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Income tax - Is Surcharge applicable even in cases of searches conducted prior to 1.6.2002 (Look for SC decision tomorrow) Interim Foreign Trade Policy on Feb 26: Nath all set to go for major procedural simplifications; Annual Plan size for Bihar for current fiscal fixed at Rs 16000 Cr; CBEC Chairman to inaugurate Central Excise Day at Teen Murti Audi tomorrow; Is film screening by a theatre taxable service? CBEC clarifies; India makes history - A R Rahman wins two Oscars + Resul Pookutty wins one; Slumdog Millionaire bags 8 Oscars; India has Rs 78000 Cr unspent foreign aid but paying commitment charges; Labour Conference calls for task force to review Contract Labour Act; OECD Development Report calls for rebalancing of world economy; India proposes to provide training to Bangladesh MP; Satyam Board decides to fire PwC and invite bids from strategic investors; India invited to G-20 summit on economic meltdown; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Amma Jayalalithaa in Trouble just before the elections – Loses Criminal case petitions on Wealth Tax; SEZs get away without payment of service tax! Rule 8D of Income Tax Act: Prospective or Retrospective? Annual Plan size for Bihar for current fiscal fixed at Rs 16000 Cr; Is film screening by a theatre taxable service? CBEC clarifies; Govt prepares National Biodiversity Action Plan; EPF Board recommends 8.5% interest rate for fiscal 2008-09; OECD Development Report calls for rebalancing World economy; Labour Conference calls for task force to review Contract Labour Act; |
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INSTRUCTION + NOTIFICATION Utilization of information in the Annual Information Returns (AIRs) relating to financial year. 2007-08 (Assessment year 2008-09) and subsequent years - reg. Corrigendum; Income Tax Department Administrative Officers (Group “A” and “B” posts), Recruitment (Amendment) Rules, 2009; CASE LAWS 2009-TIOL-86-HC-MUM-WT.pdf + ambani story.pdf Smt Smitaben N Ambani Vs CWT, Bombay City (Dated: January 16, 2009) Amount Deposited under the Compulsory Deposit Scheme is an asset under Wealth Tax; in the case of a compulsory deposit, unlike an annuity the amount invested becomes a part of the capital and under the scheme, a fixed proportion of this very capital was to be repaid Income Tax refund applied for is not asset; merely because the refund is claimed in a return, the amount of refund claimed does not become payable to the assessee. The claim for refund has to be assessed when the assessment of the return is done by the Assessing officer. He may refuse or reduce the claim. Till he performs this exercise, the refund, if any, remains an unquantified sum. For valuing self occupied property, Municipal rateable value may be adopted instead of standard rent: it is clear that in the case of self occupied property, the valuation of a house for the purpose of Wealth-tax is to be calculated on the basis of gross maintainable rent which is the sum for which the house might reasonably be expected to let from year to year. As far as rateable value is concerned, under the various Acts that govern Municipalities/Municipal Corporations rateable value is also calculated on the basis of reasonable rent that the property may fetch.: BOMBAY HIGH COURT; 2009-TIOL-122-ITAT-AGRA-TM.pdf + tm story.pdf M/s Vinod Kumar Rai Vs CIT, Gwalior (Dated: November 21, 2008) Intimation under section 143(1)(a) of the Act cannot be sought to be revised under section 263 of the Act – After intimation is issued u/s 143(1), the AO had full power to issue notice u/s 143(2) and make a regular assessment in terms of Section 143(3). The AO can also proceed where provisions of Section 147/148 are applicable. The DR. could not satisfy as to why provisions were not applied in this case. It was her opinion that time to invoke above provisions had expired and perhaps for that reason, proceedings u/s 263 were taken. When two reasonable views are possible, the view which is favouring the assessee has to be taken: various High Courts in India are not unanimous whether provisions of Section 263 are applicable where only intimation u/s 143(1) has been issued, whether such intimation is in order or assessment to attract provisions of Section 263. For the time being, it is clear from record that two reasonable views of the matter are possible. In such a situation, it has been laid down by Supreme Court in umpteen number of cases that the view which is favouring the assessee has to be taken. Members do not agree on the issue to be referred to Third Member even after acrimonious correspondence – the Members could not agree on the question which should be referred u/s 255(4) of the I.T.Act . There is unfortunate and acrimonious correspondence between the two learned Members on the question to be referred. However, no decision could be reached between the members and, ultimately, both the Members were transferred out of Agra Bench. The Registry, therefore, noted that this file was pending for disposal and sent the file to the President for disposal.:AGRA ITAT (THIRD MEMBER); GE India Exports Private Limited Vs DCIT, Bangalore (Dated: January 30, 2009) Income tax - Sec 10A/10B - assessee is into business of manufacture and sale of electrical control equipment and project-related software - AO concludes assessment u/s 143(3) but CIT invokes Sec 263 and calls for setting off carried forward losses before allowing exports benefits - held, issue is no longer res integra as carried forward loss of non-10A units cannot be set off against export income as benefit u/s 10A is to be allowed at source level before computing total income - assessee's appeal partly allowed:BANGALORE ITAT; Emeerson Network Power India Pvt Ltd Vs ACIT, Thane (Dated: November 24, 2008) Income Tax - Assessee Company files a revised return claiming exclusion of retention money from total income which was not claimed in original return - AO negatives the contention on both technical grounds as well as on merits - CIT(A) confirms AO's order - Accounting Standards issued by ICAI specifically mentions that revenue should be recognized when the seller has the property in goods to the buyer for a consideration and the transfer of property in goods, in most cases, results in or coincides with the transfer of significant risks and rewards of ownership to the buyer except if there exists uncertainties regarding the ultimate collection that the recognition of revenue can be postponed - Held, all the accounting concepts/principles i.e., consistency, periodicity, accrual and matching work together for income measurement and recognition of the assets and liabilities and profit - Assessee's appeal dismissed.:MUMBAI ITAT; |
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| SERVICE TAX SECTION CIRCULAR Service tax on movie theatres-reg; CASE LAWS M/s Aditya Birla Nuvo Ltd Vs CCE, Bhavnagar (Dated: January 16, 2009) ST - Cenvat Credit - assessee claims credit for tax paid on merger charges, charges for issuance of NOC, annual custody fees and maintenance of fax machine - Revenue disallows - held, the definition of input service has been expanded by using the words ''and includes'' and enumerates all the services which are directly and indirectly relatable to manufacture - Commissioner(A) order confirming Revenue's order not sustainable - Assessee's appeal allowed :AHMEDABAD CESTAT; M/s Chandigarh Vayu Bharti Co-Op Society Vs CCE, Chandigarh (Dated: November 28, 2008) ST - Refund - appellant is a service recipient of construction of residential flats for personal use of society members - Under Sec 11B, the service recipeint can also file refund claim but there is no specific finding on whether the appellant is eligible for the refund - case remanded for passing speaking order :DELHI CESTAT; M/s Praspack Vs CCE, Ahmedabad (Dated: February 6, 2009) ST - assessee is a sub-contractor - Demand raised - assessee pleads the contractor has paid tax on the services rendered by the assessee and any payment of tax on the same service would amount to double tax - Commissioner(A) declines to grant stay for lack of pre-deposit - Stay granted but case remanded for passing an order on merit:AHMEDABAD CESTAT; M/s Mahendra Sponge & Power Pvt Ltd Vs CCE, Raipur (Dated: January 9, 2009) ST - Cenvat credit for tax paid on GTA - Credit availed on strength of TR-6 challan - Revenue disallows on the ground that before 16/6/2005 the TR-6 challan was not a valid document - Issue is already decided in favour of the assessee by the Tribunal - Assessee's appeal allowed:DELHI CESTAT; M/s JRS Tutorials vs CCE, Allahabad (Dated: December 31, 2008) ST - Coaching service - Demand raised for payment received prior to 1.7.2003 but service provided thereafter - Issue is settled by Tribunal's decision in Krishna Coaching Institute and the demand was confirmed and cum-tax benefit extended - Assessee's appeal dismissed:DELHI CESTAT;
2009-TIOL-326-CESTAT-AHM.pdf + cx story.pdf M/s Union Quality Plastic Ltd Vs CCE, Vapi (Dated: February 6, 2009) Central Excise – limitation - Show Cause Notice issued after six months after investigation is completed – referred to Larger Bench :AHMEDABAD CESTAT; CCE, Madurai Vs Rajalakshmi Paper Mills Ltd (Datd: October 14, 2008) Central Excise – CENVAT – Removal of used capital goods – capital goods cleared after use for about 8 years by the assessee, the impugned goods are not capital goods “as such - Rule 3 (5) of the CENVAT Credit Rules, 2004 applied only to capital goods removed ‘as such' and not to the used cenvated capital goods. No need to reverse the credit originally availed. Appeal dismissed. ( Para 3):CHENNAI CESTAT; M/s Rama Newsprint And Papers Ltd Vs CCE & CC, Surat-II (Datd: November 21, 2008) Central Excise – Credit reversal for inputs used in manufacture of exempted final products does not attract Rule 6 (3) (b) – Larger Bench decision in Nicholas Piramal ( India ) Ltd [ 2008-TIOL-1877-CESTAT-MUM-LB ] followed:AHMEDABAD CESTAT; CCE, Kanpur Vs M/s Jagmini Micro knit Pvt Ltd (Datd: November 27, 2008) Central Excise – CENVAT Credit not deniable for HSD procured by 100% EOU against CT-3 for generation of electricity for captive consumption subsequent to withdrawal of warehousing facility – When EOUs do not claim reimbursement of Terminal Excise Duty they are eligible for CENVAT Credit under Notification 18/2004-CE (NT):DELHI CESTAT;
CUSTOMS SECTION 2009-TIOL-87-HC-DEL-CUS.pdf + hc cus story.pdf Jasjeet Singh Marwaha Vs UoI (Dated: February 13, 2009) CHA licence can be suspended for violation of Customs Act; the licence of a CHA can be suspended where there is a violation of the provisions of the Act or imposition of penalty, the power of suspension of licence is not confined to only those situations where there is a violation of the CHALR , 2004 Regulation. Statement under the Customs Act can be used to suspend CHA; the CHA's licence can be suspended based on the confession made under Section 108 of the Act provided it is voluntary and the statement is truthful and is not the result of such inducement, threat or promise as mentioned in Section 24 of the Indian Evidence Act, 1872. CHA acting on behalf of the importer has an obligation to ensure that entries made in the Bill of Entry are correct. since a CHA acts on behalf of the importer, it is not only his obligation to ensure that the entries made in the bill of entry are correct but also that a true and correct declaration of value and description of goods is made, and in the event of any infraction such as mis -declaration, he can be penalized under the Regulation 20 of CHALR , 2004 if it results in a misconduct which is of the nature which renders him unfit to transact the business of a CHA, at the Customs Station.:DELHI HIGH COURT; Brakes India Ltd Vs CC, Chennai (Datd: November 27, 2008) Customs – import of Non-alloy steel melting scrap - Pre-shipment inspection certificate issued by an agency having its branch in Malaysia which branch has not been specified in Hand Book of Procedures – Since the Agency at Rotterdam figures in the HBP who also issued pre-inspection certificate, penalty under Sec 125(1) and 112(a) set aside.:CHENNAI CESTAT; 2009-TIOL-319-CESTAT-BANG.pdf + Jai Hind Overseas story.pdf M/s Jai Hind Overseas Vs CC, Cochin (Dated: August 22, 2008) Customs – Goods originally cleared accepting the transaction value cannot be re-assessed without challenging original assessment – When contemporaneous imports are different in quantity & quality, transaction values not comparable – Impugned order not legal and proper, liable to be set aside :BANGALORE CESTAT; |
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