Next economic stimulus: Allow politicians to spend money during elections!

Tax havens: OECD efforts yield rich dividends; Standards become global benchmark for exchange of tax information;

Puducherry Lt Governor Govind Singh Gurjar dies at Apollo Hospital in Delhi today;

Kamal Nath to represent India at 7th India-ASEAN Summit;

Car bomb explosion in Guwahati: Four killed, 15 injured;

Partnership key to Parliamentarians' success in tackling global challenges: UN;

US links Pak aid to anti-terror measures; India welcomes Bill;

WCO, Interpol work together; Counterfeit goods worth USD 131 mn seized;

Congress flays Advani for raking up Indian money in tax havens on poll-eve;

TIOL COMMENTARY

ddt 6 Apr.pdf

Import of Waste Paper – DGFT Clarifies;

guest column.pdf

Why does India target China in anti-dumping matters?

tiol top.pdf

Next economic stimulus: Allow politicians to spend money during elections!

sunday story.pdf

Tax havens: OECD efforts yield rich dividends; Standards become global benchmark for exchange of tax information;

MIXED BUZZZ

mbuzz0363.pdf

Kamal Nath to represent India at 7th India-ASEAN Summit;

mbuzz0362.pdf

Partnership key to Parliamentarians' success in tackling global challenges: UN;

mbuzz0361.pdf

WCO, Interpol work together; Counterfeit goods worth USD 131 mn seized;

mbuzz0360.pdf

PM addresses IAS probationers, calls for development with human touch;

2009-TIOL-164-HC-MUM-IT.pdf + hc story.pdf

M/s Prasad Agents Private Ltd Vs ITO, Mumbai (Dated: March 20, 2009)

Income Tax – speculative los – section 73 - no difference between the losses suffered in the course of trading by delivery and losses in terms of the book value: loss or profit on account of valuation of closing stock has to be treated as speculative loss and allowable as revenue loss or revenue receipt as the nature of these profits are similar to the nature of business in trading of shares: As long as the assessee is carrying on business of trading by way of purchase and sale of shares even if in respect of any financial year, there are no transaction and yet the company has stock in trade of shares, the book value will have to be considered for the purpose of considering the profit and loss in case of speculative business.: BOMBAY HIGH COURT;

2009-TIOL-163-HC-J&K-IT.pdf

H S Raina Vs ITO (Dated: March 3, 2009)

Income tax - Sec 69C - Assessee is a partner in six partnership firm - files no return for past five years - Revenue asks for return-filing - house property - AO refers it to Valuation Cell - Additions made for expenses related to construction of house - Assessee pleads the sum was paid to them as compensation for land acquired by govt - AO asks for details - part of expenditure could not be explained - CIT and Tribunal do not agree with the assessee - held, there is no procedure prescribed in the Act for making additions under Sec 69C but it is obligatory on part of the assessee to explain to the satisfaction of the AO the source of expenditure, with a rider that if the explanation is not satisfactory, the Assessing Officer may use his discretion against the assessee. Since the assessee fails to produce enough evidence, the disputed sum becomes deemed income and there is no illegality in the Tribunal's order - Assessee's appeal dismissed: JAMMU & KASHMIR HIGH COURT;

2009-TIOL-162-HC-J&K-IT.pdf

Qazi Shabir Ahmed Vs ITO (Dated: February 11, 2009)

Income tax - Penalty u/s 271(1)(c) - AO makes additions for undisclosed income and unexplained credit - Assessee pleads before CIT(A) that the deposits made in his bank account are sale proceeds of a land deal - Additional evidence produced - CIT(A) does not admit it under Rule 46A(1) - Tribunal dismisses Appeal - held, concurrent findings of lower authorities do not call for interference - no substantial question of law involved - Assessee's appeal dismissed: JAMMU & KASHMIR HIGH COURT;

2009-TIOL-161-HC-DEL-IT.pdf + galileo story.pdf

DIT Vs Galileo International Inc (Dated: February 25, 2009)

Income tax - Indo-USA DTAA - Business connection - Sec 9(1)(i) - Assessee is a non-resident - operates system for providing electronic global distribution of services to airlines, hotels and tour & cab operators through Computerised Reservation System (CRS) - does business in India through dependent agent - agent installs customised systems at customers' premises which cannot be shifted without its consent - Tribunal treats relationship with its agent as service PE - attribution of profits - considering the global nature of business Tribunal holds only 15% of income is chargeable to tax in India but since the commission paid to the dependent agent is more than the revenue generated from India, no income is held to be left to be taxed

Revenue in appeal before the HC on attribution of profit issue and alleges that the Tribunal is in error as it ignored the wording of the Circular No 23 of 1969 wich talks about profit and not income and also the fact that while attributing 15% income to india the Tribunal must have given consideration to the commission paid to the agent - held, there is no error in Tribunal's decision as it has in details discussed the principle which is to be followed in apportioning the income accruing in India and the Income accruing outside India, and based on facts, attributed 15% revenue to the Indian operations and then considered the deduction for commission paid and since the revenue was less than the commission paid, no income was left to be charged to tax - Even the AO and the CIT(A) allowed the entire payment made to the agent as commission and no fault can now be found in the Tribunal decision for allowing the same and finding that no income is left to be taxed - No substantial question of law involved - Revenue's appeal dismissed:DELHI HIGH COURT;

2009-TIOL-211-ITAT-MAD.pdf

M/s Veejay Lakshmi Engg Works Ltd Vs ACIT, Coimbatore (Dated : November 21, 2008)

Prior period expenses – not deductible

Assessee claimed that these prior period expenses were crystallized only during the year and since there is no dispute about incurring such expenditure and was not claimed in any of the earlier years, the same to be allowed in the present year. After analyzing each item, Tribunal noted that the liability did not crystallize in the impugned year. Hence the disallowance was upheld by ITAT.

Appeal by assessee dismissed.:MUMBAI ITAT;

SERVICE TAX SECTION

2009-TIOL-551-CESTAT-DEL.pdf + tour story.pdf

M/s Wanderlust Travels (P) Ltd Vs CCE, Delhi-IV (Dated: March 4, 2009)

Service Tax – Tour operator – charges for hotel rooms not to be included; payment received in advance for services not taxable at that time – no tax – matter remanded:DELHI CESTAT;

2009-TIOL-550-CESTAT-MUM.pdf

M/s Keihin Fie Pvt Ltd Vs CCE, Pune-I (Dated: February 25, 2009)

Service Tax - Incidence of duty can be presumed to have been passed on to the other person as it has been debited to the Profit & Loss Account amounting to increase in cost – Refund correctly rejected on ground of unjust enrichment – Appeals rejected.:MUMBAI CESTAT;

2009-TIOL-547-CESTAT-DEL.pdf

M/s Rajpaul Homes Vs CCE (ST), Coimbatore (Dated: January 29, 2009)

Service Tax – Stay / Dispensation of pre-deposit – construction service - the appellants had paid the service tax due along with interest before issue of the show cause notice – prima facie case for waiver of pre-deposit of penalties under Sec 76,77 and 78 of the Finance Act, 1994.:DELHI CESTAT;

2009-TIOL-546-CESTAT-DEL.pdf

CCE, Indore Vs M/s Engineers Combine (Dated: February 20, 2009)

ST - classification of service - Confusion about nature of activity - since the Commissioner(A) has not passed a speaking order and it is well settled that the reasons are the hear-beats of justice, the case is remanded for fresh adjudication:DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-555-CESTAT-MUM.pdf + capital foods ltd story.pdf

CCE & CC, Nashik   Vs M/s Capital Foods Ltd (Dated: January 21, 2009)

Revenue succeeds in classifying "Chilli Vinegar" under heading 2203.00 of CETA, 1985, before the Tribunal, well almost!

Assessee had classified “Chilli Vinegar” under heading 20.01 during the period 1996 – 1997 whereas Revenue contends that the same is correctly classifiable under heading 2203.00 – Differential duty of Rs.95,391/- demanded and confirmed by lower authority along with interest and penalties – Commissioner(A) sets aside this order and allows classification under heading 20.01 – Revenue is in appeal before the Tribunal.

Tribunal's observations –

We are inclined to accept the argument of the learned SDR inasmuch as

(a) aqueous acetic acid dilution is undisputedly a substitute for vinegar and

(b) its essential character is not lost on account of adding one green chilli.

It is also found that the assessee themselves intended to market the product as vinegar.

The HSN Explanatory notes indicate that vinegar flavoured with spices would remain classified under heading 22.03.

Moreover, the respondent has failed to show that their product which was marketed as ‘Chilli Vinegar' could be classified as a preparation of green chilli.:MUMBAI CESTAT;

2009-TIOL-554-CESTAT-MUM.pdf

M/s Larsen & Toubro Ltd Vs CCE & CC, Aurangabad (Dated: March 5, 2009)

Cenvat Credit in respect of Gardening services – applicant contends that garden is to be maintained mandatory as per the regulations of Maharashtra Pollution Control Board – Pre-deposit waived following Tribunal decision in M/s Kirloskar Oil Engines Ltd. [ 2008-TIOL-779-CESTAT-Mum ].:MUMBAI CESTAT;

2009-TIOL-553-CESTAT-MUM.pdf

M/s Drilbits International Pvt Ltd Vs CCE & CC, Mumbai (Dated: March 5, 2009)

Cenvat Credit on Catering services and gardening services – Credit held to be admissible by Larger Bench in case of GTC Industries 2008-TIOL-1634-CESTAT-MUM-LB and M/s Kirloskar Oil Engines Ltd. 2008-TIOL-779 CESTAT Mum– Pre-deposit waived and recovery stayed.:MUMBAI CESTAT;

2009-TIOL-552-CESTAT-DEL.pdf

M/s Ellora Mechanical Products Pvt Ltd & Others Vs CCE, Noida (Dated: February 11, 2009)

Central Excise - manufacture - whether the process of metallisation on polyester film amounts to manufacture - revenue contended that they have not been given any opportunity to prove that the goods in question were in fact being manufactured within the definition of the Central Excise Act - matter remanded to the Commissioner.:DELHI CESTAT;

2009-TIOL-548-CESTAT-MUM.pdf

M/s FDC Ltd Vs CCE & CC, Aurangabad (Dated: March 23, 2009)

Medicaments manufactured by M/s NPPL and supplied to M/s FDC Ltd. – duty paid on the basis of cost construction method – differential duty demanded from M/s FDC on the premise that M/s FDC were the manufacturers and not M/s NPPL – M/s NPPL had informed department in writing that they are loan licensee of M/s FDC Ltd. – Extended period prima facie not invokable.

Proposal to deny Cenvat Credit availed by M/s NPPL on the premise that M/s NPPL were not the manufacturers of the medicaments – benefit given to M/s FDC must also be available to M/s NPPL – Waiver of pre-deposit ordered.:MUMBAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff09_034.pdf

Anti-dumping duty on viscose rayon filament yarn - Name of M/s Yibin Hiest Fibre Ltd Corporation substituted;

CASE LAWS

2009-TIOL-549-CESTAT-AHM.pdf

Shri Sanjay Dave Vs CC, Kandla (Dated: January 22, 2009)

Customs - CHA - Penalty under Section 112 of the Customs Act, 1962 for diversion of goods imported under DEEC - Custom House Agent handles the imports as an agent and has no liability in regard to imported goods, once the same are cleared from the customs area. CHA is under no obligation to follow the imported goods and find out the disposal of the same - no reason to impose penalty.: AHMEDABAD CESTAT;