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Pan Masala Packing Machine Rules – Abatement - Pre and post audit (See 'DDT') Improved tax cooperation a boost to restoring financial confidence: OECD Chief; Conversion of DTA into EoU/STP: DGFT decides to place it before BoA + DGFT prescribes guidelines for operation of Diamond Dollar Accounts; ITAT Vice President D Manmohan transferred from Vizag to Mumbai in place of K C Singhal; IFC preparing to pick up equity in Volkswagen India's Euro 580 mn integrated plant in Pune; EC flooded with complaints of model code violations from Uttar Pradesh; Monaco also decides to peel off 'tax haven' skin; UK, France for global blacklist of banks sticking to secrecy; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Investment of Provident Fund – Government opens up; Searchlight on Dark Corners: Obama's Apolline Gaze! Wealth tax: Order of valuation by Revenue - An Order of God! MIXED BUZZ IFC preparing to pick up equity in Volkswagen India's Euro 580 mn integrated plant in Pune Improved tax cooperation a boost to restoring financial confidence: OECD Chief ; |
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2009-TIOL-128-HC-UTTRANCHAL-IT.pdf CIT, Dehradun Vs Sundowner Offshore International (Burmuda) Ltd (Dated: February 16, 2009) Income tax - Sec 44BB - Assessee is a non-resident company incorporated in Bermuda - enters into a contract with ONGC for charter hire of oil rig - assessee offers income to tax but excludes mobilisation charges - CIT(A) takes the view that only that proportion of mobilisation charges are taxable which are attributable to the transporation in Indian territorial waters - Tribunal upholds the CIT(A) order - held, in view of this court's decision in Sedco Forex International, mobilisation charges are not reimbursement of transportation cost incurred outside India or in Indian territorial water but a lumpsum payment by ONGC and AO is justified in including the same in the total income taxable in India - Revenue's appeal allowed:UTTARAKHAND HIGH COURT; CIT, Patiala Vs Punjab Financial Corporation, Chandigarh (Dated: February 2, 2009) Income tax - Credit for TDS - Assessee has an agreement with the State of Punjab - as per the agreement the assessee makes investment with the deposits made by the State of Punjab - dividend income - same is shared as between the State of Punjab and the assessee in the ratio of 2:1 - Credit for TDS - held, benefit of deduction on account of tax deducted at source is liable to be in the same ratio in which the parties share the income as per second proviso u/s 199 of the I-T Act - Revenue's appeal allowed:PUNJAB AND HARYANA HIGH COURT; DCIT, Chennai Vs M/s Govindu Naicker Estate (Dated: January 27, 2009) Income tax - Sec 11 - Assessee is a charitable trust - borrows funds for construction of commercial complex - pays interest on loan - claims deduction for interest expenditure - AO disallows on the ground that taking loand and repaying the same with interest cannot be treated as application of money for charitable objects - CIT(A) disagrees with the AO - Tribunal upholds the CIT(A) order - held, by construction the commercial complex the assessee has not flouted the objects of the Trust. There is no provision in the Act, which disentitles the assessee Trust from claiming repayment of loan as application of income, especially in view of the fact that the Trust has to augment its income and for that purpose it has put up a construction with borrowed fund. If raising of loan does not stand in the way of its charitable activities, the repayment thereafter must be treated as application of its income. By repayment of the loan, the Trust wiped its liability and the income earned from the property would be available for being utilised for charitable purposes. Revenue's appeal dismissed: MADRAS HIGH COURT; 2009-TIOL-161-ITAT-DEL.pdf + lucent story.pdf Lucent Technologies International Inc Vs DCIT, New Delhi (Dated: December 19, 2008) Income tax - India-USA DTAA - Assessee is tax resident of the USA - a leading supplier of hardware and software used for GSM cellular service - supplies hardware and software to an Indian cellular operator through its subsidiary in India - claims its income as business profits under DTAA - AO takes the view that its subsidiary is the dependent agent of the assessee and treats the same as its PE - also treats the payments arising out of transfer of right to use of software as royalty payment - CIT(A) partly disagrees with the AO that the assessee has a PE in India but confirms that the payments made for transfer of software is royalty income taxable in India - held, given the details in the supply contract between the assessee and the Indian GSM company where warranty binds both the supplier as well as its subsidiary for the completion of the project, and employees of the assessee were also made available to the subsidiary to carry out the project, the AO was right in treating the subsidiary as service PE - CIT(A) order disallowed and AO's view upheld Transfer of right to use of software loaded on the hardware - AO treats the payment as royalty taxable in India - held, since the details of the agreement and other facts are similar to the Motorola Inc decided by the Special Bench and the same decision being a binding on the Bench, and also the fact that the assessee had not transferred the right to the Indian Cellular operator to duplicate or adapt or use the same in public, it was a mere transfer of a copyrighted article and not the copyright - income is not royalty either under the domestic law or the DTAA - CIT(A) order disallowed and the Assessee's argument upheld:DELHI ITAT; ITO, Bangalore Vs Mrs Barbara Thelma Gill (Dated: December 30, 2008) Income Tax - Assessee converted certain agricultural land into stock in trade and within six months of such conversion invested in NHAI Bonds - At the time of sale of the converted land, a demand for tax liability on account of capital gains was made which the assessee refused stating that investment made u/s 54EC qualifies for exemption - AO rejected the claim by holding that the investment ought to have been made within six months from the actual sale of the land relying on a Circular by CBDT - CIT(A) allowed assessee's claim of exemption - Held, the second circular states that the date of transfer is the date of conversion but since due to practical difficulties such as paucity of liquid funds for investment at that point of time, CBDT decided to issue a beneficial circular that even if the investment was made within six months from the date of actual sale of the converted asset, it would be sufficient compliance with section 54EC - Held, whenever the provisions are susceptible to two equally plausible interpretations, as they appear to be from a perusal of the circulars, then the interpretation that is beneficial to the assessee should be adopted - Revenue's appeal dismissed.:BANGALORE ITAT; |
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Payment of Dearness Allowance to Central Government employees - Revised Rates effective from 1.1.2009.;
SERVICE TAX SECTION Shri Chandraprasad Desai Memorial Foundation Vs CST, Ahmedabad (Dated: February 10, 2009) ST - Commercial Coaching Service - demand confirmed - assessee pleads it is a trust and its activities cannot be treated as commercial - Stay granted in view of the Tribunal's decision in the case of Ahmedabad Management Association:AHMEDABAD CESTAT; M/s Vapi Waste & Effluent Management Co Ltd Vs CCE, Daman (Dated: February 5, 2009) ST - assessee provides effluent treatment service - Revenue imposes tax - assessee pleads it is a non-profit limited company and provides this service in public interest and the jurisdictional HC has granted stay in a similar case - Stay granted in view of unconditional stay granted by the HC :AHMEDABAD CESTAT;
CCE, Ahmedabad-1 Vs Akash Fashion Prints Pvt Ltd (Dated: January 28, 2009) Central Excise – Duty paid before issue of SCN – No infirmity in Tribunal order reducing penalty to 25% of duty in spite of finding of clandestine removal not being contested:GUJARAT HIGH COURT; 2009-TIOL-434-CESTAT-DEL.pdf + 57cc story.pdf M/s Narmada Gelatines Limited Vs CCE, Bhopal (Dated: November 4, 2008) Central Excise - CENVAT Credit - demand of 8% amount under Rule 57 CC / Rule 6 of the CENVAT Credit Rules on exempted by-products is not sustainable.:DELHI CESTAT; M/s Hiren Aluminium Ltd Vs CCE, Valsad (Dated: January 12, 2009) Central Excise – CENVAT credit - demand of CENVAT Credit on the ground that the inputs were diverted - There is no dispute about the quantum of final product manufactured - Such quantum of final product cannot be manufactured out of the quantity of inputs, as contented by Revenue - The inputs were recorded in RG-23A Part-1, along with the claim of credit in RG23A part-II, the same have been shown to have been used in the manufacture of the final product, which was cleared on payment of duty. The fact that the said inputs were actually used in the manufacture of final product cleared on payment of duty stands admitted in the adjudicating authority's order - no justification to uphold the impugned order of Commissioner denying the CENVAT credit. :AHMEDABAD CESTAT; M/s Mak Controls And Systems (P) Ltd Vs CCE, Coimbatore (Dated: January 20, 2009) CE – Refunds - challenge to the duty demand by way of appeal to the tribunal is itself a protest; composite price inclusive of all the duties shows that price includes the duty payable – no unjust enrichment:CHENNAI CESTAT;
CUSTOMS SECTION NOTIFICATION DGFT prescribes guidelines for operation of Diamond Dollar Accounts; Conversion of DTA into EoU/STP: DGFT decides to place it before BoA; CASE LAWS 2009-TIOL-129-HC-MUM-CUS.pdf + cus hc story.pdf UoI Vs Shri Bharat B Chudasama (Dated: February 24, 2009) Appeal - Department's appeal in a case where party's appeal already decided – Doctrine of Merger not applicable if the issues are different: matter remanded to reconsider in view of the Court's decision in 2009-TIOL-10-HC-MUM- CX:BOMBAY HIGH COURT; Shri Dinker Khindria Vs CC, New Delhi (Dated: February 2, 2009) Customs – Smuggling of gold biscuits valued at Rs. 29 lakhs in baggage – Clear evidence adduced by Revenue to suggest clandestine removal of gold – Retractions made by appellants are clearly an afterthought – Gold not being a prohibited item, redemption allowed on payment of fine of Rs. 2.5 lakhs – No infirmity in levy of penalties :DELHI CESTAT; |
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