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Munna bhai is not a habitual criminal but NO to Parliament: SC (See 'DDT') Many teenagers in OECD countries lack environmental science grounding, reveals Study; CBEC revises Tariff Value of poppy seeds to USD 3752 PMT and brass scrap to 2446 PMT; TDS / TCS: CBDT clarifies new Form 17 to apply only from April 1, 2009; CBDT Member Sunita Kaila retires today; New Member C S Kahlon joins; Chitra Gouri Lal joins CBEC as New Member; Ashok
Dhingra, partner, Khaitan & Co, moves with his team to J
S Sagar & Associates as head of taxation; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Export Duty on clearances to SEZ –Matter in Supreme Court; Forget Jai Ho; Chant Bharat Bachao! The controversial optical fibre case; FEMA - HIGH COURT CASE LAWS + Analysis 2009-TIOL-160-HC-DEL-FEMA.pdf + fera story.pdf S K Bahadur & Anr Vs Director, Enforcement Directorate (Dated: March 13, 2009) FERA – Raid of former joint secretary's house- criminal complaints against the Petitioners who are 79 and 80 years old respectively and in particular where not even the arguments on charge have been heard for 22 years, quashed: The factors that weighed with the Court are that Petitioner No.1 is 79 years old and Petitioner No.2 is 80 years old. They have been facing ordeal of the pendency of the two criminal complaint cases for nearly 22 years now. Charge is yet to be framed. It is anybody's guess as to how many more years the trial of the case would take.:DELHI HIGH COURT; MIXED BUZZZ Exports registers 7.3% growth in February CJI to address CBI annual meet on Criminal Justice System; India's external debt up by USD 6.2 bn for last Q; Many teenagers in OECD countries lack environmental science grounding, reveals Study; |
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2009-TIOL-07-ARA-IT.pdf + ara story2.pdf M/s Four Star Oil & Gas Co (Dated: March 31, 2009) Income tax - Sec 112(1) and Sec 48 - Applicant is a US-based company - holds equity shares in an Indian company - wants to sell the same to two identified buyers - seeks advance ruling on lower rate applicable to long-term capital gains on transfer of securities - held, benefit of proviso to Sec 112(1) cannot be denied to foreign Cos even if they are entitled to relief under first proviso to Sec 48 - Ruling in Timken France, SAS applied ++ The proviso to section 112(1) of the Act was a special provision in relation to transfer of certain long-term capital assets viz listed securities, units etc. and there was no warrant to limit the 10 per cent effective rate provided therein as against the normal rate of 20 per cent only to the three categories of resident assessee specified in clause (a), (b) and (d). ++ It is clear from clause (b) of Section 55(2) that in the case of a capital asset falling within the ambit of that clause, acquired before 1 st April, 1981, the cost of acquisition can be taken as fair market value of the that asset as on 1 st April, 1981. This provision prevails over sub-clause (iiia) of clause (aa). The applicant is therefore entitled to the benefit conferred by clause (b)(i) of S.55(2).:ADVANCE RULING AUTHORITY; 2009-TIOL-06-ARA-IT.pdf + ara story.pdf Worley Parsons Services Pty Ltd (Dated: March 30, 2009) Income tax - Reliance pipeline project - Basic Engineering and Procurement services provided by Australian company fall within the scope of royalties and the receipts are taxable in India - The services rendered and the work undertaken by the applicant in terms of the Agreement for Basic Engineering and Procurement services fall within the scope of “royalties” as defined in Art. XII( 3) of the DTAA between India and Australia and the receipts are taxable in India by virtue of Art. XII( 2). Under the Act too, they are so taxable. The entire receipts under the BE & P Agreement are liable to be taxed as royalty income on gross basis and at the rate of 15 per cent However, the receipts from the P.M. Services agreement, shall be treated as business income and be taxable only to the extent they are attributable to the operations of PE in India.:ADVANCE RULING AUTHORITY; 2009-TIOL-203-ITAT-MAD.pdf + medicorp story.pdf ITO, Chennai Vs M/s Medicorp Technologies India Ltd (Dated : January 16, 2009) Income tax - 'non-compete right' acquired by the assessee-company, eligible for depreciation: if the business / commercial right, of a patent, copy right, trade mark, license, and franchise, fulfils the conditions of 'being intangible asset', then surely the impugned business / commercial right acquired by the assessee also fulfils that condition, by way of a logical corollary.:CHENNAI ITAT; ACIT, New Delhi Vs M/s Dalmia Finance Ltd (Dated : February 25, 2009) Income Tax - Section 41(1) - On scrutiny of accounts AO finds that assessee has shown sundry creditors and other liabilities which are outstanding for long particularly when no transaction has taken place during the last three years. Assessee, contends that the liability of sundry creditors and others are alive and provisions of Section 41(1) are not applicable in the light of decision of Supreme Court in the case of CIT Vs Sugauli Sugar Works. AO after considering the confirmation of the creditors held that the liabilities "ceased to exist" and therefore provisions of Section 41(1) are attracted and make addition of the portion of the sum – CIT(A) deletes the addition - Held, the mere fact that some of the liabilities are more than three years old is not sufficient to apply provisions of Section 41(1). Each liability is required to be examined and case established u/s 41(1). This has not been done. Even provisions for "taxes" and other provisions of similar nature been added on presumption. No cessation of any liability has been shown and the AO not justified in making addition of disputed amount u/s 41(1). CIT(A) order upheld. Revenue Appeal dismissed. :DELHI ITAT; Smt Preeti N Aggarwal Vs ACIT, New Delhi (Dated : February 10, 2009 ) Income Tax - AO disallows interest claim of assessee for two years - CIT(A) holds that in spite of opportunity given to the assessee, she failed to show that the borrowed fund has been used wholly and exclusively for the purposes of business and takes the view that there is no scope to admit additional evidence under Rule 46A and confirms AO order - Held, it is settled law that nexus between the borrowed funds and utilization thereof has to be established and a finding be recorded. This needs detailed examination of record. It is necessary for the revenue authorities to consider and elaborately discuss the claim made by the assessee. This has not been done in this case and impugned orders suffer from a legal infirmity - matter restored to the file of the AO:DELHI ITAT; DCIT, Bangalore Vs Motor Industries Co Ltd (Dated : December 12, 2008) Income Tax - Assessee filed return claiming deduction u/s 80-O on the technical service rendered to a foreign client—AO issued notice u/s 148 for reassessment and withdrew deduction allowed u/s 80-O - CIT(A) allowed assessee's appeal - Held, reopening of assessment is not valid as it does not comply with the requirements of the proviso to section 147 since assessee has disclosed fully and truly all material facts relevant for the assessment - Revenue's appeal dismissed.:BANGALORE ITAT; |
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SERVICE TAX SECTION CC & CCE, Indore Vs M/s Shivhare Roadlines (Dated: February 17, 2009) Service tax – No liability on the sub-contractor when the principal Contractor has paid tax on the whole contract – matter remanded :DELHI CESTAT; M/s Hero Exports Vs CCE, Ludhiana (Dated: February 17, 2009) ST - condonation of delay - Assessee directed to pre-deposit Rs 10 lakh for hearing before Commissioner (A) - Delay of 31 days - assessee pleads for condonation of delay - held, Commissioner (A) to condone the dealy and dispose off the matter on merit - Tribunal also clarifies it is not intervening the jurisdication of Commissioner (A) who may exercise its power independently:DELHI CESTAT; CCE, Meerut-I Vs M/s Harbhajan Lal Rampal (Dated: February 20, 2009) ST - Cargo Handling Service - Assessee provides cargo handling service - demand with penalty confirmed - Commissioner(A) sets aside the order - Revenue for stay of the order on the ground that the assessee is a proprietary concern which is covered under the tax net - held, since the Revenue has failed to produce any evidence indicating that the assessee is a proprietary concern, stay not granted:DELHI CESTAT;
NOTIFICATION CBEC amends jurisdiction of Central Excise Commissionerate, Chandigarh I & II; CASE LAWS 2009-TIOL-530-CESTAT-AHM.pdf + reliance story.pdfM/s Reliance Industries Ltd Vs CCE & CC, Rajkot (Dated: March 17, 2009) Revenue neutrality - it is an established legal position that, where any duty payable by an assessee would be available as CENVAT credit to the recipient of the goods, such duty cannot be demanded from the former : It is not in dispute that CENVAT credit of the amount of duty paid by the assessee on the goods in question was taken by their buyers. If that be so, similar credit of any differential duty, if paid by the assessee, can also be taken by the buyers. This certainly is a revenue-neutral situation, a position supported by several decisions available on record. Today, it is an established legal position that, where it is shown that any duty found payable by an assessee would be available as CENVAT credit to the recipient of the goods, such duty cannot be demanded from the former. In the result, the Revenue neutrality issue with reference to CENVAT credit is held in favour of the assessee. Where it is found that a mandatory condition was not satisfied by the assessee, he was not entitled to claim duty-free clearance of the goods under Rule 19(2).: The benefit of removal of goods without payment of duty under Rule 19(2) in the present case was dependent on whether the recipient of the goods was entitled to duty-free procurement of such goods. This entitlement of the recipient (advance licence holder) was to be certified by the Assistant Commissioner of Central Excise having jurisdiction over him. Such certificate would be produced before the Assistant Commissioner having jurisdiction over the assessee so that the latter could remove the goods without payment of duty under Rule 19(2). Going by the ruling of the apex court one cannot say that the above requirements of the assessee having to follow the 2001 Rules in terms of condition (ii) of Notification 44/2001 as applicable to Rule 19(2) was not mandatory.: AHMEDABAD CESTAT; M/s Interbright Appliances Pvt Ltd Vs CCE, Coimbatore (Dated: January 20, 2009) Central Excise – Transaction value - The impugned order does not substantiate the finding that the appellant and its customer conducted their business controlled by mutuality of interest between them. There is no legal justification for the Commissioner in enhancing the assessable value. A price of an excisable item remaining unchanged for a couple of years or that the entire production of such goods is sold to a single buyer cannot constitute ground to hold that the assessable value is depressed to evade excise duty and to illegally benefit each other. It is settled law that a buyer would not become a related person merely because all the goods are sold to a particular person unless the price charged to him is based on extra commercial consideration. It is not established that the appellants had charged a low price from EFL. The department has failed to prove that the appellants and EFL are related persons and therefore the price charged by the appellants is not acceptable for assessment. (Para 7 & 7.1) SSI Exemption – Brand Name – The appellants had used the brand name owned by a unit after it had closed. The Department found use of brand names by the appellants without any reliable evidence of the appellants having sold its products affixing those brand names. Therefore, denial of SSI benefit is not proper. ( Para 8):CHENNAI CESTAT; Videocon Industries Ltd Vs CC,CE & ST, Aurangabad (Dated: February 9, 2009) Videocon asked to pay a pre-deposit of Rs.10 lakhs as Counsel unable to satisfactorily answer queries posed by the Tribunal.:MUMBAI CESTAT;
CUSTOMS SECTION NOTIFICATION Tariff Value of Brass Scrap and Poppy Seeds Reduced; CASE LAWS CC, ICD,TKD, New Delhi Vs M/s Rounak Enterprises (Dated: November 28, 2009) Customs – Order passed by Appellate Commissioner without considering evidence furnished by Revenue – Matter remanded to Appellate Commissioner to decide the case on merits by providing opportunity of personal hearing to assessee:DELHI CESTAT; |
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