Prudential Guidelines on Restructuring of Advance by Banks;

RBI issues norms for prudential treatment in respect of Floating Provisions;

Govt hikes salary of Banking Ombudsman to Rs 80,000/-; Will it also do for Income Tax Ombudsman?

Ban, Sri Lankan leader confer on worsening humanitarian situation in conflict zone;

DRI seizes ketamine worth Rs 1.5 Crore from Chennai Air Cargo complex;

UN Chief on tour to Asia; may attend ASEAN Summit;

Top UN envoy condemns recent spurt in piracy off Horn of Africa; Obama sees bigger role for India;

FDI inflows plummet to USD 1.5 bn in Feb, 2009;

47 Indian Companies dominate Forbes list of 2000 biggest companies in 2008;

TIOL COMMENTARY

icecubes.pdf

EC, FC and India at sea with economics!

RBI GUIDELINES

rbi_1.pdf

Prudential Guidelines on Restructuring of Advance by Banks;

rbi_1.pdf

Prudential treatment in respect of Floating Provisions;

MIXED BUZZZ

mbuzz0375.pdf

Ban, Sri Lankan leader confer on worsening humanitarian situation in conflict zone;

mbuzz0374.pdf

UN Chief on tour to Asia; may attend ASEAN Summit;

mbuzz0373.pdf

Top UN envoy condemns recent spurt in piracy off Horn of Africa;

2009-TIOL-50-SC-IT.pdf + Woodward_story.pdf

CIT, Delhi Vs M/s Woodward Governor India P Ltd (Dated:April 8, 2009)

Income tax – Loss on account of exchange rate fluctuation – allowed both on revenue and capital accounts –when the Dollar rates were reduced, department taxed the gains but when the dollar rates increased, Department has disallowed the loss – Double Standards: In the previous years whenever the dollar rate stood reduced, the Department had taxed the gains which accrued to the assessee on the basis of accrual and it is only in the year in question when the dollar rate stood increased, resulting in loss that the Department has disallowed the deduction/debit. This fact is important. It indicates the double standards adopted by the Department.

In the present case, the "loss" suffered by the assessee on account of the exchange difference as on the date of the balance sheet is an item of expenditure under Section 37(1) of the 1961 Act.

In conclusion, in order to find out if an expenditure is deductible the following have to be taken into account

(i) whether the system of accounting followed by the assessee is mercantile system, which brings into debit the expenditure amount for which a legal liability has been incurred before it is actually disbursed and brings into credit what is due, immediately it becomes due and before it is actually received;

(ii) whether the same system is followed by the assessee from the very beginning and if there was a change in the system, whether the change was bona fide;

(iii) whether the assessee has given the same treatment to losses claimed to have accrued and to the gains that may accrue to it;

(iv) whether the assessee has been consistent and definite in making entries in the account books in respect of losses and gains;

(v) whether the method adopted by the assessee for making entries in the books both in respect of losses and gains is as per nationally accepted accounting standards;

(vi) Whether the system adopted by the assessee is fair and reasonable or is adopted only with a view to reducing the incidence of taxation.

The amendment of Section 43A by the Finance Act, 2002 w.e.f . 1.4.2003 is amendatory and not clarificatory. The amendment is in complete substitution of the section as it existed prior thereto. Under the unamended Section 43A adjustment to the actual cost took place on the happening of change in the rate of exchange whereas under the amended Section 43A the adjustment in the actual cost is made on cash basis. This is indicated by the words "at the time of making payment". In other words, under the unamended Section 43A , "actual payment" was not a condition precedent for making necessary adjustment in the carrying cost of the fixed asset acquired in foreign currency, however, under amended Section 43A w.e.f . 1.4.2003 such actual payment of the decreased/enhanced liability is made a condition precedent for making adjustment in the carrying amount of the fixed asset. This indicates a complete structural change brought about in Section 43A vide Finance Act, 2002. Therefore, the amended section is amendatory and not clarificatory in nature.: SUPREME COURT;

2009-TIOL-171-HC-MUM-IT.pdf

CIT , Mumbai Vs Smt Sushila Devi Khadaria (Dated: March 16, 2009)

Income tax - Sec 57 - Assessee takes loan for investing in share business - claims deduction for interest and finance charges - AO disallows on the ground that the assessee fails to prove that the loans were taken for earning income - CIT(A) and Tribunal find the loans as genuine and once a direct or even indirect nexus between expenditure and income is established, deduction cannot be disallowd - assessee who earned dividend income is entitled to deduction and the income need not be based on quantum of claims - Revenue's appeal dismissed :BOMBAY HIGH COURT;

SERVICE TAX SECTION

2009-TIOL-577-CESTAT-DEL.pdf

M/s Ruchi Infotech Ltd Vs CCE, Indore (Dated: February 23, 2009)

ST - Reapir and maintenance service - assessee argues the SCN relates to period 9.7.2004 to 31.3.2006 but was issued only in 2008 and is time-barred - Since the appeal mainly seeks interpretation of statute as to application of the notification bringing repair and maintenance into the ambit of taxable service w.e.f. 11.5.07 whether retrospectively or prospectively apart from various other issues to be decided in the course of elaborate hearing. Both sides agree that software was recognized as goods under the law. Prima facie, we consider that interpretation, confusion and ground of limitation call for thorough test. As an interim measure there should be no recovery of demand till disposal of the appeal.:DELHI CESTAT;

2009-TIOL-576-CESTAT-MUM.pdf

M/s Global Telecom Vs CST, Mumbai (Dated: January 15, 2009)

ST - Appeal inadvertently filed by appellant with the Deputy Commissioner, which is situated in the same premises where the office of the Commissioner(A) is located – Commissioner(A)'s order holding that the appeal is time barred is set aside and matter remanded as appeal was filed well before due date albeit in the wrong office.:MUMBAI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-575-CESTAT-MUM.pdf

Onkar Furniture Vs CCE, Mumbai-II (Dated: January 14, 2009)

Appellant engaged in the business of interior designing and furnishing – Storage cabinets, kitchen counters etc. which are erected at site and are not removable cannot be held to be furniture items – Matter remanded in light of Apex Court decision in Craft Interiors Pvt. Ltd. 2006-TIOL-142-SC-CX

Commissioner(Appeals) setting aside penalty u/s 11AC and confirmation of interest u/s 11AB of the CEA'44 by holding that benefit of doubt is to be extended as there was a genuine cause for dispute – if this be so, extended period of limitation is not available to Revenue – Same reasons which are applicable for non-imposition of penalty are applicable for non-invocation of the longer period of limitation - Revenue too has not appealed against this finding hence this finding has attained finality – Matter remanded to original adjudicating authority to re-adjudicate matter subject to limitation.:MUMBAI CESTAT;

2009-TIOL-574-CESTAT-MUM.pdf + sample story.pdf

M/s Nicholas Piramal India Ltd Vs CCE, Mumbai-II (Dated: February 4, 2009)

Valuation of Physician samples – Assessee adopts cost construction method for the period 2001-2002 whereas Revenue contends application of Board Circular dated 25.04.2005 – Tribunal orders waiver of pre-deposit and stays recovery

There is nothing in the Bombay High Court decision in Indian Drugs Manufacturer's Association vs. Union of India [2006-TIOL-292-HC-Bom-CX], to suggest that the Board Circular no. 813/10/2005-CX dated 25.04.2005 could be given a retrospective effect.:MUMBAI CESTAT;

CUSTOMS SECTION

2009-TIOL-578-CESTAT-MUM.pdf

M/s Soham Logistics Pvt Ltd Vs CC, Nhava Sheva (Dated: January 7, 2009)

Goods allowed to be loaded on the vessel without the Let Export Order – CHA's act of not informing the shipping line that he has not been able to get the Let Export Order is gross negligence – Prima facie CHA liable to penalty u/s 114(iii) of Customs Act, 1962 – Pre-deposit ordered.:DELHI CESTAT;