members do not agree even on the question to be referred to Third Member – There is very acrimonious and unfortunate correspondence between the two Members as to which question should be referred u/s 255(4) of the Income-tax Act. The Members did not agree to refer a common question to resolve the stalemate in spite of advice of the seniors to refer a common question on the facts of the case without highlighting any finding of fact arrived at by any particular Member. No effective result could be reached and there was no agreement on common question:AGRA ITAT (THIRD MEMBER);

2009-TIOL-85-ITAT-DEL.pdf

ITO, New Delhi Vs M/s MGF (India) Limited (Dated: December 19, 2008)

Income Tax - Assessee filed IT return claiming a refund - Refund alongwith interest under section 244A issued to the assessee within the prescribed time - Assessments done u/s 143(1)(a) and demands raised on assessee - CIT(A) reduced demands - ITAT further reduced assessee's liability - CIT(A) allowed assessee's demand of interest on interest - Held, that there was no error in the computation of the interest under section 244A made by the assessing authority on the refund of the taxes collected at the time of payments of the refund - Simple interest as provided under section 244A having been found to be paid to the assessee well within the statutory period prescribed under the Act, no further interest is liable to be allowed - revenue's appeal allowed.:DELHI ITAT;

2009-TIOL-84-ITAT-BANG.pdf

Karnataka Bank Limited Vs ACIT, Mangalore (Dated: November 21, 2008)

Income Tax – Sec 36(1)(vii)- disallowance of bad and doubtful debts - CIT(A)  allows the claim of the assessee with respect to broken period interest on government securities - Held, the issue stands covered in favour of the assessee as considered by the CIT(A) following the decision of the Tribunal in assessee's own case. CIT(A) order upheld

On the issue of claim of deduction under the proviso to section 36(1)(vii)(a), claim of doubtful or loss of assets - Held, as no controverting material has been brought on record, the issue stands covered by the decision of the Tribunal in assessee's own case and held against the assessee, therefore stands dismissed.:BANGALORE ITAT;

2009-TIOL-83-ITAT-BANG.pdf

DCIT, Bangalore Vs M/s GERB Vibration Control Systems Pvt Ltd (Dated: October 31, 2008)

Income Tax Act – Bad Debts – Section 36(1)(vii) - after the amendment to Section 36(1)(vii) w.e.f. 1.4.1989, it is no longer the burden of the assessee to show that the debt became bad in the relevant previous year and it is sufficient if the debt is written off in the assessee's accounts as irrecoverable

The assessee raised a new plea before ITAT that the amounts written off actually represented retention monies in most of the cases, which were not to be considered as assessee's income on the strength of certain judicial precedents were in it has been held that the retention monies retained by the clients do not accrue as income the before the satisfactory completion of the contract and, therefore, cannot be assessed as the assessee's income during the period when the contract is yet to be completed and certified to have been satisfactorily completed – Held, that there are two diametrically opposite situations - in the case of retention monies, the very accrual of income is under challenge, whereas in the case of a bad debt, the accrual of income is admitted but deduction is claimed due to the irrecoverability of the income – Held therefore, that an entirely new dimension has been given to the case by the assessee for which the necessary facts are not on record, in the interests of justice matter set aside to the AO.:BANGALORE ITAT;

settlement.pdf

Vacancy in Customs & Excise Settlement Commission;

SERVICE TAX SECTION

2009-TIOL-221-CESTAT-DEL.pdf

CCE, Jalandhar Vs M/s GNA Sons (Dated: January 6, 2009)

ST - Management Consultant - assessee enters into two companies to allow them to use trademark - receives royalty - no evidence to indicate that the assessee provided any management consultancy service - demand not sustainable:DELHI CESTAT;

2009-TIOL-220-CESTAT-DEL.pdf

M/s Jaipuria Infrastructure Developers Pvt Ltd Vs CST, New Delhi (Dated: December 19, 2008)

ST - Construction of residential and commercial complex - assessee is a developer - Revenue alleges assessee collected more tax from flat allottees than the tax paid by contractors - also makes allegation that the contractors paid tax on the cost price of flat whereas the tax was colllected from buyers at sale price - pre-deposit of Rs 30 lakh ordered:DELHI CESTAT;

2009-TIOL-219-CESTAT-DEL.pdf

M/s Secure Meters Ltd Vs CCE, Chandigarh (Dated:December 19, 2008)

ST - royalty payment to non-resident company - Demand relating to period prior to 1.1.2005 is not sustainable in view of Larger Bench decision in the case of Hindustan Zinc Ltd:DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-224-CESTAT-MUM.pdf + mrp story.pdf

M/s SAF Yeast Co Pvt Ltd Vs CCE, Pune II (Dated: January 12, 2009)

MRP assessment – Authorities under the Central Excise Act have no jurisdiction to question the correctness of the decision of the State Government in matters pertaining to the SWAMs Act, 1976 – Prima facie case – Pre-deposit dispensed and Stay granted by Tribunal.

“Fresh and dry Yeast” cleared in a 10 Kg. packing carton consisting of 20 units of 500 gm. Cakes and Central excise duty discharged by valuing goods under Section 4 of the CEA' 1944 – Revenue seeks assessment under Section 4A of the CEA'44 and demands duty of Rs.1.87 crores plus penalty and interest although under the criminal proceedings initiated under the Standards of Weights and Measures Act, 1976, in appeal the State Government has held that there is no need for affixing MRP on such packs. 

Prima facie conclusion is that the applicability of Sec. 4A is dependent upon the applicability of the said Standards of Weights and Measures Act, 1976. 
Authorities under the Standards of Weights and Measures Act, 1976 having held that no MRP is required to be affixed on the product in question, the revenue's insistence that the same should have been affixed and the goods should have been assessed under Sec. 4A cannot, prima facie, upheld at this stage. 

Condition of pre-deposit of duty, penalty and interest dispensed with and Stay petition allowed by Tribunal.:MUMBAI CESTAT;

2009-TIOL-223-CESTAT-MAD.pdf

M/s Guru Bangaru Plastics Vs CCE, Chennai (Dated: December 4, 2008)

Central Excise – Penalty under Rule 25 of the Central Excise Rules 2002 – when equal penalty is imposed under Section 11AC of the Central Excise Act' 1944, no penalty needs to be imposed under Rule 25 of the Central Excise Rules, 2002.:CHENNAI CESTAT;

2009-TIOL-222-CESTAT-MAD.pdf

M/s ARK Enterprises (P) Ltd Vs CCE, Salem (Dated: December 2, 2008)

Central Excise – Appeal – condonation of delay – delay of 16 days beyond the time limit of 60 days to file appeal before the commissioner (A) – It was not categorically established that the ground advanced was manipulated by the appellants – rejection of COD would tantamount to denial of substantive justice – matter remanded to the Commissioner (Appeals) to decide the case on merits.:CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08cir058.pdf

Ban on import of toys from China: DGFT clarifies ban to apply to toys originating from China but may be shipped from other ports ;

dgft08not084.pdf + dgft08pn142.pdf

DGFT amends HoP to extend VKGUY Scheme benefits to many other agri products and fish products;

CASE LAWS

2009-TIOL-65-HC-MAD-EXIM.pdf + dgft story.pdf

Rich Source International Vs Additional Director General Of Foreign Trade (Dated: January 9, 2009)

Foreign Trade policy - The grant of licence is based on the correctness of the contents of the application and it should satisfy all the requirements of the scheme and other applicable provisions of law. – Supporting manufacturer's name not correct – cancellation of licence correct :- The grant of licence is based on the correctness of the contents of the application and it should satisfy all the requirements of the scheme and other applicable provisions of law. When a scheme is available, that should be extended to a person who satisfies the requirement of the scheme. Therefore, the concept of grant of licence under a scheme as well as the Foreign Trade Policy and the circular has to be interpreted in order to achieve the object of providing the benefit under the scheme to the deserving persons.

In the instant case, it is seen that both the original authority as well as the appellate authority have exercised their powers in accordance with law and fairly and reasonably considered the policy decision and the petitioner's entitlement of the benefits under the scheme. They have considered all the relevant factors and exercised their powers and discretion in such a manner as those eligible alone are benefited under the scheme. The petitioner herein has not proved her case for entitlement of the benefit under the DFIA scheme and the authorities have rightly looked into the matter and accordingly cancelled the DFIA licence granted to the petitioner.:MADRAS HIGH COURT;

2009-TIOL-218-CESTAT-MAD.pdf

Jeetendra Shah Kozy Silks P Ltd Vs CC, Chennai (Dated: September 4, 2008)

Customs – DEEC scheme - non-fulfillment of export obligation and violation of conditions of Notification No 80/95 Cus – penalty under Section 114 A is not leviable in absence of ingredients for imposing the same – penalty on the Managing Director under Section 112 upheld, but quantum of penalty reduced.:CHENNAI CESTAT;