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Lok Sabha to discuss Satyam fraud tomorrow; Advani for judicial investigation; Implementation of revised pay-scale of teachers: HRD Ministry clarifies notification already issued by Central Govt; ACC shifts Dileep Raj Singh Chaudhary from DIPP to Home Ministry as Addl Secretary; Fuel price cut brings down inflation to 4.39%; DGCA asks airlines to furnish info about recent hike in airfare and transparency in advertising ; Industrial production becomes negative; April-Dec, 2008 growth rate down to 3.2%; Aviation Minister warns private airlines against cartelisation; CBI books cases for illegal export of shahtoosh shawls; arrests Naval officer for accepting bribe; Govt exempts newsprint and uncoated paper used for printing newspapers from Customs duty; Govt allows facsimile edition of Wall Street Journal in India; |
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| Dear Member, Sending the following files: |
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Customs Duty on Zinc/Copper slag, ash reduced to 5%; Growth as panacea for all economic ills - Will Interim Budget go for 'direct tax' approach to perk up demand? ITAT Appeal Filing procedure.pdf New procedure for filing of appeals; DGCA asks airlines to furnish info about recent hike in airfare and transparency in advertising ; Industrial production becomes negative; April-Dec, 2008 growth rate down to 3.2%; Nath says India to remain fastest growing economy in world; Aviation Minister warns private airlines against cartelisation; CBI books cases for illegal export of shahtoosh shawls; arrests Naval officer for accepting bribe; Govt exempts newsprint & uncoated paper from Customs; |
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Vacancies For Member AAR Income Tax.pdf Selection for the post of Member in the Authority for Advance Rulings ( Income Tax) –reg.; CASE LAWS 2009-TIOL-69-HC-DEL-IT.pdf + hc story.pdf CIT Vs M/s Jindal Exports Limited (Dated: February 6, 2009) Income tax - MAT Credit u/s 115JAA - Revenue takes the view that interest under Ss 234B and 234C to be charged before any set off of MAT Credit available to the assessee is set off against the tax payable on total income - also argues that credit can be allowed before levying interest only from 1/4/2007 after an amendment was made in the relevant Sections vide Finance Act, 2006 - Assessees take the stand that the amendments are only clarificatory in nature and are very much applicable to previous assessment years as well - Tribunal holds rectification could not be made by the Assessing Officer under Section 154 as the issue regarding charging of interest under Section 234-B of the Act without giving set off of MAT credit available to the Assessee was highly debatable - held, interest under sections 234B and 234C is to be charged only after the tax credit (MAT credit) available under section 115JAA is set off against tax payable on the total income of the year in question. ++ Even without the amendment, the law mandated that the set off of MAT credit against tax payable was to be allowed before calculating any interest payable. And the simple logic is that the MAT credit is nothing but tax paid in advance and it is a kind of advance tax which stands paid even on the first day of a new Financial Year or even before any income is earned in a Financial Year. Since the law mandates that the excess tax paid U/s 115JAA is carried forward to subsequent years and credit can be taken by the assessee, it is explicitly clear that the credit is available against such excess payment made in advance. And when tax is already paid in advance there can be no question of levying interest on short payment of advance tax and then allowing credit against the total sum of liability. ++ It is a well settled view that interest under Ss 234A, 234B and 234C are compensatory and not penal in nature. And the question of compensation arises only when what is due to the excheque is delayed or not paid and there is an apparent loss to the excheuqer. Under such circumstances the assessee is liable to compensate the revenue. But in this case it was found that leave aside the question of paying less or delayed payment of advance tax, the MAT Credit is a payment made by the assessee to the exchequer so much in advance that it stands paid even on the first day of a FY. Such a credit stands firm on the first day of a FY much to the credit of a taxpayer that it has more than compensated the exchequer by paying tax in advance through the MAT route even before any taxable income is generated.:DELHI HIGH COURT; 2009-TIOL-102-ITAT-DEL.pdf + italy story.pdf M/s Saipem SPA Vs CIT, Dehradun (Dated: November 20, 2008) Income tax - India-Italy DTAA - assessee is a non-resident - engaged in drilling operations - claims deduction of direct expenses under DTAA and then pays 10% tax of net receipts after deducting 90% of receipt as general and administrative expenses - AO allows but CIT invokes powers under Sec 263 - held, ++ On the basis of these clauses of Article 7 of DTAA, one may understand the decision of the Assessing Officer regarding allowing of deduction of certain expenses but on what basis, he has accepted the claim of the assessee that the income of the assessee is only 10% of such net receipt, is not understandable because there is no basis pointed out in the computation of income filed by the assessee or in the assessment order regarding adopting of 10% of net receipts as income of PE. ++ The Assessing Officer in fact has followed the provisions of Article-7 of DTAA between India and Italy as well as the provisions of section 44BB because the Assessing Officer has allowed deduction of expenses on the basis of article 7 of DTAA and has assessed the income of the assessee at the rate of 10% of net receipt by following the provisions of section 44BB. ++ If income is assessed as per the provisions of DTAA then the DTAA is to be applied in full. As per the DTAA, deduction has to be allowed to the assessee of actual expenses which are incurred for the PE. But there is no basis to accept the claim of the assessee that income of the PE is only 10% of net receipt after deducting the direct expenses incurred by the assessee on account of contractual payments, professional payment and salary payment. If this is accepted, it amounts to accept that 90% of such net receipt is expenses incurred by the assessee on account of executive and general administrative expenses and that too without any detail thereof. This is not acceptable. ++ As per section 44BB, it is deemed that 90% of gross receipt is expenses and only10% is income liable to tax without requiring the assessee to furnish any evidence for such expenses. If the assessee can show that such expenses are more than 90%, he may do so by complying with the requirements about maintaining of books under section 44AA and audit u/s 44AB. ++ Rule of consistency: When there are two permissible methods as per law and one of these two methods was followed by the Department in earlier years, then in the subsequent year, the Department cannot turn around and adopt the other method but when the method adopted in the earlier years is not in accordance with law, it cannot be said that by following the rule of consistency, the same method should be adopted in spite of coming to knowledge that this method is not in accordance with law.:DELHI ITAT; Shri Sayermal K Jain Vs DCIT, Mumbai (Dated: September 30, 2008) Income Tax - search and seizure - Revenue alleges bogus advertisement expenses - assesses commission @ 3% in the hands of assessee's brother - also makes additions for different assessment years as unexplained credit in the bank account and on account of cash found on the date of search, besides household expenses for several years - The CIT(A) confirms certain additions but deletes the addition made on account of household expenses and addition made on protective basis - Held, no addition can be made on protective basis as the block assessment has to be based on the material found either in the course of the search or in the course of the post-search investigation. CIT(A) order upheld. DCIT, Bangalore Vs Shri Vijay Dharam Singh (Dated: August 14, 2008) Penalty u/s 271(1)© - Mere omission of an item of receipt – No concealment - Effect of sec. 271(1B) discussed. At the end of the assessment order it is mentioned “ penalty u/s 271(1)© initiated separately ”. This will amount to giving direction to initiate penalty proceedings and in view of sec. 271(1B) this satisfies the condition of recording satisfaction during the course of the assessment proceedings. No clear cut finding in the penalty order that the assessee has concealed income or furnished inaccurate particulars. “Concealment” inherently carries with it the element of mens rea and mere omission of an item of receipt from the income cannot amount to concealment and deliberate furnishing of inaccurate particulars of income, unless and until there is some evidence to show or circumstances are found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid levy of tax thereon. Decision of Supreme Court in the case of K.C. Builders ( 265 ITR 562 ), Dilip N. Shroff When there is a doubt as to the assessability of a receipt it cannot be stated that by not including the same in the returns, the assessee concealed its income or furnished inaccurate particulars thereof. Source for capital introduced during the year was never called for by the AO and even in the penalty order AO did not demonstrate as to how it amounts to income of assessee. Since tax was deducted at source form salary income and such deducted amount paid to Govt. account by the deductor, omission to declare salary income in the return is not material and does not warrant imposition of penalty.:BANGALORE ITAT; |
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| SERVICE TAX SECTION 2009-TIOL-261-CESTAT-DEL.pdf + coaching story.pdf M/s Vigyan Gurukul Vs CCE, Jaipur (Dated: January 15, 2009) ST - Commercial Coaching and Training Service - assessee provides coaching services - Revenue authorities search the premises and find parallel registers of fees being maintained by the assessee - Revenue disallows discounts shown against fees collected from certain students and also includes the sum collected as private tuition fees by partners of the institute in the gross amount liable to tax - also includes the sum collected out of sale of forms and prospectus - assessee argues the partners are reputed professionals in their own respective subjects and gave private tuitions at home - Held, since the assessee maintained student-wise payment register which shows no discount, it is a reliable document for raising demand - since partners fail to prove that they provide private tuitions at home and also sale of prospectus, such sums are also includible in the gross amount chargeable to tax - however, penalty under Sec 76 reduced and penalty under Sec 78 set aside :DELHI CESTAT; CCE, Indore Vs M/s Ranbaxy Lab Services (Dated: January 16, 2009) ST - Business Auxiliary Service - Assessee collects samples of pathological samples from patient for testing by Ranbaxy - Revenue raises demand under BAS - assessee contends that what they collect is their margin money and they have principal to principal relationship with Ranbaxy - Commissioner(A) finds that the assessee had entered into a contract with Ranbaxy and collected samples only to be forwarded to the lab for testing and will not be covered under the BAS - since the 10% commission referred to by the Revenue is for market development, there is no reason to interfere with the Commissioner(A) order - Revenue's appeal rejected:DELHI CESTAT; M/s A S Patel Vs CST, Ahmedabad (Dated: December 30, 2008) ST - Commercial Coaching Service - assessee is a technical person - does teaching himself - Demand raised - assessee pays tax with interest before issue of show cause notice - pleads penalty is not imposable as he was not aware of tax laws - Given that the assessee is a teacher and does not have an organisation to either provide coaching or to support him, it is a fit case for invocation of Sec 80 - Assessee's appeal allowed:AHMEDABAD CESTAT; M/s Trichy Construction Company Vs CCE, Trichy (Dated: December 16, 2008) Service Tax – Commercial or Industrial Construction Service - Stay /Dispensation of pre-deposit – The nature of the contract entered into between the appellants and their clients is “works contract” as seen from the assessment order passed by the commercial tax officer. Therefore, prima facie, it is only with effect from 1.6.2007 that the value of service in works contract became liable to service tax. As the appellants have paid service tax for the period after 1.6.2007, waiver of the pre-deposit of the service tax imposed as well as interest and penalties imposed by the Commissioner and stay recovery is granted. ( Para 2):CHENNAI CESTAT;
M/s Rajam Tex Vs CCE, Salem (Dated: January 21, 2009) Central Excise – Condonation of delay – Sufficient cause existed to condone the delay of 12 days in filing the appeal beyond sixty days period provided in Section 35(1) of the Central Excise Act. Matter remanded to the lower appellate authority to decide the case on merits. ( Para 5):CHENNAI CESTAT; M/s Dalmia Cements (Bharat) Limited Vs CCE, Trichy (Dated: December 8, 2008) Central Excise – exemption under Notification 4/2006 CE to Cement cleared to industrial / institutional buyers – the appellants are eligible for exemption under Notification 4/2006 CE. :CHENNAI CESTAT; M/s Techno Economic Services Pvt Ltd Vs CCE, Mumbai-III (Dated: September 12, 2008) Central Excise – Wrong availment of MODVAT credit on inputs used in exempted products subsequently exported – Prima facie case in favour of appellants in view of Division Bench decision in Asha Industries Vs . CCE, Nagpur [2007-TIOL-1507-CESTAT-MUM ] – Pre-deposit of penalty and interest waived and recovery stayed:MUMBAI CESTAT;
CUSTOMS SECTION NOTIFICATION Govt exempts newsprint and uncoated paper used for printing newspapers from Customs duty; CASE LAWS 2009-TIOL-257-CESTAT-MUM.pdf + drawback story.pdf M/s Gurnani Metals Pvt Ltd Vs CC, Nashik (Dated: December 3, 2008) Preamble to the O-in-A cites wrong appellate authority – Drawback claims rejected by Commissioner(A) – Appeal lies before Joint Secretary (Revision Application) and not before Tribunal. No fault of appellant - Registry directed to transfer case papers to Joint Secretary (Revision Application), New Delhi.:MUMBIA CESTAT; |
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