Transfer Policy – CBDT invites suggestions from IRS officers (See 'DDT')

Bharti Airtel case: Sale of light energy – VAT and Service Tax – matter remanded to Appellate Authority;

Delhi DRI seizes 5 kg heroin; arrests Nigerian in Chandigarh;

RBI releases study on financing of transport infrastructure and services;

Pan Masala – No export and clearance without duty;

Is Oxygen gas used in manufacture of steel, raw material? – Question cannot be decided on basis of Wikipedia alone – matter remanded to AO to decide the issue: Supreme Court (Look for detailed coverage tomorrow);

Sales tax collected from customers, not deposited with Government under a deferral scheme - Future liability settled for a lesser amount – Difference is Revenue Income and chargeable to income tax: ITAT (Look for detailed coverage tomorrow);

RBI task force calls for restructuring of diamond sector in Gujarat;

TIOL COMMENTARY

ddt 9 march.pdf

Sale of light energy – VAT and Service Tax – matter remanded to Appellate Authority;

tiol top.pdf

Global meltdown sends India Inc scurrying for protectionism!

guest column.pdf

Calculation of interest on delayed payment of Central Excise duty;

CASE LAWS

2009-TIOL-36-SC-VAT.pdf

M/s Bharti Airtel Ltd Vs State Of Karnataka & Ors (Dated: March 2, 2009)

Karnataka VAT - Whether Broadband connectivity for Data Transmission is exigible to tax – High Court was right in directing the assessee to exhaust statutory alternate remedy. Looking to the nature of the concept involved in these matters (in which technical evidence needs to be looked into and cross-examination of the experts is warranted) we are of the view that the matters need adjudication. – Remanded – Supreme Court:SUPREME COURT;

MIXED BUZZ

mbuzz0265.pdf

RBI panel suggests development of Housing Start-up Index;

mbuzz0264.pdf

RBI releases study on financing of transport infrastructure and services;

2009-TIOL-115-HC- DEL-IT.pdf + HC it story.pdf

CIT,New Delhi Vs Insilco Limited (Dated: February 27, 2009)

Income Tax - Provision for a liability is amenable to a deduction if there is an element of certainty that it shall be incurred and it is possible to estimate the liability: it is well settled that if a liability arises within the accounting period, the deduction should be allowed though it may be quantified and discharged at a future date. Therefore, the provision for a liability is amenable to a deduction if there is an element of certainty that it shall be incurred and it is possible to estimate the liability with reasonable certainty even though the actual quantification may not be possible as such a liability is not of a contingent nature. Provision made in the profit and loss account for the estimated present value of the contingent liability properly ascertained and discounted on an accrued basis as falling on the assessee in the year of account could be deductible either under Section 28 or section 37 of the Act. ( it was made on the basis of actuarial valuation)

Once spares are considered as emergency spares required for plant and machinery as found by the Tribunal, the assessee was entitled to seek capitalization of the entire cost of spares: Though it is true that a machinery generally depreciates with actual user, the decisions indicate that it is not necessary to import this concept in interpreting the expression "used" is the statute. In the first place, a machinery may well depreciate even where it is not used in the business and even due to non-use or being kept idle. Secondly, a very strict correlation between the actual use of machinery and the concept of depreciation would lead to several anomalies and difficulties, for a machinery cannot be used throughout the day and night or even throughout the working hours or even during the days when the business is in full scale operation. Thirdly, there will be no strain on the statutory language by interpreting it widely and not limiting it to the actual working or actual employment of the machinery in the business. On the other hand, it would be more appropriate to envisage the expression as comprehending cases where the machinery is kept ready by the owner for its use in the business and the failure to use it actively in the business is not on account of its incapacity for being used for that purpose of its non-availability.:DELHI HIGH COURT;

2009-TIOL-114-HC- DEL-IT.pdf

CIT Vs Moving Picture Company (India) Ltd (Dated: March 5, 2009)

Income tax - TDS under Ss 194J and 194H - assessee makes payments to its subsidiary for transfer of rights in a TV serial and rights in free commercial time (FCT) - AO takes the view that it was a technical and professional service provided and TDS should have been deducted u/s 194J - CIT(A) and Tribunal take the view that it was a mere sale of rights - held, since the assessee had merely acquired the right in the TV film with the right in FCT, it does not fall within the meaning of Explanation 2 to Sec 9(1)(vii) - No infirmity in Tribuna's order

Assessee sells FCT through advertising agency which retains 15% commission on sale - Revenue for TDS u/s 194H - Tribunal finds it was a relationship between principal to principal and 15% was trade discount for the agency - No infirmity in the view of the Tribunal - Revenue's appeal dismissed:DELHI HIGH COURT;

2009-TIOL-113-HC- MUM-WT.pdf

Anand Estate Pvt Ltd Vs DCIT (Dated: February 13, 2009)

Wealth tax - Sec 40 - Assessee is into the business of warehousing - leases out warehouse against rental income - Revenue includes the value of godown in the net wealth of assessee - Tribunal finds that the warehouse was not used by the assessee and the same was given on rent and was correctly included in net wealth - held, since the Wealth Tax Act itself treats a closely held company differently from other assessees and once there be a specific provision which deals with the expression "asset" then the general definition would be excluded. In this case it will be the provisions of Section 40(3) of the Finance Act, 1983 which are relevant. Once there is a finding of fact recorded by the authorities below that the assessee was not using the building for his business but had given the same on lease, there is no error of law committed by the Tribunal - Assessee's Appeals are dismissed:BOMBAY HIGH COURT;

2009-TIOL-150-ITAT-MAD.pdf

M/s Bonfiglioli Transmissions Pvt Ltd Vs ACIT, Chennai (Dated: December 23, 2008)

Computation of deduction u/s 80HHC for the purpose of 115JA/JB Deduction should be computed u/s 80HHC(3) using book profits. Decision of ITAT Spl. Bench, Mumbai in DCIT Vs Syncome Formulations ( 106 ITD 193 ) followed.

While allowing deduction u/s 80HHC for the purpose of sec. 115JA/JB, effect has to be given to sub-sec. (1B) of sec. 80HHC wherein the deduction for each year is restricted to certain percentage of the deduction otherwise available. Sub-section (3) of sec. 80HHC is a machinery provision dealing with the mode of computation of deduction whereas the deduction can be allowed only in accordance with the prescription of the enabling section ie. 80HHC(1). The enabling section is governed by the restrictive provision laid down under sub-section (1B) of sec. 80HHC.

Appeal of assessee partly allowed.:CHENNAI ITAT;

2009-TIOL-149-ITAT-BANG.pdf

Tally Solutions Private Limited Vs DCIT, Bangalore (Dated: January 30, 2009)

Income tax - Sec 37 - Assessee is into financial software development - hires services of a consultant - claims deduction for consultancy charges - AO finds the payments excessive and disallows a major part of total payment - CIT(A) reduces the disallowance - held, it is settled law that the rule of consistency should be followed unless there is some evidence entailing a change in assessment approach, and the Revenue cannot diallow any expenditure either u/s 37 or Sec 40A(2) as long as tax evasion is not the motive and the payments are linked to business purposes as observed by the Apex Court in S A Builders case - Assessee's appeal allowed:BANGALORE ITAT;

CENTRAL EXCISE SECTION

2009-TIOL-111-HC-AHM-CX.pdf

CCE & CC Vs Kwality Tube Industries (Dated: January 28, 2009)

Central Excise – No concrete evidence adduced by way of weighment slips to justify clandestine removal – Presence of panch witnesses itself shrouded in doubt and even if present not allowed for cross-examination – Tribunal findings on these counts neither unreasonable nor unjustified – Delayed issue of SCN after four years without proper explanation questioned by Tribunal – No infirmity in Tribunal setting aside penalty when SCN itself suffers from vice of delay:GUJARAT HIGH COURT;

2009-TIOL-406-CESTAT-MAD.pdf + Bhuwalka story.pdf

CCE, Chennai Vs Bhuwalka Steel Industries Ltd (Dated: January 21, 2009)

Central Excise – CENVAT – Short receipt of goods - Whether CENVAT credit can be denied to the respondents for the period in dispute on the ground that there is shortage of inputs covered by relevant invoices vis-à-vis weighment slips? Matter referred to Larger Bench in view of conflicting decisions. ( Para 3):CHENNAI CESTAT;

2009-TIOL-405-CESTAT-DEL.pdf

M/s Glaxo Smithkline Consumer Vs CCE, Chandigarh (Dated: November 25, 2008)

Central Excise – CENVAT Credit available for inputs cleared as such for export under bond – Issue no longer res integra – Impugned order set aside:DELHI CESTAT;

2009-TIOL-404-CESTAT-KOL.pdf

M/s Bata India Ltd Vs CCE, Patna (Dated: December 16, 2008)

Central Excise – Inputs used in dutiable and exempted goods – Unwarranted restraint by Revenue has forced the assessee to hardships and multiple rounds of litigation – Unutilized credit accumulated due to restraint allowed to be taken into CENVAT account and utilize the same for payment of duty – Impugned order rejecting refund claim of unutilized credit set aside:KOLKATA CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08pn160.pdf

Export against import of raw sugar between 2004-08: DGFT extends EO fulfillment date to December, 2009 without composition fee;

CASE LAWS

2009-TIOL-112-HC- KERALA-CUS.pdf

M/s Kims Health Care Management Ltd Vs CC, CCE & ST (Dated: February 13, 2009)

Customs – Tribunal directed to hear appeal by accepting differential amount of pre-deposit after deduction of amount towards Bank guarantee furnished for release of goods and pass orders on merits:KERALA HIGH COURT;

2009-TIOL-403-CESTAT-MUM.pdf + Emirates Shipping lines story .pdf

M/s Emirates Shipping Agencies (India) P Ltd  Vs  CC, Nhava Sheva (Dated: January 7, 2009)

Shipping line loading cargo meant for export without having Let Export Order - Such offence may have grave consequences where narcotics and explosives can be exported outside without Customs knowledge because of sheer negligence of the shipping lines – Tribunal orders pre-deposit of penalty.:MUMBAI CESTAT;

SERVICE TAX SECTION

2009-TIOL-402-CESTAT-AHM.pdf

M/s Bharat Sanchar Nigam Ltd Vs CCE, Bhavnagar (Dated: January 20, 2009)

ST - Telecom service - Assessee is a PSU telecom service provider - adjusts extra tax paid in one month against the liability in subsequent month - Revenue confirms demand as conditions of Rule 6(3) are not fulfilled - assessee argues on limitation ground - demand set aside on limition ground : AHMEDABAD CESTAT;

2009-TIOL-401-CESTAT-KOL.pdf

M/s Orissa Stevedores Ltd Vs CCE & CC, ST, BBSR I (Dated: December 11, 2008)

Service tax – Contract for transportation of ore within mining area – Offer of pre-deposit of Rs. 3 lakhs accepted – Balance tax waived and stay granted:KOLKATA CESTAT;