Freely Transferable 'Supplementary'' Duty Credit Scrip – DGFT Clarifications (See 'DDT')

Are we heading towards deflation - Inflation down to 0.44 per cent;

China pins hope on bilateral talks to resolve toy import issue with India but does not rule moving WTO;

TRAI suggests steps to accelerate growth in rural telephony;

Central Excise superintendent and Inspector, Panipat, sentenced for two years' Rigorous Imprisonment in Corruption case;

After DRI, Mumbai Income Tax Investigation also sets up 'cyber lab' to pin down tax evaders;

Connectivity is major NTB for trade with CIS region: MEA Official;

IMF lowers India's growth projection to 6.25% for current fiscal;

Net direct tax mop-up exceeds Rs 312800 Crore as on March 17, 2009;

Polls for Lok Sabha: Cabinet decides to seek President's recommendations for notification under Sec 14 of Representation of People Act;

TIOL COMMENTARY

ddt 19 march.pdf

ST-3 Form amended – to include STRP details;

cobweb.pdf

Bill Gates' father urges wealthy class to pay more taxes! Can our super-rich do the same for India?

MIXED BUZZZ

mbuzz0301.pdf

TRAI suggests steps to accelerate growth in rural telephony;

mbuzz0300.pdf

Connectivity is major NTB for trade with CIS region: MEA Official;

mbuzz0299.pdf

Education is key to recovery from present crisis: UN Assembly President;

2009-TIOL-172-ITAT-DEL.pdf + oriental story.pdf

M/s Oriental Insuranace Co Ltd Vs ACIT, New Delhi (Dated: February 27, 2009)

Income Tax Act – Section 30(a)(ii) – Held, that once the expenditure is allowable u/s 30(a)(ii), if the expenditure is incurred on repair and maintenance of guest house taken on lease it should also be allowed

Income Tax Act – Section 4 & 5 – Accrual of Income - assessee engaged in the business of general insurance - In its return of income did not include the amount of interest outstanding on term loan etc. on the plea that the debtors had deferred in making payments and recoveries were outstanding for more than one year – Held, following High Court order in assessee's own case reported in 125 Taxman 1094 (Del.) that section 44 of the Act is a special provision dealing with the computation of profits and gains of business of insurance. It being a non obstinate provision, has to prevail over other provisions in the Act. It clearly provides that income from insurance business has to be computed in accordance with the rules contained in the First Schedule. It is not the case of the Revenue that the assessee has not computed the profits and gains of its insurance business in accordance with the said rules and hence section 44 being a special provision, governing computation of taxable income earned from business of insurance will supersede all other provisions.

Income Tax Act – Section 14A – Expenditure incurred on income not chargeable to tax – Held, that section 44 applies notwithstanding anything to the contained within the provisions of the Income-tax Act relating to computation of income chargeable under different heads and that there is no requirement for head-wise bifurcation while computing the income u/s 44 of the Act in the case of a insurance company. The income, of the business of insurance is essentially to be at the amount of the balance of profits disclosed by the annual accounts as furnished to the Controller of Insurance. The actual computation of profits and gains of insurance business will have to be computed in accordance with Rule 5 of the First Schedule. In the light of these special provisions coupled with non obstante clause the AO is not permitted to travel beyond these provisions – Held, further that section 14A contemplates an exception for deductions as allowable under the Act which are contained u/s 28 to 43B of the Act. Section 44 creates a special application of these provisions in the cases of insurance companies and therefore section 14A is not applicable to insurance companies.

Income Tax Act – Depreciation – Section 32 – Held, that if the assessee claims to have made addition to the assets, it is obligatory on its part to give all the details of such assets added, to the AO so that he may scrutinize them and allow depreciation as per the provisions of law.:DELHI ITAT;

2009-TIOL-171-ITAT-BANG.pdf

ACIT, Mangalore Vs New Mangalore Port Trust Panambur (Dated: December 23, 2008)

Income Tax - Sec 43(6) Expl 6 - Explanation 6 to section 43(6) inserted by Finance Act, 2008 having retrospective operation from 1/4/2003 has not been considered by AO and CIT(A)- CIT(A) allows the  Appeal of the assessee for claim of depreciation adopting original cost of assets as WDV and not the depreciated cost following decision of ITAT, Rajkot Bench in the case of Kandla Port Trust v ACIT ( 2007-TIOL-07-ITAT-RAJKOT ) - Held, In view of the clarificatory amendment by Finance Act, 2008, the amount of depreciation, which is provided in the books of account of the assessee, is deemed to be the depreciation actually allowed - Matter remanded - Revenue's appeal allowed:BANGALORE ITAT;

2009-TIOL-170-ITAT-DEL.pdf

Smt Nigam Chawla Vs ITO, New Delhi (Dated: January 16, 2009)

Income Tax—Assessee filed return but later it was discovered that she received enormous amount as advance from a company in which she had 19.72% shareholding—AO issued notice u/s 148 and added the sums to the income of the assessee as deemed dividend and initiated penalty proceedings u/s 271(1)(c)—CIT(A) confirmed AO's order—Held, there is nothing on record to come to a conclusion that advance of money by Kaks to the assessee was a device for diverting the funds of the company for the benefit of the assessee-director—Held, amount was received by the assessee as advance for supply of zippers and it was a commercial transaction and it could also not be said that any benefit accrued to the assessee—Assessee's appeal allowed.:DELHI ITAT;

2009-TIOL-169-ITAT-MUM.pdf

DCIT, Mumbai Vs M/s Reliance Industries Limited (Dated: January 20, 2009)

Income tax - Indo-USA DTAA - TDS u/s 195 - Assessee makes payment to non-resident service providers for providing services related to three Euro issues - AO holds the assessee in default for not deducting TDS on such payments as it was fee for technical services u/s 9(1)(vii) and included services under Article 12 of the DTAA - CIT(A) disagrees with the AO as the assessee had no PE in India - held, since the non-resident has no PE in India, the payment by the assessee cannot be treated as included service under Article 12(4) of the tax treaty - it is to be treated as business profits - Revenue's appeal dismissed:MUMBAI ITAT;

cbecorder052_2009.pdf

CBEC issues transfer order of three Addl/JCs;

SERVICE TAX SECTION

2009-TIOL-455-CESTAT-DEL.pdf + alstom story.pdf

M/s Alstom Project (I) Ltd Vs CST, Delhi (Dated: February 17, 2009)

Service Tax – Confusion prevailing in industry on liability of service tax on recipients for services received from offshore service provider prior to 01.01.2005 – Provisions of S. 80 applicable – No penalty leviable under when tax paid before issue of SCN:DELHI CESTAT;

2009-TIOL-454-CESTAT-MAD.pdf

M/s Bathija International Vs CCE , Salem (Dated: January 7, 2009)

Service Tax – Service received from abroad – taxable only after 18.4.2006 – Commissioner (Appeals) directed to hear appeal without pre-deposit: liability of the appellants towards service tax received during the material period is prima facie limited to the period from 18.4.2006 to 27.9.2006. The appellant has already paid the service tax due for the service received during this period. In the circumstances this appeal is allowed by way of remand to the lower appellate authority to decide the appeal on merits without insisting on the appellant making any predeposit u/s 35F of the Central Excise Act. Needless to say that the appellant shall be afforded an effective hearing. The appeal is disposed of along with the stay application.:CHENNAI CESTAT;

2009-TIOL-453-CESTAT-AHM.pdf

M/s Dahison Automobiles Vs CST, Ahmedabad (Dated: February 12, 2009)

ST - Assessee installs CNG/LPG kits on motor vehicles - Revenue for inclusion of value of kits in the gross value of service - Demand confirmed - Commissioner(A) orders 20% pre-deposit of demand, penalty and interest - since the assessee has already deposited a part of demand, case remanded for hearing the same on merit:AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-452-CESTAT-DEL.pdf + seesaw story.pdf

M/s U P State Sugar Corporation Ltd Vs CCE, Meerut -I (Dated: January 20, 2009)

Central Excise - It is settled law that summary dismissal of SLP/Civil Appeal by the Supreme Court does not amount to affirmation of the judgment/order of the Court/Tribunal appealed against, on merits – Credit available on welding electrodes used in maintenance and repair of machinery in terms of Hindustan Zinc Ltd. vs. Union of India [ 2008-TIOL-408-HC-RAJ-CX ] – Duty paid by supplier unit cannot be reassessed by officer in-charge of recipient unit – CENVAT credit of excess duty paid not deniable – Penalty on uncontested demand reduced:DELHI CESTAT;

2009-TIOL-451-CESTAT-AHM.pdf

M/s Alchemie Organics Ltd Vs CCE, Daman (Dated: December 10, 2008)

Central Excise – Goods found in packed condition and ready for removal but not entered in records – Claim of appellants that goods are meant for reprocessing not tenable when goods are in packed condition and ready for removal – Confiscation upheld and redemption fine reduced considering the correct valuation of goods – Since goods have entered RG 1 stage, demand of duty set aside subject to condition that goods would be cleared after entering proper records – Complicity of company officials necessitates penalty under 209A – Penalty reduced on individuals as penalty on the company was set aside:AHMEDABAD CESTAT;

2009-TIOL-450-CESTAT-MAD.pdf

M/s Standared Cotton Spinners Vs CCE, Coimbatore (Dated: January 9, 2009)

Central Excise – Clandestine clearances – Validity of statement – Retraction - The impugned order found clandestine clearances by the appellants on the basis of statements of the transporters, who had initially given statements to the effect that they had transported higher quantities than those shown on the related invoices in respect of several consignments. The depositions contrary to the documents/records were made three years after the event, relying on their memory. These were retracted and they deposed that the initial statements had been given at the instance of the officers. In the circumstances, the initial depositions cannot be relied on to find clandestine clearances by a third party, namely the appellants, in the absence of independent evidence. As there is no sufficient evidence to prove clandestine clearance, appeal allowed . (Para 6):CHENNAI CESTAT;

CUSTOMS SECTION

CIRCULAR

dgft08cir071.pdf

Guidelines for issuance of Freely Transferable ‘Supplementary' Duty Credit Scrip under Chapter 3 Schemes.;

CASE LAW

2009-TIOL-134-HC-DEL-CUS.pdf + detention story.pdf

Sonia Overseas (P) Ltd Vs ACC (Dated: February 19, 2009)

Customs - Detention of Goods - no liability, civil or criminal, may be attracted so long as the power exercised by the Customs is in good faith and not in colourable exercise of power – Customs Department is not completely insulated from any liability in instances of an illegal detention. In a case where imported goods are detained to the financial detriment of the importer, liability of the Customs Department will have to be determined by looking at the facts and circumstances of each case on merits Whether an act has been done in good faith would depend upon the factual scenario. In order to establish "good faith", it has to be established that what has been imputed concerning the person claiming it to be so, is true.

Burden to prove malafide is on the importer :- there is always a presumption in favour of the Administration that its exercise of power shall be in good faith and for public benefit. Therefore, the "burden is on the individual to produce sufficient material to suggest of the mala fides of the authority concerned and it is not easy to discharge the same". There is a presumption of bona fides in favour of the Authority. The burden of proving mala fides is on the individual alleging it. Indeed, it is a heavy burden which can be discharged ordinarily by initiation of civil proceedings.:DELHI HIGH COURT;

2009-TIOL-449-CESTAT-MAD.pdf

CC, Chennai Vs Skycell Communications Ltd (Dated: January 23, 2009)

Customs – Import – Computer Software – Exemption Notification - The benefit of exemption from payment of duty in terms of Sl.No.173 of the Table to the Notification No.11/97-Cus. dated 1.3.97 is available to computer software imported by the respondents. The issue is no longer res integra as it stands settled in favour of the importers by the decision of the Larger Bench in 2008-TIOL-1898-CESTAT-MAD-LB . ( Para 1) : CHENNAI CESTAT;