Laloo proposes 43 new trains; cut in pax fare and freight rate (See 'Common Basket')

Tribunal Members - What is their Pay Status? (See 'DDT')

Long distance train fare: 2% cut in fare of second class + 3AC fare & Chair Car;

Bullet Train: Feasibility Study for many projects underway;

Laloo Prasad 'politician' running fast like his rail to remain where he is! (Read our Edit);

Railway to invest three times more than 10th Plan during 11th Plan;

Railways has Rs 90,000 Cr cash surplus, claims Laloo;

Plane crash in New York suburb Buffalo; About 50 pax feared dead;

Air fare hike: MRTPC begins probe;

Satyam an aberration in System, says Minister in House;

Fodder Scam: CBI Court sentences six govt officials and four others to RI;

TIOL COMMENTARY

ddt 13 Feb.pdf

Foreign Trade Policy – FMS - Acceptance of Tracking Report – DGFT Clarifies;

edit.pdf

Laloo Prasad 'politician' running fast like his rail to remain where he is!

MIXED BASKET

rail story.pdf + rail_speech.pdf

Laloo proposes 43 new trains; cut in pax fare and freight rate;

rbi08cir051.pdf

Opening of Diamond Dollar Accounts – Liberalisation;

mbuzz0160.pdf

43 new trains including four Garib Raths introduced;

mbuzz0159.pdf

Rail fare cut by 2% across board; tally of accidents diminishing;

mbuzz0158.pdf

Pre-feasibility study to run multiple Bullet trains being done;

mbuzz0157.pdf

Air Force modernisation spurs growth of aero space industry: Air Chief Marshal;

mbuzz0156.pdf

Fodder Scam: CBI Court sentences six govt officials and four others to RI;

2009-TIOL-71-HC-MUM-IT.pdf

Sinhgad Technical Education Society Vs Mr P L Pathade (Dated: January 30, 2009)

Income tax - Writ - assessee is a registered trust u/s 12A - Revenue searches premises of the main trustee and seizes huge cash - Revenue makes huge additions on the basis of seized documents indicating receipt of donations and the same being not entered into books in violation of Sec 13(1)(c) - CIT(A) orders for huge pre-deposit and fixes the date of final hearing - assessee pleads financial hardship and denies receipt of unaccounted donations - held, the CBDT instruction on putting in abeyance the demand if the same is doubled in assessment proceedings is not applicable where the income of the Public Trust is found to have been siphoned of in gross violation of Section 13(1)(c) of the Act. However, the interest of justice would be met if the assessee furnishes a bond of Rs 1.5 Cr and will not seek adjournment to the final hearing already fixed :BOMBAY HIGH COURT;

2009-TIOL-70-HC-MUM-IT.pdf

CIT, Goa Vs M/s Sesa Goa Ltd (Dated: December 11, 2008)

Income tax - Sec 36(1)(ii) - assessee claims deduction for payment of customary bonus paid over and above the normal bonus - Revenue disallows - Tribunal upholds CIT(A) order allowing the deduction - held, since such a payment is customary and is linked to festivities and the same being a finding of fact, it does not call for interfence - Revenue's appeal dismissed:BOMBAY HIGH COURT;

2009-TIOL-104-ITAT-PUNE.pdf + tp story.pdf

Honeywell Automation India Ltd Vs DCIT, Pune (Dated: February 10, 2009)

Income Tax – Transfer Pricing – in the OECD guidelines, it is permissible to take profit of similar transaction or enterprises not only of the period under consideration, but also for next or previous year or take the average of such profit. This, however, is not permitted under the Indian Regulations on Transfer Pricing. For the relevant financial year in which the international transaction took place, is to be considered for comparability analysis. Under the proviso, data for period not being more than two years prior to financial year in which international transaction was entered, may also be considered, if such data reveals facts which could have an influence on the determination of transfer prices. Under the proviso, there is no scope to consider data for a subsequent assessment year. The assessee has not been able to reveal any facts to bring the case within the above proviso. Admittedly, Wellwin Industry Ltd. in the period prior to the financial year under consideration had shown profit and same was taken into consideration for determining arm's length price for the assessment year 2003-04. However, its accounts for the period ended 31.3.2004 are not available and, therefore, could not be taken for working mean margin of profit.

The Tribunal should not be prevented from considering questions of law arising in assessment proceedings, although not raised earlier. Tribunal therefore, permitted the assessee to raise alternative ground of appeal on question of deduction of provision for future loss debited in the profit and loss account. The Tribunal opined that consideration of above debit entry is fundamental to computation of correct profit margin of the enterprise. As the question was not raised by the taxpayer before the revenue authorities and was neither examined by the taxpayer nor by TPO , ITAT set aside impugned orders and directed that above question be examined in accordance with law and profit margin of the taxpayer be determined as warranted by facts and circumstances of the case.:PUNE ITAT;

2009-TIOL-103-ITAT-DEL.pdf + rolls story.pdf

M/s Rolls Royce Plc Vs DCIT, New Delhi (Dated: January 30, 2009)

Income tax - Miscellaneous petition - India-UK DTAA - assessee is a non-resident company - business connection - has a PE and also a dependent agent in India - Tribunal has already held that the income attributable to the PE is taxable in India - Assessee pleads that although the Tribunal has held so but since the assessee maintains no separate account for its Indian operations, how to arrive at the correct profit figure has not been spelt out in the order - seeks deduction for net of R & D expenses - held, the assessee's activities in India are in the form of marketing and sales. Therefore, all the expenses incurred till the marketing are to be reduced. The research and development activities which result into loss to the assessee and admittedly not being carried out in India is to be ignored while computing global profits to be attributed to Indian operations. And there is no uniform rule that only 10% of the sales are to be considered as profit attributabe to a PE in India as held by the Apex Court in the case of Annamalais Timber Trust &. Co. case (2003-TIOL-270-HC-MAD-IT )

Assessee pleads the Tribunal had not considered the Apex Court decision in the case of Margan Stanley where the remuneration to the agent was justified by transfer pricing analysis and therefore, no further income could be attributed to the PE and in its case also it has a dependent agent which is remunerated at arm's length basis and the fact that certain adjustments were made in the income of the agent which was brought to tax, hence no further income can be assessed in the hands of the assessee - held,

in the present case the remuneration to the agent does not take into account all the risk taking functions of the non-resident enterprise. For the functions performed by the assessee directly and also the risk assumed by the non-resident in India, no remuneration is payable to the agent in India. The services rendered by agent in India is much more than expected of it in terms of the agreement and obviously for which the agent is not remunerated. Therefore, profit needs to be attributed to the P.E. for those functions/risks that have not been considered. In the order, the Tribunal have also considered that the P.E. in India is not only because of the dependent agent's presence in India but also because of fixed place as per Article 5(1) and also in terms of Article 5(4)(c) of the Treaty. The extinguishment as propounded as per Circular 23 of 1969 or as held by the Supreme Court in Morgan Stanley & Co. Inc ( 2007-TIOL-125-SC-IT ) will apply only where the profit attributable to the non-resident is only to the extent of remuneration payable by the non-resident to the agent. Therefore, the assessment in the present case will not extinguish and the income will be computed on the basis of findings given in the order.:DELHI ITAT;

SERVICE TAX SECTION

2009-TIOL-269-CESTAT-AHM.pdf + godphrey story.pdf

CST , Ahmedabad Vs M/s Godfrey Philips India Pvt (Dated: December 31, 2008)

Service Tax – “Input Services Distributor” is not like a dealer - eligibility or otherwise of the service tax credit has to be examined at the end of input service distributor only. – Matter remanded for determining eligibility ;- The definition of the input service distributor clearly says that he is not merely a dealer. The input service distributor has to be an office of the manufacturer or producer of final products or provider of output service who will distribute the credit to his manufacturing units or service providing units as the case may be.

When we look at the functions of the input service distributor and the documents to be issued by him for passing on the credit, it becomes quite clear that the document issued by him for passing on the credit does not contain the nature of service provided and the details of services. It contains the service provider's details, distributor s details and the amount. Obviously the eligibility or otherwise of the service tax credit has to be examined at the end of input service distributor only.:AHMEDABAD CESTAT;

2009-TIOL-268-CESTAT-AHM.pdf

M/s Ecoplast Ltd Vs CCE, Daman (Dated: January 1, 2009)

ST - Cenvat credit on mobile phone - Revenue disallows on the ground that the assessee fails to establish that the phones were used in relation to manufacture of their final products - held, issue is no longer res integra and credit is available to the assessee - Assessee's appeal allowed :AHMEDABAD CESTAT;

2009-TIOL-267-CESTAT-DEL.pdf

M/s ACE Construction Vs CCE, Jaipur-II (Dated: December 30, 2008)

ST - GTA Service - assessee provides transportation service alongwith loading and unloading of gitties into trucks from limestone mines and unload the same at Railways plot for further loading into railway wagons - Revenue reaises demand for cargo handling service - held, in view of the Board's clarification that if the assessee is registered as GTA service provider and also undertakes incidental work like packing, it is not to be treated as cargo handling service - assessee's appeal allowed:DELHI CESTAT;

2009-TIOL-266-CESTAT-DEL.pdf

M/s Active International Vs CCE, Jalandhar (Dated: November 25, 2008)

ST - assessees pay commission to overseas agent having no office in India - Revenue raises demand - In vew of Larger Bench decision in the Hindustan Zinc Ltd and also Foster Wheeler Energy Ltd, demand raised for period prior to 18.4.2006 is not taxable - assessees' appeals allowed :DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-265-CESTAT-KOL.pdf + kol story.pdf

CCE, Kolkata-IV Vs M/s Fibre Fabricators (Dated: December 17, 2008)

Central Excise – Tribunal has authority to review whether Committee of Commissioners have formed an opinion or not on the legality of orders passed by Commissioners and given adequate reasons for filing appeals – Tribunals are empowered to find if orders are reviewed within stipulated time – Order passed by Co-ordinate bench of Tribunal recalling interim order of Tribunal is per incuriam in view of Apex Court decisions in CCE, Vadodara vs. Rohit Pulp Paper Mills [ 2002-TIOL-666-SC-CX ] and CCE vs. M. M. Rubber Co. [ 2002-TIOL-111-SC-CX ]:KOLKATA CESTAT;

2009-TIOL-264-CESTAT-MAD.pdf

M/s Bharat Steel Rolling Mills Vs CCE, Salem (Dated: November 21, 2008)

Central Excise – penalty – compounded levy – penalty under proviso to rule 96 ZP (3) – the provision did not leave any discretion to the authorities in imposing penalty – challenge against the penalty imposed does not sustain.:CHENNAI CESTAT;

2009-TIOL-263-CESTAT-MAD.pdf

M/s Sandfits Foundries Pvt Ltd Vs CCE, Coimbatore (Dated: October 15, 2008)

Central Excise – refund on account of exempted goods cleared on payment of duty – unjust enrichment – though the appellant had charged the duty the same was not collected from the buyer - refund of the impugned amount will not involve unjust enrichment and that the appellants are entitled to cash refund of the same.:CHENNAI CESTAT;

CUSTOMS SECTION

CIRCULAR

dgft08cir061.pdf

Import of Construction Equipment under EPCG Scheme.;

dgft08cir060.pdf

Acceptance of Tracking Report, duly certified by accredited agent of goods carrier, under FMS and Market Linked Focus Product Scheme;

CASE LAWS

2009-TIOL-262-CESTAT-MAD.pdf

M/s IEE Engg Enterprisers Pvt Ltd Vs CC, Chennai (Dated: October 14, 2008)

Customs – exemption under Notification 25/99 Cus to BOPP films – explanation added to the Notification in 2001 to include BOPP film is clarificatory and has retrospective effect.:CHENNAI CESTAT;