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Sudhir Nath, Secretary, Ministry of Sports, and husband of Sushma Nath, Expenditure Secy, passes away; President appoints three addl judges for Madras HC + two for HP High Court; EU in grip of Xenophobia; Survey reveals people in five mega member countries want jobless migrants to leave; ITAT Vice President D Manmohan transferred from Vizag to Mumbai in place of K C Singhal; Ragging episodes: SC issues contempt notice to HP, AP colleges; EC flooded with complaints of model code violations from Uttar Pradesh; Indirect tax mop-up heading for a shortfall of Rs 28000 Crore even against scaled down revised targets; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Shifting of factory – what about final products? Coaching, training and education - Should Education be taxed? TOI and HT blazing news-money trail - Jai Ho! Jai Ho! MIXED BUZZZ TRAI amends rules for non-discriminatory access to content; Import of sensitive items zooms up by 33% in nine months; Cybersquatting cases continue to balloon: WIPO; CII calls for review of 'Mark to Market' guidelines; HLC recommends comprehensive survey of income-expenditure for households; |
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NOTIFICATION Sixth Amendment Rules - Credit for tax deducted at source for the purposes of section 199; CASE LAWS 2009-TIOL-163-ITAT-DEL.pdf + japan story.pdf Mr Satoru Tanaka Vs ACIT, New Delhi (Dated: February 11, 2009) Income tax - perquisite - assessee is a non-resident - As per service agreement employer of the assessee-employee pays the tax on the salary paid - employer inadvertantly pays excess tax - refund - AO issues refund voucher in favour of employee despite an intimation that the same may be issued in favour of employer - also treats the refund as 'perquisite' taxable under Sec 17(2)(iv) - CIT(A) confirms the assessment - held, the excess tax paid by the employer on behalf of the employee should have in the first place been refunded to the employer and even if it is refunded to the employee, it does not change the character of the receipt so that it can be treated as 'perquisite' - any payment in excess of the obgliation does not become a salary or perquisite taxable u/s 17(2)(iv) - even if the excess amount bears the same character as amount "due" and "payable", then it is exempt u/s 10(5B) and cannot be charged in the hands of the assessee - Assessee's appeal allowed: DELHI ITAT; DCIT, New Delhi Vs Shri Sudhir Malik (Dated: February 20, 2009) Income Tax -Search was conducted in assessee’s premises and search warrant was issued and signed by the Additional Director of Investigation and an order u/s 132(3) was passed - CIT(A) held the action valid—Held, Additional Director (Investigation) had no jurisdiction to issue a warrant of authorization and such Additional Director or Joint Director would have to have specific empowerment by the Board which is required under Section 132(1) - Assessee’s appeal allowed: DELHI ITAT; DCIT, Mumbai Vs Yahoo Web Services India Ltd (Dated: January 27, 2009) Income Tax - Sec 35DDA - Assessee incurs retrenchment expenses - claims deduction - AO treats it as voluntary retirement scheme and restricts the expenses to 20% - CIT(A) deletes disallowance - held, in view of the fact that there is no evidence indicating any voluntary retirement scheme, it is an expenditure incurred by the assessee to meet the leave enchashment and gratuity after the closure of certain operations and since it was incurred for business it is revenue expenditure - Revenue's appeal dismissed Bad and doubtful debt - assessee writes off in books and claims deduction - held, In view of the amended provisions w.e.f. 1.4.1989, it is no longer necessary for the assessee to establish: MUMBAI ITAT; Reliance Petroleum Limited Vs DCIT, Mumbai (Dated: February 4, 2009) Income tax - Sec 35D - Assessee is into refinery business - claims deduction for expenditure on issue of Foreign Currency Convertible Bonds - AO disallows on the ground that it can be allowed from the year in which the setting up of the industrial undertaking is completed or it has commenced production - CIT(A) confirms it - held, since the language of Sec 35D is unambiguous and the deduction cannot be allowed unless the production commences or the project is completed in the previous year - Assessee's appeal disallowed: MUMBAI ITAT; Consulate Constructions Vs ITO, Bangalore (Dated: October 24, 2008) Income Tax - Assessee, a partnership firm formed to act as builders and developers, returned income under the head business—AO held that no business is carried on by the firm, therefore, the firm should be assessed as an AOP - CIT(A) confirmed AO’s order - Held, all the activities namely, borrowing of funds and advances from prospective buyers, payment of interest from the loan creditor, construction of a property and transferring the same to the business assets indicated the intention of the assessee—Held letting out is a part of arrangement for commercial exploitation of asset the income constitute the business income - The matter remanded back to AO as of assessment requires consideration in totality by the Assessing Officer - Assessee’s appeal allowed for statistical purposes: BANGALORE ITAT; |
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SERVICE TAX SECTION 2009-TIOL-441-CESTAT-MUM.pdf + ST story.pdf Sands Hotel Pvt Ltd Vs CST, Mumbai (Dated: January 1, 2009) Service Tax - Order-in-revision cannot go beyond the original show cause notice – Tribunal restores original order, in appeal by assessee. Tribunal's observations - # Order-in-revision cannot go beyond the original show cause notice: The show cause notice issued in revision proceedings under s.84(1) of the Finance Act, 1994 and order-in-revision cannot go beyond the original show cause notice and is liable to be set aside on this ground alone. Tribunal decisions in Viacom Electronics (P) Ltd .,[2006-TIOL-1376-CESTAT-Mum] and Markfed Oil & Allied Industries [2002-TIOL-218-CESTAT-Del] relied upon . # Merely screaming that there is suppression does not suffice: Mere detection by the department does not mean that non-payment was with intention to evade unless the department brings out clear facts that the appellant was in the know that service tax was payable on such services but still the assessee chose not to pay the tax in order to evade the same. As regards search, it is not forthcoming as to whether the appellant was first asked to state whether they were providing any convention services or not and it is only after the appellants contention that no such services are provided that search was undertaken. If it is general search conducted in all hotels, bonafide belief on the part of the appellants cannot be outrightly rejected unless some circumstance is shown to establish that the appellant was in the knowledge that service tax is payable on such activity. Tribunal decisions relied upon - Ram Krishna Travels Pvt. Ltd. ; Commissioner of Service Tax vs. Skematic Consultants [2007-TIOL-784-CESTAT-Kol] and ETA Engineering Ltd. [2004-TIOL-959-CESTAT-Del] Holding that the Commissioner's order is not tenable, the same was set aside and the order-in-original was restored: MUMBAI CESTAT; M/s ITC Ltd Vs Vs CC & CCE, Salem (Dated: January 27, 2009) Service Tax – CENVAT – Input service credit – Mobile Phones - Credit of service tax paid on telephone services availed through the staff of the assessees using mobile phones or landline phones at their residences is admissible as input service credit. (Para 2): CHENNAI CESTAT;
M/s Coimbatore Engineering Works Vs CCE, Coimbatore (Dated: January 13, 2009) Central Excise – SSI Exemption –Dummy unit – Clubbing of value - No mutuality of interest between the two units is established. There is no charge that the separate identities of the two units are not real. There is no finding that the management of the two units was common. There is no finding that one unit was run with funds provided by other unit or that the one unit shared its profit with other unit. There are no common premises, common partners, common office and common facilities to justify clubbing. Appeal allowed. (Para 6.4): CHENNAI CESTAT; M/s Orchid Chemicals & Pharmaceuticals Ltd, M/s Orchid Healthcare Vs CCE, Chennai (Dated: January 7, 2009) Central Excise – EOU – Clearances of used plastic drums and Containers in DTA – Exemption notifications No 23/2003 CE and 52/2003 Cus – Demand – Stay / Dispensation of pre-deposit - The goods involved are used and damaged plastic containers and metal containers. As regards such containers procured from the domestic market duty is leviable only when they are cleared without putting them to use. As regards the imported containers / packing material duty liability is attracted if they are suitable for repeated use. The records of the case show that the impugned goods are damaged containers. Prima facie, no excise duty is payable on their clearance. Wavier of pre-deposit and stay of recovery of the adjudged dues ordered. (Para 2): CHENNAI CESTAT; M/s RPG Cabled Ltd (Concepta Cables Ltd) Vs CCE, Mysore (Dated: January 9, 2009) Central Excise – Provisional Price – Refund - The sale price relevant for assessment of the excisable goods was mutually agreed to between the parties subsequent to clearance of the goods. In the circumstances, when the excess amount comprising the differential value and differential duty was returned to the buyer, the appellant had absorbed the excess duty paid. This is not a case of reduction of price subsequent to sale and removal of the goods, but one of deciding price subsequent to removal and supply of the goods. Hence, denial of refund is not sustainable. ( Para 4): CHENNAI CESTAT; CCE, Pondicherry Vs M/s Tamil Nadu Electricity Board, Cuddalore (Dated: January 21, 2009) Central Excise - Manufacture - Job-worker - Refund - Limitation – Unjust enrichment - Under Protest – Appeal – For the period from 1.3.82 to 29.2.84 the order of the Tribunal become final as no appeal was preferred. The liability of respondent to pay duty on the poles manufactured and cleared subsequent to February 1984 needs examination if the terms of the contract that governed the transactions were revised subsequent to February 1984. TNEB is at liberty to approach the authorities for a decision in this regard and to claim refund, if any, due. This will depend on whether the duty impugned had been paid under protest, whether not barred by limitation, whether grant of refund would attract the vice of unjust enrichment. This appeal of the Revenue is allowed by remand to the original authority . (Para 8): CHENNAI CESTAT;
CUSTOMS SECTION CIRCULAR Import of restricted item(s) against transferred DFIA; CASE LAW 2009-TIOL-440-CESTAT-AHM.pdf + birla story.pdf M/s Birla NGK Insulators Pvt Ltd Vs CC, Ahmedabad (Dated: February 2, 2009) Customs – Re-import of goods exported availing Notification 94/96-Cus whether to be held as goods having suffered CVD under s. 3 of Customs Tariff Act and therefore leviable to SAD under s. 3A thereof – Matter goes to larger bench: AHMEDABAD CESTAT; |
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