Packaged Drinking water – omitted from Section 4A assessment (See 'DDT')

This Kaliyugi Administration of Justice (See 'Legal Potpourri' Column)

Tax-Recovery actions in foreign countries (See 'Legal Potpourri' Column)

Direct tax mop-up realises almost 71% of Budget Estimates by Feb-end;

Core sector further goes sluggish; grows only by 1.4% in January;

TRAI releases papers on DTH tariff and value-added services;

Govt appoints two on Maytas Infrastructure Board;

Govt in-principle decides to withdraw ban on wheat exports; No change in ban on export of non-basmati rice; Notification to be issued after polls;

UPSC announces Civil Services results ; Interview to commence from March 23;

CBI arrests Telecom Div Manager of BSNL + Branch Manager of LIC in MP in corruption cases;

TIOL COMMENTARY

ddt 6 march.pdf

Service Tax @10% from 24.02.2009 – Costly reduction in tax;

potpourri.pdf

Constitutionality of 'Socialism' is questioned + tax-recovery in foreign countries;

CASE LAWS + Analysis

2009-TIOL-32-SC-CT.pdf + gst story.pdf

State Of Haryana Vs Baldev Spinners Pvt Ltd (Dated: February 25, 2009)

Haryana GST - Withdrawal of Eligibility Certificate for non production of NOC – Valid: 'non-production of NOC / CLU certificate' by itself cannot be a ground for withdrawal as it is not one of the grounds/circumstances mentioned in clause (a) of sub-rule (8). What therefore remains to be considered is whether it can be said that the eligibility certificate was obtained by the respondent by fraud, deceit, misrepresentation, misstatement or concealment of facts.:SUPREME COURT;

2009-TIOL-01-HOL.pdf

Government Of India, Ministry Of Finance (Revenue Division) VsTaylor And Another (Dated: November 23, 24, 25, 29, 1954 & January 20, 1955 )

A company, which was incorporated in England, carried on business  in India. It transferred its undertaking to the Government of India. The purchase price was received and was repatriated abroad. Subsequently a proceeding was initiated by the Indian tax authorities to recover the tax levied on the capital gains which accrued on the transfer. But the company had already gone into liquidation. The Government of India claimed in the voluntary liquidation the taxes already due. The liquidator rejected the claim made.

On appeal by the Government of India, the House of Lords held:

(i) that the courts of a country  do not  enforce the revenue laws of another country, directly or indirectly; and

(ii) ) that a claim for foreign taxes is not a liability which the liquidators of a company in liquidation are bound to  discharge.

MIXED BUZZ

mbuzz0255.pdf

Core sector further goes sluggish; grows only by 1.4% in January;

mbuzz0254.pdf

TRAI releases papers on DTH tariff and value-added services;

mbuzz0253.pdf

Direct tax mop-up realises almost 71% of Budget Estimates by Feb-end;

mbuzz0252.pdf

Silence surrounding violence against women broken: UN Expert;

2009-TIOL-147-ITAT-DEL.pdf + soft story.pdf

DCIT, New Delhi Vs M/s Hero Corporate Services Ltd (Dated: January 16, 2009)

Income tax - assessee operates a BPO unit, a STPI unit and a non-STPI unit - Revised returns filed - AO disallows carry forward loss on the ground that the assessee did not maintain separate accounts for STPI and non-STPI units - held, assessee's balance-sheets clearly show separate accounts of units and given the fact that STPI registration can be granted only on the basis of separate accounts, assessee is allowed to carry forward losses

Assessee has share application money as well as borrowed funds - makes investments in overseas subsidiaries - AO disallows interest expenditure as interest-bearing funds were invested in a business which did not commence in the relevant year - Since the assessee also had share application money the CIT(A) allows proportionate interest expenditure - held, it is not interest-bearing or non-interest bearing nature of funds that matters but only the commercial expendiency behind a decision to make a strategic investment for business promotion - since investments in this case were made in subsidiaries which in turn promote the assessee-company's business interest, part disallowance upheld by CIT(A) deleted - Revenue's appeal dismissed:DELHI ITAT;

2009-TIOL-146-ITAT-DEL.pdf

Punjab National Bank Vs ACIT, New Delhi (Dated: January 30, 2009)

Income tax - assessee is a schedule bank - undertakes share transactions on stock markets with the help of three borkers - suffers loss as brokers found involved in stock market scam - AO disallows deduction claimed for losses arising out of transactions undertaken in violation of RBI guidelines - CIT(A) terms it as speculative loss which can be set off only agaisnt speculative profit - held, as per Section 43(5) which defines the speculative transaction, there is no infirmity in the CIT(A) order - Assessee's appeal partly allowed:DELHI ITAT;

2009-TIOL-145-ITAT-MUM.pdf

M/s Laadki Trading & Investments Pvt Ltd Vs DCIT,Mumbai (Dated: November 12, 2008)

Income Tax - Asseesee filed return setting off long term capital gain against short term capital loss - AO disallowed the set off and made proportionate disallowance under s 14A and levied penalty u/s 271 (1)(c) - CIT(A) confirmed AO's order - Held before the amendment, it was debatable issue as to how the loss under one sub-head is to set off against the other sub-head under the head capital gain - Held penalty under section 271(1)(c) cannot be levied as the assessee has calculated its capital gain under a bonafide belief - Assessee's appeal allowed.:MUMBAI ITAT;

2009-TIOL-144-ITAT-MUM.pdf

M/s Birla Global Finance Ltd Vs ACIT, Mumbai (Dated: December 12, 2008)

Income tax - Sec 35D - Assessee is NBFC - claims deduction for share issue expenses - AO disallows on the ground that the assessee cannot be treated as 'industry' as per the provisions of Sec 35D - CIT(A) agrees with the AO - held, in view of the Tribunal's decision in the assessee's own case earlier, deduction u/s 35D cannot be allowed as NBFC cannot be treated as industry

Assessee makes investment in unlisted shares - value of shares diminishes - assessee writes it off and claims deduction for bad debts u/s 36(1)(vii)/37 (1) - AO disallows on the ground that it is capital loss - held, since shares were held as investment and not for the purpose of carrying on the business, the loss arising from the diminution in value of shares is not allowable as an expenditure either under Section 36(1)(vii)/37 (1) of the IT Act. The shares were held as investment which at no point of time can be treated as a business asset and as such there is no merit in the claim of the assessee even under Section 28 of the IT Act. Assessee's appeal dismissed:MUMBAI ITAT;

supdt_sys_vacancy.pdf

Preparation of panel for selection for the posts of Superintendent and Inspector on deputation in the Directorate General of Systems at Delhi and Kolkata;

SERVICE TAX SECTION

2009-TIOL-390-CESTAT-DEL.pdf

M/s Pragjyoti Syntex Ltd Vs CCE, Alwar (Dated: December 11, 2008)

ST - GTA Service - assessee is a manufacturer of acrylic yarn - avail GTA service but pays no tax - once detected that they were liable to pay, pays taxes with interest - Revenue imposes penalty - assessee admits that they did not know about their liability - held, it was a new levy and there was confusion about the liability on the service recipient - a fit case for invocation of Sec 80 - Assessee's appeal allowed :DELHI CESTAT;

2009-TIOL-389-CESTAT-DEL.pdf

CCE, Chandigarh Vs M/s Rainbow Denim Ltd (Dated: January 21, 2009)

ST - Assessee receives consultancy service from non-resident service provider - Commissioner(A) sets aside the case in favour of the assessee in view of the Larger Bench decision in Hindustan Zinc case - No ground to interefer with the Commissioner(A) order - Revenue's appeal dismissed :DELHI CESTAT;

CENTRAL EXCISE SECTION

NOTIFICATION

exnt09_05.pdf

Pan Masala: CBEC further tightens rules for gutkha sector; no export without payment of duty;

CASE LAWS

2009-TIOL-393-CESTAT-MUM.pdf + Cadbury story.pdf

Cadbury India Ltd Vs CCE, Pune I (Dated: January 13, 2009)

Finalization of provisional assessment and differential duty paid before finalization – Interest cannot be charged prior to 01.07.2001 as there was no provision for the same

Both Rule 7(4) of the CER, 2001 (w.e.f 01.07.2001) and CER, 2002 (w.e.f 01.03.2002) mandates that an assessee pays interest on the amount payable consequent to finalization of provisional assessment; however no such provisions existed in earlier rule 9B of CER, 1944.

Larger Bench decision in Cadbury India Ltd. 2008-TIOL-1986-CESTAT-Mum-LB referred.

Commissioner(Appeals)'s order partially set aside.:MUMBAI CESTAT;

2009-TIOL-392-CESTAT-DEL.pdf

CCE, Kanpur Vs M/s Shivangi Steels Pvt Ltd (Dated: January 28, 2009)

Central Excise - penalty - duty paid before issue of show cause notice - penalty under Section 11 AC reduced by the Commissioner (Appeals) - since the elements envisaged by Section 11 AC are present in the case, equal penalty under Section 11 AC imposed in the order-in-original restored. :DELHI CESTAT;

2009-TIOL-391-CESTAT-KOL.pdf

M/s Philips Electronics India Pvt Vs CCE, Kolkata-I (Dated: September 4, 2008)

Central Excise - jurisdiction - the Commissioner of Central Excise, Haldia passed the adjducation order as additional charge Commissioner of Kolkata -I - Shri C.M.Mehra who has passed the impugned Order has not been so appointed as Commissioner of Central Excise, Kolkata-I Commissionerate by the Central Board of Excise and Customs by a Notification published in the Official Gazette - order passed without jurisdiction.:KOLKATA CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08pn159.pdf

Export of sugar - quota fixed for EU;

CASE LAWS

2009-TIOL-394-CESTAT-DEL.pdf + cha story.pdf

M/s Intercontinental Cargo Services Vs CC, New Delhi (Dated: October 1, 2008)

Customs – Conflicting judgements from two division benches as to whether appeal lies before a Tribunal on rejection of application for renewal of CHA license – Matter goes to larger bench:DELHI CESTAT;